EDGAR 10-K Filing

Company CIK: 1474167
Filing Year: 2025
Filename: 1474167_10-K_2025_0001477932-25-002759.json

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ITEM 1. BUSINESS
Item 1. Business
The Company
Cosmos Health Inc. was incorporated in 2009 in Nevada and is a diversified, vertically integrated global healthcare group, owner of proprietary pharmaceutical and nutraceutical brands, generics, manufacturer and distributor of healthcare products, engaged in research & development of innovative medicines and repurposing drugs as well as operator of a telehealth platform.
As a global company we are harnessing our expertise and stepping up innovation to continue the momentum behind the discovery, delivery, and expanded development of modern pharmaceutical and nutraceutical products.
Our Markets
We operate in the healthcare sector and particularly in the Pharmaceutical and Nutraceutical businesses. We cover vertically several process phases within the abovementioned sectors, such as research & development, manufacturing, marketing, sales and distribution of products and services. More specifically, we operate in generic medicines, nutraceuticals, biocides, medical devices, novel oncology drugs, drug repurposing and telehealth services.
Generic medicines are the pharmaceutical and therapeutic equivalents of branded pharmaceutical products and are generally marketed under their generic (chemical) names rather than by brand names. Typically, a generic drug may not be marketed until the expiration of applicable patent(s) on the corresponding branded product, unless a resolution of patent litigation results in an earlier opportunity to enter the market. Generic drugs are the same as branded products in dosage form, safety, efficacy, route of administration, quality, performance characteristics and intended use, but they are sold generally at prices below those of the corresponding branded products. Generic drugs provide a cost-effective alternative for consumers, while maintaining the same high quality, efficacy, safety profile, purity and stability of the branded product.
The Company also conducts its business within the global nutraceuticals market with our own brand which we consider to be highly qualitative and competitive. Nutraceuticals are defined as products that contain at least one dietary ingredient within them and can be consumed orally. Some of the purposes of nutraceuticals are used for immune system defense, energy, stress, bones and joints.
According to a study published by Towards Healthcare, the global generic drugs market was valued at $424.98 billion in 2024 and is projected to reach $874.63 billion by 2033, representing a Compound Annual Growth Rate (CAGR) of 8.35% throughout the forecasted period. The rise in patent expiration, increasing demand for cost-effective and efficient medicines and less complex approval process for generics drive the market growth.
The global nutraceuticals market size is calculated at USD 591.15 billion in 2024, grew to USD 636.31 billion in Q1 2025, and is projected to reach around USD 1,234 billion by 2034. The market is expanding at a CAGR of 7.64% between 2025 and 2034. This indicates a growing interest in products that promote wellness and help prevent illness. This shift towards focusing on preventive health is driving an increase in market demand.
According to the Towards Healthcare study, the global obesity & weight management market size is calculated at USD 163.13 billion in 2024 and is expected to be worth USD 362.1 billion by 2034, expanding at a CAGR of 8.3% from 2024 to 2034, driven by the increasing prevalence of obesity and its associated health risks, including diabetes, hypertension, and orthopedic conditions.
According to Future Market Insights, the global hospital disinfectant products and services market size is expected to reach $75.6 billion in value by 2033. This reflects a compound annual growth rate (CAGR) of 7.7% during the forecast period, with the EU and UK market playing a significant role.
According to Fortune Business Insights, the global oncology drugs market size was valued at USD 201.75 billion in 2023 and is projected to grow from USD 220.80 billion in 2024 to USD 518.25 billion by 2032, exhibiting a CAGR of 11.3% during the forecast period (2024-2032).
The global drug repurposing market size is anticipated to reach USD 30.1 billion by 2028, up from USD 24.5 billion in 2021, reflecting a CAGR of 2.9% over the 2022-2028 period. Drug repurposing, often referred to as re-profiling, is the process of identifying new therapeutic applications for approved and marketed drugs that have already been through safety and efficacy testing and has emerged as a key strategy by the vast majority of pharmaceutical and biopharmaceutical companies to fuel significant business expansion. Notably, between 2007 and 2009, 30-40% of all biologics approved in the U.S. were either repurposed or repositioned drugs.
Growth Strategy
Our main strategy initiative is focused on continuing our progress in becoming a global healthcare company through the development of a lean, efficient and vertically integrated operating model, as well as, to expand our portfolio of our own branded nutraceutical and pharmaceutical products, grow our customer base and achieve our growth stabilization in this new market and gain an adequate size in the global pharmaceutical market. We are committed to serving our customers while continuing to innovate and provide products that make a difference in the lives of individuals. We strive to maximize our shareholders’ value by adapting to market realities and customer needs. Our strategy involves the enhancement of our manufacturing capacities and building a multinational network or wholesalers, distributors, and pharmacies and simultaneously continuing to expand the portfolio of innovative products that we distribute to that network.
We are committed to driving organic growth at attractive margins by improving execution, optimizing cash flow and leveraging our strong market position, while maintaining a streamlined cost structure throughout each of our businesses. We continue to further align our organization to our customers’ needs in a more seamless and unified way, while supporting corporate strategy and accelerating growth.
In 2024, we continued to execute on the core elements of our “Growth Strategy”, which remains as follows:
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High Marking Segments: delivering on our growth areas and high-margin segments, we continued to show strong performance of our key proprietary brands such as Sky Premium Life® (“SPL”), Mediterranation® and C-Sept® / C-Scrub® with launches into new fast growing geographical regions.
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Generic Pharmaceuticals: focusing on our generic medicines’ capital with a view on a global commercial reach, focused portfolio and pipeline footprint, we continued to optimize our generics business and build a strong pipeline that will allow us to leverage our assets, know-how and sales network.
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Manufacturing of Pharmaceuticals: directing our manufacturing business by optimizing our production facilities and establishing a global footprint in the pharmaceutical fields of contract manufacturing organization (CMO) and contract development and manufacturing organization (CDMO).
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Global Networks, leveraging our extensive global network to access new markets and business segments, amplifying our reach and impact. We aim to expand and consort our sales distribution networks of our proprietary brands through strategic agreements in new regions and territories, such as the UAE and other GCC countries, Eastern Europe etc., while strengthening our market share in core markets.
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Corporate Reorganization: through vertical integration and efficiency, a corporate reorganization is underway to streamline costs and enhance asset and resource utilization through the integration of business units. A key component of this plan is to achieve operational efficiencies and economies of scale through organic growth and a cost optimization initiative aimed at significantly reducing recurring operating expenses and while maintaining the Company's growth outlook.
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Innovation: stepping up innovation through taken steps to deliver innovative products pipeline, by accelerating our R&D efforts on IP-driven products such as the CCX0722 obesity and weight management pill, CCDL24 an innovative treatment for gastrointestinal disorders, CNS, Prostate, Ovarian and Colorectal cancer treatments. Finally, our recently acquired AI-driven drug repurposing platform “Cloudscreen®”, aims to address major health challenges in various treatment areas.
We have made several strategic acquisitions of companies, products and technologies to complement our internal growth and expertise. These acquisitions have strengthened our core product technology infrastructure by providing additional manufacturing, marketing, and research and development capabilities, including the ability to manufacture our products, other product components and services.
Product Portfolio
Our product portfolio includes generics and over-the-counter (“OTC”) pharmaceutical products, innovative medicines, as well as nutraceuticals and biocides. This structure enables strong alignment and integration between manufacturing, operations, commercial regions, research & development and our global marketing and portfolio function, optimizing our product lifecycle across therapeutic areas and physical wellbeing.
Generic Medicines:
Generic medicines are the chemical and therapeutic equivalents of originator medicines and are typically more affordable in comparison to the originator’s products. Generic medicines are required to meet similar governmental requirements as their brand-name equivalents, such as those relating to current Good Manufacturing Practices (“GMP”), manufacturing processes and health authorities’ inspections, and must receive regulatory approval prior to their sale in any given country. Generic medicines may be manufactured and marketed if relevant patents on their brand-name equivalents (and any additional government-mandated market exclusivity periods) have expired.
We develop, manufacture and sell generic medicines in a variety of dosage forms, including tablets, capsules, liquids, ointments and creams.
Our portfolio of generic medicines includes: 1) ASTO-CHOL (Pravastatin); 2) Diorium (Omeprazole); 3) HEART-FREE (Clopidogrel); 4) the LIPICHOL (Atorvastatin); 5) Miltus (Donepezil); 6) Newzypra (Olanzapine); 7) the PNEUMO-KAST (Montelukast); 8) Sahar (Pioglitazone); 9) VIVALCID (Leucovorin); and 10) the Diabit-is (Sitagliptin). The table below presents all the generics, the medication uses purpose and the active ingredient of each product:
Drug
Purpose
Active Ingredient
ASTO-CHOL 40mg / ASTO-CHOL 20mg
Cholesterol
Pravastatin
Diorium 20mg
Stomach issues
Omeprazole
HEART-FREE 75mg
Heart-related issues
Clopidogrel
LIPICHOL 20mg / LIPICHOL 40mg
Cholesterol, Heart-related issues
Atorvastatin
Miltus 5mg / Miltus 10mg
Alzheimer's disease
Donepezil
Newzypra 5mg / Newzypra 20mg
Mood disorders, Psychosis
Olanzapine
PNEUMO-KAST 5mg / PNEUMO-KAST 4mg / PNEUMO-KAST 10mg
Asthma
Montelukast
Sahar 45mg / Sahar 30mg
Blood sugar
Pioglitazone
VIVALCID 25mg / VIVALCID 30mg
Cancer drug effects
Leucovorin
Diabit-is 50mg / Diabit-is 100mg
Type 2 diabetes
Sitagliptin
Nutraceuticals
Nutraceuticals is referring to a broad range of products derived from food sources that provide health benefits in addition to their basic nutritional value. While nutraceuticals are not classified as drugs, they are often used for their therapeutic effects in a manner similar to pharmaceuticals.
Our proprietary nutraceutical brands are Sky Premium Life® (“SPL”) and Mediterranation®. Our portfolio currently includes around 165 SKUs and more specifically product codes such as Vitamins and Minerals, Amino Acids, Botanical and other Herbal extracts used for health prevention and care needs.
Our products are classified into two main categories, “Products per Benefit” and “Products per Nutrient” as follows:
Products per Benefit
Products per Nutrient
General Wellbeing
Vitamins & Multivitamins
Immunity - Immune System Health
Minerals
Cardiovascular Health
Amino-acids
Bones & Joints
Herbal Extracts
Men’s Health
Specialized Formulas
Women’s Health
Others
Beauty (Skin-Hair-Nails)
Digestive Health - GI Health
Brain Health - Memory & Focus
Energy
Sports & Fitness
Mood, Stress & Sleep
Detoxification - Liver Health
Urinary System Health
Biocides
Our proprietary portfolio of branded biocides and antiseptic soaps comprises of our brands C-Sept® and C-Scrub®. The biocide C-Sept Pro 2% has a broad-spectrum antimicrobial formulation that combines 76% Isopropyl Alcohol and 2% chlorhexidine digluconate as active substances. On the other hand, our antiseptic soap, C-Scrub Wash 4% CHG, contains chlorhexidine digluconate as its active antiseptic substance, which is approved by the World Health Organization for human use. The broad antimicrobial spectrum of C-Scrub Wash 4% CHG encompasses Gram-positive and Gram-negative microbes, fungi, and viruses, and its efficacy has been demonstrated in numerous published clinical studies. C-Scrub Wash 4% CHG significantly reduces bacterial load on the skin with long lasting.
Other Pharmaceutical Products:
Our portfolio of other pharmaceutical products includes brands such as:
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Melatonin Spray®;
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Otikon™; and
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Bio-bebe®.
Melatonin Spray®, is recommended for addressing insomnia and jet lag, offering a peaceful sleep. It is manufactured using nanonemulsification technology and primarily contains melatonin, a lipophilic molecule. To increase the absorption of such molecules, nanoemulsification is one of the most effective methods. The absorption of the ingredient increases proportionally with the reduction of the micelle diameter. The diameter of a nanoemulsion micelle ranges between 50 and 300nm.
Otikon™ ear drops, is a class II medical device in the form of ear drops for spray application and contains natural ingredients used to relieve ear pain, remove excess ear wax (cerumen) and improve hearing. The efficacy and safety of Otikon™ ear drops, or naturopathic drops, has been studied in children with ear pain associated with otitis media. Among other ingredients, it contains olive oil, mullein olive oil extract (Verbascum Thapsus), marigold oil extract (Calendula officinalis), St. John’s wort oil extract (Hypericum perforatum) and lavender oil (Lavandula officinalis).
Bio-bebe® is an organic infant care and nutrition brand. All product lines are made exclusively of 100% organic, high-quality ingredients, and are produced with minimal environmental impact. The range includes a variety of baby foods such as organic powder milk, pear, carrot and banana purée, pasta with minced meat, whole grain rice cereals, whole grain cereal porridges and organic rice creams with vanilla milk. Additional brand extensions include baby cosmetics, liquid dish soaps and detergents.
In line with our growth strategy, we are constantly evaluating and optimizing our products portfolio, including through the sale of certain product rights in our operating or entering areas.
Below is an analysis per category of our inventory as of December 31, 2024:
Product Categories
Balance as of December 31,
2024($)
Percentage
of total
Inventory
Pharmaceuticals
3,113,558
66.42 %
Parapharmaceuticals
987,214
21.06 %
Manufacturing products
40,588
0.87 %
Raw materials
226,500
4.83 %
Dairy products
21,320
0.45 %
Veterinary medicine
0.02 %
Other
297,565
6.35 %
Less provisions
(332,375 )
Total
4,355,365
100 %
Business Offerings
Manufacturing
By being licensed under European Good Manufacturing Practices (GMP) and certified by the European Medicines Agency (EMA), we are competent to produce our own pharmaceutical products as well as ramping up revenue generation from manufacturing to third parties. Our facilities can accommodate a wide range of pharmaceuticals products in the form of tablets, capsules, syrups, nasal sprays, creams, gels, ointments and a broad range of other products such as nutraceuticals, cosmetics, biocides, and medical devices.
Full Line Wholesaler
As a full line pharmaceutical wholesaler, we distribute a comprehensive range of pharmaceutical products, including prescription medications, over-the-counter (OTC) drugs, medical devices, food supplements, nutraceuticals, cosmetics and other healthcare products, to various businesses within the healthcare sector such as retail pharmacies, hospitals, private clinics and other wholesale pharmaceutical distributors.
We utilize the latest technology in pharmaceutical storage and retrieval systems to ensure the quality and accuracy of its distribution. Our facility utilizes robotic technologies such as ROWA™ and SSI SCHAEFER A-Frame to automate our processes in the inventory management, procurement, order execution and tracking. Therefore, we achieve a zero-error rate, faster order picking, automated order picking process, higher cost-efficiency. We stay in the forefront of quality assurance and accuracy by investing in the most innovative machinery and software available to pharmaceutical distributors.
We provide telehealth services through ZipDoctor, which is a direct-to-consumer subscription-based telemedicine platform that provides its customers affordable, unlimited, 24/7 access to board certified physicians and licensed mental and behavioural health counsellors and therapists. ZipDoctor’s online telemedicine platform is available to customers across the United States and offers English and Spanish coverage with virtual visits taking place either by telephone or through a secured video chat platform.
Drug Repurposing
Cloudscreen® (Cloudscreen) is a multimodal platform for drug repositioning and repurposing. It integrates both 1D and 3D data types into its AI algorithm, which thoroughly analyzes the druggable proteome and variome, offering accurate predictions for repurposing of existing drugs toward new indications. The platform is accompanied by in vitro validation for both toxicity and effectiveness.
Finding new therapeutic applications for previously researched drugs can offer patients quicker access to novel treatments. Such a strategy not only benefits developers by reducing time and costs but also retains the original IP protection. Especially for high-cost conditions like cancer, exploring anti-cancer potentials in a vast array of off-patent drugs, which have already established their safety profiles, is a powerful tactic preferred by most leading pharmaceutical enterprises.
We have built on promising preclinical discoveries, predictive insights, and simulations generated by Cosmos Health's AI-powered Cloudscreen® drug repurposing platform. Recent in vitro studies have validated the therapeutic potential of a repurposed marketed drug for both indications, with inventors establishing a novel mechanism of action unique to each of the following disease. For instance:
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Multiple sclerosis (MS) is a chronic autoimmune disorder that affects the central nervous system, leading to a broad spectrum of symptoms and potentially significant disability. According to the Atlas of MS, the global prevalence of MS has increased from 2.3 million individuals in 2013 to 2.9 million in 2023.
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Gliomas are a diverse group of primary brain and spinal cord tumors originating from glial cells. In oncology, gliomas account for approximately 30% of all central nervous system tumors and about 80% of all malignant brain tumors.
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Hematologic malignancies encompass a diverse group of cancers affecting the blood, bone marrow, and lymphatic system, including leukemia, lymphoma, and multiple myeloma. These diseases account for a significant portion of cancer diagnoses worldwide, with varying incidence rates across different regions.
Our patent application for multiple sclerosis was filed under application number N2039644, while the application pertaining to glioma was submitted under number N2039647. Additionally, a third application, focusing on hematologic malignancies including multiple myeloma was filed under number N2039645. All three applications were officially filed on February 10, 2025.
These advancements build on promising preclinical discoveries, predictive insights, and simulations generated by Cosmos Health's AI-powered Cloudscreen drug repurposing platform. Recent in vitro studies have validated the therapeutic potential of a repurposed marketed drug for both indications, with inventors establishing a novel mechanism of action unique to each cancer type.
Research & Development
Our R&D activities are focused on novel medicines development activities that are World Intellectual Property Organization (“WIPO”) patented. Specifically, they includes preclinical assessment (including toxicology, pharmacokinetics, pharmacodynamics and pharmacology studies), clinical development (including pharmacology and the design, execution and analysis of global safety and efficacy trials), as well as regulatory strategy to deliver registration of our pipeline products. We develop novel innovative medicines in our core therapeutic and disease focus areas, such as CNS cancer, prostate, ovarian and colorectal cancer, and finally obesity and weight management.
In line with our growth strategy and our focus on internal growth that leverages our R&D capabilities, we have entered, and expect to pursue, in-licensing, acquisition, collaboration, funding and other partnership opportunities to supplement and expand our existing pipeline.
Obesity & Weight Management (CCX0722)
By employing novel amino acid-based cross-linkers, a series of water-absorbent polymeric networks, known as superabsorbent hydrogels (SAHs), our obesity product, CCX0722, has emerged as promising candidates for weight management and obesity. Spatial fillers are hydrophilic biopolymer grids capable of absorbing and retaining large amounts of water or biological fluids. CCX0722 is expected to reduce food intake by increasing satiety and reducing appetite. The product is being optimized in terms of its physicochemical properties and its effects on gut microflora through a series of in vitro studies and simulations
We are currently finalizing the scale-up production phase of CCX0722, paving the way for human clinical trials and targeting a market launch in the first or second quarter of 2026. Building on the successful completion of pilot production and previous development milestones, the Company is now actively engaging with contract research organizations (CROs) to complete the technical dossier, and clinical trials are set to be completed between the end of 2025 and the beginning of 2026. This strategic progress marks a critical step in positioning CCX0722 for regulatory submission and potential classification as a class III medical device.
CNS Cancer
We have acquired all rights arising from the patent filed with the WIPO under reference code PCT/EP2023/071865, related to CNS cancer treatment. The patent filing describes the repurposing of an existing drug to act on the Mucosa-associated lymphoid tissue lymphoma translocation protein 1 (MALT1), a key target in various diseases. This innovation proposes the use of the repurposed drug in addressing certain central nervous system (CNS) cancers, hematological cancers, allergic inflammation, and autoimmune diseases. Existing preclinical data are promising for the further development of these findings.
Prostate, Ovarian and Colorectal Cancers
The Company has secured buy-out rights and exclusive licensing for two patented anticancer drugs targeting, among others, prostate, ovarian, and colorectal cancers.
Both of these innovative anticancer therapies, developed through cutting-edge oncology research, are protected by international patents and set to commence Clinical Phase I trials. The first therapy is safeguarded by WIPO patent WO 2017/001439A1 and the second by WIPO patent WO 2018/011414 A1, with a focus on major markets such as the USA, EU, Canada, Japan, China, and Australia.
The innovation on the first novel drug development task provides novel hybrid esters of steroidal lactams and alkylating agents (LSEs, steroids that contain lactam group -NHC=O- into steroid ring/s conjugated with alkylating agents). The compounds are esters of steroidal lactams with derivatives of bis(2-chloroethyl) aminophenoxypropanoic acid. These compounds exhibit: 1. higher antitumor activity, 2. lower acute toxicity in comparison with non-lactam steroid alkylating esters and conventional alkylators.
Through the important cytotoxic anticancer activity against several human cancer cell lines and tumor systems in vitro and in vivo and their well-tolerated toxicity, these new molecules seems to hold a quite unique multi-targeting profile of biological and pharmacological effects on tumor cells, fairly different of the conventional and currently used anticancer drugs.
With regard to the status of the studies, they have been conducted for the lead molecules: in silico studies, in vitro and in vivo evaluation, in 38 human cancer cell lines and in 14 human cancer xenograft models, optimized drug synthesis, acute toxicity evaluation in mice, primary pharmacokinetic (PK) study in mice.
On the other hand, novel pharmacologically active 1,2,4-triazolo-[3,4-b]-1,3,4-thiadiazole derivatives (TADs) were prepared and tested in vitro and in vivo for multi-targeted anticancer activity. TADs demonstrated: (1) High cytostatic and cytotoxic activity against human cancer cell lines, in vitro. (2) High antitumor effects against human tumor xenografts in vivo. (3) Well tolerated systemic toxicity and relatively low acute toxicities, in vivo. (3) High effectiveness against cancer cells resistant to chemotherapeutics as, platinum complexes (cisplatin, carboplatin, oxaliplatin), doxorubicin, irinotecan, paclitaxel). (4) High activity against colon and pancreatic cancer cells that bear K-RAS and/or TP53 mutations. (5) High effectiveness against hormone refractory prostate cancer. (6) High effectiveness against hormone-therapy resistant breast cancer. (7) They induce strong inhibition of phosphorylation and activity of Topoisomerase IIa. (8) They induce strong inhibition of PI3K-AKT-mTOR signal transduction cellular pathway. (9) High activity against tumors that bear KRAS, BRAF, MEK1, PIK3CA mutations. (10) Very high effectiveness against cancer tumors that present defective mismatch repair system (dMMR) with high microsatellite instability (MSI-H). (11) They significantly enhance microsatellite instability in MSI-H cancer cells, as well as in MSI stable (MSS) cancer cells. (12) They trigger the expression of PDL-1 on cancer cells, inducing a dose dependent increment of 80-100% in 2-4 days after treatment. In silico computational and primary in vitro and in vivo studies confirm that TADs act as multi-targeted agents with a novel panel of pharmacological activity.
Studies have been conducted for the lead molecules: In Silico studies, in Vitro and in vivo evaluation (in 28 human cancer cell lines and in 10 human cancer xenograft models), Optimized drug synthesis, Acute toxicity evaluation in mice.
Product Insurance
We have insurance in place for our warehouses and the products in stock against any damage or theft, but we do not insure our products after the sale, since we are working under an Ex-works policy, and thus our clients are responsible for the transportation and the insurance of the products against any damage. In the future, we will continue to reevaluate our decision and may purchase product liability insurance to cover some of or all of our product liability risk.
Customers
Through our subsidiaries, we primarily sell pharmaceutical products directly to pharmacies and a limited number of large wholesale drug distributors who, in turn, supply-sell the products to other wholesalers, hospitals, pharmacies, and governmental agencies across the European Union member state. No customer accounted for 10% or more of our total consolidated revenues during the years ended December 31, 2024 and 2023.
We have a diverse customer base that includes wholesalers and retail healthcare providers. We make a significant amount of our sales to a relatively small number of pharmaceutical wholesalers. These customers represent an essential part of the distribution chain of our products. Pharmaceutical wholesalers have undergone, and are continuing to undergo, significant consolidation on a worldwide basis. This consolidation resulted in these groups gaining additional purchasing leverage and consequently increasing the product pricing pressures facing our business.
Geographic Markets
All of our revenues are generated from operations in the European Union and UK, or otherwise earned outside of the U.S. All of our foreign operations are subject to risks inherent in conducting business abroad, including price and currency exchange controls, fluctuations in the relative values of currencies, political and economic instability and restrictive governmental actions. Our geographical market sales distribution of our total consolidated revenues during the years ended December 31, 2024 and 2023 are as follows:
Greece
97.26 %
94.67 %
UK
1.56 %
4.53 %
Croatia
0.09 %
0.05 %
Bulgaria
0.12 %
0.39 %
UAE
0.63 %
0.00 %
Cayman Islands
0.00 %
0.02 %
Cyprus
0.34 %
0.34 %
Total
100.00 %
100.00 %
We currently sell the products to wholesalers through our own sales force. We do not sell directly to large drug store chains or through distributors in countries where we do not have our own sales staff. As part of our sales marketing and promotion program, we use direct advertising, direct mailings, trading techniques, direct and personal contacts, exhibition of products at medical conventions and sponsor medical education symposia.
Competition
Our pharmaceutical businesses are conducted in intensely competitive and often highly regulated markets. Many of our trading of pharmaceutical products face competition in the form of branded or generic drugs that treat similar diseases or indications. The principal forms of competition include efficacy, safety, ease of use, and cost effectiveness. The means of competition vary across product categories and business groups, demonstrating that the value of our trading products is a critical factor for success in all of our principal businesses.
Our competitors include other pharmaceutical companies, and smaller companies with generic drug and consumer healthcare products. We compete with other companies that manufacture and sell products that treat diseases or indications similar to those treated by our trading pharmaceutical products.
Our competitive position in pharmaceutical sector is affected by several factors including among others, the amount and effectiveness of our and our competitors’ promotional resources, customer acceptance, product quality, our and our competitors’ introduction of new products, ingredients, claims, dosage forms, or other forms of innovation, and pricing, regulatory and legislative matters (such as product labeling, patient access and prescription).
The branded pharmaceutical industry is highly competitive. Our products compete with products manufactured by many other companies in highly competitive markets throughout the EU territory and internationally as well. Competitors include many of the major brand name and generic manufacturers of pharmaceutical products. If competitors introduce new products, delivery systems or processes with therapeutic or cost advantages, our products can be subject to progressive price reductions or decreased volume of sales, or both.
In the generic pharmaceutical market, we might face intense competition from other generic drug manufacturers, brand name pharmaceutical companies, existing brand equivalents and manufacturers of therapeutically similar drugs.
By specializing in high barrier to entry products, we endeavor to market more profitable and longer-lived products relative to commodity generic products. We believe that our competitive advantages include our integrated team-based approach to product development that combines our formulation, regulatory, legal and commercial capabilities; our ability to introduce new generic equivalents for brand-name drugs; our ability to meet customer expectations; and the breadth of our existing generic product portfolio offering.
Newly introduced generic products with limited or no other generic competition typically garner higher prices. At the expiration of the exclusivity period, other generic distributors may enter the market, resulting in a significant price decline for the drug. Consequently, the maintenance of profitable operations in generic pharmaceuticals depends, in part, on our ability to select, develop and launch new generic products in a timely and cost-efficient manner and to maintain efficient, high quality business capabilities.
We compete in the nutritional industry with our own branded nutraceutical products against companies that sell through retail stores, as well as against other direct selling companies. We compete against manufacturers and retailers of nutraceutical products which are distributed through supermarkets, drug stores, health food stores, vitamin outlets and mass market retailers, among others. We believe that the principal components of competition in nutraceutical products are expertise and service, high product quality, diversification and differentiation, price and brand recognition.
Operating conditions have become more challenging under the mounting global pressures of competition, industry regulation and cost containment. We continue to take measures to evaluate, adapt and improve our organization and business practices to better meet customer and public needs. We also seek to continually enhance the organizational effectiveness of all of our functions, including efforts to accurately and ethically launch and promote our products.
Information Systems
The Company operates its full-service wholesale pharmaceutical distribution facilities in Europe on one primary enterprise resource planning (“ERP”) system that provides for, among other things, electronic order entry by customers, invoice preparation and purchasing, and inventory tracking. We are currently making significant investments to enhance and upgrade our ERP system.
Additionally, we are improving our entity-wide infrastructure environment to drive efficiency, capabilities, and speed to market. We will continue to invest in advanced information systems and automated warehouse technology. For example, in an effort to comply with future pedigree and other supply chain custody requirements we have made significant investments in our secure supply chain information systems.
The Company processes a substantial portion of its purchase orders, invoices, and payments electronically. However, it continues to make substantial investments to expand its electronic interface with its suppliers. The Company has integrated warehouse operating system, which are used to manage the majority of transactional volume. The warehouse operating system has improved the distribution services productivity and operating leverage.
Government Regulations
Government authorities in the EU and in other countries extensively regulate, among other things, the research, development, testing, approval, manufacturing, labeling, post-approval monitoring and reporting, packaging, advertising and promotion, storage, distribution, marketing and export and import of pharmaceutical products. As such, our branded pharmaceutical products and the generic product candidates are subject to extensive regulation both before and after approval. The process of obtaining regulatory approvals and the subsequent compliance with applicable state, local and foreign statutes and regulations require the expenditure of substantial time and financial resources. Failure to comply with these regulations could result in, among other things, warning letters, civil penalties, delays in approving or refusal to approve a pharmaceutical product.
A main part of our business relates to the trading of branded and generic pharmaceutical products and medicines within the EU member states. In order to be able to operate our business, we need to comply with EU regulations, as well as EU member states regulations that govern various operations of our business. The Greek government regulation that applies to our business requires the granting to our operating subsidiaries of the Authorization for Wholesale Distribution of Medicinal Products for human use. In order for this Authorization to be granted, the companies need to always comply with certain Good Distribution Practices (“GDP”) that mainly assure the proper storage, handling, distribution and trade of the pharmaceutical products.
On July 22, 2015, the National Medicines Agency in Greece approved the license of wholesale sale of pharmaceutical products under the name SkyPharm SA with set validity at five years and an expiration date of July 22, 2020. Subsequently, on June 15, 2020, SkyPharm legally and timely submitted the application for renewal of the wholesale license of pharmaceutical products to the National Medicines Agency. The National Medicines Agency did not respond, therefore the Company asked for an immediate decision on the renewal. Two months after the filing of the no. 3459 / 15.01.2021 letter and almost nine months after the no. 627615.06.2020 company application for the renewal, the National Medicines Agency replied by rejecting the renewal request on March 9, 2021 (ref. 62769 / 20-25.02.2021). In addition, document No. 127351-16.12.2021 of EOF (Greek National Medicines Organization) to SkyPharm states that after an inspection of EOF at the premises of Doc Pharma, we did not have a wholesale license in violation of article 106 par. 1b and par. 1c of the ministerial decision D.YG3a / GP.32221 / 29-4-2019. The National Medicines Agency imposed a fine of €15,000 ($16,225) on SkyPharm for the above case, which was included in “General and administrative” expense on the accompany statement of operations and comprehensive loss for the 12-month period ended December 31, 2023.
Decahedron received its Wholesale Distribution Authorization for human use on February 5, 2021, from the UK Medicines and Healthcare Products Regulatory Agency (“MHRA”) in accordance with Regulation 18 of the Human Medicines Regulations 2012 (SI 2012/1916) and it is subject to the provisions of those Regulations and the Medicines Act 1971. This License will continue to remain in force from the date of issue by the Licensing Authority unless cancelled, suspended, revoked or varied as to the period of its validity or relinquished by the authorization holder.
Cosmofarm received its Wholesale Distribution Authorization for human use on February 15, 2019, from the National Organization for Medicines. The license is valid for a period of five years and pursuant to the EU directive of (2013/C343/01). Also, Cosmofarm was granted with GDP certificate on November 11, 2019.
Our subsidiary, Cana SA, is a holder of Good Manufacturing Practices license (GMP), which means that it is certified for fulfilling the minimum standards that a medicines manufacturer must meet in the production processes.
Our subsidiaries are ISO 9001 certified for a management system for the trade and distribution of pharmaceuticals. As part of the certification process by the International Organization for Standardization, we need to be compliant with the General Data Protection Regulation (“GDPR”) adopted by the European Union in May 2018. GDPR applies to the processing of personal data of persons in the EU by a controller or processor.
Research and Development
The Company entered into a Research & Development agreement with Doc Pharma S.A. on May 17, 2021. Under this agreement, Doc Pharma is responsible for the research, development, design, registration, copy rights and licenses of 250 nutritional supplements for the final products called Sky Premium Life®. More specifically, Doc Pharma is responsible for the product development and the Company has added 165 of such products codes in its portfolio as of December 31, 2024. The licenses purchased by Doc Pharma SA are capitalized and included in “Goodwill and intangible assets, net” of the Company’s Consolidated Balance Sheets as of December 31, 2024. Thus, no relevant R&D expense had been charged to the Company’s Consolidated Statements of Operations and Comprehensive Loss, concerning this agreement.
On June 25, 2022, the Company signed a research and development (“R&D”) agreement with a third party (CloudPharm PC), through which the Company assigned to the third party the development of new products and services in the field of health, focusing on the human intestinal microbiome. The project includes two phases. Phase 1 has a 20-month duration and its cost amounts to EUR 758,000 ($838,450) and phase 2, has a 22-month duration and a cost of EUR 820,000 ($907,084). The amount will be due and payable upon completion of the corresponding phases. The Company records the corresponding R&D expense based on the project’s progress, which is invoiced by the third party in the relevant period. For the 12-month periods ended December 31, 2024 and 2023, the Company incurred $0 and $164,859 of such costs respectively included in “Research and Development costs” in the Company’s Consolidated Statements of Operations and Comprehensive Loss.
On January 23, 2024, the Company completed the acquisition of Cloudscreen, a cutting-edge Artificial Intelligence (AI) powered platform. The acquisition is pursuant to a purchase agreement announced on October 11, 2023. Cloudscreen is a multimodal platform specialized in drug repurposing, a process that involves uncovering new target proteins or indications for existing drugs for use in treating different diseases. The total purchase price amounted to $637,080 incorporating both cash and stock consideration. The platform is included in “Goodwill and intangible assets, net” in the Company’s Consolidated Balance Sheets.
On December 3, 2024, the Company entered into a Research Study Agreement with the National Hellenic Research Foundation (“NHRF” or the “Contractor”) for an in vitro study supporting modifications to an existing invention. This study is conducted under a prior agreement between the Company, NHRF, and CloudPharm PC, originally signed on June 15, 2022. Under the agreement, while conducting the study, NHRF will ensure scientific rigor, provide periodic updates, and maintain confidentiality. Cosmos Health will supply the necessary documentation and support to the research. Ownership of the research protocol is shared among CloudPharm PC, NHRF and Cosmos Health, while NHRF retains control over its methodologies. NHRF is prohibited from publishing findings without Cosmos Health’s approval or using the study for any other purpose. The total contract value is €60,000 plus VAT, payable in three installments. For the 12-month period ended December 31, 2024, the Company incurred €15,000 ($15,743) in costs related to this agreement, which were recorded under “Research and Development costs” in the Company’s Consolidated Statements of Operations and Comprehensive Loss.
On December 6, 2024, the Company signed an Independent Contractor Agreement with a third-party contractor (the “Contractor”). The Contractor will provide oncology research and development services exclusively to the Company. The contract lasts three years (December 5, 2024 - December 5, 2027) and may be extended by mutual agreement. The Company may terminate the contract immediately for specific causes, including felony conviction, fraud, or loss of medical license. Either party may terminate the contract with a 30-day written notice. Certain compensation obligations will remain effective after termination. The monthly consideration to be paid to the Contractor is based on the commencement of the Clinical Trials (as defined in the agreement) and New Drugs Applications (as defined in the agreement) and additional cash and stock consideration is payable based on certain milestones. None of the milestones were met as of December 31, 2024, and thus the Company has incurred no expenses as of the end of the period.
On December 31, 2024, the Company signed an agreement with a related party, DocPharma SA (the “Licensor”), through which the Company obtained a royalty-bearing, exclusive worldwide license to actively commercialize the patents owned by the Licensor, through research and preclinical and clinical trials for the useful life of the patents, or for 20 years, whichever is longer. The patents, filed in 2016 and 2017 respectively, cover innovative treatments for cancer. The terms of the agreement include an initial payment of EUR 500,000 due by the end of 2024, followed by fixed annual payments of EUR 350,000 during the five-year Start-Up Term from 2025 to 2030. After the Start-Up Term, the Company will pay an 1.5% royalty on annual net sales of licensed products covered by an issued patent. Moreover, the Company retains an optional buy-out right for a total amount of EUR 7,500,000, which can be exercised with a 60 day-notice and a 60-day close period. The Company also has the right to sublicense the patents. For the 12-month period ended December 31, 2024, the Company incurred EUR 500,000 ($517,550) in royalties concerning this agreement, which were included in “Research and Development costs” in the Company’s Consolidated Statements of Operations and Comprehensive Loss.
Distribution & Trade Agreements
On July 1, 2021, the Company’s subsidiary, SkyPharm SA, entered into an exclusive distribution agreement with a company based in Germany (“Distributor A”), whereas SkyPharm appointed Distributor A to be the responsible partner for the distribution, promotion, trade marketing, logistics and sale of the nutraceuticals manufactured and supplied by SkyPharm (Sky Premium Life®), in the territories of Austria and Germany. Distributor A places purchase orders with SkyPharm at the company’s address and a purchase order is necessary to initiate any shipment.
On July 7, 2021, SkyPharm SA signed a trade agreement with a company specializing in e-commerce mall advice and operation (“Distributor B”). Based on the agreement, SkyPharm sells its own branded products Sky Premium Life® to final consumers through the e-commerce store opened by Distributor B on Tmall International MALL and Distributor B provides platform operation services to SkyPharm. The services provided by Distributor B include mall construction, mall operation and network promotion, along with collection, settlement, customer service, logistics and distribution.
On November 25, 2021, SkyPharm SA signed a trade agreement with a wholesaler which operates in the storage, distribution, trading and promotion of pharmaceutical products (“Distributor C”). Based on the agreement, Distributor C is appointed as the exclusive representative for the promotion and distribution of our proprietary nutraceutical products Sky Premium Life® in Greece.
During July 2021, the Company’s subsidiary Decahedron Ltd created a distribution page on Amazon UK, through which it sells, advertises and promotes our own proprietary branded nutraceutical product line Sky Premium Life®, directly to final consumers.
On September 22, 2022, the Company entered into a distribution agreement with a third party in order to become the distributor of Monkeypox Virus Real-Time PCR Detection Kits. Cosmos has exclusive distribution rights for Greece and Cyprus, with the opportunity to distribute the test kits across Europe on a non-exclusive basis.
On June 27, 2024, the Company signed an exclusive distribution agreement (the “Agreement”) with Pharmalink for its Sky Premium Life products in the UAE. As part of the Agreement, Pharmalink will be responsible for all key functions, including sales and marketing, regulatory affairs, logistics, supply, and distribution of Sky Premium Life® products in the UAE. Cosmos Health has secured its first purchase order from Pharmalink for 130,000 units and anticipates receiving orders of more than 500,000 units in the first year and in excess of 3,000,000 units over the next five years.
International Cannabis Corp. (f/k/a Kaneh Bosm Biotechnology Inc.) - Cannabis
Distribution and Equity Agreement
On March 19, 2018, the Company entered into a Distribution and Equity Acquisition Agreement (the “Distribution and Equity Acquisition Agreement”) with Marathon Global Inc. (“Marathon”), a company incorporated in the Province of Ontario, Canada. Marathon was formed to be a global supplier of Cannabis, cannabidiol (“CBD”) and/or any Cannabis Extract products, extracts, ancillaries and derivatives (collectively, the “Products”). The Company was appointed the exclusive distributor of the Products initially throughout Europe and on a non-exclusive basis wherever else lawfully permitted. The Company has no present intention to distribute any Products under this Agreement in the United States or otherwise participate in cannabis operations in the United States. The Company intends to await further clarification from the U.S. Government on cannabis regulation prior to determining whether to enter the domestic market.
The above transaction closed on May 22, 2018 after the due diligence period, following which the Company received: (a) a 33 1/3% equity interest or 5 million shares in Marathon as partial consideration for the Company’s distribution services; and (b) received cash of CAD $2,000,000, subject to repayment in common shares of the Company if it failed to meet certain performance milestones. The Company was entitled to receive an additional CAD $2,750,000 upon the Company’s receipt of gross sales of CAD $6,500,000 and an additional CAD $2,750,000 upon receipt of gross sales of CAD $13,000,000. The Company was also given the right to nominate one director to the Marathon board of directors. Since Marathon was a newly formed entity with no assets and no activity, the Company attributed no value to the 5 million shares in Marathon which was received as consideration for the distribution services.
The Distribution and Equity Acquisition Agreement was to remain in effect indefinitely unless Marathon fails to provide Market Competitive (as defined) product pricing and Marathon has not become profitable within five years of the agreement. On March 20, 2023, the Company sent a termination notice to Marathon, which became effective on April 19, 2023 as a result of Marathon’s failure to satisfy these conditions. The Company had accounted for its obligation to issue a variable number of the Company’s Common Shares as Share-settled debt obligation in accordance with ASC Topic 480, Distinguishing Liabilities from Equity (“ASC 480”), which was measured at fair value or the settlement amount of $1,554,590 (CAD $2 million). Due to termination of the Distribution and Equity Acquisition Agreement, the Company recorded a gain on extinguishment of debt of $1,554,590 due to the write-off of the share settled debt obligation, for the 12-month period ended December 31, 2023.
Employees & Human Capital
As of December 31, 2024, we had 149 full-time employees in total, of which 15 engaged in sales department, seven in procurement department, five in marketing department, 38 in warehouse services, 26 in logistics/transportation works, six in quality assurance, 12 in finance & accounting department, six in management, four in cleaning, nine in administration, 12 in call center, six in the R&D department and three in IT department. Our global workforce is comprised of the following ethnicities: 99% Caucasian and 1% Asian. Of those employees, 38% are female. Our employees are not members of any unions. We consider our relations with our employees to be good and have not experienced any work stoppages, slowdowns or other serious labor problems that have materially impeded our business operations.
We have a team with a significant track record in the pharmaceutical business. In order to achieve our strategic objectives, we have, and will remain, focused on hiring and retaining a highly skilled management team that has extensive experience and specific skill sets relating to the sales, selection, development and commercialization of pharmaceutical products. We intend to continue our efforts to build and expand this team as we grow our business. No assurances can be given that the Company will be able to retain any additional persons.
Our human capital resources objectives include, as applicable, identifying, recruiting, retaining, incentivizing and integrating our existing and additional employees. The principal purposes of our equity incentive plans are to attract, retain and motivate selected employees, consultants and directors through the granting of stock-based compensation awards and cash-based performance bonus awards.
Attracting and retaining top talent is an integral part to our success. We intentionally build a workforce of people with viewpoints and backgrounds as diverse as the customers we serve around Europe. As a responsibility to our team and in an evolving effort, we engage employees with meaningful careers and development opportunities to grow and succeed.
Available Information
Our internet address is https://www.cosmoshealthinc.com/. We post links on our website to the following filings as soon as reasonably practicable after they are electronically filed or furnished to the SEC: annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, proxy statements on Schedule 14D, and any amendment to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended. All such filings are available through our website free of charge. The information on our Internet website is not incorporated by reference into this Form 10-K or our other securities filings and is not a part of such filings.
Information about the operation of the Public Reference Room can be obtained by calling the SEC at 1-800-SEC-0330 or 1-202-551-8090. You can also access our filings through the SEC’s internet address site: www.sec.gov, under our Nasdaq ticker “COSM”.

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ITEM 1A. RISK FACTORS
Item 1A. Risk Factors
The Company is not required to provide the information called for in this item due to its status as a Smaller Reporting Company, however we describe below some of the risks we believe are material to our business. You should carefully consider the following risks in evaluating us and our business. You should also refer to the other information set forth in this report, including the information set forth in “Business” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” as well as in our consolidated financial statements and the related notes. Our business prospects, financial condition or results of operations could be adversely affected by any of the following risks.
Regulatory and Litigation Risks
Laws and regulations regarding our business may prohibit or restrict our ability to sell our products in some markets or require us to make changes to our business model in some markets. Our products, business practices and manufacturing activities are subject to extensive government regulations and could be subject to additional laws and regulations.
Taxation and transfer pricing could adversely affect our results of operations and financial condition
We are subject to foreign tax and intercompany pricing laws, including those relating to the flow of funds between our U.S. parent company and our foreign subsidiaries. These pricing laws are designed to ensure that appropriate levels of income and expense are reported by our U.S. and foreign entities, and that they are taxed appropriately. Regulators in the United States and in foreign markets closely monitor our corporate structures, intercompany transactions, and how we effectuate intercompany fund transfers. Our effective tax rate could increase, and our results of operations and financial condition could be materially adversely affected if regulators challenge our corporate structures, transfer pricing methodologies or intercompany transfers. We are eligible to receive foreign tax credits in the United States for certain foreign taxes actually paid abroad. In the event any audits or assessments are concluded adversely to us, we may not be able to offset the consolidated effect of foreign income tax assessments through the use of U.S. foreign tax credits. Because the laws and regulations governing U.S. foreign tax credits are complex and subject to periodic legislative amendment, we may not be able to take advantage of any foreign tax credits in the future. In addition, changes in the amount of our total and foreign source taxable income may also limit our ability to take advantage of foreign tax credits in the future. The various customs, exchange control and transfer pricing laws are continually changing, and are subject to the interpretation of governmental agencies. We collect and remit value-added taxes and sales taxes in jurisdictions and states in which we have determined that nexus exists. Despite our efforts to be aware of and to comply with such laws and changes to the interpretations thereof, we may not be able to continue to operate in compliance with such laws. We may need to adjust our operating procedures in response to these interpretational changes, and such changes could have a material adverse effect on our results of operations and financial condition.
Changes in consumer behavior
Consumer behavior in recent years shows an increasing trend in the health-medicines sector, especially during the period of health crisis. It is observed that shopping habits and consumer behavior in general have changed since the coronavirus pandemic. The coronavirus pandemic and the responses thereto around the world could adversely impact our business and operating results. Consumers have turned to basic necessities and digital channels and e-commerce while physical networks are underperforming.
Management of further developments
In recent years, the Company has been steadily increasing its turnover, while expanding its range of products and its own branded nutraceutical products, has acquired the latest technology drug storage systems to ensure quality and accuracy (zero error rates) in their distribution. The further increase of the Company’s operations may lead, among other things, to increased capital needs, new investments in equipment and information systems, and requirements for capacity building. Failure to raise new capital will have a significant impact on the non-implementation of the required investments necessary to increase sales. Under these conditions, the growth of the Company’s activity, its financial results and its financial situation will be negatively affected.
Currency exchange rate fluctuations could adversely affect our results of operation and financial condition
In 2024, we recognized 100% percent of our net sales in markets outside the United States, the majority of which were recognized in each market’s respective local currency. We purchase inventory from companies in foreign markets, some of them in U.S. dollars. In preparing our financial statements, we translate net sales and expenses in foreign countries from their local currencies into U.S. dollars using average annual exchange rates. Because our sales are in foreign countries, exchange rate fluctuations may have a significant effect on net sales and earnings. Our reported earnings have been significantly affected by fluctuations in currency exchange rates, with net sales and earnings generally increasing with a weaker U.S. dollar and decreasing with a strengthening U.S. dollar.
Geopolitical issues, conflicts and other global events could adversely affect our results of operations and financial condition
Because our business is conducted outside of the United States, it is subject to global political issues and conflicts such as the current war in the Ukraine. Such political issues and conflicts could have a material adverse effect on our results of operations and financial condition if they escalate in areas in which we do business. In addition, changes in and adverse actions by governments in foreign markets in which we do business could have a material adverse effect on our results of operations and financial condition.
Climate change and related legislation or regulations may adversely impact our business, including potential financial, operational and physical impacts.
The nature of our business has not required any material capital expenditures to comply with federal, state or local provisions enacted or adopted regulating the discharge of materials into the environment. No material capital expenditures to meet such provisions are anticipated. Such regulatory provisions did not have a material effect upon our results of operations or competitive position during the year ended December 31, 2024.
Cybersecurity risks and the failure to maintain the integrity of data could expose us to data loss, litigation and liability, which could adversely affect our results of operations and financial condition.
We collect and retain large volumes of data from employees and independent consultants, including credit card numbers and other personally identifiable information, for business purposes, including transactional and promotional purposes. Our various information technology systems enter, process, summarize and report such data. The integrity and protection of this data are critical to our business. We are subject to significant security and privacy regulations, as well as requirements imposed by the credit card industry. Similarly, a failure to adhere to the payment card industry’s data security standards could cause us to incur penalties from payment card associations, termination of our ability to accept credit or debit card payments, litigation and adverse publicity, any of which could have a material adverse effect on our business and financial condition. Maintaining compliance with these evolving regulations and requirements could be difficult and may increase costs. In addition, a penetrated or compromised data system or the intentional, inadvertent, or negligent release or disclosure of data could result in theft, loss or fraudulent or unlawful use of company, employee, consultant or guest data which could adversely affect our reputation, disrupt our operations, or result in remedial and other costs, fines or lawsuits, which could have a material adverse effect on our results of operations and financial condition. Although we take measures to protect the security, integrity and confidentiality of our data systems, we experience cyber-attacks of varying degrees and types on a regular basis. Our infrastructure may be vulnerable to these attacks, and in some cases, it could take time to discover them. Breaches of our data systems, or those of our vendors, whether from circumvention of security systems, denial-of-service attacks or other cyber-attacks, hacking, “phishing” attacks, computer viruses, ransomware or malware, employee or insider error, malfeasance, social engineering, vendor software supply chain compromises, physical breaches or other actions, could result in material interruptions or malfunctions in our or such vendors’ websites, applications, data processing, or disruption of other business operations. For various reasons or circumstances, our employees may work remotely from time to time. Additionally, outside parties may attempt to fraudulently induce employees, users, or customers to disclose sensitive information to gain access to our data or our users’ or customers’ data. Any such breach or unauthorized access could result in the unauthorized disclosure, misuse or loss of sensitive information and lead to significant legal and financial exposure, regulatory inquiries or investigations, loss of confidence by our sales force, disruption of our operations and damage to our reputation. These risks are heightened as we work with third-party partners and as our sales force uses social media, as the partners and social media platforms could be vulnerable to the same types of breaches.
We may be required to expend significant capital and other resources to protect against and remedy any potential or existing security breaches and their consequences. A cyber-attack could also lead to litigation, fines, other remedial action, heightened regulatory scrutiny and diminished customer confidence. In addition, our remediation efforts may not be successful, and we may not have adequate insurance to cover these losses. The unavailability of the information systems or the failure of these systems to perform as anticipated for any reason could disrupt our business and could have a material adverse effect on our business, results of operations, cash flows and financial condition. Moreover, cyber-attacks against the Ukrainian government and other countries in the region have been reported in connection with the recent conflicts between Russia and Ukraine. To the extent such attacks have collateral effects on global critical infrastructure, financial institutions or us, such developments could adversely affect our business, operating results and financial condition. At this time, it is difficult to assess the likelihood of such threat and any potential impact at this time.
Inflation and rising interest rates in the EU
In December 2024, the EU annual inflation was at 2.4%, significantly lower, compared with 2023, when the annual inflation reached the highest level ever measured at 3.4%. The annual average change in the harmonized index of consumer prices (HICP) in the EU during the period 2015-2024 was 2.52%. The high inflation has adversely affected our business due to the higher costs of purchasing raw materials, the higher transportation costs and the significantly increased operating costs. Moreover, the significant rise in the interest rates during 2023 may also adversely affect our business since all of our loan facilities carry floating interest rates and this may cause increased financing outflows. In 2024 we noticed a slight decrease in the floating rates mostly affected by the interest rate cuts imposed by the Federal Reserve, however they are on average still significantly higher compared to all recent periods prior to 2023.
Inflation Reduction Act of 2022 in the U.S.
The U.S. Inflation Reduction Act of 2022 (the “IRA”), includes several provisions that may impact our business to varying degrees, including provisions that reduce the out-of-pocket spending cap for Medicare Part D beneficiaries from $7,050 to $2,000 starting in 2025, thereby effectively eliminating the coverage gap; impose new manufacturer financial liability on certain drugs under Medicare Part D, allow the U.S. government to negotiate Medicare Part B and Part D price caps for certain high-cost drugs and biologics without generic or biosimilar competition; require companies to pay rebates to Medicare for certain drug prices that increase faster than inflation; and delay until January 1, 2032 the implementation of the U.S. Department of Health and Human Services (HHS) rebate rule that would have limited the fees that pharmacy benefit managers can charge. Further, under the IRA, orphan drugs are exempted from the Medicare drug price negotiation program, but only if they have one rare disease designation and for which the only approved indication is for that disease or condition. If a product receives multiple rare disease designations or has multiple approved indications, it may not qualify for the orphan drug exemption. Although we do not have current sales in the United States, the effects of the IRA on any future business of ours and the healthcare industry in general is not yet known.
Development, regulatory approval & marketing of products
The discovery and development of drugs, vaccines and biological products are time consuming, costly and unpredictable. The outcome is inherently uncertain and involves a high degree of risk due to the following factors, among others:
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The process from early discovery to design and adequate implementation of clinical trials to regulatory approval can take many years and have high costs.
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We may have difficulties recruiting and enrolling patients for clinical trials on a consistent basis.
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Product candidates can and do fail at any stage of the process, including as the result of unfavorable pre-clinical and clinical trial results, or unfavorable new pre-clinical or clinical data and further analyses of existing pre-clinical or clinical data, including results that may not support further clinical development of the product candidate or indication.
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We may need to amend our clinical trial protocols or conduct additional clinical trials under certain circumstances, for example, to further assess appropriate dosage or collect additional safety data.
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We may not be able to meet anticipated pre-clinical or clinical endpoints, commencement and/or completion dates for our pre-clinical or clinical trials, regulatory submission dates, regulatory approval dates and/or launch dates.
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We may not be able to successfully address all the comments received from regulatory authorities such as the FDA and the EMA, or be able to obtain approval for new products and indications from regulators.
Regulatory approvals of our products depend on myriad factors, including regulatory determinations as to the product’s safety and efficacy. In the context of public health emergencies like the COVID-19 pandemic, regulators evaluate various factors and criteria to potentially allow for marketing authorization on an emergency or conditional basis.
Additionally, clinical trial and other product data are subject to differing interpretations and assessments by regulatory authorities. As a result of regulatory interpretations and assessments or other developments that may occur during the review process, or even after a product is authorized or approved for marketing, a product’s commercial potential could be adversely affected by potential emerging concerns or regulatory decisions regarding or impacting the scope of indicated patient populations, labeling or marketing, manufacturing processes, safety issues and/or other matters, including decisions relating to emerging developments regarding potential product impurities. Finally, certain of our products have received and may in the future receive approvals under accelerated approval pathways where continued approval may be contingent upon confirmatory studies demonstrating the anticipated clinical benefit and/or safety profile.

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ITEM 1B. UNRESOLVED STAFF COMMENTS
Item 1B. Unresolved Staff Comments
Not applicable.

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ITEM 2. PROPERTIES
Item 2. Properties
The Company rents and owns the below corporate offices and facilities:
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U.S. corporate office is located at 141 W. Jackson Blvd, Suite 4236, Chicago, Illinois 60604. The first rent lease commenced in 2015 and has been amended several times throughout the years. The last amendment to that lease was on March 20, 2023 through July 31, 2025. The monthly rate is currently $831 per month.
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Our Greece office and that of SkyPharm SA are located at 5 Agiou Georgiou Street, 55438, Pilea, Thessaloniki, Greece. The Company has signed a new lease for a three-year period which commenced on October 1, 2024 at the rate of €2,202 ($2,383) per month for this office.
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The offices of Decahedron are located at Unit 14 Spice Green Centre, Flex Meadow, Harlow, CM19 5TR, Essex, U.K. The commencement of the lease was on September 25, 2020 at the rate of ₤3,500 ($4,473) per month.
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The corporate offices of CANA SA are located at Konstantinoupoleos 19, 14122, Irakleio, Athens, Greece. The Company has a signed lease which is annually renewed. The monthly rate for this office amounts to €4,244 ($4,592). Additionally, CANA SA wholly owns a 54,000 sq. ft production facility located in Irekleio, Athens, Greece, which is s licensed under European Good Manufacturing Practices (GMP) and certified by the European Medicines Agency (EMA) for the manufacture of pharmaceuticals, food supplements, cosmetics, biocides, and medical devices.
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The offices of Cosmofarm are located at Gonata Stylianou 15, Peristeri, Attiki, Greece 12133. The Company purchased the building for a total sum of $1,054,872 in cash, on April 24, 2023.
Each of the above facilities is adequate for the Company’s current needs.

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ITEM 3. LEGAL PROCEEDINGS
Item 3. Legal Proceedings
We are not aware of any pending legal proceeding to which any of our officers, directors, or any beneficial holders of 5% or more of our voting securities are adverse to us or have a material interest adverse to us.

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ITEM 4. MINE SAFETY DISCLOSURE
Item 4. Mine Safety Disclosures
None.
PART II

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ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY
Item 5. Market for Registrant’s Common Equity and Related Stockholder Matters and Issuer Purchases of Equity Securities
Market Information
Our common stock became listed on the Nasdaq Capital Market on February 28, 2022 under the symbol “COSM.” Our common stock was previously quoted on the OTC QX.
Holders of Our Common Stock
As of April 15 2025, we had 27,284,658 shares of our common stock issued and 27,198,161 shares outstanding, held by approximately 626 stockholders of record. The number of record holders does not include beneficial owners of common stock whose shares are held in the names of various broker-dealers and registered clearing agencies.
Dividends
We have not paid any cash dividends to date and do not anticipate or contemplate paying dividends in the foreseeable future. We intend to retain future earnings, if any, to finance the expansion of our business, and we do not anticipate that any cash dividends will be paid in the foreseeable future. Our future payment of dividends will depend on our earnings, capital requirements, expansion plans, financial condition and other relevant factors that our board of directors may deem relevant. Our accumulated deficit currently limits our ability to pay dividends.
Penny Stock
The SEC has adopted rules that regulate broker-dealer practices in connection with transactions in penny stocks. Penny stocks are generally equity securities with a market price of less than $5.00, other than securities registered on certain national securities exchanges, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or system. While our common stock is currently listed on the Nasdaq Capital Market and not subject to the penny stock rules, should we not be able to maintain our listing on Nasdaq, the penny stock rules require a broker-dealer, prior to a transaction in a penny stock, to deliver a standardized risk disclosure document prepared by the SEC, that: (a) contains a description of the nature and level of risk in the market for penny stocks in both public offerings and secondary trading; (b) contains a description of the broker’s or dealer’s duties to the customer and of the rights and remedies available to the customer with respect to a violation of such duties or other requirements of the securities laws; (c) contains a brief, clear, narrative description of a dealer market, including bid and ask prices for penny stocks and the significance of the spread between the bid and ask price; (d) contains a toll-free telephone number for inquiries on disciplinary actions; (e) defines significant terms in the disclosure document or in the conduct of trading in penny stocks; and (f) contains such other information and is in such form, including language, type size and format, as the SEC shall require by rule or regulation.
The broker-dealer also must provide, prior to effecting any transaction in a penny stock, the customer with (a) bid and offer quotations for the penny stock; (b) the compensation of the broker-dealer and its salesperson in the transaction; (c) the number of shares to which such bid and ask prices apply, or other comparable information relating to the depth and liquidity of the market for such stock; and (d) a monthly account statement showing the market value of each penny stock held in the customer’s account.
In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from those rules, the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written acknowledgment of the receipt of a risk disclosure statement, a written agreement as to transactions involving penny stocks, and a signed and dated copy of a written suitability statement.
Securities Authorized for Issuance under Equity Compensation Plans
Omnibus Equity Incentive Plan
On September 19, 2022, the Company held a Board of Directors meeting, whereas, the Board of Directors had elected to adopt an Omnibus Equity Incentive Plan (the “2022 Plan”), that includes reserving 200,000 shares of common stock eligible for issuance under the Plan to be registered on a Form S-8 Registration Statement with the SEC. The 2022 Plan is designed to enable the flexibility to grant equity awards to the Company’s officers, employees, non-employee directors and consultants and to ensure that it can continue to grant equity awards to eligible recipients at levels determined to be appropriate by the Board and/or the Compensation Committee. The 2022 Plan was approved by the Company’s stockholders at the Annual Meeting of Stockholders held on December 2, 2022.
On April 3, 2023, the Company approved incentive stock awards for the CFO, certain officers and directors and other employees of the Company. The awards are in the form of restricted stock and will vest in two parts: 50% on October 2, 2023, and 50% on October 2, 2024. A total of 185,000 shares were awarded and a corresponding share-based compensation expense of $328,908 and $323,957 was recorded for the 12 months ended December 31, 2024 and 2023, respectively, based on the amortization of their fair value.
On August 21, 2023, the Board adopted, subject to stockholder approval, the Cosmos Health Inc. 2023 Omnibus Equity Incentive Plan (the “2023 Plan”). The 2023 Plan is designed to enable the flexibility to grant equity awards to our officers, employees, non-employee directors and consultants and to ensure that we can continue to grant equity awards to eligible recipients at levels determined to be appropriate by the Board and/or the Compensation Committee. Subject to certain adjustments (as provided in Section 4.2 of the 2023 Plan) and exception (as provided in Section 5.6(b) of the 2023 Plan), the maximum number of shares reserved for issuance under the 2023 Plan (including incentive share options) is 2,500,000 shares. The 2023 Plan was approved by the Company’s stockholders at the Annual Meeting of Stockholders held on September 18, 2023.
On September 16, 2024, the Company’s Board of Directors approved incentive stock awards for the CEO, the CFO, certain officers and directors and other key employees of the Company pursuant to the 2023 Plan. The awards are in the form of restricted stock and will vest in two parts: 50% on September 16, 2025, and 50% on September 16, 2026. A total of 2,500,000 shares were awarded and a corresponding share-based compensation expense of $366,644 was recorded for the year ended December 31, 2024, based on the amortization of fair value from the date of issuance of September 16, 2024, through December 31, 2024.

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ITEM 6. SELECTED FINANCIAL DATA
Item 6. Selected Financial Data
A smaller reporting company is not required to provide the information required by this Item.

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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Forward-Looking Statements
Certain statements, other than purely historical information, including estimates, projections, statements relating to our business plans, objectives, and expected operating results, and the assumptions upon which those statements are based, are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements generally are identified by the words “believes,” “project,” “expects,” “anticipates,” “estimates,” “intends,” “strategy,” “plan,” “may,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions.
We intend such forward-looking statements to be covered by the safe-harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, and are including this statement for purposes of complying with those safe-harbor provisions. Forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties which may cause actual results to differ materially from the forward-looking statements. Our ability to predict results or the actual effect of future plans or strategies is inherently uncertain.
Factors which could have a material adverse effect on our operations and future prospects on a consolidated basis include but are not limited to: changes in economic conditions, legislative/regulatory changes, availability of capital, interest rates, competition, and generally accepted accounting principles. These risks and uncertainties should also be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. We undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise. Further information concerning our business, including additional factors that could materially affect our financial results, is included herein and in our other filings with the SEC.
Presentation of Information
As used in this prospectus, the terms “we,” “us” “our” and the “Company” mean Cosmos Health Inc. unless the context requires otherwise. The following discussion and analysis should be read in conjunction with our audited (and unaudited) financial statements and the related notes that appear elsewhere in this prospectus. All dollar amounts in this registration statement refer to U.S. dollars unless otherwise indicated.
Overview
Summary
We are diversified, vertically integrated global healthcare group, owner of proprietary pharmaceutical and nutraceutical brands, generics, manufacturer and distributor of healthcare products, engaged in research & development of innovative medicines and repurposing drugs as well as operator of a telehealth platform. The Company, through its subsidiaries, is operating within the pharmaceutical industry and in order to compete successfully in the healthcare industry, must demonstrate that its products offer medical benefits as well as cost advantages. Currently, most of the products that the Company is trading, compete with other products already on the market in the same therapeutic category, and are subject to potential competition from new products that competitors may introduce in the future.
Revenue sources
Full Line Wholesaler
As a full line pharmaceutical wholesaler, we distribute a comprehensive range of pharmaceutical products, including prescription medications, over-the-counter (OTC) drugs, medical devices, food supplements, nutraceuticals, cosmetics and other healthcare products, to various businesses within the healthcare sector such as retail pharmacies, hospitals, private clinics and other wholesale pharmaceutical distributors.
Branded Pharmaceuticals & Generics
We are engaged in the production, promotion, distribution and sale of licensed branded generics and OTC products throughout Europe by our subsidiaries in Greece and UK. Our capital efficient business model is based on infrastructure, efficiency and scale. We believe that there is a significant growth on opportunities through product additions and geographic expansion.
Healthcare Distribution
We conduct direct distribution and sales of pharmaceuticals, medical devices, branded generics and OTC products. Our automated and GDP licensed distribution facilities ensure all medications reach their destination daily on an efficient and secure way. Our network exceeds over 1,500 pharmacies in Greece. We have created an upgraded and high-end distribution center in Greece due to our Robotic systems and integrated automations (“ROWA” robotics).
Nutraceutical
We have created and developed our own proprietary branded nutraceutical products, named “Sky Premium Life®” which was launched in 2018 and “Mediterranation®” which was launched in 2022. Utilizing unique formulations, and specialized extraction processes which follow strict pharmaceutical standards, our proprietary lines of nutraceuticals aim for excellence. We have a full portfolio of fast-moving and specialty formulas with more than 160 product codes including vitamins, minerals and other herbal extracts. Our nutraceutical products are manufactured exclusively by Doc Pharma. Our nutraceutical products have penetrated several markets within 2022 and 2023 through digital channels such as Amazon and Tmall. We focus on nutraceutical products because we foresee it as a market with high growth opportunities due to its large market size and margin contribution as the demand for nutraceutical products is increasing globally.
General Risks
Supply chain disruption is a growing concern for the European pharmaceutical industry as it increasingly looks to cut costs by relying on ‘emerging markets’, where standards can be lower in terms of compliance, ethics and health and safety. Our business depends on the timely supply of materials, services and related products to meet the demands of our customers, which depends in part on the timely delivery of materials and services from suppliers and contract manufacturers. Significant or sudden increases in demand for our products, as well as worldwide demand for the raw materials and services we require to manufacture and sell our products, may result in a shortage of such materials or may cause shipment delays due to transportation interruptions or capacity constraints. Such shortages or delays could adversely impact our suppliers’ ability to meet our demand requirements. Difficulties in obtaining sufficient and timely supply of materials or services can have an adverse impact on our manufacturing operations and our ability to meet customer demand.
We may also experience significant interruptions of our manufacturing operations, delays in our ability to deliver products, increased costs or customer order cancellations as a result of:
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the failure or inability to accurately forecast demand and obtain sufficient quantities of quality raw materials on a cost-effective basis;
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volatility in the availability and cost of materials or services, including rising prices due to inflation;
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difficulties or delays in obtaining required import or export approvals;
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shipment delays due to transportation interruptions or capacity constraints, such as reduced availability of air or ground transport or port closures;
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information technology or infrastructure failures, including those of a third-party supplier or service provider; and
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natural disasters or other events beyond our control (such as earthquakes, utility interruptions, tsunamis, hurricanes, typhoons, floods, storms or extreme weather conditions, fires, regional economic downturns, regional or global health epidemics, geopolitical turmoil, increased trade restrictions between the U.S. and China and other countries, social unrest, political instability, terrorism, or acts of war) in locations where we or our customers or suppliers have manufacturing or other operations.
Hikes in the price of medicine and their impact on the sustainability of the healthcare systems are garnering more and more attention. European regulators are willing to play their part in safeguarding continued access to safe and effective medicines. Regulators can speed up the approval of branded pharmaceuticals and biosimilars to boost competition and drive down prices.
Cuts in healthcare spending have been frequently occurring since the financial crises of the late of 2000’s. Europe’s slow recovery has been uneven, with austerity and economic uncertainty, especially in the EU’s poorer member states, such as Greece.
Results of Operations
Year ended December 31, 2024 versus December 31, 2023
For the year ended December 31, 2024, the Company had a net loss of $16,183,018 on revenue of $54,426,402, versus a net loss of $18,542,654 on revenue of $53,376,874, for the year ended December 31, 2023.
Revenue
For the 12-month period ended December 31, 2024, the Company’s total revenue increased by 1.97%, reaching $54,426,402, compared to $53,376,874 for the prior year period ended December 31, 2023. This growth was primarily driven by the following factors:
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Wholesale Revenue Growth: The revenue increase was largely attributable to our subsidiary Cosmofarm SA, which experienced higher sales following the acquisition of several customer bases. Additionally, there was a moderate increase in demand for the period, further contributing to revenue expansion.
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Pharmaceutical Manufacturing Expansion: Our pharmaceutical manufacturing segment experienced a significant revenue increase, primarily due to the inclusion of CANA, our manufacturing subsidiary, for the full 12-month period in 2024. In contrast, during 2023, CANA contributed to the Group’s results only for six months following its acquisition on June 30, 2023. For further details, refer to the Segment Reporting section.
The combination of these factors contributed to the overall revenue growth for the period.
Our future revenue growth will continue to be affected by various factors such as industry growth trends, including drug utilization, the introduction of new innovative brand therapies, the likely increase in the number of generic drugs that will be available over the next few years as a result of the expiration of certain drug patents held by brand-name pharmaceutical manufacturers and the rate of conversion from brand products to those generic drugs, price increases and price deflation, general economic conditions in the member states of European Union, competition within the industry, customer consolidation, changes in pharmaceutical manufacturer pricing and distribution policies and practices, increased downward pressure on government and other third party reimbursement rates to our customers, and changes in government rules and regulations.
Cost of Goods Sold
For the year ended December 31, 2024, our cost of goods sold (“COGS”) was $50,115,079, representing a 2.22% increase compared to $49,027,305 for the prior fiscal year ended December 31, 2023.
The increase in COGS was proportionate to revenue growth and was primarily influenced by a shift in revenue mix, with a larger portion of total revenue derived from our wholesale segment. Historically, our wholesale operations generate lower gross margins compared to other revenue streams, contributing to the overall increase in COGS as a percentage of revenue.
Gross Profit
For the year ended December 31, 2024, our gross profit was $4,311,323, representing a decrease of $38,246, or 0.88%, compared to $4,349,569 for the prior fiscal year ended December 31, 2023.
The change in gross profit was primarily attributable to the differing year-over-year growth rates of revenue and cost of goods sold (COGS). While revenue increased compared to the prior-year period, COGS grew at a comparatively higher rate, resulting in a contraction of gross profit.
Operating Expenses
For the year ended December 31, 2024, total operating expenses were $19,856,153, compared to $26,180,786 for the prior fiscal year ended December 31, 2023, representing a decrease of $6,324,633, or 24.16%. The decrease in operating expenses was primarily attributable to the following factors:
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Lower provisions for expected credit losses and allowances for doubtful accounts, which amounted to $4,691,767 in 2024 compared to $11,850,788 in 2023.
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A significant reduction in sales and marketing expenses, particularly related to our branded nutraceuticals, which declined by 70.53% year-over-year.
Despite the overall decline in operating expenses, certain cost categories increased:
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Salaries and wages increased by $1,138,527 (25%) compared to 2023, primarily due to the full-year inclusion of our subsidiary CANA in 2024 (compared to the six months period in 2023, following its acquisition on June 30, 2023) and the hiring of additional full-time employees across our Greek subsidiaries.
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Research and development (R&D) costs increased by $368,434 (223.48%), mainly due to the annual royalty fee charged by our related-party manufacturing company, Doc Pharma SA, pursuant to a royalty agreement signed on December 31, 2024.
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Depreciation and amortization expense increased by $634,861 (103.33%), primarily driven by the amortization of 19 generic licenses acquired from Doc Pharma SA on December 29, 2023, with a total purchase value of €3,200,000 ($3,539,840).
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Impairment of intangible assets: during the year ended December 31, 2024, the Company recognized total impairment charges of $291,980 relating to intangible assets that were deemed no longer recoverable. Specifically, the Company recorded impairment losses associated with certain branded pharmaceutical products that had been acquired from Doc Pharma SA pursuant to the agreement executed on June 28, 2023. These products were initially intended to be launched and commercialized in various markets; however, following a reassessment of the Company’s commercialization strategy, management concluded that it no longer intends to proceed with their market introduction in the foreseeable future. As such, the carrying value of these assets was fully impaired. In addition, the Company fully wrote off the remaining carrying value of the telehealth platform developed and owned by its wholly owned subsidiary, Zip Doctor Inc., due to the discontinuation of the platform’s operation and the absence of future plans for its reactivation or redevelopment. No impairment charges were recorded during the year ended December 31, 2023.
As a result of these expense changes, our net operating loss for the year ended December 31, 2024 was $15,544,830, representing an improvement of $6,286,387 (28.8%) compared to a net operating loss of $21,831,217 for the year ended December 31, 2023.
Other Income (expense), net
For the year ended December 31, 2024, the Company reported other income of $86,737, compared to other expense of $65,867 for the year ended December 31, 2023. This represents a net favorable variance of $152,604, or 231.69% year-over-year improvement.
The increase was primarily attributable to the reversal of a previously recorded adjustment related to the cumulative impact of discounted sales to Medihelm SA, the exclusive distributor of the Company’s proprietary line of nutraceutical products. During 2023, the Company had adopted a conservative accounting approach to reflect the low collectability risk associated with historical sales to Medihelm and had therefore recognized a corresponding expense.
In 2024, however, due to the significant allowance already recorded in 2023 and the limited level of new sales activity with Medihelm during the current year, management determined that this adjustment was no longer required. As such, the Company reversed the previously recorded charge, resulting in an increase to other income.
For additional details, refer to Note 2 - Summary of Significant Accounting Policies, under the “Revenue Recognition” section of the accompanying consolidated financial statements.
Interest Income & Expenses
For the year ended December 31, 2024, interest expense totalled $1,012,314, representing an increase of $145,838, or 16.83%, compared to $866,476 for the prior year ended December 31, 2023. The increase was primarily driven by new debt facilities totalling $828,080, entered into by our subsidiary Cosmofarm SA.
Interest income for the year ended December 31, 2024, was $406,449, reflecting a decrease of $256,410, or 38.68%, compared to $662,859 for the year ended December 31, 2023. This decline was primarily due to the receipt of loan repayments during 2024, which reduced outstanding loan receivable balances and, consequently, interest earned on them and the absence of interest income from treasury bills, which contributed approximately $55,000 to interest income in 2023 but were not in place during 2024.
Gain on extinguishment of debt
For the year ended December 31, 2024, we did not recognize any gains on debt extinguishment.
For the year ended December 31, 2023, we recorded a gain on extinguishment of debt of $1,910,967, which was primarily attributable to an $1,605,499 gain from the termination of our agreement with Marathon Global Inc., which resulted in the write-off of the share-settled debt obligation outstanding as of December 31, 2022 and a $305,468 gain from the forgiveness of debt related to the Synthesis Structured debt facility of our subsidiary SkyPharm SA.
Bargain purchase gain
On June 30, 2023, the Company completed the acquisition of CANA. As a result of the acquisition, we recognized a bargain purchase gain of $1,440,249, which arose because the fair value of CANA’s net assets at the acquisition date exceeded the total fair value of the consideration transferred.
The bargain purchase gain was recognized as other income in the Consolidated Statements of Operations for the year ended December 31, 2023. Management determined that the gain resulted primarily from negotiated purchase terms and the specific financial condition of the seller at the time of the transaction.
As no similar transactions occurred during the year ended December 31, 2024, no such gains were recognized in the current period.
Unrealized Foreign Currency Losses & Deemed Dividends
For the year ended December 31, 2024, the Company recorded a net comprehensive loss of $24,093,129, compared to a net comprehensive loss of $25,071,043 for the year ended December 31, 2023. This change in net comprehensive loss was primarily due to the unrealized foreign currency translation loss and a change in deemed dividends, as detailed below:
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The unrealized foreign currency translation loss for the year ended December 31, 2024 amounted to $1,715,087, compared to an unrealized foreign currency translation gain of $712,791 for the same period in 2023. The significant fluctuation in foreign exchange results was largely driven by changes in the exchange rates of the Euro and British Pound against the US Dollar, primarily affecting intercompany loans and balances between the Company and its Greek and UK subsidiaries. These currency fluctuations have had a material impact on the translation of intercompany balances. For the detailed foreign exchange rates used to translate these balances, please refer to “Note 2 - Summary of Significant Accounting Policies” under the section “Foreign Currency Translation and Other Comprehensive Loss”.
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The deemed dividend for the year ended December 31, 2024 amounted to $6,195,024, relating to the Warrant Inducement Letter dated September 26, 2024. In contrast, the deemed dividends recorded for the year ended December 31, 2023, were $7,241,180, primarily associated with the Warrant Exchange Agreement the Company entered on December 29, 2023. For further details on the deemed dividends, please refer to “Note 7 - Warrant Anti-Dilution Adjustment and Deemed Dividend”.
The significant fluctuation in the unrealized foreign currency results was the primary factor influencing the difference in comprehensive loss between the two years. For a comprehensive understanding of the key accounting policies and assumptions underlying these changes, readers are encouraged to review the relevant Notes to the Financial Statements, as indicated above.
Going Concern
The Company’s consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”), which contemplates the continuation of the Company as a going concern. For the year ended period December 31, 2024, the Company had revenue of $54,426,402, net loss of $16,183,018 and net cash used in operations of $7,717,034. Additionally, as of December 31, 2024, the Company had negative working capital of $296,193, an accumulated deficit of $114,022,275, and stockholders’ equity of $24,532,929. It is management’s opinion that these conditions raise substantial doubt about the Company’s ability to continue as a going concern for a period of 12 months from the date of this filing.
The Company’s revenues are not able to sustain its operations, and concerns exist regarding the Company’s ability to meet its obligations as they become due. The Company is subject to a number of risks to those of smaller commercial companies, including dependence on key individuals and products, the difficulties inherent in the development of a commercial market, the need to obtain additional capital, competition from larger companies, and other pharmaceutical and health care companies.
Management evaluated the above conditions which raise substantial doubt about the Company’s ability to continue as a going concern to determine if it can meet its obligations for the subsequent 12 months from the date of this filing. Management considered its ability to access future capital, curtail expenses if needed, expand product lines, and acquire new products.
Management’s plans include expansion of brand name products to the market, expanding the current product portfolio, and evaluating acquisition targets to expand distribution. The exclusive distribution agreement signed for its Sky Premium Life products in the United Arab Emirates (“UAE”) and the significant orders already received, are expected to substantially strengthen its operating cash flow. Furthermore, the Company intends to vertically integrate the supply chain distribution network. On top of that, the Company plans to access the capital markets further in order to raise additional funds through equity offerings. More specifically, commencing from August 2025, the Company will be eligible to utilize an S-3 registration statement, (12 months following the date that the Company had regained compliance with Listing Rule 5250(c)(1) (the “Filing Rule”)), to be in a position to raise equity capital more efficiently in conjunction with utilizing potential equity proceeds by its outstanding warrants. Management’s plans also include postponing certain debt repayments, through achieving favorable amendments to its debt facilities and in parallel intends to make substantial efforts to receive additional debt financing. Moreover, the Company’s management is considering of postponing certain repayments of suppliers and creditors. However, management cannot provide any assurances that the Company will be successful in accomplishing any of its plans. The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described herein and eventually secure other sources of financing and attain profitable operations.
Considering the above, management is of the view that substantial doubt exists for the Company’s ability to continue as a going concern. The consolidated financial statements do not include any adjustments to reflect the possible future effect on the recoverability and classification of assets or the amounts and classifications of liabilities that may result from the outcome of this uncertainty.
Liquidity and Capital Resources
As of December 31, 2024, the Company had negative working capital of $296,193, compared to a positive working capital of $12,285,310 as of December 31, 2023. The decrease in working capital is primarily attributable to the significant cash used in operating activities during the year ended December 31, 2024. In addition, the reduction in working capital was influenced by the significant allowances for doubtful accounts recorded for the 12-month period ended December 31, 2024. The cash used in operating activities, as detailed in the liquidity section, led to a reduction in the Company’s available current assets, while the increase in allowances for doubtful accounts reflects the Company’s prudent assessment of its receivables. The Company continues to closely manage its working capital to ensure adequate liquidity for operations and strategic investments. Going forward, management is focused on improving collections and reducing allowances for doubtful accounts, which are expected to have a positive impact on working capital and overall liquidity in the coming periods.
Cash Flow from Operating Activities
As of December 31, 2024, the Company had net cash of $315,105, compared to net cash of $3,833,195 as of December 31, 2023. The decrease in net cash is primarily due to the operating cash outflows during the period, reflecting the Company's ongoing investment in key operational activities. For the year ended December 31, 2024, the Company used net cash of $7,717,034 in operating activities, compared to net cash used of $15,635,999 for the year ended December 31, 2023. The negative cash used in operating activities is primarily attributable to the Group's operating losses, which were driven by the Parent entity and all subsidiaries. The impact of working capital items was marginal in relation to the negative cash flow results. The operating losses were primarily a result of substantial investments made in several key areas, including the hiring of highly skilled employees, increased spending on research and development, and marketing costs related to the promotion of the Company’s own branded products. Additionally, depreciation and amortization expenses increased significantly, driven by the acquisition of manufacturing facilities, corporate offices, and pharmaceutical and nutraceutical licenses. The Company anticipates that these significant operating investments should yield positive results soon, contributing to future operating profits and positive operating cash flows. Management expects that, as these investments mature, the Company will achieve improved financial performance and enhance its ability to generate positive cash flows from operations in the near term. The Company’s liquidity position, as of December 31, 2024, remains under careful review by management, and the Company is focused on improving cash flows by realizing the expected benefits of its operational investments. The Company will continue to monitor its liquidity position and take necessary actions to ensure it can meet its financial obligations and maintain sufficient liquidity to support its strategic objectives.
Cash Flow from Investing Activities
For the year ended December 31, 2024, the Company used $798,269 in net cash for investing activities, compared to $13,760,357 in the prior year. The higher outflow in 2023 was primarily driven by the purchase of fixed assets, including the acquisition of facilities for the Company’s subsidiary Cosmofarm SA, the acquisition of nutraceutical and pharmaceutical licenses, and the acquisition of a building in Canada, along with the cash paid for the acquisition of the Company’s subsidiary Cana, on June 30, 2023.
In contrast, during the year ended December 31, 2023, the Company limited its investing outflows by spending approximately $1.2 million on the acquisition of several nutraceutical licenses through its subsidiary SkyPharm SA and certain machinery for its manufacturing subsidiary, CANA. These outflows were partially offset by the $468,974 in proceeds from its outstanding loans receivable. The Company’s investment strategy continues to focus on expanding its business through organic growth and selective acquisitions of companies and licenses.
Cash Flow from Financing Activities
For the year ended December 31, 2024, the Company generated $5,046,684 in net cash from financing activities, compared to $12,694,007 for the year ended December 31, 2023. The decrease in financing inflows was due to the significantly higher financing activities in 2023, which included $9,362,937 from the offering completed in July 2023, the receipt of the outstanding subscription receivable from the December 2022 offering, and $3,533,741 in net proceeds from the exercise of warrants during December 2023.
In 2024, the Company repaid $1,092,121 of its outstanding Notes Payable but received $865,600 from new debt facilities signed during the year. Additionally, the Company had $816,318 in net proceeds from its Lines of Credit. Furthermore, the Company raised additional equity funds through two Prospectus Supplements to its Registration Statement on Form S-3, resulting in gross proceeds of $649,039. In September 2024, the Company entered into a Warrant Inducement with an investor, issuing 9,748,252 new warrants and reducing the exercise price of 4,874,126 warrant shares from $1.45 to $0.8701. This transaction resulted in gross cash proceeds of $4,240,977.
Liquidity Outlook
The Company’s financing activities in 2024 have enabled it to access additional funds through debt and equity financing, which will support its ongoing investments and operational growth. The Company continues to manage its liquidity position carefully and is committed to maintaining sufficient resources to support its strategic objectives, including expanding its operations through both organic growth and selective acquisitions.
Management is confident that the Company’s current liquidity position, along with its ongoing financing and investment strategies, will enable it to meet its financial obligations and continue its growth trajectory in the coming periods.
Debt Obligations
November 16, 2015 Debt Agreement
On November 16, 2015, the Company entered into a Loan Agreement with Panagiotis Drakopoulos, the Company’s former Director and former Chief Executive Officer, pursuant to which the Company borrowed €40,000 ($42,832) as a note payable from Mr. Drakopoulos. The note bore an interest rate of 6% per annum and was due and payable in full on November 15, 2016. As of December 31, 2022, the Company had an outstanding principal balance of €8,000 ($8,558) and accrued interest of €6,797 ($7,271). During the year ended December 31, 2023, the Company repaid the entire outstanding balance of €8,000. Therefore, as of December 31, 2023, the outstanding principal balance was $0. Mr. Drakopoulos is not considered a related party since he is no longer employed by the Company and currently holds no equity position in the Company.
June 23, 2020 Debt Agreement
On June 23, 2020, the Company’s subsidiary, Cosmofarm, entered into an agreement with the National Bank of Greece S.A. (the “Bank”) to borrow a maximum of €500,000 ($611,500). The note has a maturity date of 60 months from the date of the first disbursement, which includes a grace period of nine months. The total amount of the initial proceeds was received in three equal monthly installments. The note is interest bearing from the date of receipt and is payable every three months at an interest rate of 3.06% plus 3-month Euribor (2.92% as of December 31, 2024). The outstanding balance was €88,235 ($91,232) and €205,882 ($227,747) as of December 31, 2024 and 2023, respectively, of which $91,232 and $97,606 was classified as “Notes payable - long-term portion” respectively, on the accompanying consolidated balance sheets. During the year ended December 31, 2024, the Company repaid €117,647 ($121,776) of the principal balance.
November 19, 2020 Debt Agreement
On November 19, 2020, the Company entered into an agreement with a third-party lender in the principal amount of €500,000 ($611,500). The note matures on November 18, 2025 and bears an annual interest rate, based on a 360-day year, of 3% plus 0.6% plus 6-month Euribor when Euribor is positive (2.68% as of December 31, 2024). The principal is to be repaid in 18 quarterly installments of €27,778 ($30,333). During the year ended December 31, 2023, the Company repaid €111,111 ($122,911) of the principal and as of December 31, 2023, the Company had accrued interest of €11,191 ($12,379) related to this note and a principal balance of €222,222 ($245,822), of which $122,911 is classified as “Notes payable - long term portion” on the accompanying consolidated balance sheets. During the year ended December 31, 2024, the Company repaid €111,111 ($115,011) of the principal and as of December 31, 2024, the Company has accrued interest of €7,570 ($7,836) related to this note and a principal balance of €111,111 ($115,011), all of which is classified as “Notes payable” on the accompanying consolidated balance sheets.
January 7, 2021 Convertible Promissory Note
On January 7, 2021 (the “Issue Date”), the Company entered into a subscription agreement with an unaffiliated third party, whereby the Company issued, for a purchase price of $100,000 in principal amount, a convertible promissory note (the “Convertible Promissory Note”). The Convertible Promissory Note bears an interest rate of 8% per annum. The outstanding balance as of December 31, 2022, was $100,000. On February 7, 2023, the Company fully repaid the outstanding balance and interest of the Convertible Promissory Note.
July 30, 2021 Debt Agreement
On July 30, 2021, the Company entered into an agreement with a third-party lender in the principal amount of €500,000 ($578,850). The note matures on August 5, 2026 and bears an annual interest rate that applies to 60% of the principal of the note that is based on a 365-day year, of 5.84% plus 3-month Euribor when Euribor is positive (2.92% as of December 31, 2023). Pursuant to the terms of the agreement, there is a nine-month grace period for principal repayment during which interest is accrued. The principal is to be repaid in 18 quarterly installments of €27,778 commencing three months from the end of the grace period During the year ended December 31, 2023, the Company repaid €105,747 ($109,459) of the principal. As of December 31, 2023, the Company had accrued interest of €10,905 ($12,063), principal of €316,900 ($350,555), of which $227,065 is classified as “Notes payable - long term portion” on the accompanying consolidated balance sheets. During the year ended December 31, 2024, the Company repaid €109,926 ($113,784) of the principal. As of December 31, 2024, the Company had accrued interest of €15,778 ($16,332), principal of €206,343 ($213,585), of which $94,612 is classified as “Notes payable - long term portion” on the accompanying consolidated balance sheets.
June 9, 2022 Debt Agreement
On June 9, 2022, the Company entered into an agreement with a third-party lender in the principal amount of €320,000 ($335,008). The note matures on June 16, 2027 and bears an annual interest rate of 3.89% plus an additional rate of 0.60%, plus the 3-month Euribor (2.92% as of December 31, 2024). Pursuant to the agreement, there is a 12-month grace period for principal repayment during which interest is accrued. The principal is to be repaid in 17 equal quarterly installments of €18,824. During the year ended December 31, 2024, the Company repaid €80,000 ($82,808) of the principal. As of December 31, 2024 and 2023 the Company has accrued interest of €8,352 ($8,645)and €11,043 ($12,215), respectively, and an outstanding balance of €180,000 ($186,318) of which $103,510 and $204,322, respectively, are classified as “Notes payable - long term portion” on the accompanying consolidated balance sheets.
August 29, 2022 Promissory Note
On August 29, 2022, the Company entered into a promissory note for the principal amount of $166,667. The Company received $150,000 in cash and recorded $16,667 as an original issue discount upon issuance. The promissory note matured on the earlier of (a) December 27, 2022, or (b) the date the Company completes a debt or equity financing of at least $1,000,000. The debt carried an annual interest rate of 12% which was due upon maturity. As of December 31, 2022, the Company had repaid the principal balance in full and had a balance of $5,041 in accrued interest related to this note. The Company repaid the outstanding interest during the year ended December 31, 2023 and thus the balance of both principal and interest as of December 31, 2023 was $0.
July 14, 2023 Debt Agreement
On July 14, 2023, the Company entered into an agreement with a third-party lender in the principal amount of €1,000,000 ($1,123,700). The note matures on July 31, 2028, and bears an annual interest rate of 2.46% plus the 3-month Euribor (2.92% as of December 31, 2024). Pursuant to the agreement, there is a nine-month grace period for interest and principal repayment. The principal is to be repaid in 18 equal quarterly installments of €55,556 commencing on May 2, 2024. During the year ended December 31, 2024, the Company repaid €162,950 ($168,670) of the principal. As of December 31, 2024 and 2023, the Company has accrued interest of €16,735 ($17,322) and €19,820 ($21,925), respectively, and an outstanding balance of €814,750 ($843,348) and $€977,00 ($1,081,532), of which $618,616 and $897,864, respectively, are classified as “Notes payable - long term portion” on the accompanying consolidated balance sheets.
Cloudscreen
On January 23, 2024, the Company completed the acquisition of Cloudscreen, a cutting-edge Artificial Intelligence (AI) powered platform. The acquisition is pursuant to the purchase agreement announced on October 11, 2023. Cloudscreen is a multimodal platform specialized in drug repurposing, a process that involves uncovering new target proteins or indications for existing drugs for use in treating different diseases. The total purchase price amounted to $637,080 and consisted of 280,000 shares of common stock with a fair value of $319,200 and an amount of $317,880 to be settled in cash during 2024 based on the Promissory Note signed on October 10, 2023. As of December 31, 2024, and December 31, 2023, the Company had an outstanding balance of $279,348 and $317,880 all of which is classified as “Notes payable” on the accompanying consolidated balance sheets.
July 29, 2024 Debt Agreement
On July 29, 2024 the Company entered into an agreement with a third-party lender in the principal amount of €400,000 ($432,760). The note matures on July 31, 2029 and bears an annual interest rate of 2.58% plus the 3-month Euribor (2.92% as of December 31, 2024). Pursuant to the agreement, there is a six-month grace period for principal and interest repayment. The principal is to be repaid in 18 equal quarterly installments of €22,222 commencing on April 30, 2025. During the 12 months ended December 31, 2024, the Company repaid no principal and accrued interest of €5,957 ($6,445). As of December 31, 2024, and December 31, 2023, the Company had an outstanding balance of €400,000 ($414,040) and €0 ($0), of which $345,033 is classified as “Notes payable - long term portion” on the accompanying consolidated balance sheets.
December 20, 2024 Debt Agreement
On December 20, 2024 the Company entered into an agreement with a third-party lender in the principal amount of €400,000 ($414,040). The note matures on December 20, 2027, and bears an annual interest rate of 6% (including the 3-month Euribor of 2.92% as of December 31, 2024). Pursuant to the agreement, there is a six-month grace period for principal repayment. The principal is to be repaid in 6 equal semiannual installments of €66,667 commencing on June 20, 2025. During the 12 months ended December 2024, the Company repaid no principal and had not accrued any interest. As of December 31, 2024, and December 31, 2023, the Company an outstanding balance of €400,000 ($414,040) and €0 ($0), of which $276,027 is classified as “Notes payable - long term portion” on the accompanying consolidated balance sheets.
Trade Facility Agreements
On May 12, 2017, SkyPharm entered into a Trade Finance Facility Agreement (the “SkyPharm Facility”) with Synthesis Structured Commodity Trade Finance Limited (the “Lender”) as amended on November 16, 2017 and May 16, 2018.
On October 17, 2018, the Company entered into a further amended agreement with Synthesis whereby the current balance on the TFF as of October 1, 2018, which was €4,866,910 ($5,629,555) and related accrued interest of €453,094 ($524,094) would be split into two principal balances of Euro €2,000,000 ($2,316,000), (the “EURO Loan”) and USD $4,000,000 (the “USD Loan”). Interest on both the EURO Loan and USD Loan commenced on October 1, 2018, at 6% per annum plus one-month Euribor (3.869% as of December 31, 2023), and 6% plus one-month LIBOR (5.47% as of date of December 31, 2023), respectively.
On December 30, 2020, the Company transferred the EURO Loan to a new third-party lender. The terms remained the same except interest accrues at 5.5% per annum plus one-month Euribor 3.869% as of December 31, 2023. The principal was scheduled to be repaid in a total of five quarterly installments beginning October 31, 2021 of €50,000 ($54,600) each with a final repayment of €1,800,000 ($1,965,600) payable on October 31, 2022.
On March 3, 2022, the Company entered into a modification agreement to extend the maturity date to January 10, 2023, and payments under the USD Loan. During June 2022, the Company agreed with the Lender to postpone the repayment of an installment of $500,000 due on June 30, 2022 (based on the modification agreement signed on March 3, 2022) until January 2023. During September 2022, the Company entered into an agreement with the Lender to postpone the repayment of the outstanding balance on the USD Loan of $3,950,000, plus unpaid accrued interest until January 2023. The Company capitalized fees paid upon modification of €200,000 ($221,060) that are being amortized over the life of the loan. The Company incurred non-cash interest expense of $216,182 during the year ended December 31, 2022, concerning the above capitalized fees.
During the year ended December 31, 2022, the Company repaid €175,000 ($191,100) of the EURO Loan and $2,593,363 of the USD Loan such that as of December 31, 2022, the Company had principal balances of €1,775,000 ($1,898,895) and $1,406,637 under the agreements, respectively. As of December 31, 2022, the Company had accrued $309,365 in interest expense related to these agreements.
On December 21, 2022, the USD Loan was assigned to GIB Fund Solutions ICAV (the “Fund”). On January 31, 2023, the Company paid $1,100,000 to the Fund under a full and final settlement agreement for the USD Loan, recording a gain on extinguishment of debt of $306,637 relating to the waiver of the unpaid balance. Additionally, the Company repaid €50,000 ($50,310) of the EURO Loan during the year ended December 31, 2023. As of December 31, 2023, the Company had an outstanding principal balance of €1,725,000 ($1,908,195), of which $1,327,440 is classified as “Notes payable - long term portion” on the consolidated balance sheets. As of December 31, 2023, the Company had accrued $161,274 in interest expense related to these agreements.
On December 22, 2022 SkyPharm signed an agreement for the extension of the payments and an increase in interest rate due under the EURO loan, that was extended to be repaid with a balloon payment now due on October 31, 2025. This extension was agreed upon in writing on December 22, 2022, with a retroactive modification date to October 31, 2022 (the original maturity date).
As of December 31, 2023, the Company had an outstanding principal balance of €1,725,000 ($1,908,195), of which $1,327,440 is classified as “Notes payable - long term portion” on the consolidated balance sheets. As of December 31, 2023, the Company had accrued $161,274 in interest expense related to these agreements.
The Company repaid €375,000 ($388,163) of the EURO Loan during the 12 months ended December 31, 2024. As of December 31, 2024, the Company had an outstanding principal balance of €1,350,000 ($1,397,385), all of which $1,086,638 is classified as “Notes payable” on the consolidated balance sheets. For the 12 months ended December 31, 2024, the Company had accrued $155,822, in interest expense related to these agreements.
COVID-19 Government Loans
May 12, 2020 Loan
On May 12, 2020, the Company’s subsidiary, SkyPharm, was granted loan from the Greek government and, on May 22, 2020, received the amount of €300,000 ($366,900). The loan would be repaid in 40 equal monthly installments beginning on July 29, 2022. As a condition to the loan, the Company was required to retain the same number of employees until October 31, 2020. As of December 31, 2023, the principal balance was €121,875 ($134,818). During the year ended December 31, 2024, the Company repaid €18,750 ($19,408) of the principal balance. The outstanding balance is €103,125 ($106,745) as of December 31, 2024.
June 24, 2020 Debt Agreement
On June 24, 2020, the Company’s subsidiary, Decahedron, received a loan £50,000 ($68,310) from the UK government. The loan has a ten-year maturity and bears interest at a rate of 2.5% per annum beginning 12 months after the initial disbursement, which was on July 10, 2020. The Company may prepay this loan without penalty at any time. As of December 31, 2023, the principal balance was £40,858 ($52,066). As of December 31, 2024, the principal balance was £38,144 ($47,761).
Related Party Indebtedness
Grigorios Siokas
From time to time, Grigorios Siokas loans the Company funds in the form of non-interest bearing, no-term loans.
During the 12-month period ended December 31, 2023, the Company had an outstanding principal balance under these loans of $13,257 in loans payable to Grigorios Siokas. As of December 31, 2024, the Company had an outstanding principal balance of $8,594 related to this payable. During the 12-month period ended December 31, 2024, the Company received $46,232 and repaid $49,842 of such loans.
Grigorios Siokas is the Company’s CEO and a principal shareholder and is hence considered a related party to the Company.
Dimitrios Goulielmos
On November 21, 2014, the Company entered into an agreement with Dimitrios Goulielmos, as amended on November 4, 2016. Pursuant to the amendment, this loan has no maturity date and is non-interest bearing. As of December 31, 2024 and 2023, the Company had a principal balance of €10,200 ($10,558) and €10,200 ($11,283), respectively.
The above balances are adjusted for the foreign currency rate as of the balance sheet date. For the years ended December 31, 2024 and 2023, the Company recorded a foreign currency translation gain of $725 and a loss of $371, respectively.
Significant Equipment
We do not intend to purchase any significant equipment for the next 12 months aside from a few pieces of IT equipment. Nevertheless, we will replace essential equipment for operations if it is required within the year.
Employees
In order to achieve our strategic objectives, we have, and will remain, focused on hiring and retaining a highly skilled management team that has extensive experience and specific skill sets relating to the sales, selection, development and commercialization of pharmaceutical products. We intend to continue our efforts to build and expand this team as we grow our business. We have plans to increase the number of our employees by adding more salespeople during the next 12 months.
Off Balance Sheet Arrangements
As of December 31, 2024, there were no off-balance sheet arrangements.
Critical Accounting Policies and Estimates
In December 2001, the SEC requested that all registrants list their most “critical accounting polices” in the Management’s Discussion and Analysis. The SEC indicated that a “critical accounting policy” is one which is both important to the portrayal of a company’s financial condition and results, and requires management’s most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain.
Foreign Currency. Assets and liabilities of all foreign operations are translated at year-end rates of exchange, and the statements of operations are translated at the average rates of exchange for the year. Gains or losses resulting from translating foreign currency financial statements are accumulated in a separate component of stockholders’ equity until the entity is sold or substantially liquidated. Gains or losses from foreign currency transactions (transactions denominated in a currency other than the entity’s local currency) are included in net (loss) earnings.
Income Taxes. The Company accounts for income taxes under the asset and liability method, as required by the accounting standard for income taxes, ASC 740 “Accounting for Income Taxes.” Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis, as well as net operating loss carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.
The Company is liable for income taxes in Greece and the United Kingdom. The corporate income tax rate is 22% in Greece (tax losses are carried forward for five years effective January 1, 2013) and 25% in the United Kingdom. Losses may also be subject to limitation under certain rules regarding change of ownership.
We regularly review deferred tax assets to assess their potential realization and establish a valuation allowance for portions of such assets to reduce the carrying value if we do not consider it to be more likely than not that the deferred tax assets will be realized. Our review includes evaluating both positive (e.g., sources of taxable income) and negative (e.g., recent historical losses) evidence that could impact the realizability of our deferred tax assets.
We recognize the impact of an uncertain tax position in our financial statements if, in management’s judgment, the position is not more-likely-then-not sustainable upon audit based on the position’s technical merits. This involves the identification of potential uncertain tax positions, the evaluation of applicable tax laws and an assessment of whether a liability for an uncertain tax position is necessary. We operate and are subject to audit in multiple taxing jurisdictions.
We record interest and penalties related to income taxes as a component of interest and other expense, respectively.
Potential benefits of income tax losses are not recognized in the accounts until realization is more likely than not. The Company has adopted ASC 740 “Accounting for Income Taxes” as of its inception. Pursuant to ASC 740, the Company is required to compute tax asset benefits for net operating losses carried forward. The potential benefits of the U.S. net operating losses have not been recognized in this financial statement because the Company cannot be assured it is more likely than not it will utilize the net operating losses carried forward in future years.
The Company has net operating loss carry-forwards in our parent, Cosmos Health Inc., which are applicable to future taxable income in the United States (if any). Additionally, the Company has income tax liabilities in the United Kingdom. The income tax assets and liabilities are not able to be netted. We therefore reserve the income tax assets applicable to the United States but recognize the income tax liabilities in Greece and the United Kingdom. Losses may also be subject to limitation under certain rules regarding change of ownership.
Accounts Receivable and Allowance for Credit Losses
The Company follows ASC Topic 326, Financial Instruments - Credit Losses (“ASC 326”) to estimate the allowance for doubtful accounts. The Company is required to estimate credit losses on accounts receivable balances held at amortized cost. ASC 326 introduces a new methodology for measuring credit losses, replacing the previous incurred loss model with an expected credit loss model. The Company measures credit losses on accounts receivable using an expected credit loss model, which considers historical experience, current conditions, and reasonable and supportable forecasts. Credit losses are measured as the difference between the present value of contractual cash flows expected to be collected and the present value of expected cash flows discounted at the financial instrument’s original effective interest rate. The Company reviews individually each trade receivable for collectability and performs on-going credit evaluations of its customers and adjusts credit limits based upon payment history and the customer’s current credit worthiness, as determined by the review of their current credit information; and determines the allowance for doubtful accounts based on historical write-off experience, customer specific facts and general economic conditions that may affect a client’s ability to pay. Bad debt expense is included in general and administrative expenses, if any.
Inventory
Our merchandise inventories are made up of finished goods, manufacturing products, raw materials and other products and are valued at the lower of cost or market using the weighted-average cost method. However, the net realizable value (“NRV”) will always be higher than our inventory’s cost, once most of our inventory is fast moving and the vast majority of our products is pharmaceuticals, which have standard selling prices that could not result to the NRV being higher than the average cost. Moreover, our efficient inventory management which has led to minimum obsolete and slow-moving inventory also indicates that the NRV is higher than its average cost. Thus, an NRV assessment would have no material, if any, to our inventory’s cost. Average cost includes the direct purchase price, net of vendor allowances and cash discounts, of merchandise inventory. We record valuation reserves on an annual basis for merchandise damage and defective returns, merchandise items with slow-moving or obsolescence exposure and merchandise that has a carrying value that exceeds market value. These reserves are estimates of a reduction in value to reflect inventory valuation at the lower of cost or market. The reserve for merchandise returns is based upon the determination of the historical net realizable value of products sold from our returned goods inventory or returned to vendors for credit. Our reserve for merchandise returns includes amounts for returned product on-hand as well as for new merchandise on-hand that we estimate will ultimately become returned goods inventory after being sold based on historical return rates.
Below is an analysis per category of our inventories as of December 31, 2024 and 2023:
Product Categories
December 31,
December 31,
Pharmaceuticals
3,113,558
3,417,039
Parapharmaceuticals
987,214
1,030,878
Manufacturing products
40,588
160,436
Raw materials
226,500
275,919
Dairy products
21,320
21,017
Veterinary medicine
13,872
Other
297,565
225,098
Less provisions
(332,375 )
(355,205 )
Total
4,355,365
4,789,054
Recently Issued Accounting Pronouncements
In November 2024, the Financial Accounting Standards Board (“FASB”) issued final guidance which requires disaggregated disclosures of certain categories of expenses that are included in expense line items on the face of the income statement. The disclosure is required on an annual and interim basis. The guidance also requires the total amount of selling expenses to be disclosed and, on an annual basis, the definition of selling expenses. The new disclosure requirements are effective for annual reporting periods beginning after December 15, 2026. Entities are permitted to adopt these disclosure requirements earlier than the mandated dates if they choose to do so. This new guidance will result in increased disclosures in the notes to our financial statements.
In December 2023, the FASB issued Accounting Standards Update (“ASU”) 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. This guidance is intended to enhance the transparency and decision-usefulness of income tax disclosures. The amendments in ASU 2023-09 address investor requests for enhanced income tax information primarily through changes to disclosure regarding rate reconciliation and income taxes paid both in the U.S. and in foreign jurisdictions. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, on a prospective basis, with the option to apply the standard retrospectively. Early adoption is permitted. The Company is currently evaluating this guidance to determine the impact it may have on its consolidated financial statements disclosures.
In November 2023, the FASB issued ASU 2023-07, Segment Reporting: Improvements to Reportable Segment Disclosures. This guidance expands public entities’ segment disclosures primarily by requiring disclosure of significant segment expenses that are regularly provided to the chief operating decision maker and included within each reported measure of segment profit or loss, an amount and description of its composition for other segment items, and interim disclosures of a reportable segment’s profit or loss and assets. The guidance is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The amendments are required to be applied retrospectively to all prior periods presented in an entity’s financial statements. The Company has completed its evaluation of this guidance and has implemented the standard. A respective disclosure has been included in Note 19 (Segment Reporting) to the consolidated financial statements.
Management does not believe that any recently issued, but not effective, accounting standards, if currently adopted, would have a material effect on the Company’s consolidated financial statements.

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ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
A smaller reporting company is not required to provide the information required by this Item.

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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Item 8. Financial Statements and Supplementary Data
New York Office:
805 Third Avenue
New York, NY 10022
www.rbsmllp.com
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Stockholders and the
Board of Directors of
Cosmos Health, Inc. and subsidiaries
Opinion on the Consolidated Financial Statements
We have audited the accompanying consolidated balance sheets of Cosmos Health, Inc. and its subsidiaries (the Company) as of December 31, 2024 and 2023, the related consolidated statements of operations, stockholders’ equity and cash flows for the years ended December 31, 2024 and 2023, 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 of December 31, 2024 and 2023, and the results of its operations and its cash flow for the year ended December 31, 2024 and 2023, in conformity with accounting principles generally accepted in the United States of America.
The Company’s Ability to Continue as a Going Concern
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company has incurred substantial operating losses and will require additional capital to continue as a going concern. This raises substantial doubt about the Company’s ability to continue as a going concern. Management’s plans regarding these matters are also described in Note 1. The financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the outcome of this uncertainty.
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 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 audits 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 were we engaged to perform, an audits of its internal control over financial reporting. As part of our audits, 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.
New York, NY Washington DC Mumbai & Pune, India Boca Raton, FL
Houston, TX San Francisco, CA Las Vegas, NV Beijing, China Athens, Greece
Member: ANTEA International with affiliated offices worldwide
Our audits 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 audits provide a reasonable basis for our opinion.
Critical Audit Matters
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: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.
We determined that there are no critical audit matters.
/s/ RBSM LLP
We have served as the Company’s auditor since 2024.
New York, NY
April 15, 2025
PCAOB ID Number 587
New York, NY Washington DC Mumbai & Pune, India Boca Raton, FL
Houston, TX San Francisco, CA Las Vegas, NV Beijing, China Athens, Greece
Member: ANTEA International with affiliated offices worldwide
COSMOS HEALTH INC.
CONSOLIDATED BALANCE SHEETS
December 31,
December 31,
ASSETS
CURRENT ASSETS:
Cash and cash equivalents
$ 315,105
$ 3,833,195
Accounts receivable, net
13,478,263
19,759,254
Accounts receivable - related party
1,230,308
1,099,098
Marketable securities
21,148
20,075
Inventory
4,355,365
4,789,054
Loans receivable
614,473
411,858
Loans receivable - related party
557,473
442,480
Prepaid expenses and other current assets
1,310,388
1,811,911
Prepaid expenses and other current assets - related party
3,578,825
4,440,855
TOTAL CURRENT ASSETS
25,461,347
36,607,780
Property and equipment, net
9,689,505
10,332,090
Intangible assets, net
7,756,534
7,807,592
Loans receivable - long term portion
2,876,523
3,509,200
Loans receivable - related party - long term
2,898,280
3,539,840
Operating lease right-of-use asset
696,166
1,131,552
Financing lease right-of-use asset
13,607
28,790
Advances for building's acquisition
2,000,020
2,000,020
Other assets
1,108,484
1,057,947
Other assets - related party
1,811,425
TOTAL ASSETS
$ 54,311,892
$ 66,014,811
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable and accrued expenses
$ 11,157,658
11,911,978
Accounts payable and accrued expenses - related party
1,269,403
231,564
Accrued interest
221,820
166,348
Lines of credit
6,985,052
6,630,273
Notes payable
2,548,480
1,570,886
Notes payable - related party
10,558
11,283
Loans payable - related party
6,194
13,257
Operating lease liability, current portion
196,718
285,563
Financing lease liability, current portion
11,484
27,222
Other current liabilities
3,350,173
3,474,096
TOTAL CURRENT LIABILITIES
25,757,540
24,322,470
Notes payable - long term portion
1,560,433
3,035,341
Operating lease liability, net of current portion
498,398
844,866
Financing lease liability, net of current portion
3,399
5,261
Other liabilities
1,959,193
1,763,845
TOTAL LIABILITIES
29,778,963
29,971,783
Commitments and Contingencies (see Note 15)
-
-
STOCKHOLDERS' EQUITY:
Common stock, $0.001 par value; 300,000,000 shares authorized; 23,689,135 and 15,982,472 shares issued and 23,602,638 and 15,895,975 outstanding as of December 31, 2024 and December 31, 2023, respectively
23,689
15,983
Additional paid-in capital
141,583,625
129,008,301
Subscription receivable
(20 )
(20 )
Treasury stock, at cost, 86,497 shares as of December 31, 2024 and December 31, 2023
(917,159 )
(917,159 )
Accumulated deficit
(114,022,275 )
(91,644,233 )
Accumulated other comprehensive loss
(2,134,931 )
(419,844 )
TOTAL STOCKHOLDERS' EQUITY
24,532,929
36,043,028
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
$ 54,311,892
$ 66,014,811
The accompanying notes are an integral part of these consolidated financial statements.
COSMOS HEALTH INC.
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
Twelve Months Ended December 31,
REVENUE
$ 54,426,402
$ 53,376,874
COST OF GOODS SOLD
50,115,079
49,027,305
GROSS PROFIT
4,311,323
4,349,569
OPERATING EXPENSES
General and administrative expenses
11,733,237
19,642,005
Salaries and wages
5,693,436
4,554,909
Sales and marketing expenses
354,969
1,204,636
Research and development costs
533,293
164,859
Impairment Charges
291,980
-
Depreciation and amortization expense
1,249,238
614,377
TOTAL OPERATING EXPENSES
19,856,153
26,180,786
LOSS FROM OPERATIONS
(15,544,830 )
(21,831,217 )
OTHER INCOME (EXPENSE)
Other income (expense), net
86,737
(65,867 )
Interest expense
(1,012,314 )
(866,476 )
Interest income
406,449
662,859
Gain on equity investments, net
2,470
4,584
Gain on extinguishment of debt
-
1,910,967
Change in fair value of derivative liability
-
3,384
Bargain purchase gain
-
1,440,249
Foreign currency transaction, net
(121,530 )
198,863
TOTAL OTHER INCOME (EXPENSE), NET
(638,188 )
3,288,563
LOSS BEFORE INCOME TAXES
(16,183,018 )
(18,542,654 )
INCOME TAX EXPENSE
-
-
NET LOSS
(16,183,018 )
(18,542,654 )
Deemed dividend on issuance of warrants
(6,185,231 )
Deemed dividend on downround of warrants
-
(22,695 )
Deemed dividend on warrant exchange/modification
(9,793 )
(7,218,485 )
NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS
(22,378,042 )
(25,783,834 )
OTHER COMPREHENSIVE INCOME (LOSS)
Foreign currency translation adjustment, net
(1,715,087 )
712,791
TOTAL COMPREHENSIVE LOSS
$ (24,093,129 )
$ (25,071,043 )
BASIC NET LOSS PER SHARE
(1.17 )
$ (2.15 )
DILUTED NET LOSS PER SHARE
(1.17 )
$ (2.15 )
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING
Basic
19,147,726
11,968,665
Diluted
19,147,726
11,968,665
The accompanying notes are an integral part of these consolidated financial statements.
COSMOS HEALTH INC.
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY AND MEZZANINE EQUITY
Accumulated
Preferred Stock
Common Stock
Additional
Treasury Stock
Other
Total
No. of Shares
Value
No. of Shares
Value
Paid-in Capital
Subscription
Receivable
No. of Shares
Value
Accumulated
Deficit
Comprehensive
Loss
Stockholders'
Equity
Balance at January 1, 2023
-
$ 372,414
10,605,412
$ 10,606
$ 112,205,952
$ (4,750,108 )
15,497
$ (816,707 )
$ (66,232,813 )
$ (1,132,635 )
$ 39,284,295
Foreign currency translation adjustment, net
-
-
-
-
-
-
-
-
-
712,791
$ 712,791
Proceeds from sale of common stock
-
-
-
-
-
4,750,088
-
-
-
-
4,750,088
Proceeds from sale of common stock, net of financing fees of $442,870
-
-
2,116,936
2,117
4,804,921
-
-
-
-
-
4,807,038
Proceeds from the exercise of warrants, net of financing fees of $275,000
-
-
1,487,000
1,487
3,257,254
3,258,741
Shares issued in lieu of cash
-
-
15,258
96,873
-
-
-
-
-
96,888
Shares issued for purchase of customer base
-
-
99,710
315,981
-
-
-
-
-
316,081
Shares issued for purchase of Cana
-
-
46,377
138,621
-
-
-
-
-
138,667
Shares issued for purchase of Cloudscreen
-
-
280,000
318,920
319,200
Shares issued upon exchange of related party debt
-
-
51,485
51,948
52,000
Stock-based compensation
-
-
1,280,294
1,280
576,651
-
-
-
-
-
577,931
Repurchase of treasury stock
-
-
-
-
-
-
71,000
(100,452 )
(100,452 )
Deemed dividend upon issuance and downround of warrants
-
$ -
-
-
7,241,180
-
-
-
(7,241,180 )
-
-
Deemed dividend reclassified upon elimination of its redemption provision
-
$ (372,414 )
372,414
372,414
Net loss
-
-
-
-
-
-
-
-
(18,542,654 )
-
(18,542,654 )
Balance at December 31, 2023
-
-
15,982,472
15,983
129,008,301
(20 )
86,497
(917,159 )
(91,644,233 )
(419,844 )
36,043,028
Preferred Stock
Common Stock
Additional
Treasury Stock
Other
Total
No. of Shares
Value
No. of Shares
Value
Paid-in
Capital
Subscription
Receivable
No. of Shares
Value
Accumulated
Deficit
Comprehensive
Loss
Stockholders'
Equity
Balance at January 1, 2024
-
$ -
15,982,472
15,983
$ 129,008,301
$ (20 )
86,497
$ (917,159 )
$ (91,644,233 )
$ (419,844 )
$ 36,043,028
Foreign currency translation adjustment, net
-
-
-
-
-
-
-
-
-
(1,715,087 )
(1,715,087 )
Proceeds from sale of common stock, net of financing fees of $19,467
-
-
901,488
628,525
-
-
-
-
-
629,426
Shares issued in lieu of cash
-
-
2,500,000
2,500
692,905
-
-
-
-
-
695,405
Shares issued pursuant to warrant exchange agreement
-
-
950,063
(950 )
-
-
-
-
-
-
Stock-based compensation
-
-
680,000
993,627
-
-
-
-
-
994,307
Proceeds from exercise of warrants, net of financing fees of $372,109
-
-
2,332,000
2,332
3,866,536
-
-
-
-
-
3,868,868
Deemed dividend on warrant inducement
-
-
-
-
6,195,024
-
-
-
(6,195,024 )
-
-
Debt exchanges
-
-
343,112
199,657
-
-
-
-
-
200,000
Net loss
-
-
-
-
-
-
-
-
(16,183,018 )
-
(16,183,018 )
Balance at December 31, 2024
-
$ -
23,689,135
$ 23,689
$ 141,583,625
$ (20 )
86,497
$ (917,159 )
$ (114,022,275 )
$ (2,134,931 )
$ 24,532,929
The accompanying notes are an integral part of these consolidated financial statements.
COSMOS HEALTH INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Twelve Months Ended December 31,
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Loss
$ (16,183,018 )
$ (18,542,654 )
Adjustments to Reconcile Net Loss to Net Cash Used In Operating Activities:
Depreciation and amortization expense
1,219,355
590,691
Amortization of right-of-use assets
29,883
23,686
Bad debt expense
4,638,555
11,850,788
Impairment charges
454,280
-
Provision for extraordinary tax charges
-
578,425
Shares issued in lieu of cash
-
96,888
Lease expense
286,765
365,639
Interest on finance leases
2,066
2,903
Stock-based compensation
1,689,712
577,931
Deferred income taxes
(11,843 )
78,553
Gain on extinguishment of debt
-
(1,910,967 )
Bargain purchase gain
-
(1,440,249 )
Change in fair value of the derivative liability
-
(3,384 )
Gain on net change in fair value of equity investments
(2,470 )
(4,584 )
Other income
-
(928 )
Changes in assets and liabilities:
Accounts receivable
1,367,136
(5,484,213 )
Accounts receivable - related party
(136,028 )
1,457,845
Inventory
146,451
(890,903 )
Prepaid expenses and other assets
(1,320,365 )
(579,467 )
Prepaid expenses and other current assets - related party
(1,191,096 )
(913,574 )
Accounts payable and accrued expenses
(205,791 )
644,838
Accounts payable and accrued expenses - related party
1,252,340
71,777
Accrued interest
69,070
(115,668 )
Lease liabilities
(285,945 )
(373,816 )
Taxes payable
-
(128,801 )
Other current liabilities
141,204
(1,359,180 )
Other liabilities
322,705
(227,575 )
NET CASH USED IN OPERATING ACTIVITIES
(7,717,034 )
(15,635,999 )
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from loan receivable
468,974
806,464
Cash paid for the acquisition of Cana
-
(5,230,593 )
Loan receivable - related party
-
(168,469 )
Purchase of intangible assets
(849,168 )
(6,189,564 )
Advances for building's acquisition
-
(1,665,000 )
Purchase of property and equipment
(418,075 )
(1,313,195 )
NET CASH USED IN INVESTING ACTIVITIES
(798,269 )
(13,760,357 )
CASH FLOWS FROM FINANCING ACTIVITIES:
Payment of convertible note payable
-
(100,000 )
Payment of note payable
(1,092,121 )
(1,611,774 )
Proceeds from note payable
865,600
1,057,540
Payment of related party loan
(25,968 )
-
Proceeds from related party loan
19,476
-
Payment of lines of credit
(25,123,635 )
(19,532,735 )
Proceeds from lines of credit
25,939,953
20,193,343
Proceeds from the issuance of common stock
649,039
10,000,017
Proceeds from the exercise of warrants
4,240,977
3,533,741
Payments of financing fees
(391,575 )
(717,888 )
Payments of finance lease liability
(35,062 )
(27,786 )
Payments for purchase of treasury stock
-
(100,452 )
NET CASH PROVIDED BY FINANCING ACTIVITIES
5,046,684
12,694,007
Effect of exchange rate changes on cash
(49,471 )
(214,139 )
NET CHANGE IN CASH
(3,518,090 )
(16,916,488 )
CASH AT BEGINNING OF YEAR
3,833,195
20,749,683
CASH AT END OF YEAR
$ 315,105
$ 3,833,195
Supplemental Disclosure of Cash Flow Information
Cash paid during the year:
Interest
$ 704,839
$ 406,885
Income tax
$ -
$ -
Supplemental Disclosure of Non-Cash Investing and Financing Activities
Common shares issued for acquisition of customer base
$ -
$ 316,081
Common shares issued for acquisition of Cana
$ -
$ 138,667
Closing of acquisition of Cloudscreen
$ 637,080
$ -
Deemed dividend reclassified upon elimination of its redemption provision
$ -
$ 372,414
Deemed dividend upon warrant exchange
$ 6,195,024
$ -
Common stock issued to employees
$ 695,405
$ -
Common stock issued to consultants
$ 994,160
$ -
The accompanying notes are an integral part of these consolidated financial statements.
COSMOS HEALTH INC.
Notes to the Consolidated Financial Statements
NOTE 1 - ORGANIZATION AND NATURE OF BUSINESS
Cosmos Health Inc. and its subsidiaries (Nasdaq: COSM), (“us”, “we”, the “Group”, or the “Company”) are an international healthcare group headquartered in Chicago, Illinois. The Group is engaged in the nutraceuticals sector through its own proprietary lines of products “Sky Premium Life” and “Mediterranation”. The Company is operating in the pharmaceutical sector as well, through the provision of a broad line of branded generics and OTC medications. In addition, the Group is involved in the healthcare distribution sector through its subsidiaries in Greece and the UK, serving retail pharmacies and wholesale distributors. The Company is strategically focusing on the research and development (“R&D”) of novel patented nutraceuticals and specialized root extracts as well as on the R&D of proprietary complex generics and innovative OTC products. The Company has developed a global distribution platform and is currently expanding throughout Europe, Asia, the UAE and North America. The Company has offices and distribution centers in Thessaloniki and Athens, Greece and Harlow, UK.
The Company was incorporated in the State of Nevada under the name Prime Estates and Developments, Inc. on July 21, 2009. On November 14, 2013, we changed our name to Cosmos Holdings Inc., and on November 29, 2022, we changed our name to Cosmos Health Inc. Through its acquisition of Amplerissimo Ltd, on September 27, 2013, the Company changed its principal activities into trading of products, providing representation, and provision of consulting services to various sectors. On August 1, 2014, the Company formed SkyPharm S.A., a Greek Company (“SkyPharm”), a subsidiary that used to focus on the trading, sourcing and export of nutraceutical and pharmaceutical products. In February 2017, the Company acquired Decahedron Ltd., a UK Company (“Decahedron”) which is a fully licensed second-generation wholesaler specializing in imports and exports of generics and OTC pharmaceutical products within the EEA (European Economic Area) and distributor of Sky Premium Life nutraceutical products in the UK. On December 19, 2018, the Company acquired Cosmofarm S.A. (“Cosmofarm”), a pharmaceutical wholesaler specializing in the distribution and export of pharmaceutical products through its extensive pharmacies network. On April 3, 2023, the Company completed the acquisition of ZipDoctor Inc. (“ZipDoctor”), a telehealth company, a direct-to-consumer subscription-based telemedicine platform. On June 30, 2023, the Company acquired Laboratories Holdings (Cyprus) Limited (“Cana”), which wholly owned an operating subsidiary, Pharmaceutical Laboratories Cana S.A. (“Cana SA”), a Greek pharmaceutical company that manufactures, sells, distributes, and markets original branded products researched and developed by leading global pharmaceutical and healthcare companies.
Acquisition Accounting
Cloudscreen
On January 23, 2024, the Company completed the acquisition of Cloudscreen, a cutting-edge Artificial Intelligence (AI) powered platform. The acquisition is pursuant to the purchase agreement announced on October 11, 2023. Cloudscreen is a multimodal platform specialized in drug repurposing, a process that involves uncovering new target proteins or indications for existing drugs for use in treating different diseases. The total purchase price amounted to $637,080 and consisted of 280,000 shares of common stock with a fair value of $319,200 and an amount of $317,880 to be settled in cash during 2024 based on the Promissory Note signed on October 10, 2023. The Company accounted for the acquisition as an asset acquisition in accordance with Accounting Standards Codification (“ASC”) Topic 805, Business Combinations, (“ASC 805”) and recorded $637,080 as “Other assets” related to the technology platform acquired. The total amount was reclassified to “Goodwill and intangible assets, net” in January 2024 with the closing of the agreement (refer to Note 20).
ZipDoctor
On April 3, 2023, the Company completed the acquisition of ZipDoctor Inc. (“ZipDoctor”), a telehealth company for a total sum of $150,000 in cash and $8,788 in fees. The Company accounted for the acquisition as an asset acquisition in accordance with Accounting Standards Codification (“ASC”) Topic 805, Business Combinations, (“ASC 805”) and recorded $158,788 as an intangible asset related to the technology platform acquired.
During the year ended December 31, 2024, the Company recognized an impairment charge of $131,032 related to the technology platform. This decision followed management’s assessment that the asset’s recoverability was no longer supportable due to changes in market conditions and a shift in strategic priorities. Specifically, the telehealth platform was no longer in use and did not generate revenues, as the Company elected not to focus on the telehealth business segment. As a result, the unamortized balance of the intangible asset was effectively written off. The impairment charge is recorded within “Other income (expense), net” in the Consolidated Statement of Operations for the year ended December 31, 2024.
Bikas
On June 15, 2023, Cosmos Health Inc. entered into an Assignment and Assumption Agreement (the “Agreement”) with Ioannis Bikas O.E., a Greek Company (“Bikas”). Bikas is owner of a pharmaceutical distribution network in Greece and agreed to sell to the Company their distribution network and customer base. The purchase price of the network was €100,000 ($109,330) of cash, and €300,000 ($316,081) of the Company’s stock. The Company issued 99,710 shares of common stock related to the acquisition of the customer base, based on the fair value of the stock on acquisition date. The Company accounted for the acquisition as an asset acquisition in accordance with ASC 805 and recorded $425,411 as an intangible asset related to the customer base acquired.
COSMOS HEALTH INC.
Notes to the Consolidated Financial Statements
Buildings Acquisitions
On April 24, 2023, the Company purchased a building for a total sum of $1,054,872 in cash. The Company accounted for the acquisition as an asset acquisition in accordance with ASC 805 and recorded the cost of the building as “Property, plant and equipment” on the consolidated balance sheets.
On January 6, 2023, the Company agreed to purchase land and building located in Montreal, Canada from a third-party vendor. The total purchase price amounts to $3,950,000 and the closing date of the agreement based on the amendment signed on July 19, 2023, was December 31, 2023. As of December 31, 2024, the Company has made prepayments of $2,000,020 classified as “Advances for building’s acquisition” on the Company’s consolidated balance sheets.
Cana
On June 30, 2023, the Company acquired Cana Laboratories Holding (Cyprus) Limited (“Cana”), which wholly owned an operating subsidiary, Pharmaceutical Laboratories Cana S.A. (“Cana SA”) for €800,000 ($873,600) in cash and 46,377 shares of common stock, with fair value of $138,667 as of the date of acquisition. Moreover, on February 28, 2023, the Company had signed a Secured Promissory Note with Cana, whereby Cana borrowed the sum of €4,100,000 ($4,457,520), included in the total consideration of $5,469,787. The Company accounted for the acquisition as a business acquisition in accordance with ASC 805. The fair value of Cana assets acquired, and liabilities assumed was based upon management’s estimates assisted by an independent third-party valuation firm. The fixed assets of Cana (which included land, building & machinery) were valued as of December 31, 2022 and the Company believes that nothing has materially changed between such date and the acquisition date (June 30, 2023). The following table summarizes the preliminary allocation of purchase price of the acquisition:
Consideration
Cash
$ 5,331,120
Fair value of common stock issued
138,667
Fair value of total consideration transferred
$ 5,469,787
Recognized amounts of identifiable assets acquired
Financial assets
$ 1,796,911
Inventory
297,340
Property, plant and equipment
7,488,818
Identifiable intangible assets
562,200
Financial liabilities
(3,235,233 )
Total identifiable net assets
$ 6,910,036
Bargain purchase gain
$ 1,440,249
Revenue for the 6- month period ended December 31, 2023
$
344,708
Loss for the 6- month period ended December 31, 2023
$
(1,232,732
)
During the prior year period, Cana had minimal operations as it was in financial difficulties and seeking for an investor. Therefore, we consider that presenting prior period pro forma financial information pursuant to ASC 805 would not provide meaningful information.
Going Concern
The Company’s consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”), which contemplates the continuation of the Company as a going concern. For the year ended period December 31, 2024, the Company had revenue of $54,426,402, net loss of $16,183,018 and net cash used in operations of $7,717,034. Additionally, as of December 31, 2024, the Company had negative working capital of $296,193, an accumulated deficit of $114,022,275, and stockholders’ equity of $24,532,929. It is management’s opinion that these conditions raise substantial doubt about the Company’s ability to continue as a going concern for a period of 12 months from the date of this filing.
COSMOS HEALTH INC.
Notes to the Consolidated Financial Statements
The Company’s revenues are not able to sustain its operations, and concerns exist regarding the Company’s ability to meet its obligations as they become due. The Company is subject to a number of risks to those of smaller commercial companies, including dependence on key individuals and products, the difficulties inherent in the development of a commercial market, the need to obtain additional capital, competition from larger companies, and other pharmaceutical and health care companies.
Management evaluated the above conditions which raise substantial doubt about the Company’s ability to continue as a going concern to determine if it can meet its obligations for the subsequent 12 months from the date of this filing. Management considered its ability to access future capital, curtail expenses if needed, expand product lines, and acquire new products.
Management’s plans include expansion of brand name products to the market, expanding the current product portfolio, and evaluating acquisition targets to expand distribution. The exclusive distribution agreement signed for its Sky Premium Life products in the United Arab Emirates (“UAE”) and the significant orders already received, are expected to substantially strengthen its operating cash flow. Furthermore, the Company intends to vertically integrate the supply chain distribution network. On top of that, the Company plans to access the capital markets further in order to raise additional funds through equity offerings. More specifically, commencing from August 2025, the Company will be eligible to utilize an S-3 registration statement, (12 months following the date that the Company had regained compliance with Listing Rule 5250(c)(1) (the “Filing Rule”)), to be in a position to raise equity capital more efficiently in conjunction with utilizing potential equity proceeds by its outstanding warrants. Management’s plans also include postponing certain debt repayments, through achieving favorable amendments to its debt facilities and in parallel intends to make substantial efforts to receive additional debt financing. Moreover, the Company’s management is considering of postponing certain repayments of suppliers and creditors. However, management cannot provide any assurances that the Company will be successful in accomplishing any of its plans. The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described herein and eventually secure other sources of financing and attain profitable operations.
Considering the above, management is of the view that substantial doubt exists for the Company’s ability to continue as a going concern. The consolidated financial statements do not include any adjustments to reflect the possible future effect on the recoverability and classification of assets or the amounts and classifications of liabilities that may result from the outcome of this uncertainty.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Financial Statement Presentation
The accompanying consolidated financial statements have been prepared in accordance with U.S. GAAP.
Principles of Consolidation
Our consolidated accounts include our accounts and the accounts of our wholly owned subsidiaries, SkyPharm S.A., Decahedron Ltd., Cosmofarm S.A., Cana Laboratories Holding (Cyprus) Limited and ZipDoctor Inc. The Group’s financial statements are prepared in accordance with U.S. GAAP. The consolidated financial statements reflect the consolidation of all entities in which the Company has control, as determined by the ability to direct the activities that significantly affect the entities’ economic performance. All significant intercompany balances and transactions have been eliminated.
Use of Estimates
The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
COSMOS HEALTH INC.
Notes to the Consolidated Financial Statements
The Effects of War in the Ukraine
On February 24, 2022, Russian forces launched significant military action against Ukraine. There continues to be sustained conflict and disruption in the region, which is expected to endure for the foreseeable future. We do not conduct any commercial transactions with either Ukraine or Russia and the Company and, as such, is not aware of any specific event or circumstance that would require an update to its estimates or judgments or a revision of the carrying value of its assets or liabilities as of the date of issuance of this Annual Report on Form 10-K. Such political issues and conflicts could have a material adverse effect on our results of operations and financial condition if they escalate in areas in which we do business. In addition, changes in and adverse actions by governments in foreign markets in which we do business could have a material adverse effect on our results of operations and financial condition.
Credit Losses
In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses of Financial Instruments, which amends the requirement on the measurement and recognition of expected credit losses for financial assets held. Furthermore, amendments ASU 2019-10 and ASU 2019-11 provided additional clarification for implementing ASU 2016-13. ASU 2016-13 is effective for the Company beginning January 1, 2023, with early adoption permitted. The Company adopted the standard on January 1, 2023, and the standard did not have a material impact on the Company’s consolidated financial statements and related disclosures. The Company is exposed to credit losses primarily through sales to its customers and the loans that it has provided. The Company assesses each customer’s/ borrower’s ability to pay, and a credit loss estimate by conducting a credit review which includes consideration of established credit rating, or an internal assessment of the customer’s creditworthiness based on an analysis of their payment history when a credit rating is not available. The Company monitors credit exposure through active review of customer balances. In accordance with ASC 326 and the Current Expected Credit Loss (CECL) framework, the Company has elected to apply the practical expedient available for its trade receivables, which are short-term in nature and do not contain a significant financing component. The Company applies a loss-rate method for calculating expected credit losses (“ECL”) on accounts receivable, based on a combination of historical experience, industry data, and adjustments for current conditions and reasonable and supportable forecasts. Receivables are grouped into four aging buckets, with loss rates applied as follows: 1% for receivables aged 0-30 days, 2% for receivables aged 31-60 days, 3% for receivables aged 61-90 days, and 5% for receivables aged over 90 days. These loss rates are based on management’s expectations, which are further supported by external benchmarks, due to the Company’s limited history of actual write-offs. The resulting provision for expected credit losses is recognized in net income and is included in “General and administrative expenses”. Receivables that are deemed uncollectible are written off against the allowance when it is determined that they are no longer recoverable.
Foreign Currency Translation and Other Comprehensive Loss
The functional currency of the Company’s subsidiaries is the Euro and British Pound. For financial reporting purposes, both the Euro (“EUR”) and British Pound (“GBP”) have been translated into United States dollars ($ and/or “USD”) as the reporting currency. Assets and liabilities are translated at the exchange rate in effect at the balance sheet date. Revenues and expenses are translated at the average rate of exchange prevailing during the reporting period. Equity transactions are translated at each historical transaction date spot rate. Translation adjustments arising from the use of different exchange rates from period to period are included as a component of stockholders’ equity (deficit) as “Accumulated other comprehensive income (loss)”. Gains and losses resulting from foreign currency transactions are included in the statements of operations and comprehensive loss as other comprehensive loss. There have been no significant fluctuations in the exchange rate for the conversion of EUR or GBP to USD after the balance sheet date.
Assets and liabilities denominated in foreign currencies are translated into the functional currency at the exchange rates prevailing at the consolidated balance sheet date with any transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency included in the consolidated results of operations as incurred.
COSMOS HEALTH INC.
Notes to the Consolidated Financial Statements
As of December 31, 2024, and 2023, the exchange rates used to translate amounts in Euros into USD and British Pounds into USD for the purposes of preparing the consolidated financial statements were as follows:
December 31,
December 31,
Exchange rate on balance sheet dates
EUR: USD exchange rate
1.0351
1.1062
GBP: USD exchange rate
1.2521
1.2743
Average exchange rate for the period
EUR: USD exchange rate
1.0820
1.0817
GBP: USD exchange rate
1.2781
1.2440
Cash and Cash Equivalents
For purposes of the statement of cash flows, the Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. As of December 31, 2024, and December 31, 2023, there were no cash equivalents.
The Company maintains bank accounts in the United States denominated in U.S. Dollars, in Greece denominated in Euros, U.S. Dollars and Great Britain Pounds (British Pounds Sterling), and in Bulgaria denominated in Euros. The Company also maintains bank accounts in the United Kingdom, denominated in Euros and Great Britain Pounds (British Pounds Sterling). As of December 31, 2024 and 2023, the aggregate amount in these foreign accounts were $293,040 and $1,047,738, respectively. Additionally, as of December 31, 2024, and 2023, the Company had cash on hand in the amount of $15,067 and $48,590, respectively.
Reclassifications to Prior Year Financial Statements and Adjustments
Certain reclassifications have been made in the Company’s financial statements of the prior year to conform with current year presentation. As of December 31, 2023, $123,409 was reclassified from “Property and equipment, net” to “Goodwill and intangible assets, net”. Moreover, $164,859 was reclassified from “General and administrative expenses” to “Research and Development costs”. These reclassifications had no impact on earnings or stockholders’ equity.
Accounts Receivable & Allowance for Doubtful Accounts
Accounts receivable are stated at their net realizable value. The allowance for credit losses against gross accounts receivable reflects the best estimate of probable losses inherent in the receivables’ portfolio determined on the basis of historical experience, specific allowances for known troubled accounts and other currently available information. As of December 31, 2024 and 2023, the Company’s allowance for credit losses and doubtful accounts was $22,799,219 and $19,686,091, respectively. Below is the summary of changes in the allowance for doubtful accounts:
December 31,
Balance as of January 1, 2024
$ 19,686,091
Provisions for credit losses
58,913
Provisions for doubtful accounts
4,579,641
Foreign exchange adjustments
(1,525,426 )
Balance as of December 31, 2024
$ 22,799,219
COSMOS HEALTH INC.
Notes to the Consolidated Financial Statements
Tax Receivables
The Company pays Value Added Tax (“VAT”) or similar taxes (“input VAT”), income taxes, and other taxes within the normal course of its business in most of the countries in which it operates related to the procurement of merchandise and/or services it acquires and/or on sales and taxable income. The Company also collects VAT or similar taxes on behalf of the government (“output VAT”) for merchandise and/or services it sells. If the output VAT exceeds the input VAT, this creates a VAT payable to the government. If the input VAT exceeds the output VAT, this creates a VAT receivable from the government. The VAT tax return is filed on a monthly basis offsetting the payables against the receivables. In observance of EU regulations for intra-EU cross-border sales, our subsidiaries in Greece, SkyPharm, CANA and Cosmofarm, do not charge VAT for sales to wholesale drug distributors registered in other European Union member states. As of December 31, 2024 and 2023, the Company had a VAT net receivable balance of $534,263 and $187,512 respectively, recorded in the consolidated balance sheets as “Prepaid expenses and other current assets”.
Inventories
Inventory is stated at the lower-of-cost or net realizable value using the weighted average method. Inventory consists primarily of finished goods and packaging materials, i.e., packaged pharmaceutical products and the wrappers and containers they are sold in. A periodic inventory system is maintained by 100% count. Inventory is replaced periodically to maintain the optimum stock on hand available for immediate shipment.
The Company writes down inventories to net realizable value based on physical condition, expiration date and current market conditions, as well as forecasted demand. The Company’s inventories are not highly susceptible to obsolescence. Many of the Company’s inventory items are eligible for return to our suppliers when pre-agreed product requirements, including, but not limited to, physical condition and expiration date, are not met. No significant judgments have been applied in estimating the selling price of our inventory.
Property and Equipment, net
Property and equipment are stated at cost, less accumulated depreciation. Depreciation is calculated on a straight-line basis over the useful lives (except for leasehold improvements which are depreciated over the lesser of the lease term or the useful life) of the assets as follows:
Estimated
Useful Life
Leasehold improvements and technical works
Lesser of lease term or 25 years
Buildings
25-30 years
Vehicles
6 years
Machinery
20 years
Furniture, fixtures and equipment
5-10 years
Computers
3 years
Depreciation expense was $387,036 and $353,043 for the years ended December 31, 2024 and 2023, respectively.
COSMOS HEALTH INC.
Notes to the Consolidated Financial Statements
Property and Equipment additions
Property and Equipment additions are recognized as assets when it is probable that future economic benefits associated with the asset will flow to the entity and the cost of the asset can be measured reliably. Additions are initially measured at cost, which includes all costs directly attributable to bringing the asset to its working condition and location for its intended use. This may include purchase price, freight, installation, and any directly attributable professional fees. They are capitalized if their cost exceeds a certain threshold. The threshold is determined based on materiality considerations. Costs below the threshold are typically expensed as incurred. After initial recognition, additions are measured at cost less accumulated depreciation and any accumulated impairment losses. Depreciation is calculated systematically over the estimated useful life of the asset. They are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. If the carrying amount exceeds the recoverable amount, an impairment loss is recognized, and the carrying amount of the asset is adjusted accordingly. Borrowing costs directly attributable to the acquisition, construction, or production of qualifying assets, including Property and Equipment additions, are capitalized as part of the cost of those assets.
Impairment of Long-Lived Assets
In accordance with ASC 360-10, Long-lived Assets, property and equipment and intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of long-lived assets to be held and used is measured by a comparison of the carrying amount of an asset to the estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated undiscounted future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the assets. Fair value is generally determined using the asset’s expected future discounted cash flows or market value, if readily determinable. For the years ended December 31, 2024, and 2023, the Company has recorded impairment charge of $291,980 and $0, respectively. The impairment charge for the period ended December 31, 2024 concerns a number of the Company’s branded pharmaceuticals purchased by Doc Pharma SA, pursuant to the agreement signed on June 28, 2023, which the Company does not currently intend to launch in the market and the “write-off” of the telehealth platform owned by the Company’s fully owned subsidiary, Zip Doctor Inc, which the Company does not currently utilize. Both assets were included in “Goodwill and intangible assets, net” in the Company’s Consolidated Balance Sheets.
Goodwill and Intangibles, net
The Company periodically reviews the carrying value of intangible assets not subject to amortization, including goodwill, to determine whether impairment may exist. Goodwill and certain intangible assets are assessed annually, or when certain triggering events occur, for impairment using fair value measurement techniques. These events could include a significant change in the business climate, legal factors, a decline in operating performance, competition, sale or disposition of a significant portion of the business, or other factors. First, under step 0, we determine whether it is more likely than not that the fair value of the reporting unit is less than the carrying amount. Following, if step 0 fails, goodwill impairment is determined using a two-step process. The first step of the goodwill impairment test is used to identify potential impairment by comparing the fair value of a reporting unit with its carrying amount, including goodwill. The Company uses level 3 inputs and a discounted cash flow methodology to estimate the fair value of a reporting unit. A discounted cash flow analysis requires one to make various judgmental assumptions including assumptions about future cash flows, growth rates, and discount rates. The assumptions about future cash flows and growth rates are based on the Company’s budget and long-term plans. Discount rate assumptions are based on an assessment of the risk inherent in the respective reporting units. If the fair value of a reporting unit exceeds its carrying amount, goodwill of the reporting unit is considered not impaired and the second step of the impairment test is unnecessary. If the carrying amount of a reporting unit exceeds its fair value, the second step of the goodwill impairment test is performed to measure the amount of impairment loss, if any. The second step of the goodwill impairment test compares the implied fair value of the reporting unit’s goodwill with the carrying amount of that goodwill. If the carrying amount of the reporting unit’s goodwill exceeds the implied fair value of that goodwill, an impairment loss is recognized in an amount equal to that excess. The implied fair value of goodwill is determined in the same manner as the amount of goodwill recognized in a business combination. That is, the fair value of the reporting unit is allocated to all of the assets and liabilities of that unit (including any unrecognized intangible assets) as if the reporting unit had been acquired in a business combination and the fair value of the reporting unit was the purchase price paid to acquire the reporting unit.
On December 19, 2018, as a result of the acquisition of Cosmofarm, the Company recorded $49,697 of goodwill.
COSMOS HEALTH INC.
Notes to the Consolidated Financial Statements
Intangible assets with definite useful lives are recorded on the basis of cost and are amortized on a straight-line basis over their estimated useful lives. The Company uses a useful life of five years for an import/export license and a useful life of ten years for the pharmaceutical and nutraceutical products licenses included in Note 4 as “Licenses”. A useful life of ten years is also used for the platforms included in Note 4 as “Software” as long as the customer bases. The Company evaluates the remaining useful life of intangible assets annually to determine whether events and circumstances warrant a revision to the remaining amortization period. If the estimate of the intangible asset’s remaining useful life is changed, the remaining carrying amount of the intangible asset will be amortized prospectively over that revised remaining useful life. As of December 31, 2024, no revision to the remaining amortization period of the intangible assets was made. For the years ended December 31, 2024 and 2023, the Company has recorded impairment charge of $291,980 and $0, respectively concerning a number of its intangible assets. The impairment charge for the period ended December 31, 2024, concerns a number of the Company’s branded pharmaceuticals purchased by Doc Pharma SA, pursuant to the agreement signed on June 28, 2023, which the Company does not currently intend to launch in the market and the “write-off” of the telehealth platform owned by the Company’s fully owned subsidiary, Zip Doctor Inc, which the Company does not currently utilize.
Amortization expense was $793,836 and $239,841 for the years ended December 31, 2024 and 2023, respectively.
Equity Method Investment
For those investments in common stock or in-substance common stock in which the Company has the ability to exercise significant influence over the operating and financial policies of the investee, the investment is accounted for under the equity method. The Company records its share in the earnings of the investee and is included in “Equity earnings of affiliate” in the consolidated statement of operations. The Company assesses its investment for other-than-temporary impairment when events or changes in circumstances indicate that the carrying amount of the investment might not be recoverable and recognizes an impairment loss to adjust the investment to its then current fair value.
Investments in Equity Securities
Investments in equity securities are accounted for at fair value with changes in fair value recognized in net income (loss). Equity securities are classified as short-term or long-term based on the nature of the securities and their availability to meet current operating requirements. Equity securities that are readily available for sale in current operations are reported as a component of current assets in the accompanying consolidated balance sheets. Equity securities that are not considered available for use in current operations would be reported as a component of long-term assets in the accompanying consolidated balance sheets. For equity securities with no readily determinable fair value, the Company elects a measurement alternative to fair value. Under this alternative, the Company measures the investments at cost, less any impairment, and adjusted for changes resulting from observable price changes in transactions for identical or similar investments of the investee. The election to use the measurement alternative is made for each eligible investment.
As of December 31, 2024, investments consisted of: (i) 3,000,000 shares of ICC International Cannabis Corp., which traded at a closing price of $0 per share or a value of $0, and (ii) 16,666 shares of National Bank of Greece, which traded at a closing price of $0.79 per share or value of $12,766. Additionally, the Company has $7,665 in equity securities of Pancreta Bank, which are revalued annually. As of December 31, 2023, investments consisted of: (i) 3,000,000 shares of ICC International Cannabis Corp., which traded at a closing price of $0 per share or a value of $0, and (ii) 16,666 shares of National Bank of Greece, which traded at a closing price of $0.70 per share or value of $11,596. Additionally, the Company has $8,479 in equity securities of Pancreta Bank, which are revalued annually. See Note 2 for additional investments in equity securities.
Fair Value Measurement
The Company applies ASC 820, Fair Value Measurements and Disclosures, (“ASC 820”), for assets and liabilities measured at fair value on a recurring basis. ASC 820 establishes a common definition for fair value to be applied to existing generally accepted accounting principles that require the use of fair value measurements establishes a framework for measuring fair value and expands disclosure about such fair value measurements.
ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Additionally, ASC 820 requires the use of valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. These inputs are prioritized below:
Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities.
COSMOS HEALTH INC.
Notes to the Consolidated Financial Statements
Level 2: Inputs other than quoted prices that are observable, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.
Level 3: Unobservable inputs in which little or no market data exists, therefore developed using estimates and assumptions developed by us, which reflect those that a market participant would use.
The following table presents assets that are measured and recognized at fair value as of December 31, 2024 and 2023, on a recurring basis:
December 31, 2024
Total Carrying
Level 1
Level 2
Level 3
Value
Marketable securities - ICC International Cannabis Corp.
$ -
-
-
$ -
Marketable securities - National Bank of Greece
12,766
-
-
12,766
$ 12,766
$ 12,766
December 31, 2023
Total Carrying
Level 1
Level 2
Level 3
Value
Marketable securities - ICC International Cannabis Corp.
$ -
-
-
$ -
Marketable securities - National Bank of Greece
11,596
-
-
11,596
$ 11,596
$ 11,596
In addition, ASC 825-10-25, Fair Value Option, (“ASC 825-10-25”), expands opportunities to use fair value measurements in financial reporting and permits entities to choose to measure many financial instruments and certain other items at fair value. The Company did not elect the fair value options for any of its qualifying financial instruments.
Our financials also included the following financial instruments as of December 31, 2024: cash, accounts receivable, inventory, prepaid expenses, loans receivable, accounts payable, notes payable and lines of credit. Except for the loans receivable which carry fixed interest rates, the carrying value of the remaining instruments, approximates fair value due to their short-term nature.
Derivative Instruments
Derivative financial instruments are recorded in the accompanying consolidated balance sheets at fair value in accordance with ASC 815. When the Company enters into a financial instrument such as a debt or equity agreement (the “host contract”), the Company assesses whether the economic characteristics of any embedded features are clearly and closely related to the primary economic characteristics of the remainder of the host contract. When it is determined that (i) an embedded feature possesses economic characteristics that are not clearly and closely related to the primary economic characteristics of the host contract, and (ii) a separate, stand-alone instrument with the same terms would meet the definition of a financial derivative instrument, then the embedded feature is bifurcated from the host contract and accounted for as a derivative instrument. The estimated fair value of the derivative feature is recorded in the accompanying consolidated balance sheets separately from the carrying value of the host contract. Subsequent changes in the estimated fair value of derivatives are recorded as a gain or loss in the Company’s consolidated statements of operations.
COSMOS HEALTH INC.
Notes to the Consolidated Financial Statements
Customer Advances
The Company receives prepayments from certain customers for pharmaceutical products prior to those customers taking possession of the Company’s products. The Company records these receipts as current liabilities until it has met all the criteria for recognition of revenue including passing control of the products to its customer, at such point, the Company will reduce the customer advances balance and credit the Company’s revenues. As of December 31, 2024 and December 31, 2023 the Company had $363,708 and $451,575 included in “Other current liabilities” in the Company’s Consolidated Balance Sheets.
Revenue Recognition
In accordance with ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”), the Company uses a five-step model for recognizing revenue by applying the following steps:
1)
Identification of the Contract: The Company identifies a contract with a customer when it enters into an agreement that creates enforceable rights and obligations.
2)
Identification of Performance Obligations: The Company identifies distinct performance obligations within each contract, which represent promises to transfer goods or services to the customer.
3)
Determination of Transaction Price: The Company determines the transaction price, which represents the amount of consideration to which it expects to be entitled in exchange for transferring promised goods or services to the customer, excluding any amounts collected on behalf of third parties.
4)
Allocation of Transaction Price: The Company allocates the transaction price to each distinct performance obligation based on its standalone selling price. If the standalone selling price is not observable, the Company estimates it using an appropriate method.
5)
Recognition of Revenue: Revenue is recognized when (or as) the Company satisfies a performance obligation by transferring a promised good or service to the customer. This typically occurs at a point in time or over time, depending on the nature of the performance obligation.
Wholesale revenue and sales of own branded nutraceutical and pharmaceutical products
The Company has contracts or signed partnership forms (usual in the wholesale sector of the pharma industry) with its customers, stipulating the enforceable rights and obligations. The Company is responsible for transferring the goods to the customer’s location, which represents its sole performance obligation. Thus, the transaction price, which is predetermined in most of the products sold, is exclusively allocated to this performance obligation. Revenue is recognized at a single point in time, which is upon issuance of the corresponding sales invoice. The Company has assessed the impact of the items invoiced but not delivered to the customer’s location as of December 31, 2024 and 2023, and deemed that it had no material effect.
Pharma manufacturing
The Company has active contracts with its customers, stipulating the enforceable rights and obligations. The Company is responsible for the manufacturing and the packaging of specific products assigned by its customers, which represents its performance obligations to which the Company allocates the transaction price determined. The customers are responsible for providing the raw materials to the Company. Revenue is recognized over a period of time, which is during the production and packaging period of the respective products. As of December 31, 2024 and 2023 there were no products or batches of products for which the production or packaging phase was in progress.
Medihelm SA
Commencing from January 1, 2023, and pursuant to the agreement with Medihelm, the exclusive distributor of the Company’s own proprietary line of nutraceuticals, the Company considered the transaction price to be variable and records an estimate of the transaction price, subject to the constraint for variable consideration. The Company is basing the change in transaction price with the exclusive distributor through assessment of significant overdue receivables from the exclusive distributor, which the Company reassesses each reporting period. Through this assessment, the Company applied the “expected value” model under ASC 606-10-32-5 and had applied specific constraints to revenue due from the customer at the end of each reporting period. Following the application of the “expected value” model, the Company deferred an amount of $367,000 and recorded it against the sales to Medihelm for the year ended December 31, 2023. However, during 2024, the Company’s sales to Medihelm SA were limited and significantly constrained since the Company only sold to Medihelm items that were “out of stock” or newly launched. Thus, the Company recorded a reversal to the cumulative effect of the discounted sales to Medihelm, which is an accounting approach followed in 2023, due to the significantly low collectability of the past sales. This was no longer required following the significant allowance recorded in 2023 and the limited sales in 2024 and thus reversed. The reversal of $367,000 was included in “Other income (expense), net” in the Company’s Consolidated Statements of Operations and Comprehensive Loss. The Company does not consider that sales to any other customer include a variable component as of December 31, 2024.
COSMOS HEALTH INC.
Notes to the Consolidated Financial Statements
Stock-based Compensation
The Company records stock-based compensation in accordance with ASC 718, Stock Compensation (“ASC 718”) and Staff Accounting Bulletin No. 107 (“SAB 107”) regarding its interpretation of ASC 718. ASC 718 requires the fair value of all stock-based employee compensation awarded to employees to be recorded as an expense over the related requisite service period. The Company values any employee or non-employee stock-based compensation at fair value using the Black-Scholes Option Pricing Model.
The Company accounts for non-employee share-based awards in accordance with the measurement and recognition criteria of ASU 2018-07, “Compensation-Stock Compensation-Improvements to Nonemployee Share-Based Payment Accounting.”
Concentrations of Credit Risk
Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash investments and accounts receivable.
The Company had no clients which contributed 10% or more of revenue and accounts receivable, respectively for the years ended December 31, 2024 and 2023.
Income Taxes
The Company accounts for income taxes under the asset and liability method, as required by the accounting standard for income taxes ASC 740. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis, as well as net operating loss carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.
The Company is liable for income taxes in Greece and the United Kingdom. The corporate income tax rate is 22% in Greece and 25% in the United Kingdom. Losses may also be subject to limitation under certain rules regarding change of ownership.
We regularly review deferred tax assets to assess their potential realization and establish a valuation allowance for portions of such assets to reduce the carrying value if we do not consider it to be more likely than not that the deferred tax assets will be realized. Our review includes evaluating both positive (e.g., sources of taxable income) and negative (e.g., recent historical losses) evidence that could impact the realizability of our deferred tax assets. At December 31, 2024, we believe our United Kingdom and Greece deferred tax assets will not be realized, as such, we did not record a reversal on the full valuation approach we followed during the period ended December 31, 2023.
Leases
The Company accounts for leases in accordance with ASC 842. For all leases, the Company recognizes a right-of-use (ROU) asset and a lease liability on the balance sheet. The ROU asset represents the Company’s right to use the underlying asset for the lease term, and the lease liability represents the obligation to make lease payments arising from the lease, both measured at the present value of future lease payments. Lease payments are recognized as an operating expense on a straight-line basis over the lease term. The interest on the lease liability and the amortization of the ROU asset are recognized separately in the income statement. Initial direct costs incurred by the Company in negotiating and securing leases are capitalized and amortized over the lease term on a straight-line basis. The assets and liabilities from operating and finance leases are recognized at the commencement date based on the present value of remaining lease payments over the lease term using the Company’s secured incremental borrowing rates or implicit rates, when readily determinable. Short-term leases, which have an initial term of 12 months or less, are not recorded on the balance sheet. The Company’s operating leases do not provide an implicit rate that can readily be determined. Therefore, we use a discount rate based on our incremental borrowing rate, which is determined using the average interest rate of our long-term debt on the date of inception.
COSMOS HEALTH INC.
Notes to the Consolidated Financial Statements
Retirement and Termination Benefits
Under Greek labor law, employees are entitled to lump-sum compensation in the event of termination or retirement. The amount depends on the employee’s work experience and remuneration as of the day of termination or retirement. If an employee remains with the company until full-benefit retirement, the employee is entitled to a lump-sum equal to 40% of the compensation to be received if the employee were to be dismissed on the same day. The Company periodically reviews the uncertainties and judgments related to the application of the relevant labor law regulations to determine retirement and termination benefits obligations of its Greek subsidiaries. The Company has evaluated the impact of these regulations and has identified a potential retirement and termination benefits liability. The amount of the liability as of December 31, 2024, and December 31, 2023, was $377,264 and $408,665, respectively, and has been recorded as a long-term liability within the consolidated balance sheets (“Other liabilities”). The Company engaged an actuarial expert for the first time, during the period ended December 31, 2023, and thus the liability of $408,665 is the cumulative effect of the 2-year period ended December 31, 2023. Management did not engage an actuarial expert for the 12-month period ended December 31, 2024, since there were no circumstances indicating that there would be a significant change to the liability recorded and thus the movement compared to 2023, solely relates to the foreign exchange effect.
Basic and Diluted Net Loss per Common Share
Basic income per share is calculated by dividing income available to common stockholders by the weighted average number of shares of common stock outstanding during the period. Diluted income per share is calculated by dividing income available to common stockholders by the weighted average number of common shares outstanding for the period and, when dilutive, potential shares from stock options, warrants and any convertible instruments to purchase common stock, using the treasury stock method. In accordance with ASC 260, Earnings Per Share, the following table reconciles basic shares outstanding to fully diluted shares outstanding.
The following table summarizes the potential shares of common stock that were excluded from the computation of diluted net loss per share for the years ended December 31, 2024 and 2023 as such shares would have had an anti-dilutive effect:
Common Stock Warrants
12,926,507
8,561,476
Common Stock Options
-
-
Convertible Debt
-
-
Total
12,926,507
8,561,476
Common stock equivalents are included in the diluted income per share calculation only when option exercise prices are lower than the average market price of the common shares for the period presented.
Recent Accounting Pronouncements
In November 2024, the Financial Accounting Standards Board (“FASB”) issued final guidance which requires disaggregated disclosures of certain categories of expenses that are included in expense line items on the face of the income statement. The disclosure is required on an annual and interim basis. The guidance also requires the total amount of selling expenses to be disclosed and, on an annual basis, the definition of selling expenses. The new disclosure requirements are effective for annual reporting periods beginning after December 15, 2026. Entities are permitted to adopt these disclosure requirements earlier than the mandated dates if they choose to do so. This new guidance will result in increased disclosures in the notes to our financial statements.
In December 2023, the FASB issued Accounting Standards Update (“ASU”) 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. This guidance is intended to enhance the transparency and decision-usefulness of income tax disclosures. The amendments in ASU 2023-09 address investor requests for enhanced income tax information primarily through changes to disclosure regarding rate reconciliation and income taxes paid both in the U.S. and in foreign jurisdictions. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024 on a prospective basis, with the option to apply the standard retrospectively. Early adoption is permitted. The Company is currently evaluating this guidance to determine the impact it may have on its consolidated financial statements disclosures.
In November 2023, the FASB issued ASU 2023-07, Segment Reporting: Improvements to Reportable Segment Disclosures. This guidance expands public entities’ segment disclosures primarily by requiring disclosure of significant segment expenses that are regularly provided to the chief operating decision maker and included within each reported measure of segment profit or loss, an amount and description of its composition for other segment items, and interim disclosures of a reportable segment’s profit or loss and assets. The guidance is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The amendments are required to be applied retrospectively to all prior periods presented in an entity’s financial statements. The Company has completed its evaluation of this guidance and has implemented the standard. A respective disclosure has been included in Note 19 (Segment Reporting) to the consolidated financial statements.
COSMOS HEALTH INC.
Notes to the Consolidated Financial Statements
Management does not believe that any recently issued, but not effective, accounting standards, if currently adopted, would have a material effect on the Company’s consolidated financial statements.
NOTE 3 -EQUITY METHOD INVESTMENTS
Distribution and Equity Agreement
On March 19, 2018, the Company entered into a Distribution and Equity Acquisition Agreement with Marathon Global Inc. (“Marathon”), a company incorporated in the Province of Ontario, Canada. Marathon was formed to be a global supplier of cannabis, cannabidiol (CBD) and/or any cannabis extract products, extracts, ancillaries and derivatives (collectively, the “Products”). The Company was appointed the exclusive distributor of the Products initially throughout Europe and on a non-exclusive basis wherever else lawfully permitted. The Company has no present intention to distribute any Products under this Agreement in the United States or otherwise participate in cannabis operations in the United States. The Company intended to await further clarification from the U.S. Government on cannabis regulation prior to determining whether to enter the U.S. domestic market.
The above transaction closed on May 22, 2018 after the due diligence period, following which the Company received: (a) a 33 1/3% equity interest or 5 million shares in Marathon as partial consideration for the Company’s distribution services; and (b) cash of CAD $2,000,000, subject to repayment in common shares of the Company if it failed to meet certain performance milestones. The Company was entitled to receive an additional CAD $2,750,000 upon the Company’s receipt of gross sales of CAD $6,500,000 and an additional CAD $2,750,000 upon receipt of gross sales of CAD $13,000,000. The Company was also given the right to nominate one director to the Marathon board of directors. Since Marathon was a newly formed entity with no assets and no activity, the Company attributed no value to the 5 million shares in Marathon which was received as consideration for the distribution services.
The Distribution and Equity Acquisition Agreement was to remain in effect indefinitely unless Marathon fails to provide Market Competitive (as defined) product pricing and Marathon has not become profitable within five years of the agreement. On March 20, 2023, the Company sent a termination notice, to Marathon, which became effective on April 19, 2023 as a result of Marathon’s failure to satisfy these conditions. The Company had accounted for its obligation to issue a variable number of the Company’s Common Shares as Share-settled debt obligation in accordance with ASC Topic 480, Distinguishing Liabilities from Equity (“ASC 480”), which was measured at fair value or the settlement amount of $1,554,590 (CAD $2 million). Due to termination of the Distribution and Equity Acquisition Agreement, the Company recorded a gain on extinguishment of debt of $1,554,590 due to the write-off of the share settled debt obligation, for the year ended December 31, 2023.
COSMOS HEALTH INC.
Notes to the Consolidated Financial Statements
Cosmo Farmacy LP
In September 2019, the Company entered into an agreement with an unaffiliated third party to incorporate CosmoFarmacy L.P. for the purpose of providing strategic management consulting services and the retail trade of pharmaceutical products, and OTC to pharmacies. CosmoFarmacy was incorporated with a 30-year term through May 31, 2049. The unaffiliated third party is the general partner (the “GP”) of the limited partnership and is responsible for management and decision-making associated with CosmoFarmacy. The initial share capital was set to EUR 150,000 ($163,080) which was later increased to EUR 500,000 ($543,600). The GP contributed the pharmacy license (the “License”) valued at EUR 350,000 (30-year term) to operate the business of CosmoFarmacy in exchange for a 70% equity ownership. The Company is a limited partner and contributed cash of EUR 150,000 ($163,080) for the remaining 30% equity ownership. CosmoFarmacy is not publicly traded, and the Company’s investment has been recorded using the equity method of accounting. During the 12-month period ended December 31, 2024, the Company determined that its investment in CosmoFarmacy LP was fully impaired. As the entity is currently dormant and has not published or provided any financial statements, whether audited or unaudited, to substantiate the carrying value of the investment, management concluded that there was no reasonable expectation of recovery. Accordingly, the Company recognized a full impairment loss on the investment, writing off its entire carrying amount. As a result, the Company has determined that the investment no longer holds any recoverable value. The value of the investment as of December 31, 2024 and December 31, 2023, was $0 and $160,470, respectively, and is included in “Other assets” on the Company’s consolidated balance sheets.
NOTE 4 - PROPERTY AND EQUIPMENT, NET
Property and equipment, net consists of the following on December 31, 2024 and 2023:
Land
$ 3,322,780
$ 3,551,018
Buildings and improvements
4,526,432
4,787,963
Leasehold improvements
3,405
3,639
Vehicles
265,261
285,388
Furniture, fixtures and equipment
2,846,657
2,661,337
10,964,535
11,289,345
Less: Accumulated depreciation and amortization
(1,275,030 )
(957,255 )
Total
$ 9,689,505
$ 10,332,090
Depreciation expense was $387,036 and $353,043 for the years ended December 31, 2024 and 2023, respectively.
NOTE 5 - INTANGIBLE ASSETS
Intangible assets consist of the following at December 31, 2024 and 2023:
License
$ 7,257,938
$ 6,876,169
Trade name / mark
390,188
392,197
Customer base
626,397
602,204
Software
1,113,840
373,067
9,388,363
8,243,637
Less: Accumulated amortization & impairment
License
(1,117,341 )
(326,795 )
Trade name / mark
(36,997 )
(36,997 )
Customer base
(174,279 )
(110,161 )
Software
(352,909 )
(11,789 )
Subtotal
7,706,837
7,757,895
Goodwill
49,697
49,697
Total
$ 7,756,534
$ 7,807,592
COSMOS HEALTH INC.
Notes to the Consolidated Financial Statements
Amortization expense was $793,836 and $239,841 for the years ended December 31, 2024, and 2023, respectively. In addition, the Company recorded an impairment charge of $291,980 for the year ended December 31, 2024 ($0 for the year ended December 31, 2023), related to a telehealth platform categorized as software under intangible assets and certain pharmaceutical products classified under the "licenses" category. These impairments were recognized due to indications of diminished recoverability based on management’s assessment of market conditions and expected future cash flows. On December 31, 2024, the estimated aggregate amortization expense for intangible assets subject to amortization for each of the five succeeding fiscal years is as follows:
Year
Amount
$ 861,557
862,445
862,148
861,775
842,441
Thereafter
3,061,271
Sum
$ 7,351,637
NOTE 6 - LOAN RECEIVABLE
On October 30, 2021, the Company entered into an agreement for a ten-year loan with Medihelm SA to memorialize €4,284,521 ($4,849,221) in prepayments the Company had made. The prepayments to Medihelm SA had been made in accordance with the parallel export business, through which Medihelm supplied and would supply SkyPharm SA with branded pharmaceuticals. This business is no longer in place for the Company and thus the Company entered into this agreement with Medihelm SA in order for the outstanding amount to be settled. Interest is calculated at a rate of 5.5% per annum on a 360-day basis. Under the terms of the agreement, the Company is to receive 120 equal payments over the term of the loan. As of December 31, 2023, the Company had a short-term receivable balance of $411,858 and a long-term receivable balance of $3,509,200 under this loan. During the year ended December 31, 2024, the Company received €223,914 ($231,774) in principal payments such that as of December 31, 2024, the Company had a short-term receivable balance of $614,473 and a long-term receivable balance of $2,876,523 under this loan. The Company also received €107,144 ($110,904) in interest payments during year ended December 31, 2024. The Note is considered fully recoverable as of December 31, 2024.
NOTE 7 - CAPITAL STRUCTURE
Preferred Stock
The Company is authorized to issue 100 million shares of preferred stock, of which 6,000,000 are designated as Series A convertible preferred stock. The preferred stock has a liquidation preference over the common stock and is non-voting. As of December 31, 2024 and 2023, all Series A convertible preferred stock had been converted, and no preferred shares were issued and outstanding.
Major Rights & Preferences of Series A Preferred Stock
On and effective October 4, 2021, the Company amended and restated its articles of incorporation (the “Amended and Restated Articles”) and filed a certificate of designation (the “COD”) for its Series A Preferred Stock (the “Series A Preferred Stock”) with the State of Nevada. The Amended and Restated Articles allow the Company’s Board of Directors the authority to authorize the issuance of preferred stock from time to time in one or more classes or series by resolution. On February 23, 2022, the Company filed Correction No. 1 to the COD. On July 28, 2022, the Company filed an Amendment to the COD with the State of Nevada to allow a holder to waive application of the Beneficial Ownership Limitation with respect to the conversion of Series A Preferred Stock.
With respect to payment of dividends and distribution of assets upon liquidation, dissolution, or winding up of the Company, whether voluntary or involuntary, all shares of the Series A Preferred Stock will rank: (i) senior to all of the Company’s Common Stock and any other equity securities that the Company may issue in the future, (ii) equal to any other equity securities that the Company may issue in the future, the terms of which specifically provide that such equity securities are on parity or senior to the Series A Preferred Stock (“Parity Securities”), (iii) junior to all other equity securities the Company issues, the terms of which specifically provide that such equity securities rank senior to the Series A Preferred Stock, and (iv) junior to all of the Company’s existing and future indebtedness; without the prior written consent of the Majority Holders.
COSMOS HEALTH INC.
Notes to the Consolidated Financial Statements
In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Company (a “Liquidation”), the Holders of shares of Series A Preferred Stock shall be first entitled to receive out of the assets of the Company available for distribution to its shareholders.
Each Holder shall not be entitled to vote with holders of outstanding shares of Common Stock, voting together as a single class, with respect to any and all matters presented to the stockholders of the Company for their action or consideration, except as provided by law or as set forth in the COD. The holders of Series A Preferred Stock are entitled to receive dividends paid and distributions made to the holders of Common Stock to the same extent as if the holders of Series A Preferred Stock had converted such shares into shares of Common Stock.
The Series A Preferred Stock was initially convertible into the Company’s Common Stock as determined by dividing the number of shares of Series A Preferred Stock to be converted by the lower of (i) $75.00 or (ii) 80% of the average volume weighted average price for the Company’s Common Stock for the five trading days immediately following the effectiveness of the registration statement concerning the shares (the “Conversion Price”). On June 14, 2022, the Conversion Price was reset to $15.54 per share.
Each holder is entitled to receive dividends in shares of Series A Preferred Stock or cash determined based on the stated value of each Series A Preferred Stock at the dividend rate of 8.0% per year. For the year ended December 31, 2022, the Company recorded $372,414 as a deemed dividend in accordance with the Series A Preferred Stock cumulative dividend. As of December 31, 2022, the cumulative dividend has been recorded as mezzanine equity. Following, Mr. Siokas waiver of the right to receive the dividends on February 26, 2024 and the unanimous written consent of the Company’s Board of Directors on February 29, 2024, through which was resolved that the Company shall remove all accrued and unpaid dividends payable to the previous holders of Series A Preferred stock, the Company eliminated the total deemed dividend of $372,414 through retained earnings. Thus, the balance of mezzanine equity as of December 31, 2023, was $0.
On February 28, 2022, the Company entered into a securities purchase agreement, or the Purchase Agreement, with certain investors and an insider for a private placement of the Company’s securities (the “Private Placement”).
The Private Placement consisted of the sale of 6,000 shares of the Company’s Series A Convertible Preferred Stock, or the Series A Shares, at a price of $1,000 per share, and 80,000 warrants to purchase shares of common stock, or the Warrants, for aggregate gross proceeds of approximately $6 million. The Warrants were initially exercisable to purchase shares of common stock at $82.50 per share, or 110% of the Series A Shares initial conversion price and will expire five and one-half years following the initial exercise date of the Warrants. The Company determined that the 80,000 warrants are additional value being distributed to the preferred stockholders and presented the warrants’ fair value of $5,788,493 as a deemed dividend on issuance of warrants in the consolidated statements of operations and comprehensive loss. The warrants were valued using the Black-Scholes option pricing model with the following terms: a) exercise price of $82.50, b) common stock fair value of $85.50, c) volatility of 118%, d) discount rate of 1.71%, e) term of 5.50 years and f) dividend rate of 0%.
The closing of the Private Placement occurred on February 28, 2022. As a condition to the closing of the sale, the Company’s common stock received conditional approval for listing and trading on the Nasdaq Capital Market and commenced trading on February 28, 2022, under the trading symbol COSM. Concurrent with the issuance of the Series A Shares, the Company executed a registration rights agreement (the “Registration Rights Agreement”) to register the resale of the shares of common stock issuable upon conversion of the Series A Shares and the shares of common stock issuable upon exercise of the warrants issued in connection with the Series A Shares. The Company was required to file its initial registration statement within 45 days following February 28, 2022. The Effectiveness Date was required to be 60 days after February 28, 2022, or 75 days following the SEC’s full review, and any additional registration statements that may be required are to be filed within 20 days following the date required by the SEC. If the Company fails to timely file its initial registration statement, or any additional registration statement, or otherwise comply with the requirements of the Registration Rights Agreement, the Company shall pay each holder 2% of the subscription amount in cash until cured, with an additional penalty of 18% if the cash payment is not made within seven days of the cash payable date.
COSMOS HEALTH INC.
Notes to the Consolidated Financial Statements
The Company filed its initial registration statement on May 25, 2022, and thus accrued for liquidated damages payable to the holders in the amount of $250,260, calculated as described above, for both the late filing of the registration statement (event) and the 1st anniversary (30 days following the event date) of the event, which, along with an additional lump sum amount of $2,000,000 agreed to be paid to the investors as additional damages, led to a total amount of $2,250,260 concerning liquidated damages related to the February Private Placement within the year ended December 31, 2022. Upon the effectiveness of the Company’s registration statement, the Series A Shares conversion price was adjusted to $15.54 and the warrant exercise price was adjusted to $15.54 per share. The Company recorded a deemed dividend in the amount of $8,189,515 upon reducing the conversion price from $75.00 to $15.54 which was recorded as an increase to additional paid-in capital and an increase to accumulated deficit.
The Series A Shares rank senior to all of the Company’s Common Stock and any other equity securities that the Company may issue in the future with respect to payment of dividends and distribution of assets upon liquidation, dissolution or winding up. While the Series A Shares are outstanding, the Company may not amend, alter or change adversely the powers, preferences or rights given to the Series A Shares, create, or authorize the creation of, any additional class or series of capital stock of the Company (or any security convertible into or exercisable for any class or series of capital stock of the Company), including any class or series of capital stock of the Company that ranks superior to or in parity with the Series A Shares, alter, amend, modify, or repeal its Articles of Incorporation or other charter documents in any manner that adversely affects any rights of the holders of Series A Shares, increase or decrease the number of authorized shares of Series A Shares, any agreement, commitment or transaction that would result in a Change of Control, any sale or disposition of any material assets outside of the ordinary course of business of the Company, any material change in the principal business of the Company, including the entry into any new line of business or exit of any current line of business, and circumvent a right or preference of the Series A Shares. Any holder of the Series A Shares shall have the right by written election to the Company to convert all or any portion of the outstanding Series A Shares. Immediately upon effectiveness of a registration statement registering for resale all of the Registrable Securities (as defined in the Registration Rights Agreement), all outstanding Series A Shares shall automatically convert into Common Stock, subject to certain beneficial ownership limitations.
Treasury stock
As of December 31, 2024 and 2023, the Company held 86,497 and 86,497, respectively, shares of its common stock at a cost of $917,159 and $917,159, respectively. Shares of common stock that are repurchased are classified as treasury stock pending future use and reduce the number of shares outstanding used in calculating earnings per share. Cosmos may repurchase shares from time to time through open market purchases in accordance with applicable securities laws and other restrictions. The Company repurchased 71,000 shares of its common stock for $100,452 during the year ended December 31, 2023.
On January 24, 2023, the Company announced that its Board of Directors has approved a share repurchase program with authorization to purchase up to $3 million of its common stock. Cosmos may repurchase shares from time to time through open market purchases in accordance with applicable securities laws and other restrictions.
Mezzanine Equity
The Series A Shares are recorded as mezzanine equity in accordance with ASC 480 at its initial net carrying value in the amount of $5,452,300. The Series A Shares are recorded as mezzanine equity in accordance with ASC 480 as the Company may be obligated to issue a variable number of shares at a fixed price known at inception and there is no maximum number of shares that could potentially be issued upon conversion. In this instance, cash settlement would be presumed and the Series A Shares are classified as mezzanine equity in accordance with ASC 480-10-S99. Immediately upon effectiveness of the registration statement registering for resale of all the common stock issuable under the Series A Shares, all outstanding Series A Shares shall automatically convert into common stock. However, following the reset of the conversion price to $15.54 on June 14, 2022, the number of shares to be issued upon conversion became fixed.
As of December 31, 2022, 6,000 of the Series A Shares had been converted into 386,588 shares of common stock in accordance with the terms of the agreements and thus an amount of $5,452,300 was reclassified from mezzanine equity to common stock and additional paid-in capital, in the aggregate.
COSMOS HEALTH INC.
Notes to the Consolidated Financial Statements
Common Stock
The Company is authorized to issue 300 million shares of common stock. As of December 31, 2024 and 2023, the Company had 23,689,161 and 15,982,472 shares of our common stock issued, respectively, and 15,895,975 and 23,602,664 shares outstanding, respectively.
Issuance of Common Stock
During the 12 months ended December 31, 2024, the Company raised additional equity funds through two Prospectus Supplements to its Registration Statement on Form S-3 (No. 333-267550) filed with the SEC on February 29 and March 7, 2024. More specifically, the Company sold 901,488 shares of common stock for gross proceeds of $648,893. Placement agent’s fees and other commissions amounted to $19,467 and thus the total net proceeds for the period were $629,426.
On July 1, 2024, the Company entered into a consulting agreement with a third-party consultant for the provision of a variety of services such as preparation of press releases and other publications, relationship management and other additional services as described in the respective agreement. The agreement has a duration of sixteen months, and the consultant will solely receive stock consideration for the services rendered. More precisely, they have been awarded a total of 240,000 shares of the Company’s common stock valued at a total of $264,000 based on the fair value of the Company’s common stock as of the agreements’ date.
On September 16, 2024, the Company’s Board of Directors approved incentive stock awards for the CEO, the CFO, certain officers and directors and other key employees of the Company pursuant to the 2023 Plan adopted on August 21, 2023. The awards are in the form of restricted stock and will vest in two parts: 50% on September 16, 2025 and 50% on September 16, 2026. A total of 2,500,000 shares were awarded and issued as of September 16, 2024, subject to certain claw-back restrictions.
On November 21, 2023, the Company had entered into certain consulting agreements with four third-party consultants for the provision of a variety of services such as digital marketing, advisory services relating to target acquisitions and M&As and other additional services as described in the respective agreements. The agreements have a duration from 10 to 18 months and the consultants will solely receive stock consideration for the services rendered. More precisely, they have been awarded a total of 970,000 shares of the Company’s common stock valued at a total of $999,100 based on the fair value of the Company’s common stock as of the agreements’ date. On September 17, 2024, the termination date of two out of the four consulting agreements were extended and the consultants received additional 440,000 shares as complementary compensation for the extended services to be provided, valued at a total of $501,600 based on the fair value of the Company's common stock as of the agreements' date.
On September 26, 2024, the Company entered into a Warrant Inducement Letter (the “Letter”) with an investor pursuant to which the Company issued 9,748,252 new warrants (the “New Warrants”) and reduced the exercise price of 4,874,126 warrant shares from $1.45 to $0.8701 to induce exercise and receive gross cash proceeds of $4,240,977 (the “Original Warrants”). The Company issued 2,332,000 shares of common stock, held 2,532,126 shares in escrow until the investor’s beneficial ownership limitation allows for the transfer of the escrow shares.
On December 20, 2024, the Company issued 257,334 shares of common stock priced at $0.5829, which is the fair market value of our stock on the date of the agreement, to Grigorios Siokas, the CEO of the Company, in exchange for $150,000 of debt. The debt related to unpaid salaries and bonuses, the Company had due to Mr. Siokas, as of December 31, 2024.
On December 20, 2024, the Company issued 85,778 shares of common stock priced at $0.5829, which is the fair market value of our stock on the date of the agreement, to Georgios Terzis, the CFO of the Company, in exchange for $50,000 of debt. The debt related to unpaid salaries and bonuses, the Company had due to Mr. Terzis, as of December 31, 2024.
During the 12 months ended December 31, 2023, the Company issued 15,258 shares of common stock to a consultant for services rendered. The shares were valued and expensed in the amount of $96,888 on the date of issuance and are separately presented in the consolidated statement of changes in stockholders’ equity and mezzanine equity as “Shares issued in lieu of cash” for the year ended December 31, 2023.
On April 3, 2023, the Company issued 185,000 shares of unvested common stock to employees, officers and directors under the Company’s Equity Incentive Plan. These shares vest in two tranches, 1) 50% vesting on October 2, 2023, and 2) 50% vesting on October 2, 2024. The Company valued these shares on April 3, 2023 in the amount of $653,050 which is being amortized over the vesting period. During the year ended December 31, 2023, the Company had recorded $323,957 of stock-based compensation expense related to the shares issued, which is included in “General and administrative expense” on the accompanying consolidated statements of operations and comprehensive loss. As of December 31, 2023, the unamortized stock-based compensation for the 185,000 shares of common stock was $329,093, which will be amortized through October 2, 2024.
On June 15, 2023, the Company issued 99,710 shares of common stock related to the acquisition of the customer base of Bikas. The fair value of these shares at the acquisition date was $316,081, which was included in the purchase price.
On June 30, 2023, the Company issued 46,377 shares of common stock related to the acquisition of the Cana. The fair value of these shares at the acquisition date was $138,667, which was included in the purchase price of Cana.
On July 20, 2023, the Company entered into a Securities Purchase Agreement with three investors to issue and sell in the aggregate 1,401,163 shares of common stock, 715,773 pre-funded warrants at an exercise price of $0.01 per share in lieu of common stock and warrants to purchase 1,935,484 warrants at an exercise price of $2.75 per share of common stock. The 1,935,484 warrants expire on January 1, 2029. The common stock and warrants were sold together at the unit price of $2.75 per share, raised gross proceeds of approximately $5,250,000, and incurred financing fees of approximately $443,000. The Company issued 2,116,936 shares of common stock which were recorded in the amount of $4,807,038 on the Company’s consolidated statements of changes in stockholders’ equity and mezzanine equity.
The July 20, 2023, Securities Purchase Agreement triggered a down round provision for 782,610 previously issued warrants. The Company recorded a deemed dividend in the amount of $15,385, which was calculated using the Black-Scholes option pricing model with the following assumptions: a) exercise prices of $11.50 before repricing and $2.75 after repricing, b) common stock fair value of $1.89, c) volatility of 253.1% before repricing and 234.7% after repricing, d) discount rate of 4.26% before repricing and 4.03% after repricing, e) terms of 4.42 years before repricing and 5.51 years after repricing and f) dividend rate of 0%.
On October 9, 2023, the Company issued 280,000 shares for the acquisition of Cloudscreen. The fair value of these shares at the acquisition date was $319,200, which was included in the purchase price.
On October 24, 2023, the Company issued 51,485 shares of common stock priced at $1.01, which is the fair market value of our stock on the date of the agreement, to George Terzis, the CFO of the Company, in exchange for $52,000 of debt. The debt related to unpaid salaries and bonuses, the Company had due to Mr. Terzis, as of December 31, 2023. This amount was recorded as equity.
On December 29, 2023, the Company had entered into a warrant exchange agreement (the “Warrant Exchange”) with an investor to reduce the exercise price of 2,437,063 warrants from $2.75 per share to $1.45 per shares as an inducement to exercise. The Company issued 1,487,000 shares of common stock, held 950,063 shares in escrow until the investor’s beneficial ownership limitation allows for the transfer of the escrow shares, and received gross cash proceeds of 3,533,741. The 950,063 shares were issued on December 1, 2024 but were already valued in the year ended December 31, 2023.
On December 29, 2023, the Company issued 125,294 shares of common stock related to the acquisition of the customer base of Bikas. The fair value of these shares was $176,665, which was included in the purchase price.
COSMOS HEALTH INC.
Notes to the Consolidated Financial Statements
Debt Conversions
During the year ended December 31, 2022, the Company issued 9,520 shares of common stock upon the conversion of $1,190,000 of notes payable. The Company recorded $973,420 as a capital contribution and an increase in equity related to the conversion of the $1,190,000 reduced by $216,580 recorded as a gain upon extinguishment of debt upon modification. The $216,580 gain upon extinguishment was determined using the fair value of the Company of $102.25 per share at the extinguishment commitment date.
On May 1, 2022, the Company issued 1,574 shares of common stock to convert $26,515 principal and accrued interest. Following the conversion, the outstanding balance of the above Note was $0. Upon conversion, the 1,574 shares were issued at a fair value of $38,144 which was recorded as equity. Accordingly, upon conversion, the Company reduced its derivative liability by $11,629 (see Note 11).
Exercise of Warrants
During the year ended December 31, 2024, the Company issued 2,332,000 shares of common stock upon the exercise of 2,332,000 warrants. The Company received gross proceeds of $4,240,977 upon exercise. The net proceeds after deducting legal, agent and escrow fees of $372,109 amounted to $3,868,868. The warrants were exercised following the Warrant Inducement letter the Company signed on September 26, 2024, through which their exercise price was reduced from $1.45 to $0.8701.
During the year ended December 31, 2023, the Company issued 2,437,063 shares of common stock upon the exercise of 2,437,063 warrants. The Company received proceeds of $3,533,741 upon exercise.
During the year ended December 31, 2022, the Company issued 3,608,667 shares of common stock upon the exercise of 3,608,667 warrants. The Company received proceeds of $10,826,000 upon exercise.
During the year ended December 31, 2022, the Company issued 526,112 shares of common stock upon the cashless exercise of 776,674 warrants.
Issuance of Common Stock and Warrants
On December 29, 2023, the Company entered into a warrant exchange agreement (the “Warrant Exchange”) with an investor to reduce the exercise price of 2,437,063 warrants from $2.75 per share to $1.45 per shares as an inducement to exercise. The Company issued 1,487,000 shares of common stock, held 950,063 shares in escrow until the investor’s beneficial ownership limitation allows for the transfer of the escrow shares, and received gross cash proceeds of 3,533,741. The Company contingently granted 4,874,126 additional warrants to be issued upon shareholder approval, with an exercise price of $1.45 and a term of five years. For the year ending December 31, 2023, the Company recorded a deemed dividend of $7,642 for the inducement to exercise and $7,218,485 for the grant of new warrants.
On May 25, 2022, the Company granted 1,333 warrants to a third party based on a settlement agreement signed on May 25, 2022, as compensation concerning the consulting services the third party provided for the Private Placement closed on February 28, 2022. The Company recorded stock-based compensation in the amount of $24,101 upon issuance of the warrants valued using the Black-Scholes option pricing model with the following assumptions: a) common stock fair value of $26.75, b) exercise price of $82.50, c) term of 5.51 years, d) volatility of 107.3%, e) dividend rate of 0%, and f) discount rate of 2.71%.
COSMOS HEALTH INC.
Notes to the Consolidated Financial Statements
On June 7, 2022, the Company issued 344,765 warrants upon triggering the down round protection feature in relation to the warrants issued in connection with the Series A shares with an exercise price of $15.54 and a term of approximately 5 years. Additionally, the Company lowered the exercise price of the 80,000 warrants then outstanding from $82.50 to $15.54 per common share upon triggering the down round protection. The Company recorded a deemed dividend in the amount of $8,480,379 in relation to the down round protection feature for the incremental value of the shares issued and lowered exercise price valued using the Black-Scholes option pricing model with the following assumptions: a) common stock fair value of $26.75, b) old exercise price of $82.50 and revised exercise price of $15.54, c) term of 5.24 years, d) volatility of 121.47%, e) dividend rate of 0%, and f) discount rate of 2.99%.
On July 14, 2022, the Company issued 300 shares to a consultant for services rendered. For the year ended December 31, 2022, the Company recorded $3,120 as general and administrative expense related to the issuance.
On October 20, 2022, the Company issued 2,486,667 shares of common stock and 5,000,000 warrants, in the aggregate, upon entering into a securities purchase agreement for an aggregate purchase price of $7,500,000. Of the 5,000,000 warrants, 2,500,000 were designated as Series A and 2,500,000 were designated as Series B. The Series A warrants have an exercise price of $3.00 per share and expire two years from the date of issuance. The Series B warrants have an exercise price of $3.00 per share and expire seven years from the date of issuance. The Company allocated the proceeds between the common stock and warrants issued and recorded a discount to the common stock associated with the warrants in the amount of $8,437,977, in the aggregate, which was recorded as additional paid-in capital and a deemed dividend. The warrants were valued using the Black-Scholes option pricing model with the following assumptions: a) fair value of common stock of $2.20, b) exercise price of $3.00, c) terms of two years and seven years, d) dividend rate of 0%, e) volatility of 135.05% and 129.02%, and f) risk free interest rate of 4.62% and 4.36%.
On October 20, 2022, the Company cancelled 424,765 warrants in exchange for 849,530 additional warrants with existing warrant holders. The new warrants were issued with an exercise price of $3.00 per common share and a term of seven years. As a result, the Company recorded a deemed dividend as an increase to accumulated deficit and additional paid-in capital and reduced net income available to common shareholders by $1,067,876. The Company valued (a) the fair value of the 424,765 warrants immediately before exchange in the amount of $645,108, (b) the fair value of the warrants immediately after the exchange in the amount of $1,712,984, and (c) recorded the difference as a deemed dividend in the amount of $1,067,876. The warrants were valued using the Black-Scholes option pricing model using the following assumptions: a) fair value of common stock of $2.20, b) exercise prices of $15.54 pre-exchange and $3.00 post-exchange, c) terms of 4.87 years pre-exchange and seven years post-exchange, d) dividend rate of 0%, e) volatility of 132.3% pre-exchange and 131.9% post-exchange, and f) risk free interest rate of 4.45% pre-exchange and 4.36% post-exchange.
On November 21, 2022, the Company entered into a settlement and general release pursuant to a letter agreement dated July 7, 2021 whereby a consultant claimed to be entitled to compensation with respect to a previous financing. As a result of the settlement, the Company issued 40,000 shares of common stock which was recorded as general and administrative expense for the year ended December 31, 2022 in the amount of $173,121.
On December 19, 2022, the Company issued 2,828,320 shares of common stock and 2,828,320 warrants (of which 260,870 were cancelled subsequent to December 31, 2022), in the aggregate, upon entering into a securities purchase agreement for an aggregate purchase price of $32,525,680 and net proceeds of $30,600,319. The warrants have an exercise price of $11.50 per share and expire five years from the date of issuance. The Company allocated the proceeds between the common stock and net warrants issued and recorded a discount to the common stock associated with the warrants in the amount of $17,778,260 which was recorded as additional paid-in capital and a deemed dividend. The warrants were valued using the Black-Scholes option pricing model with the following assumptions: a) fair value of common stock of $11.50, b) exercise price of $7.59, c) terms of five years, d) dividend rate of 0%, e) volatility of 157.53%, and f) risk free interest rate of 3.70%.
No options warrants or other potentially dilutive securities other than those disclosed above have been issued as of December 31, 2024.
COSMOS HEALTH INC.
Notes to the Consolidated Financial Statements
Warrant Classification
The Company determines the classification of its warrants upon issuance by identifying the instrument issued to determine if it is debt or equity classified. The Company determined its warrants meet the scope exception in ASC 815-10 and are equity classified because, (a) the warrant is indexed to the Company’s own stock, (b) require settlement in equity shares, and (c) the Company has enough authorized and unissued shares.
NOTE 8 - INCOME TAXES
The Company provides for income taxes using an asset and liability approach under which deferred income taxes are provided for based upon enacted tax laws and rates applicable to periods in which the taxes become payable.
The domestic and foreign components of income (loss) before (benefit from) provision for income taxes were as follows:
December 31,
December 31,
Domestic
$ (6,700,828 )
$ (2,832,980 )
Foreign
(9,482,180 )
(15,709,674 )
$ (16,183,018 )
$ (18,542,654 )
The components of the (benefit from) provision for income taxes are as follows:
December 31,
December 31,
Current tax provision
Federal
$ -
$ -
State
-
-
Foreign
-
-
Total current tax provision
$ -
$ -
Deferred tax provision
Domestic
$ -
$ -
State
-
-
Foreign
-
-
Total deferred tax provision
$ -
$ -
Total current provision
$ -
$ -
COSMOS HEALTH INC.
Notes to the Consolidated Financial Statements
The reconciliation of income tax expense computed at the U.S. federal statutory rate to the income tax provision for the years ended December 31, 2024 and 2023 is as follows:
December 31,
December 31,
US
Loss before income taxes
$ (16,183,018 )
$ (18,542,654 )
Taxes under statutory US tax rates
$ (3,398,434 )
$ (3,893,957 )
Increase (decrease) in taxes resulting from:
Increase in valuation allowance
$ 3,904,140
$ 4,339,572
Foreign tax rate differential
$ 111,774
$ 245,518
Permanent differences
$ (99,080 )
$ (448,032 )
Prior period adjustments
$ 4,020
$ (151,879 )
State taxes
$ (522,420 )
$ (91,222 )
Income tax expense
$ -
$ -
Companies subject to the Global Intangible Low-Taxed Income provision (GILTI) have the option to account for the GILTI tax as a period cost if and when incurred, or to recognize deferred taxes for outside basis temporary differences expected to reverse as GILTI. We have elected to account for GILTI as a period cost.
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and amounts used for income tax purposes. Significant components of the Company’s deferred tax assets and liabilities consist of the following:
December 31,
December 31,
Net operating loss carryforward
$ 10,977,546
$ 7,621,277
Capital loss carryforward
801,744
801,744
Section 163(j) carryforward
469,387
563,138
Foreign exchange
129,916
129,916
Allowance for doubtful accounts
4,991,818
4,404,277
Accrued expenses
333,260
261,466
Mark to market adjustment in securities
358,761
358,761
Lease liability
258,682
261,377
Capitalized research & development costs
(8,208 )
52,261
Depreciation
(35,734 )
(35,734 )
Total deferred tax assets
18,277,172
14,418,483
Intangibles
31,932
(15,845 )
Inventory
(170 )
4,853
Right of use asset
(256,075 )
(258,770 )
Goodwill
(10,980 )
(10,980 )
Total deferred tax liabilities
(235,293 )
(280,742 )
Valuation allowance
(18,041,879 )
(14,137,741 )
Net deferred tax assets
$ -
$ -
As of December 31, 2024, the Company had total net operating loss ("NOL") carryforwards of approximately $38,451,790. Of this amount, $10,386,689 relates to the Group’s foreign entities, while $28,065,101 pertains to its U.S. entities. These NOL carryforwards may be utilized to offset future taxable income, subject to potential limitations under Internal Revenue Code (IRC) Section 382.(“” Of the $28.1 million U.S. Federal NOL carryforwards, $2.5 million are pre-2018 and begin to expire in 2031. The remaining balance of 25.6 million are limited to utilization of 80% of taxable income but do not have an expiration. At December 31, 2024, the Company had Greek NOL carryforwards of $3,384,922 and UK NOL carryforwards of $2,379,127. A valuation allowance exists for all operations except SkyPharm, based on a more likely than not criterion and in consideration of all available positive and negative evidence.
ASC 740 requires that the tax benefit of NOLs, temporary differences and credit carryforwards be recorded as an asset to the extent that management assesses that realization is “more likely than not.” Realization of the future tax benefits is dependent on the Company’s ability to generate sufficient taxable income within the carryforward period. Because of the Company’s history of domestic operating losses, management believes that recognition of the deferred tax assets arising from the above-mentioned future tax benefits is currently not likely to be realized and, accordingly, has provided a valuation allowance, on all our deferred tax asset. Management considered all available evidence to when evaluating the realizability of foreign deferred tax assets by jurisdiction and concluded primarily based upon a strong earnings history that these deferred tax assets were more-likely-than-not realizable.
COSMOS HEALTH INC.
Notes to the Consolidated Financial Statements
The Company applied the “more-likely-than-not” recognition threshold to all tax positions taken or expected to be taken in a tax return, which resulted in no unrecognized tax benefits as of December 31, 2024 and December 31, 2023, respectively. We recognize interest accrued related to unrecognized tax benefits and penalties as income tax expense.
The Company files income tax returns in Illinois, United States, and in foreign jurisdictions including Greece and the United Kingdom. As of December 31, 2024, all domestic tax years are open to tax authority examination due the availability of net operating loss deductions, 2010 through 2024. In Greece, the statute of limitations is open for five years, 2018 through 2023. In the United Kingdom, the statute of limitations is open for four years, 2019 through 2023. Currently, there are no ongoing tax authority income tax examinations.
NOTE 9 - RELATED PARTY TRANSACTIONS
Doc Pharma S.A.
Doc Pharma S.A. is considered a related party to the Company due to the fact that the CEO of Doc Pharma is the son of Grigorios Siokas, the Company’s CEO and principal shareholder, who also served as a principal of Doc Pharma S.A. in the past.
Prepaid expenses and other current assets - related party & Other assets - related party
As of December 31, 2024, and December 31, 2023, the Company had a prepaid balance of $3,284,052 and $4,347,184, respectively, to Doc Pharma. For the year ended December 31, 2024 the prepayment of approximately $2.6 million relates to purchases of inventory pursuant to the CMO agreement signed between the Company and Doc Pharma SA on October 10, 2020, $310k concern the purchase of pharmaceutical and nutraceutical licenses according to the May 17, 2021 R&D agreement and the remaining $362k relate to the current portion of the Royalty Agreement signed on December 31, 2024 between the and DocPharma SA (refer to “Research and Development” section of the MD&A). The non-current portion of the Royalty Agreement of $1,811,425 is included in “Other Assets - Related Party” in the Company’s Consolidated Balance Sheets as of December 31, 2024.
Accounts payable and accrued expenses - related party
As of December 31, 2024 and December 31, 2023, the Company had an accounts payable balance to Doc Pharma of $249,768 and $34,217, respectively. The December 31, 2024 balance concerns a trade payable balance that our subsidiary wholesaler, Cosmofarm SA, owes to Doc Pharma SA, concerning purchases of certain pharmaceutical products.
Accounts receivable - related party
Additionally, the Company had a receivable balance of $2,295,706 and $2,386,721 from Doc Pharma S.A. as of December 31, 2024, and December 31, 2023, respectively, which concerns trading receivables balances with the Company’s Greek and UK subsidiaries. As of December 31, 2024, a cumulative allowance for doubtful accounts of approximately $1.4 million has been recognized, effectively offsetting this balance.
Sales and Purchases
During the years ended December 31, 2024 and 2023, the Company purchased a total of $1,091,540 and $1,365,324 of products from Doc Pharma S.A., respectively and additionally sold a total of $781,386 and $619,637 of products to Doc Pharma, respectively.
Other Agreements
On October 10, 2020, the Company entered into a contract manufacturer outsourcing (“CMO”) agreement with Doc Pharma whereby Doc Pharma is responsible for the development and manufacturing of pharmaceutical products and nutritional supplements according to the Company’s specifications based on strict pharmaceutical standards and good manufacturing practice (“GMP”) protocols as the National Organization for Medicines requires. The Company has the exclusive ownership rights for trading and distribution of its own branded nutritional supplements named “Sky Premium Life®”. The duration of the agreement is for five years, however, either party may terminate the agreement at any time giving six-month advance notice. Doc Pharma is exclusively responsible for supplying the raw materials and packaging required to manufacture the final product. However, they are not responsible for potential delays that may arise, concerning their import. Doc Pharma is also obligated to store the raw and packaging materials. The delivery of raw and packaging materials should be purchased at least 30 and 25 days, respectively, before the delivery date of the final product. The Manufacturer solely delivers the finished product to the Company. There is a minimum order quantity (“MoQ”) of 1,000 pieces per product code. Both parties have agreed that the Company will deposit 60% of the total cost upon agreement and assignment and 40% of the total cost including VAT charge upon the delivery date. The prices are indicative and are subject to amendments if the cost of the raw material or the production cost change.
COSMOS HEALTH INC.
Notes to the Consolidated Financial Statements
For the years ended December 31, 2024 and 2023, the Company has purchased €493,241 ($533,687) and €1,144,043 ($1,237,467), respectively, in inventory related to this agreement.
On May 17, 2021, Doc Pharma and the Company entered into a Research and Development (“R&D”) agreement whereby Doc Pharma will be responsible for the research, development, design, registration, copy rights and licenses of 250 nutritional supplements for the final products called Sky Premium Life®. These products will be sold in Greece and abroad. The total cost of this project will be €1,425,000 plus VAT and will be done over three phases as follows: Design & Development (€725,000); Control and Product Manufacturing (€250,000) and Clinical Study and Research (€450,000). SkyPharm has bought a total of as of 81 licenses at value of €554,500 ($593,204) which is 38.91% of the total cost, as of December 31, 2022. During the year ended December 31, 2023, 24 additional licenses were purchased at value of €475,014 ($525,461) and during the year ended December 31, 2024, 60 additional Sky Premium Life licenses were purchased for €710,000 ($734,921). The agreement will terminate on December 31, 2025.
On December 31, 2024, the Company signed an agreement with DocPharma SA (the “Licensor”), through which the Company obtained a royalty-bearing, exclusive worldwide license to actively commercialize the patents owned by the Licensor, through research and preclinical and clinical trials for the useful life of the patents, or for 20 years, whichever is longer. The patents, filed in 2016 and 2017 respectively, cover innovative treatments for cancer. The terms of the agreement include an initial payment of EUR 500,000 due by the end of 2024, followed by fixed annual payments of EUR 350,000 during the five-year Start-Up Term from 2025 to 2030. After the Start-Up Term, the Company will pay an 1.5% royalty on annual net sales of licensed products covered by an issued patent. Moreover, the Company retains an optional buy-out right for a total amount of EUR 7,500,000, which can be exercised with a 60-days notice and a 60-day close period. The Company also has the right to sublicense the patents. For the 12-month period ended December 31, 2024, the Company incurred EUR 500,000 ($517,550) in royalties concerning this agreement, which were included in “Research and Development costs” in the Company’s Consolidated Statements of Operations and Comprehensive Loss.
Purchase of branded pharmaceuticals & generics
On June 28, 2023, the Company approved the purchase of five proprietary and innovative branded pharmaceuticals with significant market presence and material profit contribution from Zakalia Ltd., the parent company of Doc Pharma, for €1,800,000 ($1,965,600). The transaction was settled on a non-cash basis through the reduction, of an equivalent amount, of prepaid expense balances the Company held with Doc Pharma. The purchased branded pharmaceuticals are presented in “Goodwill and intangible assets, net” on the accompanying consolidated balance sheets. During the year ended December 31, 2024, the Company recognized an impairment charge of $160,947 related to two licenses that are no longer expected to be commercialized. The impairment was recorded after management’s assessment determined that the recoverability of these assets was no longer supportable due to changes in market conditions and strategic priorities. This charge is included in “Other income (expense), net” within the Consolidated Statement of Operations. On December 29, 2023, the Company approved the purchase of additional 19 generic licenses from Doc Pharma, of a total value of €3,200,000 ($3,539,840). This transaction was also settled on a non-cash basis through the reduction, of an equivalent amount, of prepaid expense balances the Company held with Doc Pharma.
Loans receivable - related party
The balance of prepaid expenses due Doc Pharma as of December 31, 2022, had increased to €7,103,706 ($7,599,545), which was mainly attributable to the prepayments SkyPharm S.A. made in accordance with the CMO agreement and the extensive orders and sales of the SPL products the Company expects to achieve within 2023, mainly through its Amazon channels in the UK, Singapore, Canada and other countries. However, as the benefit from a significant portion of the prepaid balance would not have been realized within a 12-month period, the Company opted to secure a portion of the outstanding prepaid balance through a loan agreement. SkyPharm S.A. (the “Lender”) entered into a loan agreement with Doc Pharma (the “Borrower”) for €4,000,000 ($4,279,200), all of which was financed through the outstanding prepaid balance. The duration of the loan is for a 10-year period up to December 1, 2032 (the “Maturity Date”). The loan bears a fixed interest rate of 5.5% payable on a monthly basis and will be repayable in 120 equal instalments of €33,333.33 ($35,660). The loan may be prepaid anytime during its duration in full or partially based on the Company’s product requirements and other factors, without Doc Pharma incurring any prepayment penalty. As of December 31, 2024 and December 31, 2023, the loan had a current portion of €500,000 ($517,550) and €400,000 ($442,480), and a non-current portion of €2,800,000 ($2,898,280), and €3,200,000 ($3,539,840), respectively, which is classified as “Loans receivable - related party” on the accompanying consolidated balance sheets. During the year ended December 31, 2024, the Company received €300,000 ($310,530) in principal repayments, and €121,550 ($125,816) of interest repayments. Additionally, during the year ended December 31, 2024, the Company recorded €188,375 ($203,822) as interest income relating to this loan.
Cana Laboratories Holding Limited
Cana was considered a related party as the Company had signed a binding letter of intent and an SPA for the acquisition of Cana. The acquisition was completed on June 30, 2023 according to the SPA signed on May 31, 2023. Thus, all balances between the Company and Cana were eliminated upon consolidation as of December 31, 2023. The Secured Promissory Note discussed below was included in consideration transferred upon acquisition.
COSMOS HEALTH INC.
Notes to the Consolidated Financial Statements
Loans receivable - Related Party - Long Term
On February 28, 2023 (Issue Date) the Company signed a Secured Promissory Note with Cana Laboratories Holding (Cyprus) Limited (the “Holder”), whereby the Holder borrowed the sum of €4,100,000 ($4,457,520) from the Company. Interest on the Principal Amount under this Note shall accrue at a rate equal to Five Percent (5%) plus one month LIBOR per annum (5.47% as of December 31, 2023). The maturity date (“Maturity Date”) of this Note shall be five years from the Issue Date. The Principal Amount, as well as all accrued interest shall be due and payable on the Maturity Date. During the six months ended June 30, 2023, the Company recorded interest income of €137,138 ($148,789). Following, the completion of Cana’s acquisition on June 30, 2023 the balance of the Note was eliminated on a consolidated level.
Panagiotis Kozaris
Panagiotis Kozaris is considered a related party due to the fact that he is a former General operational manager and current employee of Cosmofarm S.A.
Prepaid Expenses and Other Current Assets - Related Party
From time-to-time the Company purchases back shares that Panagiotis Kozaris owns and records them as treasury shares. The Company pays Panagiotis Kozaris in advance for the shares owned and obtains the shares upon execution of a cumulative stock-purchase agreement (“SPA”). During the years ended December 31, 2023 and 2022, the Company paid Panagiotis Kozaris an additional sum of $51,159 and $143,056 respectively for shares owned, however, no SPA for these funds has been executed as of December 31, 2024. The Company intends to execute a cumulative SPA for these amounts within 2025. The total balances owed of $194,215 and $194,215 are included in “Prepaid expenses and other current assets - related party”, on the accompanying consolidated balance sheets as of December 31, 2024 and 2023, respectively.
Basotho Investment Limited
Basotho Investment Limited is considered a related party once Panagiotis Kozaris (former General operational manager and current employee of Cosmofarm S.A) is one of its directors.
General and administrative expenses
On November 21, 2023, the Company issued 120,000 shares of common stock to Basotho Investment Limited for services rendered. The fair value of these shares for the period ended December 31, 2024 and 2023 was $113,300 and $10,300, respectively, which was included in “General and administrative expenses” in the Company’s Consolidated Statements of Operations and Comprehensive Loss.
Maria Kozari
Maria Kozari is considered a related party to the Company due to the fact that she is the daughter of Panagiotis Kozaris, a former Operational General Manager and current employee of Cosmofarm S.A.
Accounts Receivable - Related Party
During 2021, the Company, through its subsidiary, Cosmofarm SA, commenced a partnership with a pharmacy called “Pharmacy & More”, owned by Maria Kozari. The transactions with the respective pharmacy were in Cosmofarm’s normal course of business, however, a more flexible credit policy was allowed as the pharmacy was new and needed to be established in the market. During the years ended December 31, 2024 and 2023 the Company’s net sales to Pharmacy & More amounted to $414,443 and $480,029 respectively. As of December 31, 2024 and 2023 the Company’s outstanding receivable balance due from the pharmacy amounted to $1,183,429 and $1,142,402, respectively, and are included in “Accounts receivable - related party”, on the accompanying consolidated balance sheets. As of December 31, 2024, a cumulative allowance for doubtful accounts of approximately $735,000 has been recognized, effectively offsetting this balance.
COSMOS HEALTH INC.
Notes to the Consolidated Financial Statements
The Company plans to acquire Pharmacy & More within fiscal year 2025. Upon acquisition, the Company intends to offset the outstanding receivable balance with the corresponding purchase price and additionally plans to make Pharmacy & More the first shop-in-shop of its own branded line of nutraceutical products, Sky Premium Life® (SPL).
Other Related Parties
Additionally, the Company has the following material related-party balances as of December 31, 2024: a) a balance of $851,000 relating to unpaid salaries and bonuses due to Grigorios Siokas, the CEO of the Company, classified as “Accounts payable and accrued expenses - related party” in the Company’s consolidated balance sheets, b) a balance of $168,000 relating to unpaid salaries and bonuses due to George Terzis, the CFO of the Company, classified as “Accounts payable and accrued expenses - related party” in the Company’s consolidated balance sheets c) a balance of $15,000 relating to unpaid salaries and bonuses due to Nikolaos Bardakis, the COO of the Company, classified as “Accounts payable and accrued expenses - related party” in the Company’s consolidated balance sheets.
Notes Payable - Related Party
A summary of the Company’s related party notes payable during the years ended December 31, 2024 and 2023 is presented below:
Beginning Balance
$ 11,283
$ 10,912
Payments
-
-
Foreign currency translation
(725 )
Ending Balance
$ 10,558
$ 11,283
Grigorios Siokas
Grigorios Siokas is the Company’s CEO and principal shareholder.
On December 20, 2018, the €1,500,000 ($1,718,400) note payable, originally borrowed pursuant to a Loan Agreement with a third-party lender, dated March 16, 2018, was transferred to Grigorios Siokas. The note bore an interest rate of 4.7% per annum, originally matured on March 18, 2019 pursuant to the original agreement, which was extended to December 31, 2021, and again to December 31, 2023. During the year ended December 31, 2022, the Note was paid in full and as of December 31, 2023 the Company had no outstanding balance.
Dimitrios Goulielmos
Dimitris Goulielmos was the Company’s former CEO and a Director of the Company.
On November 21, 2014, the Company entered into an agreement with Dimitrios Goulielmos, as amended on November 4, 2016. Pursuant to the amendment, this loan has no maturity date and is non-interest bearing. As of December 31, 2024 and 2023, the Company had a principal balance of €10,200 ($10,558) and €10,200 ($11,283), respectively.
The above balances are adjusted for the foreign currency rate as of the balance sheet date. For the years ended December 31, 2024 and 2023, the Company recorded a foreign currency translation gain of $725 and a loss of $371, respectively.
COSMOS HEALTH INC.
Notes to the Consolidated Financial Statements
Loans Payable - Related Party
A summary of the Company’s related party loans payable during the years ended December 31, 2024 and 2023 is presented below:
Beginning balance
$ 13,257
$ 12,821
Proceeds
-
-
Payments
(6,210 )
-
Foreign currency translation
(853 )
Ending balance
$ 6,194
$ 13,257
Grigorios Siokas
From time to time, Grigorios Siokas loans the Company funds in the form of non-interest bearing, no-term loans. As of December 31, 2024 and 2023, the Company had an outstanding principal balance under these loans of $6,194 and $13,257, respectively, in loans payable to Grigorios Siokas.
The above balances are adjusted for the foreign currency rate as of the balance sheet date. For the years ended December 31, 2024 and 2023, the Company recorded a gain of $853 and a loss of $436, respectively.
Except as set forth above, we have not entered into any material transactions with any director, executive officer, and promoter, beneficial owner of five percent or more of our common stock, or family members of such persons.
NOTE 10 - LINES OF CREDIT
A summary of the Company’s lines of credit as of December 31, 2024 and 2023, is presented below:
December 31,
December 31,
National
$ 4,012,642
$ 3,918,523
Alpha
960,867
1,130,140
Pancreta
1,583,291
1,122,210
EFG
428,252
459,400
Ending balance
$ 6,985,052
$ 6,630,273
The Company has three lines of credit with the National Bank of Greece, which are renewed annually. The three lines have interest rates of 6.00% (the “National Bank LOC”), 3.6% (the “COSME 2 Facility”), and 3.6% plus the six-month Euribor rate and any contributions currently in force by law on certain lines of credit (the “COSME 1 Facility”).
The maximum borrowing allowed for the 6% line of credit was $5,175,500 and $3,290,945 as of December 31, 2024 and 2023, respectively. During the year ended December 31, 2024, the Company increased the maximum borrowing capacity under this line of credit. This amendment was executed to enhance financial flexibility and support the Company’s operational and strategic initiatives. The outstanding balance of the facility was $3,165,058 and $2,829,828, as of December 31, 2024 and 2023, respectively.
The cumulative maximum borrowing allowed for the COSME 1 Facility and COSME 2 Facility (collectively, the “Facilities”) was $1,035,100 and $1,106,200 as of December 31, 2024 and 2023, respectively. The outstanding balance of the Facilities was $895,987 and $1,099,255 as of December 31, 2024 and 2023, respectively.
The Company maintains a line of credit with Alpha Bank of Greece (“Alpha LOC”), which is renewed annually and has a current interest rate of 6.00%. The maximum borrowing allowed was $1,035,100 and $1,106,200 as of December 31, 2024 and 2023, respectively. The outstanding balance of the Alpha LOC was $960,828 and $1,130,141, as of December 31, 2024 and 2023, respectively.
The Company holds a line of credit with Pancreta Bank (“Pancreta LOC”), which is renewed annually and has a current interest rate of 4.10%. The maximum borrowing allowed as of December 31, 2024 and 2023 was $1,552,650 and $1,537,618, respectively. As of December 31, 2024 and 2023, the outstanding balance of the Pancreta LOC was $1,583,291 and $1,122,210, respectively.
COSMOS HEALTH INC.
Notes to the Consolidated Financial Statements
The Company maintains a line of credit with EGF (“EGF LOC”), which is renewed annually and has a current interest rate of 4.49%. The maximum borrowing allowed as of December 31, 2024 and 2023 was $414,040 and $442,480, respectively. As of December 31, 2024 and 2023, the outstanding balance of the EGF LOC was $428,251 and $459,400, respectively.
Under the aforementioned line of credit agreements, the Company is required to maintain certain financial ratios and covenants. As of December 31, 2024 and 2023, the Company was in compliance with these ratios and covenants.
All lines of credit are guaranteed by customer receivable checks, which are a type of factoring in which postponed customer checks are assigned by the Company to the bank, in order to be financed at an agreed upon rate.
For the years ended December 31, 2024 and 2023, interest expense on the Company’s outstanding lines of credit balances was $503,745 and $393,628, respectively.
NOTE 11 - CONVERTIBLE DEBT
A summary of the Company’s convertible debt during the years ended December 31, 2024 and 2023 is presented below:
Beginning balance convertible notes
$ -
$ 100,000
New notes
-
Payments
-
(100,000 )
Conversion to common stock
-
Subtotal notes
-
-
Debt discount at year end
-
-
Convertible note payable, net of discount
$ -
$ -
December 21, 2020 Securities Purchase Agreement
On December 21, 2020 the Company entered into a convertible promissory note with Platinum Point Capital, LLC (the “Holder”, “Lender” or “Platinum”) pursuant to a Securities Purchase Agreement (the “SPA”).
The Company issued the $540,000 Note in exchange for $500,000 in cash and included a $40,000 Original Issue Discount (“OID”) and paid $3,000 in financing costs. The principal amount together with interest at the rate of eight percent (8.0%) per annum, compounded annually (the “Interest Rate”), will be paid to the Lenders on or before the Maturity Date (December 31, 2021 or as defined below). Accrued interest shall be calculated on the basis of a 360-day year for the actual number of days elapsed. In the event that on or before the Maturity Date, the Note either (i) had not been converted or have not been otherwise satisfied in full or (ii) an Event of Default (as defined in the SPA) occurs, then the applicable rate of interest on the outstanding amount of the Note since inception shall be the Interest Rate plus eighteen percent (18.0%), the Default Interest. Unless previously converted, the principal and accrued interest on the Note is due and payable in cash (USD) upon the earlier of (i) December 31, 2021, (ii) a Change of Control (as defined in the SPA) or (iii), an Event of Default (collectively, the “Maturity Date”).
On May 1, 2022, the Company issued 1,574 shares of common stock to convert the outstanding principal and accrued interest balance of $26,515. Following the conversion, the outstanding balance of the above Note is $0. Upon conversion, the 1,574 shares were issued at a fair value of $38,144 which was recorded as equity. Accordingly, upon conversion, the Company reduced its derivative liability by $11,629 (see Note 7).
COSMOS HEALTH INC.
Notes to the Consolidated Financial Statements
The Company determined that the embedded conversion feature of the convertible promissory note meets the definition of a derivative liability which is accounted for separately. The Company determined a derivative liability exists and determined that the embedded derivative was valued at $456,570 which was recorded as a debt discount, and together with the original issue discount and transaction expenses of $43,000, in the aggregate of $499,570, is being amortized over the life of the loan. As of December 31, 2022 the full amount of the debt discount has been amortized. Therefore, as of December 31, 2023 and 2022, the fair value of the derivative liability was $0 and $0, respectively. For the years ended December 31, 2023 and 2022, the Company recorded a loss on the change in fair value of the derivative of $0 and a loss of $5,807, respectively.
January 7, 2021 Subscription Agreement
On January 7, 2021 (the “Issue Date”), the Company entered into a subscription agreement with an unaffiliated third party, whereby the Company issued for a purchase price of $100,000 in principal amount, a convertible promissory note. The note bore an interest rate of 8% per annum and originally matured on the earlier of (i) consummation of the Company listing its common shares on the NEO Stock Exchange or (ii) October 31, 2021.
However, the listing to NEO Stock Exchange did not occur. As of December 31, 2022, the Company had a principal balance of $100,000 and had accrued $13,740 in interest expense. During the year ended December 31, 2023, the Company paid the balance in full.
The Company determined that the embedded conversion feature of the convertible promissory note meets the definition of a derivative liability which is accounted for separately. The Company measured the embedded derivative valued at $62,619 which was recorded as a debt discount and additional paid-in capital and was being amortized over the life of the loan. As of December 31, 2022, the debt discount had been fully amortized. As of December 31, 2023 and 2022, the fair value of the derivative liability was $0 and $54,293, respectively. For the years ended December 31, 2023 and 2022, the Company recorded a loss of $3,384 and $14,450, respectively, from the change in fair value of derivative liability, which is included in “Other expense, net" in the consolidated statements of operations and comprehensive loss.
The Company considered both the note payable and conversion feature separately and upon settlement. The Company re-valued the conversion feature to fair value and applied extinguishment accounting as the debt has now been settled. Because the conversion feature is extinguished upon settling the note, the value of the conversion feature goes though debt extinguishment and the Company recorded a gain on settlement of debt, which totaled $50,909 for the year ended December 31, 2023.
COSMOS HEALTH INC.
Notes to the Consolidated Financial Statements
NOTE 12 - NOTES PAYABLE
A summary of the Company’s third-party debt during the years ended December 31, 2024 and 2023 is presented below:
December 31, 2024
Trade
Facility
Third
Party
COVID
Loans
Total
Beginning balance, December 31, 2023
$ 1,908,195
2,511,148
186,884
4,606,227
Proceeds
-
828,080
-
828,080
Payments
(388,163 )
(634,653 )
(22,806 )
(1,045,622 )
Oher additions
-
-
-
-
Debt forgiveness
-
-
-
-
Foreign currency translation
(122,647 )
(147,552 )
(9,573 )
(279,772 )
Ending balance, December 31, 2024
1,397,385
2,557,023
154,505
4,108,913
Notes payable - long-term
-
(1,437,798 )
(122,635 )
(1,560,433 )
Notes payable - short-term
$ 1,397,385
1,119,225
31,870
2,548,480
December 31, 2023
Trade
Facility
Third
Party
COVID
Loans
Total
Beginning balance, December 31, 2022
$ 3,305,532
$ 1,505,078
$ 207,377
$ 5,017,987
Proceeds
-
1,082,231
-
1,082,231
Payments
(1,155,310 )
(415,557 )
(27,027 )
(1,597,894 )
Oher additions
-
317,880
-
317,880
Debt forgiveness
(306,637 )
-
-
(306,637 )
Foreign currency translation
64,610
21,516
6,534
92,660
Ending balance, December 31, 2023
1,908,195
2,511,148
186,884
4,606,227
Notes payable - long-term
(1,327,440 )
(1,549,768 )
(158,133 )
(3,035,341 )
Notes payable - short-term
$ 580,755
$ 961,380
$ 28,751
$ 1,570,886
Our outstanding debt as of December 31, 2024 is repayable as follows:
December 31,
$ 2,548,480
669,334
512,616
280,364
2028 and thereafter
98,119
Total debt
4,108,913
Less: notes payable - current portion
(2,548,480 )
Notes payable - long term portion
$ 1,560,433
COSMOS HEALTH INC.
Notes to the Consolidated Financial Statements
Trade Facility Agreements
On May 12, 2017, SkyPharm entered into a Trade Finance Facility Agreement (the “SkyPharm Facility”) with Synthesis Structured Commodity Trade Finance Limited (the “Lender”) as amended on November 16, 2017 and May 16, 2018.
On October 17, 2018, the Company entered into a further amended agreement with Synthesis whereby the current balance on the TFF as of October 1, 2018, which was €4,866,910 ($5,629,555) and related accrued interest of €453,094 ($524,094) would be split into two principal balances of Euro €2,000,000 ($2,316,000), (the “EURO Loan”) and USD $4,000,000 (the “USD Loan”). Interest on both the EURO Loan and USD Loan commenced on October 1, 2018, at 6% per annum plus one-month Euribor (3.869% as of December 31, 2023), and 6% plus one-month LIBOR (5.47% as of date of December 31, 2023), respectively.
On December 30, 2020, the Company transferred the EURO Loan to a new third-party lender. The terms remained the same except interest accrues at 5.5% per annum plus one-month Euribor 3.869% as of December 31, 2023. The principal was scheduled to be repaid in a total of five quarterly installments beginning October 31, 2021 of €50,000 ($54,600) each with a final repayment of €1,800,000 ($1,965,600) payable on October 31, 2022.
On March 3, 2022, the Company entered into a modification agreement to extend the maturity date to January 10, 2023 and payments under the USD Loan. During June 2022, the Company agreed with the Lender to postpone the repayment of an installment of $500,000 due on June 30, 2022 (based on the modification agreement signed on March 3, 2022) until January 2023. During September 2022, the Company entered into an agreement with the Lender to postpone the repayment of the outstanding balance on the USD Loan of $3,950,000, plus unpaid accrued interest until January 2023. The Company capitalized fees paid upon modification of €200,000 ($221,060) that are being amortized over the life of the loan. The Company incurred non-cash interest expense of $216,182 during the year ended December 31, 2022 concerning the above capitalized fees.
During the year ended December 31, 2022, the Company repaid €175,000 ($191,100) of the EURO Loan and $2,593,363 of the USD Loan such that as of December 31, 2022, the Company had principal balances of €1,775,000 ($1,898,895) and $1,406,637 under the agreements, respectively.
On December 21, 2022, the USD Loan was assigned to GIB Fund Solutions ICAV (the “Fund”). On January 31, 2023, the Company paid $1,100,000 to the Fund under a full and final settlement agreement for the USD Loan, recording a gain on extinguishment of debt of $306,637 relating to the waiver of the unpaid balance. Additionally, the Company repaid €50,000 ($50,310) of the EURO Loan during the year ended December 31, 2023. As of December 31, 2023, the Company had an outstanding principal balance of €1,725,000 ($1,908,195), of which $1,327,440 is classified as “Notes payable - long term portion” on the consolidated balance sheets. As of December 31, 2023, the Company had accrued $161,274 in interest expense related to these agreements.
On December 22, 2022 SkyPharm signed an agreement for the extension of the payments and an increase in interest rate due under the EURO loan, that was extended to be repaid with a balloon payment now due on October 31, 2025. This extension was agreed upon in writing on December 22, 2022, with a retroactive modification date to October 31, 2022 (the original maturity date).
As of December 31, 2023 the Company had an outstanding principal balance of €1,725,000 ($1,908,195), of which $1,327,440 is classified as ''Notes payable - long term portion" on the consolidated balance sheets. As of December 31, 2023, the Company had accrued $161,274 in interest expense related to these agreements.
The Company repaid €375,000 ($388,163) of the EURO Loan during the 12 months ended December 31, 2024. As of December 31, 2024, the Company had an outstanding principal balance of €1,350,000 ($1,397,385), all of which $1,086,638 is classified as ''Notes payable" on the consolidated balance sheets. For the 12 months ended December 31, 2024, the Company had accrued $155,822, in interest expense related to these agreements.
COSMOS HEALTH INC.
Notes to the Consolidated Financial Statements
Third Party Debt
June 23, 2020 Debt Agreement
On June 23, 2020, the Company’s subsidiary, Cosmofarm, entered into an agreement with the National Bank of Greece S.A. (the “Bank”) to borrow a maximum of €500,000 ($611,500). The note has a maturity date of 60 months from the date of the first disbursement, which includes a grace period of nine months. The total amount of the initial proceeds was received in three equal monthly installments. The note is interest bearing from the date of receipt and is payable every three months at an interest rate of 3.06% plus 3-month Euribor (2.92% as of December 31, 2024). The outstanding balance was €88,235 ($91,232) and €205,882 ($227,747) as of December 31, 2024 and 2023, respectively, of which $91,232 and $97,606 was classified as “Notes payable - long-term portion” respectively, on the accompanying consolidated balance sheets. During the year ended December 31, 2024, the Company repaid €117,647 ($121,776) of the principal balance.
November 19, 2020 Debt Agreement
On November 19, 2020, the Company entered into an agreement with a third-party lender in the principal amount of €500,000 ($611,500). The note matures on November 18, 2025 and bears an annual interest rate, based on a 360-day year, of 3% plus 0.6% plus 6-month Euribor when Euribor is positive (2.68% as of December 31, 2024). The principal is to be repaid in 18 quarterly installments of €27,778 ($30,333). During the year ended December 31, 2023, the Company repaid €111,111 ($122,911) of the principal and as of December 31, 2023, the Company had accrued interest of €11,191 ($12,379) related to this note and a principal balance of €222,222 ($245,822), of which $122,911 is classified as “Notes payable - long term portion” on the accompanying consolidated balance sheets. During the year ended December 31, 2024, the Company repaid €111,111 ($115,011) of the principal and as of December 31, 2024, the Company has accrued interest of €7,570 ($7,836) related to this note and a principal balance of €111,111 ($115,011), all of which is classified as “Notes payable” on the accompanying consolidated balance sheets.
COSMOS HEALTH INC.
Notes to the Consolidated Financial Statements
July 30, 2021 Debt Agreement
On July 30, 2021, the Company entered into an agreement with a third-party lender in the principal amount of €500,000 ($578,850). The note matures on August 5, 2026 and bears an annual interest rate that applies to 60% of the principal of the note that is based on a 365-day year, of 5.84% plus 3-month Euribor when Euribor is positive (2.92% as of December 31, 2023). Pursuant to the terms of the agreement, there is a nine-month grace period for principal repayment during which interest is accrued. The principal is to be repaid in 18 quarterly installments of €27,778 commencing three months from the end of the grace period During the year ended December 31, 2023, the Company repaid €105,747 ($109,459) of the principal. As of December 31, 2023, the Company had accrued interest of €10,905 ($12,063), principal of €316,900 ($350,555), of which $227,065 is classified as “Notes payable - long term portion” on the accompanying consolidated balance sheets. During the year ended December 31, 2024, the Company repaid €109,926 ($113,784) of the principal. As of December 31, 2024, the Company had accrued interest of €15,778 ($16,332), principal of €206,343 ($213,585), of which $94,612 is classified as “Notes payable - long term portion” on the accompanying consolidated balance sheets.
June 9, 2022 Debt Agreement
On June 9, 2022 the Company entered into an agreement with a third-party lender in the principal amount of €320,000 ($335,008), the “Note”. The Note matures on June 16, 2027 and bears an annual interest rate of 3.89% plus an additional rate of 0.60%, plus the 3-month Euribor (2.92% as of December 31, 2024). Pursuant to the agreement, there is a 12-month grace period for principal repayment during which interest is accrued. The principal is to be repaid in 17 equal quarterly installments of €18,824. During the year ended December 31, 2024, the Company repaid €80,000 ($82,808) of the principal. As of December 31, 2024 and 2023 the Company has accrued interest of €8,352 ($8,645) and €11,043 ($12,215), respectively, and an outstanding balance of €180,000 ($186,318) of which $103,510 and $204,322, respectively, are classified as “Notes payable - long term portion” on the accompanying consolidated balance sheets.
July 14, 2023 Debt Agreement
On July 14, 2023, the Company entered into an agreement with a third-party lender in the principal amount of €1,000,000 ($1,123,700), the “Note”. The Note matures on July 31, 2028 and bears an annual interest rate of 2.46% plus the 3-month Euribor (2.92% as of December 31, 2024). Pursuant to the agreement, there is a nine-month grace period for interest and principal repayment. The principal is to be repaid in 18 equal quarterly installments of €55,556 commencing on May 2, 2024. During the year ended December 31, 2024, the Company repaid €162,950 ($168,670) of the principal. As of December 31, 2024 and 2023 the Company has accrued interest of €16,735 ($17,322) and €19,820 ($21,925), respectively, and an outstanding balance of €814,750 ($843,348) and $€977,00 ($1,081,532), of which $618,616 and $897,864, respectively, are classified as “Notes payable - long term portion” on the accompanying consolidated balance sheets.
Cloudscreen
On January 23, 2024, the Company completed the acquisition of Cloudscreen, a cutting-edge Artificial Intelligence (AI) powered platform. The acquisition is pursuant to the purchase agreement announced on October 11, 2023. Cloudscreen is a multimodal platform specialized in drug repurposing, a process that involves uncovering new target proteins or indications for existing drugs for use in treating different diseases. The total purchase price amounted to $637,080 and consisted of 280,000 shares of common stock with a fair value of $319,200 and an amount of $317,880 to be settled in cash during 2024 based on the Promissory Note signed on October 10, 2023. As of December 31, 2024, and December 31, 2023, the Company had an outstanding balance of $279,348 and $317,880 all of which is classified as “Notes payable” on the accompanying consolidated balance sheets.
July 29, 2024 Debt Agreement
On July 29, 2024 the Company entered into an agreement with a third-party lender in the principal amount of €400,000 ($432,760), the “Note”. The Note matures on July 31, 2029 and bears an annual interest rate of 2.58% plus the 3-month Euribor (2.92% as of December 31, 2024). Pursuant to the agreement, there is a six-month grace period for principal and interest repayment. The principal is to be repaid in 18 equal quarterly installments of €22,222 commencing on April 30, 2025. During the 12 months ended December 31, 2024, the Company repaid no principal and accrued interest of €5,957 ($6,445). As of December 31, 2024, and December 31, 2023 the Company an outstanding balance of €400,000 ($414,040) and €0 ($0), of which $345,033 is classified as “Notes payable - long term portion” on the accompanying consolidated balance sheets.
December 20, 2024 Debt Agreement
On December 20, 2024 the Company entered into an agreement with a third-party lender in the principal amount of €400,000 ($414,040), the “Note”. The Note matures on December 20, 2027, and bears an annual interest rate of 6% (including the 3-month Euribor of 2.92% as of December 31, 2024). Pursuant to the agreement, there is a six-month grace period for principal repayment. The principal is to be repaid in 6 equal semiannual installments of €66,667 commencing on June 20, 2025. During the 12 months ended December 2024, the Company repaid no principal and had not accrued any interest. As of December 31, 2024, and December 31, 2023 the Company an outstanding balance of €400,000 ($414,040) and €0 ($0), of which $276,027 is classified as “Notes payable - long term portion” on the accompanying consolidated balance sheets.
COVID-19 Loans
May 12, 2020 Loan
On May 12, 2020, the Company’s subsidiary, SkyPharm, was granted loan from the Greek government and, on May 22, 2020, received the amount of €300,000 ($366,900). The loan would be repaid in 40 equal monthly installments beginning on July 29, 2022. As a condition to the loan, the Company was required to retain the same number of employees until October 31, 2020. As of December 31, 2023, the principal balance was €121,875 ($134,818). During the year ended December 31, 2024, the Company repaid €18,750 ($19,408) of the principal balance. The outstanding balance is €103,125 ($106,745) as of December 31, 2024.
June 24, 2020 Debt Agreement
On June 24, 2020, the Company’s subsidiary, Decahedron, received a loan £50,000 ($68,310) from the UK government. The loan has a ten-year maturity and bears interest at a rate of 2.5% per annum beginning 12 months after the initial disbursement, which was on July 10, 2020. The Company may prepay this loan without penalty at any time. As of December 31, 2023, the principal balance was £ 40,858 ($52,066). As of December 31, 2024, the principal balance was £ 38,144 ($47,761).
COSMOS HEALTH INC.
Notes to the Consolidated Financial Statements
Distribution and Equity Agreement
As discussed in Note 3 above, the Company entered into a Distribution and Equity Acquisition Agreement with Marathon. The Company was appointed the exclusive distributor of the Products (as defined) initially throughout Europe and on a non-exclusive basis wherever else lawfully permitted. As consideration for its services, Company received: (a) a 33 1/3% equity interest or 5 million shares in Marathon as partial consideration for the Company’s distribution services; and (b) received cash of CAD $2,000,000, subject to repayment in Common Shares of the Company if it fails to meet certain performance milestones. The Company is entitled to receive an additional CAD $2,750,000 upon the Company’s receipt of gross sales of CAD $6,500,000 and an additional CAD $2,750,000 upon receipt of gross sales of CAD $13,000,000.
As discussed in Note 3, the Company attributed no value to the shares received in Marathon pursuant to (a) above. In relation to the CAD $2 million cash received noted in (b) above, the Company accounted for its obligation to issue a variable number of the Company’s Common Shares as Share-settled debt obligation in accordance with ASC 480 measured at fair value or the settlement amount of $1,554,590 (CAD $2 million). If settlement were to occur on December 31, 2022, the Company would be required to issue 420,471 common shares to settle its debt obligation. The Company could be obligated to potentially issue an unlimited number of common shares to settle its Share-settled debt obligation.
On March 20, 2023, the Company’s legal counsel provided notice to Marathon, that the Company terminated the Distribution and Equity Acquisition agreement pursuant to Section 3.2 and that termination was effective 30 days from the date of the letter.
None of the above loans were made by any related parties.
NOTE 13 - LEASES
The Company has various operating and finance lease agreements with terms up to ten years, for various types of property and equipment (such as office space and vehicles) etc. Some leases include options to purchase, terminate or extend for one or more years. These options are included in the lease term when it is reasonably certain that the option will be exercised. Leases with an initial term of 12 months or less are not recorded on the balance sheet; we recognize lease expense for these leases on a straight-line basis over the lease term.
Operating Leases
The Company’s weighted-average remaining lease term relating to its operating leases is 3.85 years, with a weighted-average discount rate of 6.74%.
The following table presents information about the amount, timing and uncertainty of cash flows arising from the Company’s operating leases as of December 31, 2024:
Maturity of Operating Lease Liability
235,009
210,091
150,950
24,371
2029 and thereafter
170,391
Total undiscounted operating lease payments
$ 790,902
Less: Imputed interest
(95,786 )
Present value of operating lease liabilities
$ 695,116
COSMOS HEALTH INC.
Notes to the Consolidated Financial Statements
The Company incurred lease expense, due to amortization of operating lease right-of-use assets, of $296,914 and $364,968 which was included in “General and administrative expenses,” for the 12 months ended December 31, 2024 and 2023, respectively.
Finance Leases
The Company’s weighted-average remaining lease term relating to its finance leases is 1.07 years, with a weighted-average discount rate of 6.74%.
The following table presents information about the amount, timing and uncertainty of cash flows arising from the Company’s finance leases as of December 31, 2024:
Maturity of Lease Liability
11,986
3,447
Total undiscounted finance lease payments
$ 15,433
Less: Imputed interest
(550 )
Present value of finance lease liabilities
$ 14,883
The Company had financing cash flows used in finances leases of $33,595 and $28,420 for the years ended December 31, 2024 and 2023, respectively.
The Company incurred interest expense on its finance leases of $2,065 and $2,903 which was included in “Interest expense,” for the years ended December 31, 2024 and 2023, respectively. The Company incurred amortization expense on its finance leases of $29,883 and $23,685 which was included in “Depreciation and amortization expense,” for the years ended December 31, 2024 and 2023, respectively.
NOTE 14 - OTHER LIABILITIES
As of December 31, 2024, the Company’s other liabilities primarily consist of obligations to local tax authorities, payroll taxes, fines, and other miscellaneous liabilities.
The significant components of other liabilities are as follows:
·
The Company’s Greek subsidiaries have $2,552,488 and $2,430,517 in settled tax liabilities as December 31, 2024 and December 31, 2023, respectively, which are payable in installments to the tax authorities.
·
Payroll tax-related current liabilities amount to $1,191,315 and $1,046,507 as of December 31, 2024 and December 31, 2023, respectively, and represent obligations due to tax authorities within the next 12 months.
·
A provision of $598,843 has been recorded for potential tax liabilities related to the unaudited tax years of SkyPharm S.A., in accordance with ASC 450-20, as the Company has assessed that a loss is probable and reasonably estimable.
·
A provision of $382,399 has been recognized for staff leaving compensation, based on actuarial valuations performed in accordance with ASC 715-30 (Defined Benefit Plans - Pension).
·
Customer prepayments totaling $363,708 and $207,204 as of December 31,2024 and December 31, 2023, respectively, are included in “Other Current Liabilities” as of December 31, 2023, in accordance with ASC 606-10-45-2 (Revenue Recognition - Contract Liabilities).
Liabilities that are due within 12 months from the balance sheet date are classified under “Other Current Liabilities. “Obligations that extend beyond 12 months are classified as “Other Non-Current Liabilities.”
NOTE 15 - COMMITMENTS AND CONTINGENCIES
Legal Matters
From time to time, the Company may be involved in litigation relating to claims arising out of the Company’s operations in the normal course of business. As of December 31, 2024, the following litigations were pending. None of the below is expected to have a material financial or operational impact.
Regulatory License Renewal and Penalty Imposed on SkyPharm S.A.
On July 22, 2015, the National Medicines Agency granted SkyPharm SA a wholesale pharmaceutical license with a five-year validity, expiring on July 22, 2020. On June 15, 2020, SkyPharm timely submitted an application for the renewal of the license. The National Medicines Agency did not respond to the renewal request, prompting the Company to request an immediate decision. On March 9, 2021, nearly nine months after the initial renewal application, the National Medicines Agency formally rejected the request (Ref. 62769 / 20-25.02.2021). Furthermore, on December 16, 2021, the Greek National Medicines Organization (EOF) issued Document No. 127351-16.12.2021, stating that an inspection at the premises of Doc Pharma revealed that SkyPharm did not hold a valid wholesale license, which was deemed a violation of Article 106, paragraphs 1(b) and 1(c) of Ministerial Decision D.YG3a / GP.32221 / 29-4-2019. As a result, EOF imposed a fine of €15,000 ($16,214) on SkyPharm, which has been recorded under “General and administrative expenses” in the Consolidated Statement of Operations and Comprehensive Loss for the 12 months ended December 31, 2023.
Tax Audit-Related Fine - Cosmofarm
A payment request was issued by the Greek court in relation to a fine arising from a tax audit of Cosmofarm for the financial year 2014. The fine was imposed under Law No. 483/16.12.2020. Cosmofarm appealed the decision under Law No. 11541/09.03.2021; however, the appeal was dismissed 120 days after its submission. The Company settled additional taxes and fines related to this matter in the amount of €91,652 ($99,644) but has filed a claim to recover the amount through appeal. As of December 31, 2024, the trial remains pending.
Criminal Cases Related to Dishonored Checks
·
On January 25, 2023, a criminal case involving dishonored checks issued by Cosmofarm’s customer, Filippou, was heard at the Z’ Three-Member Misdemeanor Court of Athens. The case was postponed to November 27, 2023, when the defendant was tried and found guilty.
·
On October 23, 2023, a criminal case involving dishonored checks issued by Cosmofarm’s customer, Kafantaris, was heard at the Sixth Single-Member Misdemeanor Court of Athens. The case was postponed to January 26, 2024, when the defendant was convicted under Decision No. 1599/2024.
Appeal Against Decision 1389/2021 - Eleutheria Drakopoulou
On January 26, 2023, the Company’s appeal against Eleutheria Drakopoulou and Decision No. 1389/2021 of the Single-Member Court of First Instance of Athens was heard at the Athens Court of Appeal. The appeal was partially accepted. The Court ordered the return of the fee to the appellants, dismissed the action against the third defendant (Kozaris), and accepted the action against the first and second defendants (Kastrantas & Cosmofarm). The case was settled in two equal installments by Cosmofarm SA, of €35,000 ($37,880) on July 31, 2024 and of €35,000 ($37,993) on October 31, 2024.
Urban Planning Compensation Claim - Cana Laboratories
In October 2023, the Company’s subsidiary, Cana Laboratories, was approached by an attorney representing two clients seeking compensation of €39,211 related to 34.70 square meters of urban sprawl, for which an Act of Imputation had been issued by the Department of Urban Planning. The Company’s legal counsel has advised that Cana is not obligated to accept the compensatory value as agreed and has suggested exploring an out-of-court settlement. As of the date of this report, the clients’ attorney has not provided further communication.
Pending Lawsuits Against Euaggelismos & Pananikolaou Hospitals
The Company’s subsidiary, Cana Laboratories, has two pending lawsuits against Euaggelismos Hospital for unpaid bills totaling €526,436. A court date has been scheduled for one of the lawsuits on December 11, 2024, while the other remains unscheduled. The matter is currently pending a court decision. Based on legal counsel’s assessment, it is considered highly probable that the losing party will appeal the decision once it is rendered. However, counsel has also indicated that the collection of the full amount awarded to the Company is considered highly probable.
There is also an unasserted claim against Papanikolaou Hospital, for a total sum of €89,300 due to unpaid bills, which will be asserted through a lawsuit. Court date is not set yet. The opinion of our legal advisor is that the success of the case and the collection of the aforementioned amount is probable and as of now negotiations are taking place in the direction of out-of-court settlement.
Both claims have been classified under “Other assets” within non-current assets in the Company’s consolidated balance sheets as of December 31, 2024.
COSMOS HEALTH INC.
Notes to the Consolidated Financial Statements
Employment Dispute - Cana Laboratories
A lawsuit filed on April 5, 2018, by a former employee against the Company’s subsidiary, Cana, before the Athens Court of First Instance, sought the nullification of the termination of employment and compensation for unpaid wages and moral damages. Following multiple appeals, Judgment No. 1192/2024 was issued on September 26, 2023, requiring Cana to reinstate the former employee, with a penalty of €200 per day for non-compliance. According to the Company’s legal counsel, for the penalty to be enforceable, the former employee must file a new lawsuit requesting reinstatement. As of the date of this report, no such lawsuit or request for reinstatement has been received.
Lease Dispute
A lawsuit has been filed against the Company’s subsidiary, Cana, seeking restitution of a leased property, payment of approximately €13,190 in outstanding rent, and €8,488 in compensation for use of the property. The Company has settled the monetary claims in full, rendering that portion of the case moot. However, the claim for restitution of the leased property remains pending and is expected to be accepted by the court.
Claims for Recovery of Receivables
The Company’s subsidiary, Cosmofarm SA, is in the process of initiating legal action to recover approximately €20,301 in unpaid invoices from a certain customer. The hearing is expected to be scheduled in 2026. Based on legal counsel’s assessment, the claim is anticipated to be upheld. In addition, Cosmofarm SA is preparing to file two further lawsuits for the recovery of €15,143 and €15,255, respectively, related to unpaid invoices concerning two customers. Both hearings are expected to be scheduled in 2026, and legal counsel similarly anticipates favorable outcomes in both cases.
Advisory Agreements
On July 1, 2021, the Company entered into a two-year advisory agreement with a third party (the “Consultant”) for advisory and consulting services related to the Company’s intention to become listed on Nasdaq. Peter Goldstein, a then director of the Company is a principal of the Consultant. As consideration for services rendered, and successful Nasdaq listing, the Company paid $100,000. The $100,000 bonus was incurred and settled within 2022. Finally, the Consultant received a total of 10,000 shares of the Company’s common stock, 2,000 of such shares that have been previously issued pursuant to previous agreements and additional 15,258 shares that were issued on February 2, 2023, based on the amendment signed on February 1, 2023.
On November 21, 2023, the Company entered into certain consulting agreements with four third-party consultants for the provision of a variety of services such as digital marketing, advisory services relating to target acquisitions and M&As and other additional services as described in the respective agreements. The agreements have duration from ten to 18 months and the consultants will solely receive stock consideration for the services rendered. More precisely, they have been awarded a total of 970,000 shares of the Company’s common stock valued at a total of $999,100 based on the fair value of the Company’s common stock as of the agreements’ date. On September 17, 2024 the terms of two out of the four aforementioned consulting agreements were extended and the consultants received additional 440,000 shares as complementary compensation for the extended services to be provided. The additional stock based consideration was valued at a total of $501,600 based on the fair value of the Company’s common stock as of the agreements’ date.
On July 1, 2024 the Company entered into a consulting agreement with a third-party consultant for the provision of a variety of services such as preparation of press releases and other publications, relationship management and other additional services as described in the respective agreement. The agreement has a duration of 16 months and the consultant will solely receive stock consideration for the services rendered. More precisely, they have been awarded a total of 240,000 shares of the Company’s common stock valued at a total of $264,000 based on the fair value of the Company’s common stock as of the agreements’ date.
The corresponding stock-based compensation expense is accrued evenly over the term of the agreements. For the 12-month periods ended December 31, 2024 and 2023 the Company has recorded $994,160 and $77,250 as stock based compensation for the above agreements, respectively, classified as “General and administrative expenses” in the Company’s consolidated statements of operations and comprehensive loss.
Research and Development Agreements
The Company entered into a Research & Development agreement with Doc Pharma S.A. on May 17, 2021. Under this agreement, Doc Pharma is responsible for the research, development, design, registration, copy rights and licenses of 250 nutritional supplements for the final products called Sky Premium Life®. More specifically, Doc Pharma is responsible for the product development and the Company has added 165 of such products codes in its portfolio as of December 31, 2024. The licenses purchased by Doc Pharma SA are capitalized and included in “Goodwill and intangible assets, net” of the Company’s Consolidated Balance Sheets as of December 31, 2024. Thus, no relevant R&D expense had been charged to the Company’s Consolidated Statements of Operations and Comprehensive Loss, concerning this agreement.
On June 25, 2022, the Company signed a research and development (“R&D”) agreement with a third party(CloudPharm PC), through which the Company assigned to the third party the development of new products and services in the field of health, focusing on the human intestinal microbiome. The project includes two phases. Phase 1 has a 20-month duration and its cost amounts to EUR 758,000 ($838,450) and phase 2, has a 22-month duration and a cost of EUR 820,000 ($907,084). The amount will be due and payable upon completion of the corresponding phases. The Company records the corresponding R&D expense based on the project’s progress, which is invoiced by the third party in the relevant period. For the 12-month periods ended December 31, 2024 and 2023, the Company incurred $0 and $164,859 of such costs respectively included in “Research and Development costs” in the Company’s Consolidated Statements of Operations and Comprehensive Loss.
On January 23, 2024, the Company completed the acquisition of Cloudscreen, a cutting-edge Artificial Intelligence (AI) powered platform. The acquisition is pursuant to the purchase agreement announced on October 11, 2023. Cloudscreen is a multimodal platform specialized in drug repurposing, a process that involves uncovering new target proteins or indications for existing drugs for use in treating different diseases. The total purchase price amounted to $637,080 incorporating both cash and stock consideration the platform is included in “Goodwill and intangible assets, net” in the Company’s Consolidated Balance Sheets.
On December 3, 2024, the Company and the National Hellenic Research Foundation (NHRF) (Contractor) signed a Research Study Agreement. NHRF will conduct an in vitro study to support modifications to an invention, pursuant to the prior agreement involving CloudPharm PC (signed on June 15, 2022). NHRF ensures scientific rigor, provides updates, and maintains confidentiality. Cosmos Health provides necessary support and documentation. Rights to the research protocol belong to CloudPharm PC, NHRF, and Cosmos Health, while NHRF retains control over its methodologies. NHRF cannot publish findings without Cosmos Health’s approval and cannot use the study for other purposes. The total fee to by paid by the Company amounts to €60,000 plus VAT, payable in three installments. For the 12-month period ended December 31, 2024, the Company incurred EUR 15,000 ($15,743) concerning this agreement, which were included in “Research and Development costs” in the Company’s Consolidated Statements of Operations and Comprehensive Loss.
On December 6, 2024, the Company signed an Independent Contractor Agreement with a third-party contractor (the “Contractor”). The Contractor will provide oncology research and development services exclusively to the Company. The contract lasts three years (December 5, 2024 - December 5, 2027) and may be extended by mutual agreement. The Company may terminate the contract immediately for specific causes, including felony conviction, fraud, or loss of medical license. Either party may terminate the contract with 30 days' written notice. Certain compensation obligations will remain even after termination. The monthly consideration to be paid to the Contractor is based on the commencement of the Clinical Trials and New Drugs Applications and additional cash and stock consideration is payable based on certain milestones. None of the milestones were met as of December 31, 2024, and thus the Company has incurred no expenses as of the end of the period.
On December 31, 2024, the Company signed an agreement with a related party, DocPharma SA (the “Licensor”), through which the Company obtained a royalty-bearing, exclusive worldwide license to actively commercialize the patents owned by the Licensor, through research and preclinical and clinical trials for the useful life of the patents, or for 20 years, whichever is longer. The patents, filed in 2016 and 2017 respectively, cover innovative treatments for cancer. The terms of the agreement include an initial payment of EUR 500,000 due by the end of 2024, followed by fixed annual payments of EUR 350,000 during the five-year Start-Up Term from 2025 to 2030. After the Start-Up Term, the Company will pay a 1.5% royalty on annual net sales of licensed products covered by an issued patent. Moreover, the Company retains an optional buy-out right for a total amount of EUR 7,500,000, which can be exercised with 60 days' notice and a 60-day close period. The Company also has the right to sublicense the patents. For the 12-month period ended December 31, 2024, the Company incurred EUR 500,000 ($517,550) in royalties concerning this agreement, which were included in “Research and Development costs” in the Company’s Consolidated Statements of Operations and Comprehensive Loss.
COSMOS HEALTH INC.
Notes to the Consolidated Financial Statements
NOTE 16 - EARNINGS PER SHARE
Basic net loss per share is computed by dividing net loss attributable to the common stockholders, decreased with respect to net income or increased with respect to net loss by dividends declared on preferred stock by using the weighted-average number of common shares outstanding. The dilutive effect of incremental common shares potentially issuable under outstanding options, warrants and restricted shares is included in diluted earnings per share in 2024 and 2023 utilizing the treasury stock method. The computations of basic and diluted per share data were as follows:
Numerator for Basic and Diluted Earnings Per Share:
Net loss attributable to common stockholders
$ (22,378,042 )
$ (25,783,834 )
Denominator for Basic Earnings Per Share:
Weighted Average Shares
19,147,726
11,968,665
Potentially Dilutive Common Shares
-
Adjusted Weighted Average Shares
19,147,726
11,968,665
Basic and Diluted Net Loss per Share
(1.17 )
(2.15 )
The following table summarized the potential shares of common stock that were excluded from the computation of diluted net loss per share for the years ended December 31, 2024 and 2023 as such shares would have had an anti-dilutive effect:
Common Stock Warrants
12,926,506
8,561,476
Common Stock Options
-
-
Convertible Debt
-
-
Total
12,926,506
8,561,476
NOTE 17 - STOCK OPTIONS AND WARRANTS
Options
As of December 31, 2023 and 2024, there were no options outstanding and no options exercisable.
COSMOS HEALTH INC.
Notes to the Consolidated Financial Statements
Omnibus Equity Incentive Plan
On September 19, 2022 the Company held a Board of Directors meeting, whereas, the Board of Directors had elected to adopt an Omnibus Equity Incentive Plan (the “2022 Plan”), that includes reserving 200,000 shares of common stock eligible for issuance under the 2022 Plan to be registered on a Form S-8 Registration Statement with the SEC. The 2022 Plan is designed to enable the flexibility to grant equity awards to the Company’s officers, employees, non-employee directors and consultants and to ensure that it can continue to grant equity awards to eligible recipients at levels determined to be appropriate by the Board and/or the Compensation Committee. According to the Proxy Statement filed with the SEC on October 20, 2022, the 2022 Plan received final approval by the Company’s stockholders at the Annual Meeting of Stockholders held on December 2, 2022. As of December 31, 2023, 15,000 shares remained reserved and available for future issuance under the Company's 2022 Plan.
On April 3, 2023, the Company approved incentive stock awards for the CFO, certain officers and directors and other employees of the Company. The awards are in the form of restricted stock and will vest in two parts: 50% on October 2, 2023 and 50% on October 2, 2024. A total of 185,000 shares were awarded and a corresponding share-based compensation expense of $323,957 was recorded for the 12 months ended December 31, 2023, respectively, based on the amortization of fair value from the date of issuance of April 3, 2023 through December 31, 2023. For the year ended December 31, 2024, the Company recognized share-based compensation expense of $2,383 in connection with the awards described above.
On August 21, 2023, the Board adopted, subject to stockholder approval, the Cosmos Health Inc. 2023 Omnibus Equity Incentive Plan (the “2023 Plan”). The 2023 Plan is designed to enable the flexibility to grant equity awards to our officers, employees, non-employee directors and consultants and to ensure that we can continue to grant equity awards to eligible recipients at levels determined to be appropriate by the Board and/or the Compensation Committee. Subject to certain adjustments (as provided in Section 4.2 of the 2023 Plan) and exception (as provided in Section 5.6(b) of the 2023 Plan), the maximum number of shares reserved for issuance under the Plan (including incentive share options) is 2,500,000 shares. The 2023 Plan was approved by the Company’s stockholders at the Annual Meeting of Stockholders held on September 18, 2023. As of December 31, 2024, no shares remained reserved and available for future issuance under the Company's 2023 Plan.
On September 16, 2024 the Company’s Board of Directors approved incentive stock awards for the CEO, the CFO, certain officers and directors and other key employees of the Company pursuant to the 2023 Plan. The awards are in the form of restricted stock and will vest in two parts: 50% on September 16, 2025 and 50% on September 16, 2026. A total of 2,500,000 shares were awarded and a corresponding share-based compensation expense of $366,644 was recorded reflecting the amortization of the grant’s fair value over the service period from the grant date through December 31, 2024. The expense was recorded in accordance with ASC 718 (Compensation-Stock Compensation) and is included in the Company’s Consolidated Statement of Operations.
Warrant Anti-Dilution Adjustment and Deemed Dividend
The Company’s warrants outstanding contain certain anti-dilution adjustments if the Company issues shares of its common stock at a lower price per share than the applicable exercise price of the underlying warrant. If any such dilutive issuance occurs prior to the exercise of such warrant, the exercise price will be adjusted downward to a price equal to the common stock issuance, and the number of warrants that may be purchased upon exercise is increased proportionately so that the aggregate exercise price payable under the warrant shares shall be the same as the aggregate exercise price in effect immediately prior to such adjustment.
On December 21, 2021, the Company issued its common stock upon conversion of its convertible debt at an issuance price of $50.50 per share. As a result, the Company issued additional warrants to the Company’s existing warrant holders to purchase 101,343 shares of common stock with an exercise price of $50.50 per share. The new warrants were issued with a weighted average contractual term of 2.04 years. The deemed dividend was recorded as an increase to accumulated deficit and additional paid-in capital and reduced net income available to common shareholders by the same amount. The Company valued (a) the fair value of the warrants immediately before the re-pricing in the amount of $1,915,077, (b) the fair value of the warrants immediately after the re-pricing in the amount of $9,548,110, and (c) recorded the difference as deemed dividend in the amount of $7,633,033. The warrants were valued using the Black-Scholes option pricing model using the following terms: a) fair value of common stock of $93.75, b) exercise prices of $125.00, $150.00 and $187.50 before re-pricing, c) exercise price of $50.50 after re-pricing, d) terms of 1.40 years, 1.97 years, 2.20 years and 2.26 years, e) dividend rate of 0%, and f) risk free interest rate of 0.41%.
On December 29, 2023, the Company entered into a warrant exchange agreement (the “Warrant Exchange”) with an investor to reduce the exercise price of 2,437,063 warrants from $2.75 per share to $1.45 per shares as an inducement to exercise. The Company issued 1,487,000 shares of common stock, held 950,063 shares in escrow until the investor’s beneficial ownership limitation allows for the transfer of the escrow shares, and received gross cash proceeds of 3,533,741. The Company contingently granted 4,874,126 additional warrants to be issued upon shareholder approval, with an exercise price of $1.45 and a term of five years. For the year ended December 31, 2023, the Company recorded a deemed dividend of $7,642 for the inducement to exercise and $7,218,485 for the grant of new warrants. The Company valued (a) the fair value of the warrants immediately before the re-pricing in the amount of $3,603,183, (b) the fair value of the warrants immediately after the re-pricing in the amount of $3,610,825, and (c) recorded the difference as deemed dividend in the amount of $7,642. The warrants were valued using the Black-Scholes option pricing model using the following terms: a) fair value of common stock of $1.49, b) exercise price of $1.45 before re-pricing, c) exercise price of $2.75 after re-pricing, d) terms of 5.07 years and 5.02 years, e) dividend rate of 0%, and f) risk free interest rate of 3.83%. Regarding the valuation of the 4,874,126 new warrants (and the recognition of a deemed dividend of $7,218,485) the following terms were used: a) fair value of common stock of $1.49, b) exercise price of $1.45, d) term of 5 years, e) dividend rate of 0%, and f) risk free interest rate of 3.83%.
On September 26, 2024, the Company entered into a Warrant Inducement Letter (the “Letter”) with an investor pursuant to which the Company issued 9,748,252 new warrants (the “New Warrants”) and reduced the exercise price of 4,874,126 warrant shares from $1.45 to $0.8701 to induce exercise and receive gross cash proceeds of $4,240,977 (the “Original Warrants”). Of the 9,748,252 warrants 4,874,126 of them have a term of 5 years (“Series A Warrants”) and the remaining 4,874,126 have a term of 1.5 years (“Series B Warrants”). The Company issued 2,332,000 shares of common stock, held 2,532,126 shares in escrow until the investor’s beneficial ownership limitation allows for the transfer of the escrow shares. For the year ended December 31, 2024, the Company recorded a deemed dividend of $9,793 for the inducement to exercise and $6,185,231 for the grant of new warrants. The Company valued (a) the fair value of the warrants immediately before the re-pricing in the amount of $4,197,280, (b) the fair value of the warrants immediately after the re-pricing in the amount of $4,207,073, and (c) recorded the difference as deemed dividend in the amount of $9,793. The warrants were valued using the Black-Scholes option pricing model using the following terms: a) fair value of common stock of $0.8701, b) exercise price of $1.45 before re-pricing, c) exercise price of $0.8701 after re-pricing, d) term of 4.26 years, e) dividend rate of 0%, and f) risk free interest rate of 3.55%. Regarding the valuation of the 9,748,252 new warrants (and the recognition of a deemed dividend of $6,185,321) the following terms were used: a) fair value of common stock of $0.8701, b) exercise price of $0.95, d) terms of 5 years for the Series A Warrants and 1.5 years for the Series B Warrants, e) dividend rate of 0%, and f) risk free interest rate of 3.55% for the Series A Warrants and 3.57% for the Series B Warrants.
As of December 31, 2024, there were 12,926,506 warrants outstanding and 12,913,172 warrants exercisable with 12,913,172 warrants having expiration dates from May 2026 through October 2029 and 13,334 warrants with no expiration date.
COSMOS HEALTH INC.
Notes to the Consolidated Financial Statements
A summary of the Company’s warrant activity for the years ending December 31, 2024 and 2023 is as follows:
Weighted
Weighted
Average
Average
Remaining
Aggregate
Number of
Exercise
Contractual
Intrinsic
Warrants
Shares
Price
Term
Value
Balance Outstanding, January 1, 2023
4,194,236
$ 8.31
5.04
$ 2,562,600
Granted
7,524,933
1.65
5.13
-
Forfeited
-
-
-
-
Exercised
(3,152,386 )
-
-
-
Expired
(5,307 )
-
-
-
Balance Outstanding, December 31, 2023
8,561,476
$ 3.91
4.64
$ 18,801
Granted
9,748,252
0.95
Forfeited
-
-
-
-
Exercised
(4,874,126 )
-
-
-
Expired
(509,096 )
-
-
-
Balance Outstanding, December 31, 2024
12,926,506
$ 2.63
3.24
$ 8,920
Exercisable, December 31, 2024
12,913,172
$ 2.63
3.24
$ 8,920
NOTE 18 - DISAGGREGATION OF REVENUE
ASC 606-10-50-5 requires that entities disclose disaggregated revenue information in categories (such as type of good or service, geography, market, type of contract, etc.). ASC 606-10-55-89 explains that the extent to which an entity’s revenue is disaggregated depends on the facts and circumstances that pertain to the entity’s contracts with customers and that some entities may need to use more than one type of category to meet the objective for disaggregating revenue.
The Company disaggregates revenue by country to depict the nature and economic characteristics affecting revenue.
The following table presents our revenue disaggregated by country for the years ended:
Country
Croatia
$ 47,233
$ 26,985
Cyprus
184,000
180,404
Bulgaria
66,658
210,033
Ireland
-
1,636
Greece
52,935,979
50,526,307
United States
-
Cayman Islands
-
12,632
UAE
341,782
-
UK
850,750
2,418,373
Total
$ 54,426,402
$ 53,376,874
NOTE 19 - SEGMENT REPORTING
A. Basis for segmentation
The Group operates through various operating segments, which include the wholesale sector, the pharmaceutical manufacturing sector, the nutraceuticals and pharmaceuticals sector and other, with only the first three of them being reportable segments based on the criteria (quantitative thresholds) of ASC 280. The financial information utilized by our Chief Operating Decision Maker (“CODM”), which is our CEO, for resource allocation and performance evaluation is included within the operating segments described above. The reconciling items presented in the tables below are excluded from the segment data provided to the Chief Operating Decision Maker (“CODM”). The “Other” category primarily consists of corporate expenses incurred by the Group’s parent entity, including, but not limited to, costs related to SEC legal and compliance matters, executive compensation, audit and review fees, and other corporate overhead expenses.
COSMOS HEALTH INC.
Notes to the Consolidated Financial Statements
B. Information about reportable segments
The table below present's information about the Company's reportable segments for the 12-month period ended December 31, 2024. The accounting policies followed in the preparation of the reportable segments are the same with those followed in the preparation of the Company's consolidated financial statements.
Year ended December 31, 2024
Wholesale
Pharma
manufacturing
Nutraceuticals & Pharmaceuticals
Other
Total
Revenues
51,593,787
865,373
1,967,242
-
54,426,402
Cost of Sales
(48,887,569 )
(249,061 )
(978,449 )
-
(50,115,079 )
General and Administrative expenses
(647,225 )
(773,429 )
(1,442,102 )
(4,176,049 )
(7,038,805 )
Salaries
(1,701,552 )
(1,243,568 )
(1,430,736 )
(1,317,580 )
(5,693,436 )
Sales and Marketing expenses
(10,516 )
(489 )
(255,559 )
(88,405 )
(354,969 )
Research and Development costs
-
-
-
(533,293 )
(533,293 )
Net finance costs
(840,456 )
-
234,856
(265 )
(605,865 )
Segment profit / (loss)
(493,531 )
(1,401,174 )
(1,904,748 )
(6,115,592 )
(9,915,045 )
Reconciling items:
Depreciation and amortization
(231,344 )
(565,371 )
(334,075 )
(118,448 )
(1,249,238 )
Provisions
(1,021,818 )
(123,503 )
(3,549,111 )
-
(4,694,432 )
Impairment Charges
-
-
(160,948 )
(131,032 )
(291,980 )
Other income and expenses
(304,495 )
5,789
225,665
40,718
(32,323 )
Net profit/(loss) before Income Taxes
(2,051,188 )
(2,084,259 )
(5,723,217 )
(6,324,354 )
(16,183,018 )
The following summary describes the operations of each reportable segment:
Reportable segments
Operations
Wholesale
Distribution and export of pharmaceutical products
Pharma manufacturing
Production of pharmaceutical products
Nutraceutical and pharmaceuticals
Trade of owned nutraceutical & pharmaceutical products
NOTE 20 - SUBSEQUENT EVENTS
On January 27, 2025, Cosmofarm S.A., a wholly owned subsidiary of the Company, entered into an agreement with a Third-Party Lender for the issuance of a €2,200,000 (approximately $2,308,000) secured bond loan. The loan will be disbursed in two tranches: €700,000 (Series A Bonds), repayable in ten equal semi-annual installments, and €1,500,000 (Series B Bonds), repayable at maturity. The loan bears interest at 2.95% plus the 6-month Euribor rate, payable semi-annually, and matures on January 27, 2030. The loan is secured by Cosmofarm’s 2,700 square meter premises and is intended to support the subsidiary’s growth initiatives and general corporate purposes.
During the period from January 1, 2025, to March 31, 2025, Grigorios Siokas, the Chief Executive Officer of the Company, executed a series of debt-for-equity exchange transactions. These transactions involved the conversion of debt owed by the Company to Mr. Siokas, specifically relating to unpaid salaries and bonuses, into shares of the Company’s common stock. A total of $649,000 in debt was exchanged, resulting in the issuance of 1,053,372 shares. All of these transactions were duly reported through the filing of Forms 4 with the U.S. Securities and Exchange Commission (SEC), as required for insider transactions.

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ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
Item 9. Changes In and Disagreements with Accountants on Accounting and Financial Disclosure
None.

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ITEM 9A. CONTROLS AND PROCEDURES
Item 9A. Controls and Procedures
Disclosure Controls and Procedures
The Company maintains disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act) that are designed to ensure that information required to be disclosed in the Company’s Securities Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and that such information is accumulated and communicated to the Company’s management, including its Principal Executive Officer/Principal Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.
Evaluation of Disclosure Controls and Procedures
The Company’s management, with the participation of the Company’s Principal Executive Officer and Principal Financial Officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures as of the end of the period covered by this report. Based upon that evaluation, the Principal Executive Officer and the Principal Financial Officer have concluded that, as of the end of the period covered by this report, the Company’s disclosure controls and procedures were ineffective due to material weaknesses stated in Management’s Report on Internal Control over Financial Reporting set forth below.
Management’s Report on Internal Control over Financial Reporting
Management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13a-15(f) under the Exchange Act. This rule defines internal control over financial reporting as a process designed by, or under the supervision of, the Company’s Chief Executive Officer and Chief Financial Officer, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. GAAP. Our internal control over financial reporting includes those policies and procedures that:
·
Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect our transactions and dispositions;
·
Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. GAAP, and that our receipts and expenditures are being made only in accordance with authorizations of management and directors of the Company; and
·
Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. In addition, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
With the participation of the Chief Executive Officer and Chief Financial Officer, our management conducted an evaluation of the effectiveness of our internal control over financial reporting. Based on this evaluation, our management has concluded that our internal control over financial reporting was ineffective as of December 31, 2024, as the result of the below weaknesses.
AS 2201 and the SEC define the term “material weakness” as “a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis.” We had the following material weaknesses at December 31, 2024 set forth below:
·
The Company has a lack of proper segregation of duties.
·
The Company’s internal control structure lacks multiple levels of review and oversight and does not have appropriate IT General Controls (ITGCs) for the applications used in the Financial Reporting process, caused by lack of design of relevant controls and overall IT risk management.
Remediation of Deficiencies and Material Weaknesses
We are in the process of remediating all material weaknesses present in our internal controls.
- The Company has a lack of proper segregation of duties.
We are in the process of updating the organizational chart in order to reallocate roles among personnel and emphasize sharing the responsibilities of key business processes by distributing the discrete functions of these processes to multiple people and departments. Specifically, we have delegated the following processes to different personnel; authorization, custody, recordkeeping, and reconciliation. For example, a manager authorizing discount sales is not responsible for maintaining accounts receivable records or handling cash receipts. In addition, we have set access rights at the data and our software based on the job responsibilities and level of the personnel, therefore unauthorized users are not able to change any data on the system or process to bank transactions.
- The Company’s internal control structure lacks multiple levels of review and oversight and does not have appropriate IT General Controls (ITGCs) for the applications used in the Financial Reporting process, caused by lack of design of relevant controls and overall IT risk management.
Enhancements to Internal Controls and Financial Reporting Systems
The Company is actively refining its internal control framework by implementing multiple levels of review tailored to job responsibilities and personnel hierarchy. Key enhancements include:
·
Bank Reconciliation Oversight: Management conducts timely reviews to ensure bank reconciliations are prepared accurately and on schedule. Discrepancies between the general ledger and bank statements are promptly identified and addressed.
·
Review and Authorization of Financial Information: The Chief Financial Officer (CFO) reviews management accounting information and authorizes material transactions and adjustments, ensuring compliance with financial policies and procedures.
·
Payroll Process Controls: Payroll is processed by an external service provider, subsequently reviewed by the accountant, and formally approved by the CFO before payment authorization.
·
Financial Reporting System Assessment: The Company is evaluating the implementation of a new financial reporting application across all subsidiaries. This system is expected to enhance financial data processing, reporting accuracy, and integration of key financial controls, thereby strengthening IT General Controls (ITGCs) within a unified and more reliable platform.
These initiatives reflect the Company’s ongoing commitment to improving financial reporting processes, internal controls, and operational efficiency in alignment with best practices and regulatory requirements.
Limitations on the Effectiveness of Internal Controls
Our management, including our Chief Executive Officer and our Chief Financial Officer, does not expect that our disclosure controls and procedures or our internal control over financial reporting are or will be capable of preventing or detecting all errors or all fraud. Any control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. The design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Further, because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements, due to error or fraud will not occur or that all control issues and instances of fraud, if any, within the company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns may occur because of simple error or mistake. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of controls. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Projections of any evaluation of controls effectiveness to future periods are subject to risk.
This annual report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our registered public accounting firm pursuant to rules of the Securities and Exchange Commission that permit us to provide only management’s report in this annual report.
Changes in Internal Control Over Financial Reporting
During the most recently completed fiscal year, there has been no change in our internal control over financial reporting that has materially affected or is reasonably likely to materially affect, our internal control over financial reporting.

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ITEM 9B. OTHER INFORMATION
Item 9B. Other Information
None.

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ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Item 10. Directors, Executive Officers and Corporate Governance
Our current directors and officers are listed below. Each of our directors will serve for one year or until their respective successors are elected and qualified. Our officers serve at the pleasure of the Board.
Name
Age
Position
Grigorios Siokas
CEO and Director
Georgios Terzis
CFO
Nikolaos Bardakis
COO
Suhel Bhutawala
Director and Commercial Director of Decahedron Ltd
Demetrios G. Demetriades
Secretary and Audit Committee Member
Manfred Ziegler
Director and Advisory Board Member
John J. Hoidas
Director and Audit Committee Member
Anastasios Aslidis
Director and Audit Committee Chairman
Grigorios Siokas joined us as CEO, CFO and Director on February 26, 2016. He has over 20 years’ experience in the pharmaceutical industry. Since 2014, he has served as the CEO and Operations Manager of SkyPharm SA a wholly owned subsidiary of the Company. SkyPharm SA is a pharmaceutical company located in Greece that mainly exports medicines from Greece to other European countries, such as Germany, England and Denmark. Prior to 2014, Mr. Siokas worked in a variety of sectors of the pharmaceutical industry mostly in the trading of medicines in Greece and other European countries. Additionally, since 2000 he has been a major shareholder in various pharmaceutical companies such as: Ippokratis Pharmaceuticals, (annual sales of over € 78 million); Thrakis Pharmaceuticals, (annual sales of over € 20 million); Thessalias Pharmaceuticals, (annual sales of over € 18 million); and ZED Pharma SA, (annual sales of over € 35 million). During the 1990s, Mr. Siokas founded and operated a marble wholesale import - export company in Germany. Within a period of two years, he became the 4th biggest Greek marble importer in Germany. He also ran a Tour Operation with many different airlines, serving millions of customers. Grigorios Siokas has a Bachelor’s Degree in Geology from the Aristotle University of Thessaloniki, Greece. He received a Master’s in management and finance from the University of Stuttgart and the University of Tuebigen, Germany.
Georgios Terzis was elected CFO on November 11, 2020. Prior thereto he was employed by the Company as International Finance Manager. He has served as an Executive Consultant to several multinational advisory firms where, he achieved commitments of more than €50million funding, financing and state incentives to a numerus investment in healthcare, logistics, RES and manufacturing industries. George holds an MBA from Alba Graduate Business School and a Bachelor’s Degree in Financial Management from University of Attica. He is certified as an independent valuator of companies and private investments by the European Commission.
Nikolaos Bardakis was appointed as COO on February 1, 2023, succeeding Mr. Pavlos Ignatiades. Mr. Bardakis was for more than eleven years, the National Sales Director for Servier Hellas, a multinational pharmaceutical company specializing in the areas of Cardiovascular, Central Nervous System and Metabolic diseases, where he led a cross functional client focused team comprised of Sales, Trade, Marketing and Business Development personnel, managing over 130 employees. He gained international exposure, participating in several boards and meetings focused on European level design and launch projects, pioneering in international operations. Mr. Bardakis received a BS in Finance from American College of Greece along with relevant studies in Natural Sciences.
Demetrios G. Demetriades was elected as Secretary and Director of the Company effective January 13, 2014. Since January 2003, Mr. Demetriades has been Director of Highlander Spring Trading Ltd, a trading company. From November 2000 to December 2002, he was Marketing Director of Eurolink Securities Ltd which was involved in trading in the Cyprus Stock Exchange. From January 1995 to November 2000, he was Supervising Officer of Laiki Factors Ltd a financing company. As a member of the board, Mr. Demetriades contributes the benefits of his trading, executive leadership and management experience. Mr. Demetriades will be compensated for his service from time-to-time as the Board of Directors will determine. He was appointed to the Audit Committee during fiscal year 2021.
Dr. Manfred Ziegler was elected as Director on the AGM held on December 2, 2022. Dr. Ziegler has over 30 years of executive management, financial, and operational experience, as well as extensive expertise in mergers and acquisitions, with a particular focus on high-growth public and private companies. Notably, Dr. Manfred Ziegler served as Chief Executive Officer of CC Pharma, a leading German distributor of pharmaceutical and medical products into more than 24 countries. Dr. Ziegler was instrumental in the restructuring of CC Pharma and contributed to the acquisition of CC Pharma by Aphria (NYSE:APHA) in 2019. Before joining CC Pharma, Dr. Ziegler founded, built and managed several companies in the automotive, food and medical industries, both domestic and international. Currently, Dr. Manfred Ziegler is a managing director and founder of Conzima GmbH, a business management consultancy firm focused on restructuring and reorganizing business processes to improve operational efficiency. Dr. Ziegler received a degree in business administration from University of Mannheim.
John J. Hoidas was elected a Member of the Company’s Board of Directors on November 18, 2016. He was also elected to the Audit Committee during the fiscal year 2021. Mr. Hoidas is a wealth management professional with extensive experience in the capital markets and specifically in the financing of pharmaceutical companies. He is currently the senior vice president of Uhlmann Price Securities based in Chicago. Over the previous years he achieved to raise significant amounts of capital for late-stage pre-IPO companies such as Organovo (ONVO), Invivo Therapeutics (NVIV) and Matinas BioPharma (MTNB) to name a few. He has served as a broker dealer to the following firms: Kingsbury Capital Investment Advisors, Kingsbury Capital LLC, Spencer Trask Ventures.
Dr. Anastasios Aslidis was elected to serve on the Board of Directors and was appointed as a chair of the Audit Committee, on April 28, 2022, He has been the CFO, Treasurer and a member of the board of directors of EuroDry. He is also member of the board of directors, Treasurer and CFO of Euroseas since September, 2005. He also served as consultant to the boards of directors of shipping companies (public and private) advising on strategy development, asset selection and investment timing. Dr. Aslidis holds a Ph.D. in Ocean Systems Management from the MIT, M.S. in Operations Research and M.S. in Ocean Systems Management also from the MIT, and a Diploma in Naval Architecture and Marine Engineering from the National Technical University of Athens.
Suhel Bhutawala was elected to serve on the Board of Directors at the Company’s Annual General Meeting held on September 18, 2023. He has over 20 years of experience in the pharmaceutical industry. He has worked in different sectors such as: Community Pharmacies, R&D department of Pharmaceuticals and is currently working as a commercial director at Cosmos Health Inc.’s subsidiary, Decahedron Ltd, UK since 2017. Mr. Bhutawhala has bachelor’s degree in pharmacy and Master of Science degree from King’s College, London.
Term of Office
Our directors are appointed for a one-year term to hold office until the next annual general meeting of our shareholders or until removed from office in accordance with our bylaws. Our officers are appointed by our board of directors and hold office until removed by the board.
Family Relationships
There are no family relationships between or among the directors, executive officers or persons nominated or chosen by us to become directors or executive officers.
Legal Proceedings
No officer, director, or persons nominated for such positions, promoter or significant employee has been involved in the last ten years in any of the following:
·
Any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time.
·
Any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offenses).
·
Being subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities.
·
Being found by a court of competent jurisdiction (in a civil action), the Commission or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated.
·
Having any government agency, administrative agency, or administrative court impose an administrative finding, order, decree, or sanction against them as a result of their involvement in any type of business, securities, or banking activity.
·
Being the subject of a pending administrative proceeding related to their involvement in any type of business, securities, or banking activity.
·
Having any administrative proceeding been threatened against you related to their involvement in any type of business, securities, or banking activity.
All legal cases outstanding as of December 31, 2024 are disclosed in Note 15.
Audit Committee
We have a separately designated standing audit committee, which is appointed by our Board of Directors. On April 28, 2022, Dr. Anastasios Aslidis was elected to serve on the Board of Directors and was appointed as a chair of the Audit Committee, replacing Mr. Peter Goldstein, who submitted his resignation on the same date. Our four independent directors, Anastasios Aslidis, John Hoidas, Manfred Ziegler and Demetrios Demetriades serve on the Audit Committee. The primary function of the committee is to assist the Board of Directors in overseeing (1) the financial reporting and accounting processes of the Company, and (2) the financial statements audits of the Company. The Committee also prepares a written report to be included in the annual proxy statement of the Company pursuant to the applicable rules and regulations of the SEC. In furtherance of these purposes, the Committee shall maintain direct communication among the Company’s independent auditors and the Board of Directors. The independent auditors and any other registered public accounting firm engaged in preparing or issuing an audit report or performing other audit review or attest services for the Company shall report directly to the Committee and are ultimately accountable to the Committee and the Board of Directors.
In discharging its oversight role, the Committee is authorized to investigate any matter brought to its attention with full access to all books, records, facilities and personnel of the Company. The Committee shall have the sole authority to retain at the Company’s expense outside legal, accounting or other advisors to advise the Committee and to receive appropriate funding, as determined by the Committee, from the Company for the payment of the compensation of such advisors and for the payment of ordinary administrative expenses of the Committee that are necessary to carry out its duties. The Committee may request any officer or employee of the Company or the Company’s outside counsel or independent auditors to attend a meeting of the Committee or to meet with any member of, or advisors to, the Committee. The Committee may also meet with the Company’s investment bankers or financial analysts who follow the Company.
The Committee shall meet no less frequently than four times per year, with additional meetings as circumstances warrant. The Committee shall also meet periodically with management, the internal auditors, if any, and the independent auditors in separate executive sessions. The Committee shall record the minutes of all such meetings and shall submit the minutes of its meetings to, or discuss the matters deliberated at each meeting with, the Board of Directors. The Company’s chief financial or accounting officer shall function as the management liaison officer to the Committee.
Director Independence
Our board of directors has determined that each of John Hoidas, Anastasios Aslidis, Manfred Ziegler and Demetrios G. Demetriades qualify as an “independent board member” as the term is used in Item 7(d)(3)(iv)(B) of Schedule 14A under the Securities Exchange Act of 1934, as amended, and as defined by Rule 4200(a)(15) of the NASDAQ Marketplace Rules.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act requires our directors and executive officers and persons who beneficially own more than ten percent of a registered class of the Company’s equity securities to file with the SEC initial reports of ownership and reports of changes in ownership of common stock and other equity securities of the Company. Officers, directors and greater than ten percent beneficial shareholders are required by SEC regulations to furnish us with copies of all Section 16(a) forms they file. To the best of our knowledge based solely on a review of Forms 3, 4, and 5 (and any amendments thereof) received by us during or with respect to the year ended December 31, 2024, the following persons each failed to file, on a timely basis: Suhel Bhutawala in connection with one report concerning the receipt of 25,000 incentive shares on September 19, 2024; Grigorios Siokas in connection with one report concerning the receipt of 1,410,000 incentive shares on September 19, 2024; Anastasios Aslidis in connection with one report concerning the receipt of 20,000 incentive shares on September 19, 2024; John J. Hoidas in connection with one report concerning the receipt of 20,000 incentive shares on September 19, 2024, and a second report concerning the disposal of 5,000 of his incentive shares in November 2024;Georgios Terzis in connection with one report concerning the receipt of 490,000 incentive shares on September 19, 2024; Manfred Ziegler in connection with one report concerning the receipt of 15,000 incentive shares on September 19, 2024; Nikolaos Bardakis in connection with one report concerning the receipt of 35,000 incentive shares on September 19, 2024; all required by Section 16(a) of the Exchange Act during fiscal year ended December 31, 2024. On February 12, 2025, each of the abovementioned persons filed a Form 5 to report such transactions not previously disclosed. Additionally, Demetrios Demetriades had failed to disclose his shareholding of 20,000 shares of Common Stock on Form 3, which was subsequently filed on April 4, 2025.
Code of Ethics
We have adopted a Code of Ethics for Financial Executives, which includes our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. A copy of our Code of Ethics has previously been filed as an exhibit with the SEC.

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ITEM 11. EXECUTIVE COMPENSATION
Item 11. Executive Compensation
Summary Compensation Table
The table below summarizes all compensation awarded to, earned by, or paid to both to our officers and to our directors for all services rendered in all capacities to us for our fiscal year ended December 31, 2024 and 2023.
SUMMARY COMPENSATION TABLE
Name
YE
Nonqualified
Non-Equity
Deferred
Stock
Option
Incentive Plan
Compensation
All Other
Salary
Bonus
Awards
Awards
Compensation
Earnings
Compensation
Total
($)
($)
($)
($)
($)
($)
($)
($)
Grigorios
1,080,000
400,000
1,424,100
-
-
-
-
2,904,100
Siokas (1)
1,080,000
1,800,000
-
-
-
-
-
2,880,000
Georgios
166,698
100,000
494,900
-
-
-
-
761,898
Terzis (2)
160,272
100,000
175,212
-
-
-
-
435,483
Manfred
-
-
15,150
-
-
-
15,000
30,150
Ziegler (3)
-
-
8,761
-
-
-
12,500
21,261
Anastasios
-
-
20,200
-
-
-
40,000
60,200
Aslidis (4)
-
-
35,042
-
-
-
60,000
95,042
John
15,150
-
-
-
53,000
68,150
Hoidas(5)
-
-
8,761
-
-
-
29,500
38,261
Demetrios G.
-
-
15,150
-
-
-
15,000
30,150
Demetriades (6)
-
-
8,761
-
-
-
15,000
23,761
Nikolaos
22,722
15,000
35,350
-
-
-
15,071
88,143
Bardakis (7)
19,470
-
17,521
-
-
-
10,817
47,808
Suhel
84,357
-
25,250
-
-
-
10,000
119,607
Bhutawala (8)
74,640
-
8,761
-
-
-
-
83,401
________________
(1)
Mr. Siokas became the Company’s Chief Executive Officer and Director of the Company in 2016.
(2)
Mr. Terzis became the Company’s Chief Financial Officer on November 11, 2020.
(3)
Manfred Ziegler was first elected as Director at the AGM held on December 2, 2022.
(4)
Dr. Anastasios Aslidis was elected to serve on the Board of Directors and was appointed as a chair of the Audit Committee on April 28, 2022.
(5)
John J. Hoidas was first elected as a Member of the Company’s Board of Directors on November 18, 2016. He was also elected to the Audit Committee during the fiscal year 2021.
(6)
Demetrios G. Demetriades was elected as Secretary and Director of the Company effective January 13, 2014.
(7)
Nikolaos Bardakis was appointed as COO on February 1, 2023, succeeding Mr. Pavlos Ignatiades.
(8)
Suhel Bhutawala was elected to serve on the Board of Directors at the Company’s Annual General Meeting held on September 18, 2023 and is the Commercial Director of our subsidiary, Decahedron Ltd, since April 2017.
Narrative Disclosure to the Summary Compensation Table
There are no arrangements or plans in which we provide pension, retirement or similar benefits for executive officers.
Insider Trading Arrangements and Policies
There are no Rule 10b5-1 trading arrangements held by any officer or director of the Company. The company has adopted its Insider Trading Policies and Procedures, which is being filed herein as Exhibit 19.1.
Outstanding Equity Awards at Fiscal Year-End
As of December 31, 2024, there were no unexercised stock options, unvested stock, or outstanding equity incentive plan awards for any of our directors or executive officers.
OUTSTANDING EQUITY AWARDS AT YEAR END
Director Compensation
During the fiscal year ended December 31, 2024, the following amounts were approved for the directors as compensation for the services rendered within the period: a) $30,000 as BoD participation fees and $10,000 as committee participation fees for Dr. Anastasios Aslidis, b) $10,000 as BoD participation fees and $5,000 as committee participation fees for John J. Hoidas, c) $10,000 as BoD participation fees and $5,000 as committee participation fees for Demetrios G. Demetriades, d) $10,000 as BoD participation fees and $5,000 as committee participation fees for Manfred Ziegler, e) $10,000 as BoD participation fees for Suhel Bhutawala.
In the future we may grant options to our directors to purchase shares of common stock as determined by our Board of Directors or a compensation committee that may be established.
Omnibus Equity Incentive Plan
On September 19, 2022, the Company held a Board of Directors meeting, whereas, the Board of Directors had elected to adopt an Omnibus Equity Incentive Plan (the “2022 Plan”), that includes reserving 200,000 shares of common stock eligible for issuance under the 2022 Plan to be registered on a Form S-8 Registration Statement with the SEC. The 2022 Plan is designed to enable the flexibility to grant equity awards to the Company’s officers, employees, non-employee directors and consultants and to ensure that it can continue to grant equity awards to eligible recipients at levels determined to be appropriate by the Board and/or the Compensation Committee. The 2022 Plan was approved by the Company’s stockholders at the Annual Meeting of Stockholders held on December 2, 2022.
On April 3, 2023, the Company approved incentive stock awards for the CFO, certain officers and directors and other employees of the Company. The awards are in the form of restricted stock and will vest in two parts: 50% on October 2, 2023 and 50% on October 2, 2024. A total of 185,000 shares were awarded and a corresponding share-based compensation expense of $323,957 was recorded for the 12 months ended December 31, 2023, respectively, based on the amortization of fair value from the date of issuance of April 3, 2023 through December 31, 2023.
On August 21, 2023, the Board adopted, subject to stockholder approval, the Cosmos Health Inc. 2023 Omnibus Equity Incentive Plan (the “2023 Plan”). The 2023 Plan is designed to enable the flexibility to grant equity awards to our officers, employees, non-employee directors and consultants and to ensure that we can continue to grant equity awards to eligible recipients at levels determined to be appropriate by the Board and/or the Compensation Committee. Subject to certain adjustments (as provided in Section 4.2 of the 2023 Plan) and exception (as provided in Section 5.6(b) of the 2023 Plan), the maximum number of shares reserved for issuance under the 2023 Plan (including incentive share options) is 2,500,000 shares. The 2023 Plan was approved by the Company’s stockholders at the Annual Meeting of Stockholders held on September 18, 2023.
On September 16, 2024 the Company’s Board of Directors approved incentive stock awards for the CEO, the CFO, certain officers and directors and other key employees of the Company pursuant to the 2023 Plan. The awards are in the form of restricted stock and will vest in two parts: 50% on September 16, 2025 and 50% on September 16, 2026. A total of 2,500,000 shares were awarded and a corresponding share-based compensation expense of $366,644 was recorded reflecting the amortization of the grant’s fair value over the service period from the grant date through December 31, 2024.
Clawback Policy
On November 28, 2023, the Board of Directors adopted a clawback policy which provides for the recovery of certain executive compensation in the event of an accounting restatement resulting from material non-compliance with financial reporting requirements under the federal securities laws. There have been no accounting restatements to date, nor is there any compensation to be recovered.
Cosmos Health’s Policies and Practices Related to the Grant of Certain Equity Awards Close in Time to the Release of Material Nonpublic Information
The Company does not have any formal policy that requires the Company to grant, or avoid granting, equity-based compensation to its executive officers at certain times. Consistent with its annual compensation cycle, the Compensation Committee has granted annual equity awards to its directors and executive officers and might grant annual equity awards to its directors and executive officers in the future. The timing of any equity grants to directors or executive officers in connection with new hires or other non-routine grants is tied to the event giving rise to the award (such as an executive officer’s commencement of employment effective date). As a result, in all cases, the timing of grants of equity awards, including stock options or RSUs, occurs independent of the release of any material nonpublic information, and Cosmos Health does not time the disclosure of material nonpublic information for the purpose of affecting the value of equity-based compensation.
Pursuant to Item 402(x) of Regulation S-K, the Company is required to provide tabular disclosure of any stock options or stock appreciation rights (SARs) granted to named executive officers during a period commencing four business days before and ending one business day after the disclosure of material nonpublic information (the “Covered Period”).
During the fiscal year ended December 31, 2024, the Company did not grant any stock options or stock appreciation rights to named executive officers during any Covered Period following the disclosure of material nonpublic information, including earnings releases or other significant corporate announcements. Accordingly, the tabular disclosure required under Item 402(x)(2) is not applicable.

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ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
The following table sets forth information regarding the beneficial ownership of our common stock as of April 15, 2025, for each of the following persons, after giving effect to the transaction under the Exchange Agreement:
·
all such directors and executive officers as a group; and
·
each person who is known by us to own beneficially five percent or more of our common stock prior to the change of control transaction.
Beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission. Unless otherwise indicated in the table, the persons and entities named in the table have sole voting and sole investment power with respect to the shares set forth opposite the shareholder’s name. The percentage of class beneficially owned set forth below is based on 27,198,161 shares of common stock issued and outstanding on April 15, 2025. We calculated beneficial ownership according to Rule 13d-3 of the Securities Exchange Act of 1934, as amended as of that date (the “Exchange Act”). Shares of our Common Stock issuable upon exercise of options or warrants or conversion of Notes that are exercisable or convertible within 60 days of April 15, 2025 are included as beneficially owned by the holder, but not deemed outstanding for computing the percentage of any other Stockholder for Percentage of Common Stock Beneficially Owned Immediately. Beneficial ownership generally includes voting and dispositive power with respect to securities. Unless otherwise indicated below, the persons and entities named in the table have sole voting and sole dispositive power with respect to all shares beneficially owned.
Name of Beneficial Owners of Common Stock
Amount and
Nature of
Beneficial
Ownership
% of
Common Stock
Grigorios Siokas
4,827,685 (1)
17.30 %
Georgios Terzis
727,263
2.67 %
Nikolaos Bardakis
45,000
0.17 %
Suhel Bhutawala
30,000
0.11 %
John J. Hoidas
15,000
0.06 %
Dr. Anastasios Aslidis
40,000
0.15 %
Dr. Manfred Ziegler
20,000
0.07 %
Demetrios G. Demetriades
20,000
0.07 %
DIRECTORS AND OFFICERS
As a group (8 persons)
5,724,948
20.60 %
5% SHAREHOLDERS
-
-
None
(1)
Includes 4,115,302 issued shares; 212,383 shares issuable upon exercise of Exchange Warrants issued on October 2, 2022, pursuant to a Warrant Exchange Agreement dated as of October 3, 2022 and 500,000 shares issuable upon exercise of Series B Common Warrants exercisable at $3.00 per share. The exercise of the Exchange Warrants, Series A Common Warrants and Series B Common Warrants are all subject to the Beneficial Ownership Limitation.

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ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Item 13. Certain Relationships and Related Transactions, and Director Independence
Grigorios Siokas
Grigorios Siokas is the Company’s CEO and principal shareholder and is hence considered a related party to the Company.
From time to time, Grigorios Siokas loans the Company funds in the form of non-interest bearing, no-term loans.
During the 12-month period ended December 31, 2023, the Company had an outstanding principal balance under these loans of $13,257 in loans payable to Grigorios Siokas. As of December 31, 2024, the Company had an outstanding principal balance of $8,594 related to this payable. During the 12- month period ended December 31, 2024 the Company received $46,232 and repaid $49,842 in such loans.
Dimitrios Goulielmos
Dimitris Goulielmos was the Company’s former CEO and a Director of the Company.
On November 21, 2014, the Company entered into an agreement with Dimitrios Goulielmos, as amended on November 4, 2016. Pursuant to the amendment, this loan has no maturity date and is non-interest bearing. As of December 31, 2024 and 2023, the Company had a principal balance of €10,200 ($10,558) and €10,200 ($11,283) respectively.
Doc Pharma
Doc Pharma S.A. is considered a related party to the Company due to the fact that the CEO of Doc Pharma is the son of Grigorios Siokas, the Company’s CEO and principal shareholder, who also served as a principal of Doc Pharma S.A. in the past.
As of December 31, 2024, and December 31, 2023, the Company had a prepaid balance of $3,284,052 and $4,347,184, respectively, to Doc Pharma. For the year ended December 31, 2024 the prepayment of approximately $2.6 million relates to purchases of inventory pursuant to the CMO agreement signed between the Company and Doc Pharma SA on October 10, 2020, $310k concern the purchase of pharmaceutical and nutraceutical licenses according to the May 17, 2021 R&D agreement and the remaining $362k relate to the current portion of the Royalty Agreement signed on December 31, 2024 between the and DocPharma SA (refer to “Research and Development” section of the MD&A). The non-current portion of the Royalty Agreement of $1,811,425 is included in “Other Assets - Related Party” in the Company’s Consolidated Balance Sheets as of December 31, 2024.
As of December 31, 2024 and December 31, 2023, the Company had an accounts payable balance to Doc Pharma of $249,768 and $34,217, respectively. The December 31, 2024 balance concerns a trade payable balance that our subsidiary wholesaler, Cosmofarm SA, owes to Doc Pharma SA, concerning purchases of certain pharmaceutical products.
Additionally, the Company had a receivable balance of $2,295,706 and $2,386,721 from Doc Pharma S.A. as of December 31, 2024, and December 31, 2023, respectively, which concerns trading receivables balances with the Company’s Greek and UK subsidiaries. As of December 31, 2024, a cumulative allowance for doubtful accounts of approximately $1.4 million has been recognized, effectively offsetting this balance.
During the years ended December 31, 2024 and 2023, the Company purchased a total of $1,091,540 and $1,365,324 of products from Doc Pharma S.A., respectively and additionally sold a total of $781,386 and $619,637 of products to Doc Pharma, respectively.
On October 10, 2020, the Company entered into a contract manufacturer outsourcing (“CMO”) agreement with Doc Pharma whereby Doc Pharma is responsible for the development and manufacturing of pharmaceutical products and nutritional supplements according to the Company’s specifications based on strict pharmaceutical standards and good manufacturing practice (“GMP”) protocols as the National Organization for Medicines requires. The Company has the exclusive ownership rights for trading and distribution of its own branded nutritional supplements named “Sky Premium Life®”. The duration of the agreement is for five years, however, either party may terminate the agreement at any time giving six-month advance notice. Doc Pharma is exclusively responsible for supplying the raw materials and packaging required to manufacture the final product. However, they are not responsible for potential delays that may arise, concerning their import. Doc Pharma is also obligated to store the raw and packaging materials. The delivery of raw and packaging materials should be purchased at least 30 and 25 days, respectively, before the delivery date of the final product. The Manufacturer solely delivers the finished product to the Company. There is a minimum order quantity (“MoQ”) of 1,000 pieces per product code. Both parties have agreed that the Company will deposit 60% of the total cost upon agreement and assignment and 40% of the total cost including VAT charge upon the delivery date. The prices are indicative and are subject to amendments if the cost of the raw material or the production cost change. For the years ended December 31, 2024 and 2023, the Company has purchased €493,241 ($533,687) and €1,144,043 ($1,237,467), respectively, in inventory related to this agreement.
On May 17, 2021, Doc Pharma and the Company entered into a Research and Development (“R&D”) agreement whereby Doc Pharma will be responsible for the research, development, design, registration, copy rights and licenses of 250 nutritional supplements for the final products called Sky Premium Life®. These products will be sold in Greece and abroad. The total cost of this project will be €1,425,000 plus VAT and will be done over three phases as follows: Design & Development (€725,000); Control and Product Manufacturing (€250,000) and Clinical Study and Research (€450,000). SkyPharm has bought a total of as of 81 licenses at value of €554,500 ($593,204) which is 38.91% of the total cost, as of December 31, 2022. During the year ended December 31, 2023, 24 additional licenses were purchased at value of €475,014 ($525,461) and during the year ended December 31, 2024, 60 additional Sky Premium Life licenses were purchased for €710,000 ($734,921).The agreement will terminate on December 31, 2025.
On December 31, 2024, the Company signed an agreement with DocPharma SA (the “Licensor”), through which the Company obtained a royalty-bearing, exclusive worldwide license to actively commercialize the patents owned by the Licensor, through research and preclinical and clinical trials for the useful life of the patents, or for 20 years, whichever is longer. The patents, filed in 2016 and 2017 respectively, cover innovative treatments for cancer. The terms of the agreement include an initial payment of EUR 500,000 due by the end of 2024, followed by fixed annual payments of EUR 350,000 during the five-year Start-Up Term from 2025 to 2030. After the Start-Up Term, the Company will pay an 1.5% royalty on annual net sales of licensed products covered by an issued patent. Moreover, the Company retains an optional buy-out right for a total amount of EUR 7,500,000, which can be exercised with 60 days' notice and a 60-day close period. The Company also has the right to sublicense the patents. For the 12-month period ended December 31, 2024, the Company incurred EUR 500,000 ($517,550) in royalties concerning this agreement, which were included in “Research and Development costs” in the Company’s Consolidated Statements of Operations and Comprehensive Loss.
On June 28, 2023, the Company approved the purchase of five proprietary and innovative branded pharmaceuticals with significant market presence and material profit contribution from Zakalia Ltd., the parent company of Doc Pharma, for €1,800,000 ($1,965,600). The transaction was settled on a non-cash basis through the reduction, of an equivalent amount, of prepaid expense balances the Company held with Doc Pharma. The purchased branded pharmaceuticals are presented in “Goodwill and intangible assets, net” on the accompanying consolidated balance sheets. During the year ended December 31, 2024, the Company recognized an impairment charge of $160,947 related to two licenses that are no longer expected to be commercialized. The impairment was recorded after management’s assessment determined that the recoverability of these assets was no longer supportable due to changes in market conditions and strategic priorities. This charge is included in “Other income (expense), net” within the Consolidated Statement of Operations. On December 29, 2023, the Company approved the purchase of additional 19 generic licenses from Doc Pharma, of a total value of €3,200,000 ($3,539,840). This transaction was also settled on a non-cash basis through the reduction, of an equivalent amount, of prepaid expense balances the Company held with Doc Pharma.
The balance of prepaid expenses due Doc Pharma as of December 31, 2022, had increased to €7,103,706 ($7,599,545), which was mainly attributable to the prepayments SkyPharm S.A. made in accordance with the CMO agreement and the extensive orders and sales of the SPL products the Company expects to achieve within 2023, mainly through its Amazon channels in the UK, Singapore, Canada and other countries. However, as the benefit from a significant portion of the prepaid balance would not have been realized within a 12-month period, the Company opted to secure a portion of the outstanding prepaid balance through a loan agreement. SkyPharm S.A. (the “Lender”) entered into a loan agreement with Doc Pharma (the “Borrower”) for €4,000,000 ($4,279,200), all of which was financed through the outstanding prepaid balance. The duration of the loan is for a 10-year period up to December 1, 2032 (the “Maturity Date”). The loan bears a fixed interest rate of 5.5% payable on a monthly basis and will be repayable in 120 equal instalments of €33,333.33 ($35,660). The loan may be prepaid anytime during its duration in full or partially based on the Company’s product requirements and other factors, without Doc Pharma incurring any prepayment penalty. As of December 31, 2024 and December 31, 2023, the loan had a current portion of €500,000 ($517,550) and €400,000 ($442,480) , and a non-current portion of €2,800,000 ($2,898,280), and €3,200,000 ($3,539,840), respectively, which is classified as “Loans receivable - related party” on the accompanying consolidated balance sheets. During the year ended December 31, 2024, the Company received €300,000 ($310,530) in principal repayments, and €121,550 ($125,816) of interest repayments. Additionally, during the year ended December 31, 2024, the Company recorded €188,375 ($203,822) as interest income relating to this loan.
Panagiotis Kozaris
Panagiotis Kozaris is considered a related party due to the fact that he is a former General operational manager and current employee of Cosmofarm S.A.
From time-to-time the Company purchases back shares that Panagiotis Kozaris owns and records them as treasury shares. The Company pays Panagiotis Kozaris in advance for the shares owned and obtains the shares upon execution of a cumulative stock-purchase agreement (“SPA”). During the years ended December 31, 2023 and 2022, the Company paid Panagiotis Kozaris an additional sum of $51,159 and $143,056 respectively for shares owned, however, no SPA for these funds has been executed as of December 31, 2023. The Company intends to execute a cumulative SPA for these amounts within 2025. The total balances owed of $194,215 and $194,215 are included in “Prepaid expenses and other current assets - related party”, on the accompanying consolidated balance sheets as of December 31, 2024 and 2023, respectively.
Basotho Investment Limited
Basotho Investment Limited is considered a related party once Panagiotis Kozaris (former General operational manager and current employee of Cosmofarm S.A) is one of its directors.
On November 21, 2023, the Company issued 120,000 shares of common stock to Basotho Investment Limited for services rendered. The fair value of these shares for the period ended December 31, 2024 and 2023 was $113,300 and $10,300, respectively, which was included in “General and administrative expenses” in the Company’s Consolidated Statements of Operations and Comprehensive Loss.
Maria Kozari
Maria Kozari is considered a related party to the Company due to the fact that she is the daughter of Panagiotis Kozaris, a former Operational General Manager and current employee of Cosmofarm S.A.
During 2021, the Company, through its subsidiary, Cosmofarm SA, commenced a partnership with a pharmacy called “Pharmacy & More”, owned by Maria Kozari. The transactions with the respective pharmacy were in Cosmofarm’s normal course of business, however, a more flexible credit policy was allowed as the pharmacy was new and needed to be established in the market. During the years ended December 31, 2024 and 2023 the Company’s net sales to Pharmacy & More amounted to $414,443 and $480,029 respectively. As of December 31, 2024 and 2023 the Company’s outstanding receivable balance due from the pharmacy amounted to $1,183,429 and $1,142,402, respectively, and are included in “Accounts receivable - related party”, on the accompanying consolidated balance sheets. As of December 31, 2024, a cumulative allowance for doubtful accounts of approximately $735,000 has been recognized, effectively offsetting this balance.
The Company plans to acquire Pharmacy & More within fiscal year 2025. Upon acquisition, the Company intends to offset the outstanding receivable balance with the corresponding purchase price and additionally plans to make Pharmacy & More the first shop-in-shop of its own branded line of nutraceutical products, Sky Premium Life® (SPL).
Cana Laboratories Holding Limited
Cana was considered a related party as the Company had signed a binding letter of intent and an SPA for the acquisition of Cana. The acquisition was completed on June 30, 2023 according to the SPA signed on May 31, 2023. Thus, all balances between the Company and Cana were eliminated upon consolidation as of December 31, 2023. The Secured Promissory Note discussed below was included in consideration transferred upon acquisition.
On February 28, 2023 (Issue Date) the Company signed a Secured Promissory Note with Cana Laboratories Holding (Cyprus) Limited (the “Holder”), whereby the Holder borrowed the sum of €4,100,000 ($4,457,520) from the Company. Interest on the Principal Amount under this Note shall accrue at a rate equal to Five Percent (5%) plus one month LIBOR per annum (5.18% as of September 30, 2023). The maturity date (“Maturity Date”) of this Note shall be five years from the Issue Date. The Principal Amount, as well as all accrued interest shall be due and payable on the Maturity Date. During the six months ended June 30, 2023, the Company recorded interest income of €137,138 ($148,789). Following the completion of Cana’s acquisition on June 30, 2023, the balance of the Note is eliminated on a consolidated level.
Other Related Parties
Additionally, the Company has the following material related-party balances as of December 31, 2024: a) a balance of $851,000 relating to unpaid salaries and bonuses due to Grigorios Siokas, the CEO of the Company, classified as “Accounts payable and accrued expenses - related party” in the Company’s consolidated balance sheets, b) a balance of $168,000 relating to unpaid salaries and bonuses due to George Terzis, the CFO of the Company, classified as “Accounts payable and accrued expenses - related party” in the Company’s consolidated balance sheets. c) a balance of $15,000 relating to unpaid salaries and bonuses due to Nikolaos Bardakis, the COO of the Company, classified as “Accounts payable and accrued expenses - related party” in the Company’s consolidated balance sheets.

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ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
Item 14. Principal Accountant Fees and Services
On January 18, 2019, the Company’s Board of Directors approved the engagement of Armanino LLP (“Armanino”) as the Company’s new Independent Certified Public Accountants, and the Company entered into an engagement agreement with Armanino on January 18, 2019. Armanino performed the audit of the Company’s consolidated financial statements for the fiscal year ended December 31, 2022, and issued the audit report in this Annual Report.
On August 8, 2023, the Company’s Board of Directors approved the engagement of KPMG Certified Auditors S.A. (“KPMG”) as the Company’s independent registered public accounting firm, effective August 7, 2023. KPMG replaced the Company’s former auditor, Armanino.
On April 26, 2024, the Company dismissed KPMG as the Company’s independent registered accountant, effective immediately. On April 29, 2024, RBSM LLP (“RBSM”) was appointed by the Company’s Audit Committee as the Company’s independent registered public accounting firm, to audit the Company’s consolidated financial statements as of and for the fiscal year ended December 31, 2023, subject to customary client acceptance procedures. On May 21, 2024, RBSM completed such procedures, formally accepted its appointment by executing and engagement letter with the Company and issued its independence letter to the Company’s Audit Committee. During the two most recent fiscal years and through May 21, 2024, the Company had not consulted with RBSM regarding any matter that was the subject of a disagreement, or a reportable event described in Items 304(a)(1)(iv) or (v), respectively, of Regulation S-K.
The following table presents: (1) fees for professional audit services rendered by RBSM LLP for the audit of our annual financial statements and for other services for the year ended December 31, 2024 and for the year ended December 31, 2023.
Financial Statements for the Year Ended
Audit
Services
Audit
Related
Fees
Tax
Fees
Other
Fees
December 31, 2024
RBSM LLP
$ 200,000
45,335
-
40,000
December 31, 2023
RBSM LLP
$ 400,000
-
-
-
As defined by the SEC, (i) “audit fees” are fees for professional services rendered by our principal accountant for the audit of our annual financial statements and review of financial statements included in our Form 10-K, or for services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for those fiscal years; (ii) “audit-related fees” are fees for assurance and related services by our principal accountant that are reasonably related to the performance of the audit or review of our financial statements and are not reported under “audit fees;” (iii) “tax fees” are fees for professional services rendered by our principal accountant for tax compliance, tax advice, and tax planning; and (iv) “all other fees” are fees for products and services provided by our principal accountant, other than the services reported under “audit fees,” “audit-related fees,” and “tax fees.”
Audit Fees for the fiscal years ended December 31, 2024 and 2023 were for professional services rendered for the audits and quarterly reviews of the financial statements of the Company, consents, and other assistance required to complete the year-end audit of the financial statements.
As the Company has a formal audit committee, the services described above were approved by the audit committee under the de minimus exception provided by Rule 2-01(c)(7)(i)(C) under Regulation S-X. Further, as the Company has a formal audit committee, the Company has audit committee pre-approval policies and procedures.
PART IV

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ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
Item 15. Exhibits and Financial Statement Schedules
Exhibit No.
Document Description
2.1
Share Exchange Agreement by and among Prime Estates and Developments Inc. and Amplerissimo dated September 27, 2013 (14)
3.1
Amended and Restated Articles of Incorporation of the Registrant (1)
3.2
Correction to Certificate of Designations of Rights and Preferences of Series A Convertible Preferred Stock dated February 24, 2022 (2)
3.3
Amendment to Certificate of Designation of Rights and Preferences of Series A Convertible Preferred Stock (55)
3.4
Certificate of Amendment to Articles of Incorporation (63)
3.5
Amended and Restated Bylaws of the Registrant (1)
4.1
Omnibus Equity Incentive Plan (59)
4.2
Form of Senior Convertible Note (12)
4.3
Common Stock Purchase Warrant issued to Roth Capital Partners (11)
4.4
Common Stock Purchase Warrant dated September 4, 2017 issued to Roth Capital Partners LLC (15)
4.5
Form of Second Amendment and Exchange Agreement (20)
4.6
2023 Omnibus Equity Incentive Plan (72)
4.7
Form Rights Agreement and Rights Certificate (74)
10.1
Loan Facility Agreement, dated as of August 4, 2016, by and among SkyPharm S/A, Grigorios Siokas, as Guarantor and Synthesis Peer to Peer Income Fund. (4)
10.2
Pledge Agreement, by and between Grigorios Siokas and Synthesis Peer-to Peer Income Fund (4)
10.3
First Deed of Amendment relating to Loan Facility Agreement, dated as of August 4, 2016, by and among Sky Pharm S.A., as Borrower, Grigorios Siokas, as Guarantor and Synthesis Peer-to Peer Income Fund (5)
10.4
Intellectual Property Sale Agreement, dated as of October 1, 2016, by and among the Company, Anastasios Tsekas and Olga Parthenea Georgatsou (6)
10.5
Amended and Restated Loan Facility Agreement, dated as of March 23, 2017, by and among SkyPharm S.A., as Borrower, Grigorios Siokas, as Guarantor and Synthesis Peer-to Peer Income Fund, as Lender (7)
10.6
Trade Finance Facility Offer Letter, dated as of April 10, 2017, by and between Decahedron Ltd. and Synthesis Structured Commodity Trade Finance Limited. (8)
10.7
Trade Finance Facility Agreement, dated as of April 10, 2017, by and between Decahedron Ltd. and Synthesis Structured Commodity Trade Finance Limited. (8)
10.8
Cross Guarantee and Indemnity Agreement, dated as of April 10, 2017, by and among Cosmos Health Inc., Decahedron Ltd. and Synthesis Structured Commodity Trade Finance Limited. (8)
10.9
Security Assignment of Receivables and other Contractual Rights, dated as of April 10, 2017, by and between Decahedron Ltd. and Synthesis Structured Commodity Trade Finance Limited. (8)
10.10
Trade Finance Facility Agreement, dated May 12, 2017 by and between SkyPharm S.A. and Synthesis Structured Commodity Finance Limited. (9)
10.11
Cross Guarantee and Indemnity Agreement dated May 12, 2017 by and between SkyPharm S.A., as Commodity Buyer, Cosmos Health Inc. as Guarantor and Synthesis Structured Commodity Trade Finance Limited (9)
10.12
Security Assignment of Receivables and other Contractual Rights, dated May 12, 2017 by and between SkyPharm S.A. and Synthesis Structured Commodity Trade Finance Limited (9)
10.13
Distribution and Equity Acquisition Agreement Effective as of March 19, 2018 by and between Cosmos Health, Inc. and Marathon Global Inc. (13)
10.14
First Amendment to Share Exchange Agreement dated May 24, 2018 (16)
10.15
Stock Purchase Agreement dated as of June 23, 2018 by and among Cosmofarm Ltd., Deepdae Health Ltd. and Cosmos Health Inc. (17)
10.16
Share Exchange Agreement dated as of June 26, 2018 with Marathon Global Inc. (18)
10.17
Share Purchase Agreement dated September 30, 2018 by and between Cosmos Health Inc. and Abbydale Management Ltd. (52)
10.18
Further Amendment dated October 17, 2018 to Supplemental Deed dated May 16, 2018 by and among SkyPharm S.A., Cosmos Health Inc. and Synthesis Structured Commodity Trade Finance Limited (21)
10.19
Amendment dated as of December 19, 2018 to Stock Purchase Agreement dated as of June 23, 2018 by and among Cosmofarm Ltd., Deepdae Holding Ltd. and Cosmos Health Inc. (23)
10.20
Promissory Note dated December 19, 2018 from Cosmos Health Inc. to Deepdae Holding Ltd. (23)
10.21
Stock Purchase Agreement dated as of February 5, 2019 (24)
10.22
Stock Purchase Agreement dated as of February 18, 2019 (25)
10.23
Amendment dated as of December 19, 2018 to Stock Purchase Agreement dated as of June 23, 2018 by and among Cosmofarm Ltd., Deepdae Holding Ltd. and Cosmos Health Inc. filed with Form 8-K on December 20, 2018 (23)
10.24
Promissory Note dated December 19, 2018 from Cosmos Health Inc. to Deepdae Holding Ltd. filed with Form 8-K on December 20, 2018 (23)
10.25
Form of Senior Promissory Note (26)
10.26
Form of Guaranty Agreement (26)
10.27
Assumption Contract for the Design, Development and Production of Dietary Supplements dated March 10, 2017 by and between SkyPharm and Doc Pharma S.A. (27)
10.28
Form of Securities Purchase Agreement by and Among Cosmos Health Inc. and the Buyer (28)
10.29
Form of Senior Convertible Note (28)
10.30
Debt Exchange Agreement dated May 28, 2019 (29)
10.31
Debt Exchange Agreement dated June 24,2019 (30)
10.32
Form of Forbearance and Amendment Agreement (31)
10.33
Form of Senior Promissory Note dated May 5, 2020 for $2,000,000 (32)
10.34
Form of Senior Promissory Note dated May 8, 2020 for $2,000,000 (32)
10.35
Form of Senior Promissory Note dated May 18, 2020 for $2,000,000 (33)
10.36
Form of Senior Promissory Note dated July 3, 2020 for $5,000,000 (33)
10.37
Amendment dated June 30, 2020 by and among Synthesis Peer-to-Peer Income Fund, Sky Pharma S.A. and Grigorios Siokas (33)
10.38
Advisory Agreement dated October 8, 2020 by and between the Registrant and PGS Ventures B.V. (35)
10.39
Advisory Agreement dated October 5, 2020 by and between Greg Siokas and PGS Ventures B.V. (36)
10.40
Advisory Agreement dated October 5, 2020 by and between the Registrant and PGS Ventures B.V (36)
10.41
Senior Promissory Note dated August 4, 2020 for $3,000,000 (37)
10.42
Employment Agreement dated January 1, 2019 by and between the Registrant and Georgios Terzis (37)
10.43
Debt Exchange Agreement dated December 21, 2020 by and among the Registrant, Grigorios Siokas and an unaffiliated lender (39)
10.44
Debt Exchange Agreement dated October 29, 2020 by and among the Registrant, Grigorios Siokas and an unaffiliated lender (40)
10.45
Amended and Restated Debt Exchange Agreement dated as of February 5, 2021 (41)
10.46
Consulting Agreement dated as of February 5, 2021 by and between the Registrant and an unaffiliated consultant (42)
10.47
Addendum to Consulting Agreement dated as of February 5, 2021 by and between the Registrant and an unaffiliated consultant (42)
10.48
Debt Exchange Agreement dated May 10, 2021 by and between the Registrant and Grigorios Siokas (43)
10.49
Third Forbearance and Amendment Agreement dated June 18, 2021 by and between Hudson Bay Master Fund Ltd. and the Registrant (44)
10.50
Debt Exchange Agreement dated June 23, 2021 by and between the Registrant and Grigorios Siokas (45)
10.51
Debt Exchange Agreement dated July 13, 2021 by and between the Registrant and Grigorios Siokas (46)
10.52
Convertible Promissory Note dated July 20, 2021 payable to Grigorios Siokas (47)
10.53
Debt Exchange Agreement dated August 4, 2021 by and between a senior institutional lender, the Registrant, SkyPharm S.A. and Grigorios Siokas (48)
10.54
Capital Market Advisory Agreement dated as of July 1, 2021 and Exchange Listing LLC (49)
10.55
Form of Securities Purchase Agreement dated as of September 17, 2021 (50)
10.56
Form of Registration Rights Agreement dated as of September 17, 2021 (50)
10.57
Form of Convertible Promissory Note (50)
10.58
Form of Warrant to Purchase Common Stock (51)
10.59
Form of Securities Purchase Agreement dated February 2022 (51)
10.60
Form of Registration Rights Agreement (51)
10.61
Binding Letter of Intent with Pharmaceutical Laboratories Cana, S.A. dated July 19, 2022 (56)
10.62
Form of Placement Agent Agreement (57)
10.63
Form of Sales Agreement (58)
10.64
Form of Exchange Warrant (60)
10.65
Form of Warrant Exchange Agreement (60)
10.66
Form of Placement Agency Agreement (61)
10.67
Form of Pre-Funded Warrant (61)
10.68
Form of Common Warrant (61)
10.69
Form of Securities Purchase Agreement (61)
10.70
Form of Pre-Funded Warrant (62)
10.71
Form of Series A Common Warrant (62)
10.72
Form of Series B Common Warrant (62)
10.73
Form of Securities Purchase Agreement (62)
10.74
Form of Pre-Funded Warrant (64)
10.75
Form of Common Warrant (64)
10.76
Form of Securities Purchase Agreement (64)
10.77
Form of Placement Agency Agreement (64)
10.78
Amendment No. 1 to Securities Purchase Agreement of Grigorios Siokas (65)
10.79
Secured Promissory Note dated February 28, 2023 issued by Cana Laboratories Holdings (Cyprus) Limited (66)
10.80
Cana Holdings Share Pledge Agreement dated as of February 28, 2023 (66)
10.81
Cana Pharmaceutical Share Pledge Agreement dated as of February 28, 2022 (66)
10.82
Canada Inc. Purchase Agreement dated as of January 6, 2023 (67)
10.83
Binding Letter of Intent dated May 25, 2023 by and among Cosmos Health Inc. and Docpharm GmbH and Dr. Mathiaas Krebs (68)
10.84
Stock Purchase Agreement dated May 8, 2023 by and among Cosmos Health Inc. and Kostantinos-Gaston Kanaroglou and Kostantina-Mathilde Kanaroglou regarding Cana Laboratories Holding (Cyprus) Limited (69)
10.87
Form of Pre-Funded Warrant (70)
10.88
Form of Common Warrant (70)
10.89
Form of Securities Purchase Agreement (70)
10.90
Form of Placement Agency Agreement (70)
10.91
Form of Investor Agreement (70)
10.92
Form of Amendment No. 1 to Common Warrant Agreement (70)
10.93
Form of Warrant (71)
10.94
Form of Warrant Exchange Agreement (71)
14.1
Code of Ethics (19)
19.1*
Insider Trading Policies and Procedures
21*
List of Subsidiaries
23.1*
Consent of RBSM LLP
31.1*
Certification of CEO pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2*
Certification of CFO pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1*
Certification of CEO pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2*
Certification of CFO pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
97.1
Clawback Policy (73)
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*
Interactive data files formatted in XBRL (eXtensible Business Reporting Language): (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Operations, (iii) the Consolidated Statements of Cash Flows, and (iv) the Notes to the Consolidated Financial Statements.*
*
Filed with this Report
(1)
Incorporated by reference to the filing of the Current Report on Form 8-K filed by the Registrant on October 12, 2021.
(2)
Incorporated by reference to the Current Report on Form 8-K filed by the Registrant on March 1, 2022.
(3)
Incorporated by reference to the Current Report on Form 8-K filed by the Registrant on November 9, 2015.
(4)
Incorporated by reference to the Current Report on Form 8-K filed by the Registrant on August 16, 2016.
(5)
Incorporated by reference to the Current Report on Form 8-K filed by the Registrant on September 16, 2016.
(6)
Incorporated by reference to the Current Report on Form 8-K filed by the Registrant on October 5, 2016.
(7)
Incorporated by reference to the Current Report on Form 8-K/A filed by the Registrant on March 28, 2017.
(8)
Incorporated by reference to the Current Report on Form 8-K filed by the Registrant on April 14, 2017.
(9)
Incorporated by reference to the Current Report on Form 8-K filed by the Registrant on May 18, 2017.
(10)
Incorporated by reference to the Current Report on Form 8-K filed by the Registrant on November 16, 2017.
(11)
Incorporated by reference to the Current Report on Form 8-K filed by the Registrant on December 27, 2017.
(12)
Incorporated by reference to the Current Report on Form 8-K filed by the Registrant on February 21, 2018.
(13)
Incorporated by reference to the Current Report on Form 8-K filed by the Registrant on March 19, 2018.
(14)
Incorporated by reference to the filing of the Current Report on Form 8-K filed by the Registrant on October 3, 2013.
(15)
Incorporated by reference to the filing of the Current Report on Form 8-K filed by the Registrant on September 5, 2018.
(16)
Incorporated by reference to the filing of the Current Report on Form 8-K filed by the Registrant on May 31, 2018.
(17)
Incorporated by reference to the filing of the Current Report on Form 8-K filed by the Registrant on June 26, 2018.
(18)
Incorporated by reference to the filing of the Current Report on Form 8-K filed by the Registrant on July 19, 2018.
(19)
Incorporated by reference to the filing of the Annual Report on Form 10-K filed by the Registrant on April 17, 2018.
(20)
Incorporated by reference to the filing of the Current Report on Form 8-K filed by the Registrant on September 27, 2018.
(21)
Incorporated by reference to the filing of the Current Report on Form 8-K filed by the Registrant on October 19, 2018.
(22)
Incorporated by reference to the filing of the Current Report on Form 8-K filed by the Registrant on December 13, 2018.
(23)
Incorporated by reference to the filing of the Current Report on Form 8-K filed by the Registrant on December 21, 2018.
(24)
Incorporated by reference to the filing of the Current Report on Form 8-K filed by the Registrant on February 6, 2019.
(25)
Incorporated by reference to the filing of the Current Report on Form 8-K filed by the Registrant on February 19, 2019.
(26)
Incorporated by reference to the filing of the Current Report on Form 8-K filed by the Registrant on April 4, 2019.
(27)
Incorporated by reference to Registration Statement on Form S-1/A (No. 333-222061) filed by the Registrant on January 31, 2018.
(28)
Incorporated by reference to the filing of the Quarterly Report on Form 10-Q filed by the Registrant on May 16, 2019.
(29)
Incorporated by reference to the filing of the Current Report on Form 8-K filed by the Registrant on May 28, 2019.
(30)
Incorporated by reference to the filing of the Current Report on Form 8-K filed by the Registrant on June 25, 2019.
(31)
Incorporated by reference to the filing of the Current Report on Form 8-K filed by the Registrant on March 23, 2020.
(32)
Incorporated by reference to the filing of the Quarterly Report on Form 10-Q filed by the Registrant on May 15, 2020.
(33)
Incorporated by reference to the filing of the Current Report on Form 10-Q filed by the Registrant on August 13, 2020.
(34)
Incorporated by reference to the filing of the Report on Form 8-K filed by the Registrant on September 24, 2020.
(35)
Incorporated by reference to the filing of the Current Report on Form 8-K filed by the Registrant on October 21, 2020.
(36)
Incorporated by reference to the filing of the Current Report on Form 8-K filed by the Registrant on November 13, 2020.
(37)
Incorporated by reference to the filing of the Quarterly Report on Form 10-Q filed by the Registrant on November 16, 2020.
(38)
Incorporated by reference to the filing of the Current Report on Form 8-K filed by the Registrant on November 17, 2020.
(39)
Incorporated by reference to the filing of the Current Report on Form 8-K filed by the Registrant on December 22, 2020.
(40)
Incorporated by reference to the filing of the Current Report on Form 8-K filed by the Registrant on March 11, 2021.
(41)
Incorporated by reference to the filing of the Current Report on Form 8-K filed by the Registrant on April 2, 2021.
(42)
Incorporated by reference to the filing of the Current Report on Form 8-K filed by the Registrant on April 8, 2021.
(43)
Incorporated by reference to the filing of the Quarterly Report on Form 10-Q filed by the Registrant on May 17, 2021.
(44)
Incorporated by reference to the filing of the Current Report on Form 8-K filed by the Registrant on June 21, 2021.
(45)
Incorporated by reference to the filing of the Current Report on Form 8-K filed by the Registrant on June 25, 2021.
(46)
Incorporated by reference to the filing of the Current Report on Form 8-K filed by the Registrant on July 14, 2021.
(47)
Incorporated by reference to the filing of the Current Report on Form 8-K filed by the Registrant on July 27, 2021.
(48)
Incorporated by reference to the filing of the Current Report on Form 8-K filed by the Registrant on August 10, 2021.
(49)
Incorporated by reference to the filing of the Current Report on Form 10-Q filed by the Registrant on August 16, 2021.
(50)
Incorporated by reference to the filing of the Current Report on Form 8-K filed by the Registrant on September 21, 2021.
(51)
Incorporated by reference to the filing of the Current Report on Form 8-K filed by the Registrant on March 1, 2022.
(52)
Incorporated by reference to the filing of the Company’s Current Report on Form 8-K filed by the Registrant on October 4, 2018
(53)
Incorporated by reference to the filing of the Annual Report on Form 10-K filed by the Registrant on April 15, 2022.
(54)
Incorporated by reference to the filing of the Registration Statement on Form S-1 filed by the Registrant on May 24, 2022.
(55)
Incorporated by reference to the filing of the Company’s Current Report on Form 8-K filed by the Registrant on July 29, 2022.
(56)
Incorporated by reference to the filing of the Company’s Current Report on Form 8-K filed by the Registrant on July 25, 2022.
(57)
Incorporated by reference to the filing of the Company’s Registration Statement on Form S-1 filed by the Registrant on September 19, 2022.
(58)
Incorporated by reference to the filing of the Company’s Registration Statement on Form S-3 filed by the Registrant on September 21, 2022.
(59)
Incorporated by reference to the Company’s Schedule 14A filed by the Registrant on September 23, 2022.
(60)
Incorporated by reference to the filing of the Company’s Current Report on Form 8-K filed by the Registrant on October 3, 2022.
(61)
Incorporated by reference to the filing of the Company’s Registration Statement on Form S-1/A filed by the Registrant on October 11, 2022.
(62)
Incorporated by reference to the filing of the Company’s Current Report on Form 8-K filed by the Registrant on October 18, 2022.
(63)
Incorporated by reference to the filing of the Company’s Current Report on Form 8-K filed by the Registrant on December 19, 2022.
(64)
Incorporated by reference to the filing of the Company’s Current Report on Form 8-K filed by the Registrant on December 20, 2022.
(65)
Incorporated by reference to the filing of the Company’s Current Report on Form 8-K filed by the Registrant on January 17, 2023.
(66)
Incorporated by reference to the filing of the Company’s Registration Statement on Form S-3 filed by the Registrant on January 18, 2023.
(67)
Incorporated by reference to the filing of the Company’s Current Report on Form 8-K filed by the Registrant on March 6, 2023.
(68)
Incorporated by reference to the filing of the Company’s Annual Report on Form 10-K filed by the Registrant on April 12, 2023.
(69)
Incorporated by reference to the filing of the Company’s Current Report on Form 8-K filed by the Registrant on May 31, 2023.
(70)
Incorporated by reference to the filing of the Company’s Current Report on Form 8-K filed by the Registrant on May 11, 2023
(71)
Incorporated by reference to the filing of the Company’s Current Report on Form 8-K filed by the Registrant on July 25, 2023.
(72)
Incorporated by reference to the filing of the Company’s Registration Statement on Form S-3 filed by the Registrant on August 18, 2023.
(73)
Incorporated by reference to the filing of the Company’s Current Report on Form 8-K filed by the Registrant on December 29, 2023.
(74)
Incorporated by reference to the filing of the Company’s Schedule 14A filed by the Registrant on September 5, 2023.
(75)
Incorporated by reference to the filing of the Company’s Current Report on Form 8-K filed by the Registrant on November 28, 2023.
(76)
Incorporated by reference to the filing of the Company’s Registration Statement on Form S-3 filed by the Registrant on January 29, 2024.
(77)
Incorporated by reference to the filing of the Company’s Current Report on Form 8-K filed by the Registrant on April 25, 2024.