Cosmos Health Inc.

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

For the quarterly period endedJune 30, 2025

For the transition period from __________ to __________

Commission file number:000-54436

COSMOS HEALTH INC.

(Exact name of registrant as specified in its charter)

Registrant’s telephone number:(312)536-3102

Securities registered under Section 12(b) of the Exchange Act:

Securities registered under Section 12(g) of the Exchange Act:

Check whether the Issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by checkmark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes☐ No ☒

Applicable only to Corporate Issuers:

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:30,213,876 as of August 14, 2025.

TABLE OF CONTENTS

COSMOS HEALTH INC.UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

COSMOS HEALTH INC.UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

COSMOS HEALTH INC.UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

COSMOS HEALTH INC.UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

NOTE 1 – BASIS OF PRESENTATION

The terms “COSM,” “we,” the “Company,” the “Group” and “us” as used in this report refer to Cosmos Health Inc. The accompanying unaudited condensed consolidated balance sheet as of June 30, 2025 and unaudited condensed consolidated statements of operations and comprehensive income (loss) for the three months ended June 30, 2025 have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. generally accepted accounting principles for complete financial statements. In the opinion of the management of COSM, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three months ended June 30, 2025, are not necessarily indicative of the results that may be expected for the year ending December 31, 2025, or any other period. These unaudited condensed consolidated financial statements and notes should be read in conjunction with the financial statements for the year ended December 31, 2024, included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 (“Form 10-K”). The accompanying condensed consolidated balance sheet as of December 31, 2024 has been derived from the audited financial statements filed in our Form 10-K and is included for comparison purposes on the accompanying balance sheet.

Going Concern

The Company’s unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”), which contemplates the continuation of the Company as a going concern. For the six‑month period ended June 30, 2025, the Company generated revenue of $28,458,230, incurred a net loss of $3,646,165, and used $1,396,236 of net cash in operating activities. As of June 30, 2025, the Company had cash and cash equivalents of $655,503, compared to $315,105 as of December 31, 2024, reflecting an increase of $340,398. The Company also had negative working capital of $604,249, an accumulated deficit of $117,668,440, and stockholders’ equity of $26,231,633.

These conditions raise substantial doubt about the Company’s ability to continue as a going concern for a period of 12 months from the date of this filing. While the Company’s revenues have grown, they remain insufficient to fund operating expenses and meet debt obligations as they become due. Furthermore, the Company remains dependent on external financing sources to sustain operations and fund growth initiatives.

Management has evaluated these factors and its ability to meet obligations due within the next 12 months. Its plans include expanding the portfolio of brand‑name and private‑label products, launching new distribution channels, and increasing sales from recently secured agreements, such as the exclusive distribution of Sky Premium Life products in the United Arab Emirates (“UAE”). Significant purchase orders have already been received under this agreement and are expected to contribute to operating cash inflows in the near term. Moreover, the Company is planning to expand the customer base of its subsidiary, Cosmofarm S.A., which is expected to substantially increase its wholesale revenue stream. In addition, the Company’s manufacturing subsidiary, CANA S.A., which is already demonstrating improved revenue and gross profit, is planning to strengthen its existing contract manufacturing agreements and secure new ones.

From a financing perspective, during the six‑month period ended June 30, 2025, the Company raised capital through the issuance of convertible notes by the Parent Company and by entering into new debt facilities at both the Parent Company and subsidiaries level. Management intends to continue accessing capital markets to raise additional funds through equity offerings. Beginning in August 2025, the Company expects to become eligible to utilize an S‑3 registration statement (12 months after regaining compliance with Nasdaq Listing Rule 5250(c)(1)) to access equity capital more efficiently. In addition, the Company is pursuing amendments to certain debt facilities to defer principal repayments and exploring additional debt financing opportunities to enhance liquidity. Finally, on August 5, 2025, the Company entered into a Securities Purchase Agreement for the issuance of up to $300 million of senior secured convertible promissory notes, with an initial $8 million closing completed on August 6, 2025. The availability of these proceeds, primarily intended for digital asset acquisition and working capital, significantly improves the Company’s liquidity and alleviates substantial doubt regarding our ability to continue as a going concern for at least the next 12 months.

Management is also considering postponing certain payments to suppliers and other creditors if required. Although these actions are intended to address the going concern uncertainty, there can be no assurance that the Company will be successful in executing its plans or obtaining the necessary funding.

As a result, substantial doubt remains regarding the Company’s ability to continue as a going concern for a period of 12 months from the date of this filing. The accompanying consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty, including potential effects on the recoverability or classification of assets or the amounts and classification of liabilities.

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 – ORGANIZATION AND NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Cosmos Health Inc. and its subsidiaries (Nasdaq: COSM), (“us”, “we”, the “Group”, or the “Company”) are an international healthcare group headquartered in Thessaloniki, Greece. The Group is engaged in the nutraceuticals sector through its own proprietary lines of products “Sky Premium Life” and “Mediterranation”. The Company is operating in the pharmaceutical sector as well, through the provision of a broad line of branded generics and OTC medications. In addition, the Group is involved in the healthcare distribution sector through its subsidiaries in Greece and the UK, serving retail pharmacies and wholesale distributors. The Company is strategically focusing on the research and development (“R&D”) of novel patented nutraceuticals and specialized root extracts, as well as on the R&D of proprietary complex generics and innovative OTC products. The Company has developed a global distribution platform and is currently expanding throughout Europe, Asia, the UAE and North America. The Company has offices and distribution centers in Thessaloniki and Athens, Greece and Harlow, UK.

The Company was incorporated in the State of Nevada under the name Prime Estates and Developments, Inc. on July 21, 2009. On November 14, 2013, we changed our name to Cosmos Holdings Inc., and on November 29, 2022, we changed our name to Cosmos Health Inc. Through its acquisition of Amplerissimo Ltd, on September 27, 2013, the Company changed its principal activities into trading of products, providing representation, and provision of consulting services to various sectors. On August 1, 2014, the Company formed SkyPharm S.A., a Greek Company (“SkyPharm”), a subsidiary that used to focus on the trading, sourcing and export of nutraceutical and pharmaceutical products. In February 2017, the Company acquired Decahedron Ltd., a UK Company (“Decahedron”) which is a fully licensed second-generation wholesaler specializing in imports and exports of generics and OTC pharmaceutical products within the EEA (European Economic Area) and distributor of Sky Premium Life nutraceutical products in the UK. On December 19, 2018, the Company acquired Cosmofarm S.A. (“Cosmofarm”), a pharmaceutical wholesaler specializing in the distribution and export of pharmaceutical products through its extensive pharmacies network. On April 3, 2023, the Company completed the acquisition of ZipDoctor Inc. (“ZipDoctor”), a telehealth company, a direct-to-consumer subscription-based telemedicine platform. On June 30, 2023, the Company acquired Laboratories Holdings (Cyprus) Limited (“Cana”), which wholly owned an operating subsidiary, Pharmaceutical Laboratories Cana S.A. (“Cana SA”), a Greek pharmaceutical company that manufactures, sells, distributes, and markets original branded products researched and developed by leading global pharmaceutical and healthcare companies.

Acquisition Accounting

Cloudscreen

On January 23, 2024, the Company completed the acquisition of Cloudscreen, a cutting-edge Artificial Intelligence (AI) powered platform. The acquisition was pursuant to the purchase agreement announced on October 11, 2023. 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 5).

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 was 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 the 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.

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. Pursuant to the last amendment signed on December 31, 2024 the closing date was extended to December 31, 2025. As of June 30, 2025, the Company has made prepayments of $2,000,020 classified as “Advances for building’s acquisition” on the Company’s unaudited condensed 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:

During the prior year period, Cana had minimal operations as it was in financial difficulties and seeking for an investor.

Basis of Financial Statement Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. GAAP.

Principles of Consolidation

Our consolidated accounts include our accounts and the accounts of our wholly owned subsidiaries, SkyPharm S.A., Decahedron Ltd., Cosmofarm S.A., Cana Laboratories Holdings (Cyprus) Limited and ZipDoctor Inc. The Group’s financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”). The consolidated financial statements reflect the consolidation of all entities in which the Company has control, as determined by the ability to direct the activities that significantly affect the entities’ economic performance. All significant intercompany balances and transactions have been eliminated.

Transactions in and Translations of Foreign Currency

The functional currency for the Greek subsidiaries of the Company (CANA Laboratories, Cosmofarm S.A. and SkyPharm SA) is Euro (€) and for the UK subsidiary (Decahedron Ltd) is GBP (£). ZipDoctor Inc. is a U.S. based entity. As a result, the financial statements of the subsidiaries (except for ZipDoctor Inc.) have been translated from the local currency into U.S. dollars using (i) year-end exchange rates for balance sheet accounts, and (ii) average exchange rates for the reporting period for all income statements accounts. Foreign currency translations gains and losses are reported as a separate component of the condensed consolidated statements of changes in stockholders’ equity.

Use of Estimates

The preparation of the unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

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.

Cash and Cash Equivalents

For purposes of the statement of cash flows, the Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents.

The Company maintains bank accounts in the United States denominated in U.S. Dollars, in Greece denominated in Euros, U.S. Dollars and Great Britain Pounds (British Pounds Sterling), and in Bulgaria denominated in Euros. The Company also maintains bank accounts in the United Kingdom, denominated in Euros and Great Britain Pounds (British Pounds Sterling).

Accounts Receivable, net

Accounts receivable are stated at their net realizable value. The allowance for doubtful accounts against gross accounts receivable, prepaid expenses and other current assets and other assets reflects the best estimate of probable losses inherent in the receivables’ portfolio determined on the basis of historical experience, specific allowances for known troubled accounts and other currently available information. As of June 30, 2025 and December 31, 2024, the Company’s allowance for doubtful accounts was $25,830,462 and $22,799,219, respectively. Below is the summary of changes in the allowance for doubtful accounts:

Tax Receivables

The Company pays Value Added Tax (“VAT”) or similar taxes (“input VAT”), income taxes, and other taxes within the normal course of its business in most of the countries in which it operates related to the procurement of merchandise and/or services it acquires and/or on sales and taxable income. The Company also collects VAT or similar taxes on behalf of the government (“output VAT”) for merchandise and/or services it sells. If the output VAT exceeds the input VAT, this creates a VAT payable to the government. If the input VAT exceeds the output VAT, this creates a VAT receivable from the government. The VAT tax return is filed on a monthly basis offsetting the payables against the receivables. In observance of EU regulations for intra-EU cross-border sales, our subsidiaries in Greece, SkyPharm and Cosmofarm, do not charge VAT for sales to wholesale drug distributors registered in other European Union member states. As of June 30, 2025 and December 31, 2024, the Company had a VAT net receivable balance of $574,985 and $534,263 respectively, recorded in the condensed consolidated balance sheet as prepaid expenses and other current assets and accounts payable and accrued expenses, respectively.

Inventory

Inventory is stated at the lower-of-cost or net realizable value using the weighted average method. Inventory consists primarily of finished goods and packaging materials, i.e., packaged pharmaceutical products and the wrappers and containers they are sold in. A periodic inventory system is maintained by 100% count. Inventory is replaced periodically to maintain the optimum stock on hand available for immediate shipment.

The Company writes down inventories to net realizable value based on physical condition, expiration date, and current market conditions, as well as forecasted demand. The Company’s inventories are not highly susceptible to obsolescence. Many of the Company’s inventory items are eligible for return to our suppliers when pre-agreed product requirements, including, but not limited to, physical condition and expiration date, are not met. No significant judgments have been applied in estimating the selling price of our inventory.

Property and Equipment, net

Property and equipment are stated at cost, less accumulated depreciation. Depreciation is calculated on a straight-line basis over the useful lives (except for leasehold improvements which are depreciated over the lesser of the lease term or the useful life) of the assets as follows:

Depreciation expense was $97,539 and $103,558 for the three months ended June 30, 2025 and 2024, respectively and $212,553 and $216,432 for the six months ended June 30, 2025 and 2024, respectively.

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.

Intangibles, net

Intangible assets with definite useful lives are recorded on the basis of cost and are amortized on a straight-line basis over their estimated useful lives. The Company uses a useful life of 5 years for an import/export license and a useful life of 10 years for the pharmaceutical and nutraceutical products licenses included in Note 4 as “Licenses”. A useful life of 10 years is also used for the platforms included in Note 5 as “Software” and 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 June 30, 2025 and December 31, 2024, no revision to the remaining amortization period of the intangible assets was made.

Amortization expense was $249,811 and $193,518 for the three months ended June 30, 2025 and 2024, respectively, and $458,644 and $383,373 for the six months ended June 30, 2025 and 2024, respectively.

Impairment of Long-Lived Assets

In accordance with ASC 360-10, Long-lived Assets, property and equipment and intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of long-lived assets to be held and used is measured by a comparison of the carrying amount of an asset to the estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated undiscounted future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the assets. Fair value is generally determined using the asset’s expected future discounted cash flows or market value, if readily determinable. For the three and six months ended June 30, 2025, and 2024, the Company has recorded no impairment charge.

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 on 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 on 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 June 30, 2025, investments consisted of 16,666 shares which traded at a closing price of $1.08 per share or value of $18,049 of National Bank of Greece. Additionally, the Company has $7,665 in equity securities of Pancreta Bank, which are revalued annually.

Fair Value Measurement

The Company applies ASC 820, Fair Value Measurements and Disclosures, (“ASC 820”), for assets and liabilities measured at fair value on a recurring basis. ASC 820 establishes a common definition for fair value to be applied to existing generally accepted accounting principles that require the use of fair value measurements establishes a framework for measuring fair value and expands disclosure about such fair value measurements.

ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Additionally, ASC 820 requires the use of valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. These inputs are prioritized below:

Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2: Inputs other than quoted prices that are observable, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.

Level 3: Unobservable inputs in which little or no market data exists, therefore developed using estimates and assumptions developed by us, which reflect those that a market participant would use.

In addition, ASC 825-10-25, Fair Value Option, (“ASC 825-10-25”), expands opportunities to use fair value measurements in financial reporting and permits entities to choose to measure many financial instruments and certain other items at fair value. 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 June 30, 2025 and 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.

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.

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:

Wholesale revenue and sales of own branded nutraceutical and pharmaceutical products

The Company has contracts or signed partnership forms (usual in the wholesale sector of the pharma industry) with its customers, stipulating the enforceable rights and obligations. The Company is responsible for transferring the goods to the customer’s location, which represents its sole performance obligation. Thus, the transaction price, which is predetermined in most of the products sold, is exclusively allocated to this performance obligation. Revenue is recognized at a single point in time, which is upon issuance of the corresponding sales invoice. The Company has assessed the impact of the items invoiced but not delivered to the customer’s location as of June 30, 2025 and 2024 and deemed that it had no material effect.

Pharma manufacturing

The Company has active contracts with its customers, stipulating the enforceable rights and obligations. The Company is responsible for the manufacturing and the packaging of specific products assigned by its customers, which represents its performance obligations to which the Company allocates the transaction price determined. The customers are responsible for providing the raw materials to the Company. Revenue is recognized over a period of time, which is during the production and packaging period of the respective products. As of June 30, 2025 and 2024 there were no products or batches of products for which the production or packaging phase was in progress.

Medihelm SA

Effective January 1, 2023, and pursuant to the distribution agreement with Medihelm SA (“Medihelm”), the exclusive distributor of the Company’s proprietary line of nutraceutical products, the Company determined that the transaction price for sales to Medihelm was variable in nature. In accordance with ASC 606,Revenue from Contracts with Customers, and specifically ASC 606-10-32-5, the Company applied the “expected value” method to estimate the transaction price, subject to the constraint on variable consideration.

This approach was necessitated by the existence of significant overdue receivables from Medihelm, which raised substantial doubt regarding full collectability of the contractual amounts. The Company reassessed the estimate of the transaction price at each reporting date, considering changes in facts and circumstances.

There was no impact on revenue recognition for the three and six-month periods ended June 30, 2025 and 2024 and no further adjustments to variable consideration were necessary.

Stock-based Compensation

The Company records stock-based compensation in accordance with ASC 718, Stock Compensation (“ASC 718”) and Staff Accounting Bulletin No. 107 (“SAB 107”) regarding its interpretation of ASC 718. ASC 718 requires the fair value of all stock-based employee compensation awarded to employees to be recorded as an expense over the related requisite service period. The Company values any employee or non-employee stock-based compensation at fair value using the Black-Scholes Option Pricing Model.

The Company accounts for non-employee share-based awards in accordance with the measurement and recognition criteria of ASU 2018-07, “Compensation-Stock Compensation-Improvements to Nonemployee Share-Based Payment Accounting.”

Income Taxes

The Company accounts for income taxes under the asset and liability method, as required by the accounting standard for income taxes ASC 740. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis, as well as net operating loss carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

The Company is liable for income taxes in Greece and the United Kingdom The corporate income tax rate is 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 June 30, 2025, we believe our United Kingdom and Greece deferred tax assets will not be realized, as such, we did not record a reversal on the full valuation approach we followed during the year ended December 31, 2024.

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.

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 June 30, 2025 and December 31, 2024, was $434,821 and $377,264, 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. Management did not engage an actuarial expert since then, 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 the income available to common stockholders by the weighted average number of shares of common stock outstanding during the period. Diluted income per share is calculated by dividing income available to common stockholders by the weighted average number of common shares outstanding for the period and, when dilutive, potential shares from stock options and warrants to purchase common stock, using the treasury stock method. In accordance with ASC 260, Earnings Per Share, the following tables reconcile basic shares outstanding to fully diluted shares outstanding for the three- and six-month periods ended June 30, 2025 and 2024.

The following table summarizes potential common shares that were excluded as their effect is anti-dilutive:

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

ASU 2025‑01 – Income Statement: Clarifying Effective Date of Expense Disaggregation (Subtopic 220‑40)

Issued January 7, 2025

This update clarifies that ASU 2024‑03’s requirement to disclose disaggregated expense categories applies for annual reporting periods beginning after December 15, 2026, and interim periods within annual periods beginning after December 15, 2027. Public business entities may early adopt. Entities with non‑calendar year ends should note that interim adoption in early periods is not required under this clarification.

ASU 2025‑02 – Liabilities (Topic 405): Amendments Pursuant to SAB No. 122

Issued March 2025

This update rescinds SEC Staff Accounting Bulletin No. 121—specifically the SAB 121 liability recognition requirement for safeguarding crypto‑assets held for platform users—through amendments to ASC 405 SEC paragraphs. Full retrospective application is mandated for annual periods beginning after December 15, 2024, with earlier adoption permitted, including in interim periods.

ASU 2025‑03 – Business Combinations: Identifying the Accounting Acquirer in a VIE Transaction (Topics 805 and 810)

Issued May 12, 2025

This update amends ASC 805 and ASC 810 to require entities to consider the ASC 805‑10‑55‑12 through 55‑15 factors when identifying the accounting acquirer in business combinations effected primarily via equity exchange—even when the acquiree qualifies as a variable interest entity (VIE). The amendment enhances comparability with voting interest entity combinations and may result in reverse-acquisition accounting in more cases. It is effective for fiscal years beginning after December 15, 2026, including interims, and must be applied prospectively to combinations after adoption. Early adoption is permitted.

NOTE 3 – EQUITY METHOD INVESTMENTS

CosmoFarmacy LP

In September 2019, the Company entered into an agreement with an unaffiliated third party to incorporate CosmoFarmacy L.P. for the purpose of providing strategic management consulting services and the retail trade of pharmaceutical products, and OTC to pharmacies. CosmoFarmacy was incorporated with a 30-year term through May 31, 2049. The unaffiliated third party is the general partner (the “GP”) of the limited partnership and is responsible for management and decision-making associated with CosmoFarmacy. The initial share capital was set to EUR 150,000 ($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 June 30, 2025 and December 31, 2024, was $0.

NOTE 4 – PROPERTY AND EQUIPMENT, NET** **

Property and equipment, net consists of the following at June 30, 2025 and December 31, 2024:

NOTE 5 – INTANGIBLE ASSETS

Goodwill and intangible, net assets consist of the following at June 30, 2025 and December 31, 2024:

At June 30, 2025, the estimated aggregate amortization expense for intangible assets subject to amortization for each of the five succeeding fiscal years is as follows:

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. During the three and six months ended June 30, 2025, the Company accrued interest income of €46,198 ($50,554) and €89,377 ($97,804) in connection with the note receivable governed by this agreement. During the six-month period ended June 30, 2025 the Company received €333,241 ($392,225) in principal payments in connection with this Note. No interest payments were received during the period. The Note is considered fully recoverable as of June 30, 2025.

NOTE 7 – INCOME TAXES** **

The Company is incorporated in the United States of America and is subject to United States federal taxation. No provisions for income taxes have been made as the Company had no U.S. taxable income for the three months ended June 30, 2025, and 2024.

The Company’s Greek subsidiaries are governed by the income tax laws of Greece. The corporate tax rate in Greece is 22% on income reported in the statutory financial statements after appropriate tax adjustments.

The Company’s United Kingdom subsidiaries are governed by the income tax laws of the United Kingdom. The corporate tax rate in the United Kingdom is 25% on income reported in the statutory financial statements after appropriate tax adjustments.

As of June 30, 2025, and 2024, the Company’s effective tax rate differs from the U.S. federal statutory tax rate primarily due to a valuation allowance recorded against net deferred tax assets in in the United States and the United Kingdom.

We regularly review deferred tax assets to assess their potential realization and establish a valuation allowance for portions of such assets to reduce the carrying value if we do not consider it to be more likely than not that the deferred tax assets will be realized. Our review includes evaluating both positive (e.g., sources of taxable income) and negative (e.g., recent historical losses) evidence that could impact the realizability of our deferred tax assets. As of June 30, 2025, and December 31, 2024, the Company has maintained a valuation allowance against all net deferred tax assets in the United States, Greece, and the UK.

For the three and six months ended June 30, 2025, and 2024, the Company has not recorded any tax benefits/expenses in any jurisdiction where it is subject to income tax.

NOTE 8 – 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 June 30, 2025 and December 31, 2024, no preferred shares were issued and outstanding.

Treasury stock

As of June 30, 2025 and December 31, 2024, the Company held 86,497 and 86,497, respectively, shares of our common stock at a cost of $917,159 and $917,159, respectively. Shares of our 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 no shares of our common stock during the three and six months ended June 30, 2025.

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.

Common Stock

The Company is authorized to issue 300 million shares of common stock. As of June 30, 2025 and December 31, 2024, the Company had 29,804,299 and 23,689,135 shares of our common stock issued, respectively, and 29,717,802 and 23,602,638 shares outstanding, respectively.

Issuance of Common Stock

Between January 13, 2025, and May 23, 2025, the Company issued an aggregate of 3,096,954 shares of common stock to Mr. Grigorios Siokas, the Company’s Chief Executive Officer, in settlement of outstanding obligations totaling $1,434,978. The liabilities settled pertaining to unpaid salaries and performance-related bonuses previously accrued by the Company and owed to Mr. Siokas. The shares were issued at the respective fair market value of the Company’s common stock on the dates of issuance. The transaction was accounted for as a non-cash settlement of related party debt.

On June 9, 2025, in connection with the execution of a secured convertible loan agreement with an aggregate principal amount of $1,304,348, the Company issued 326,087 restricted shares of common stock (the “Commitment Stock”) to the lender as additional consideration. The shares were issued at a nominal price of $0.001 per share, were fully vested and nonforfeitable upon issuance, and were not subject to any further service or performance conditions. The fair value of the Commitment Stock on the issuance date was determined to be $0.48 per share, resulting in a total fair value of $156,522. This amount was recognized as other finance costs, included in “Interest expense” in the condensed consolidated statement of operations for the three and six months ended June 30, 2025.

On June 3, 2025 (the “Effective Date”), the Company issued 150,000 shares of its common stock to a consultant in exchange for business advisory services. The shares were earned in full as of the Effective Date. The fair value of the shares on issuance was $0.458 per share, resulting in a total expense of $68,700, which has been recognized in the condensed consolidated statement of operations. The consultant provides non-exclusive business advisory services, including guidance on growth strategies and networking with its contacts for general business purposes.

On September 26, 2024, the Company had 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 2,542,126 shares in escrow until the investor’s beneficial ownership limitation allows for the transfer of the escrow shares. The 2,542,126 shares were issued on January 28, 2025, but were already valued in the year ended December 31, 2024.

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 9 – RELATED PARTY TRANSACTIONS** **

Doc Pharma S.A.

Doc Pharma S.A. is considered a related party to the Company due to the fact that the CEO of Doc Pharma is the son of Grigorios Siokas, the Company’s CEO and principal shareholder, who also served as a principal of Doc Pharma S.A. in the past.

Prepaid expenses and other current assets – related party

As of June 30, 2025 and December 31, 2024, the Company had a prepaid balance of $4,273,089 and $3,284,052, respectively, to Doc Pharma. For the period ended June 30, 2025, the prepayment of approximately $3.6 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 $412 k 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 $2,059,750 is included in “Other Assets – Related Party” in the Company’s Consolidated Balance Sheets as of June 30, 2025.

Accounts payable and accrued expenses - related party

As of June 30, 2025 and December 31, 2024, the Company had an accounts payable balance to Doc Pharma of $498,988 and $249,768, respectively. The June 30, 2025 balance mostly concerns a trade payables balances that our subsidiaries, Cosmofarm SA and Skypharm SA, owe to Doc Pharma SA.

Accounts receivable - related party

Additionally, the Company had a receivable balance of $2,606,798 and $2,295,706 from Doc Pharma S.A. as of June 30, 2025 and December 31, 2024, respectively, which concerns trading receivables balances with the Company’s Greek and UK subsidiaries. As of June 30, 2025, a cumulative allowance for doubtful accounts of approximately $1.6 million has been recognized, effectively offsetting this balance.

Sales and Purchases

During the six months ended June 30, 2025 and 2024, the Company purchased products from Doc Pharma S.A in the amounts of $658,019 and $425,656, respectively. For the three months ended June 30, 2025 and 2024, purchases from Doc Pharma totaled $300,208 and $189,048, respectively.

During the six months ended June 30, 2025 and 2024, the Company sold products to Doc Pharma S.A. totaling $263,757 and $520,721, respectively. For the three months ended June 30, 2025 and 2024, sales to Doc Pharma amounted to $130,362 and $384,321, 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, it is not responsible for potential delays that may arise, concerning their import. Doc Pharma is also obligated to store the raw and packaging materials. The delivery of raw and packaging materials should be purchased at least 30 and 25 days, respectively, before the delivery date of the final product. The Manufacturer solely delivers the finished product to the Company. There is a minimum order quantity (“MoQ”) of 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 three months ended June 30, 2025 and 2024, the Company has purchased €208,568 ($228,534) and €61,597 ($66,295) respectively, in inventory related to this agreement.

For the six months ended June 30, 2025 and 2024, the Company has purchased €404,866 ($443,039) and €126,758 ($137,027) 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). During the six months ended June 30, 2025, no additional licenses were purchased. The agreement will terminate on December 31, 2025.

Purchase of branded pharmaceuticals

On June 28, 2023, the Company approved the purchase of five proprietary and innovative branded pharmaceuticals with significant market presence and material profit contribution from Zakalia Ltd., the parent company of Doc Pharma, for €1,800,000 ($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. No additional impairment charge was recorded within the three and six-month periods ended June 30, 2025.

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 expected 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 31, 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 ($37,150). 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 June 30, 2025 and December 31, 2024, the loan had a current portion of €693,038 ($815,706) and €500,000 ($517,550), and a non-current portion of €2,722,668 ($3,204,580), and €2,800,000 ($2,898,280), respectively, which is classified as “Loans receivable – related party” on the accompanying consolidated balance sheets. During the six-month period ended June 30, 2025, the Company received no principal repayments or interest repayments. Additionally, during the three months ended June 30, 2025 and 2024, the Company recorded €45,375 ($49,653) and €47,667 ($51,528) as interest income relating to this loan. During the six months ended June 30, 2025 and 2024, the Company recorded €90,750 ($99,307) and €96,708 ($103,584) 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.

Loans receivable - Related Party - Long Term

On February 28, 2023 (Issue Date), the Company signed a Secured Promissory Note with Cana Laboratories Holdings (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 1 month LIBOR per annum (5.47% as of December 31, 2023). The maturity date (“Maturity Date”) of this Note shall be five (5) years from the Issue Date. The Principal Amount, as well as all accrued interest shall be due and payable on the Maturity Date. Following the completion of Cana’s acquisition on June 30, 2023 the balance of the Note was eliminated on a consolidated level. Following the cessation of the London Interbank Offered Rate (“LIBOR”), the Company and the subsidiary mutually agreed to replace LIBOR with EURIBOR as the benchmark interest rate for the intercompany loan. The change was implemented in accordance with the loan agreement’s provisions and did not result in a modification to other key terms of the arrangement.

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 June 30, 2025 and December 31, 2024, respectively.

Basotho Investment Limited

Basotho Investment Limited is considered a related party since Panagiotis Kozaris (former general operational manager and current employee of Cosmofarm SA) 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 amortization of the fair value of these shares for the three and six-month periods ended June 30, 2025 and 2024 was $0 and $30,900 and $0 and $61,800, respectively, which was recorded as general and administrative expense.

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 three and six months ended June 30, 2025 and 2024 the Company’s net sales to Pharmacy & More amounted to $100,870 and $86,678 and $217,565 and $196,607 respectively. As of June 30, 2025 and December 31, 2024 the Company’s outstanding receivable balance due from the pharmacy amounted to $1,347,235 and $1,183,429, respectively, and are included in “Accounts receivable - related party”, on the accompanying consolidated balance sheets. As of June 30, 2025 and December 31, 2024, a cumulative allowance for doubtful accounts of approximately $909,881 and $735,000, respectively, 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).

Other Related Parties

Additionally, the Company has the following material related-party balances as of June 30, 2025: a) a prepaid balance of $296,947 relating to prepaid salaries 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 $228,000 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 $16,588 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 as of June 30, 2025 and December 31, 2024 is presented below:

Dimitrios Goulielmos

Dimitris Goulielmos was the Company’s former CEO and a Director of the Company.

On November 21, 2014, the Company entered into an agreement with Dimitrios Goulielmos, as amended on November 4, 2016. Pursuant to the amendment, this loan has no maturity date and is non-interest bearing. As of June 30, 2025 and December 31, 2024, the Company had a principal balance of €10,200 ($12,040) and €10,200 ($10,558), respectively.

The above balances are adjusted for the foreign currency rate as of the balance sheet date. For the six months ended June 30, 2025, the Company recorded a foreign currency translation loss of $1,447.

Loans Payable – Related Party

A summary of the Company’s related party loans payable as of June 30, 2025 and December 31, 2024 is presented below:

Grigorios Siokas

From time to time, Grigorios Siokas loans the Company funds in the form of non-interest bearing, no-term loans. As of June 30, 2025 and December 31, 2024 the Company had an outstanding principal balance under these loans of $0 and $6,194, respectively.

The above balances are adjusted for the foreign currency rate as of the balance sheet date. For the six months ended June 30, 2025, the Company recorded a loss of $850.

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 June 30, 2025 and December 31, 2024 is presented below:

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 $5,885,000 and $5,175,000 as of June 30, 2025 and December 31, 2024, respectively. The outstanding balance of the facility was $3,496,057 and $3,165,058, as of June 30, 2025 and December 31, 2024, respectively.

The cumulative maximum borrowing allowed for the COSME 1 Facility and COSME 2 Facility (collectively, the "Facilities") was $1,177,000 and $1,035,100 as of June 30, 2025 and December 31, 2024, respectively. The outstanding balance of the Facilities was $889,564 and $895,987 as of June 30, 2025 and December 31, 2024, 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 $1,079,600 and $1,177,000 as of June 30, 2025 and December 31, 2024, respectively. The outstanding balance of the Alpha LOC was $991,364 and $960,868, as of June 30, 2025 and December 31, 2024, 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 June 30, 2025 and December 31, 2024 was $1,765,500 and $1,552,650, respectively. The outstanding balance of the Pancreta LOC as of June 30, 2025 and December 31, 2024, was $1,423,967 and $1,583,291, respectively.

The Company maintains a line of credit with EGF ("EGF LOC"), which is renewed annually and has a current interest rate of 4.49% plus 3-month Euribor. The maximum borrowing allowed as of June 30, 2025 and December 31, 2024, was $470,800 and $414,040, respectively. The outstanding balance of the EGF LOC as of June 30, 2025 and December 31, 2024 was $484,608 and $428,251, respectively.

On January 27, 2025, the Company entered into a bond loan agreement with Attica Bank, providing for maximum borrowings of up to €2,200,000 ($2,357,120). Under the terms of the facility, the Company received initial proceeds of €700,000 ($749,600), which were classified as Notes Payable in the Company’s consolidated financial statements. The remaining borrowing capacity of €1,500,000 ($1,619,400) is available to the Company on a revolving basis, subject to the provision of qualifying checks receivable as collateral. These subsequent drawdowns are classified as Lines of Credit due to their secured and contingent nature. The facility bears interest at a floating rate of 2.95% plus the applicable 6-month Euribor, recalculated periodically in accordance with market conditions. The loan agreement includes standard covenants and collateral arrangements customary for this type of facility. The maximum borrowing allowed as of June 30, 2025 was $1,765,500 and the outstanding balance of the Attica Bank LOC as of June 30, 2025 was $876,279.

Under the aforementioned line of credit agreements, the Company is required to maintain certain financial ratios and covenants. As of June 30, 2025, and December 31, 2024, the Company was in compliance with these ratios and covenants.

All lines of credit are guaranteed by customer receivable checks, which are a type of factoring in which postponed customer checks are assigned by the Company to the bank, in order to be financed at an agreed upon rate.

Interest expense on the Company’s outstanding lines of credit balances for the three and six months ended June 30, 2025 and 2024, was $150,336 and $185,378, and $231,301 and $229,946, respectively.

NOTE 11 – CONVERTIBLE DEBT

A summary of the Company’s convertible debt during the 6-month period ended June 30, 2025 and the year ended December 31, 2024 is presented below:

As permitted under Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 825,Financial Instruments (“ASC 825”), the Company elects to account for its convertible promissory note, which meets the required criteria, at fair value at inception and at each subsequent reporting date. Subsequent changes in fair value are recorded as a component of non-operating loss in the consolidated statements of operations. This election is made on an instrument-by-instrument basis as permitted under ASC 825. The portion of total changes in fair value of the convertible promissory note attributable to changes in instrument-specific credit risk are determined through specific measurement of periodic changes in the discount rate assumption exclusive of base market changes and are presented as a component of comprehensive income in the accompanying Consolidated Statements of Operations and Comprehensive Income (Loss). As a result of electing the fair value option, direct costs and fees related to the convertible promissory note are expensed as incurred.

The Company estimates the fair value of the convertible promissory note using a Monte Carlo simulation model, which uses as inputs the fair value of our common stock and estimates for the equity volatility and volume volatility of our common stock, the time to expiration of the convertible promissory note, the risk-free interest rate for a period that approximates the time to expiration, and probability of default. Therefore, we estimate our expected future volatility based on the actual volatility of our common stock and historical volatility of our common stock utilizing a lookback period consistent with the time to expiration. The time to expiration is based on the contractual maturity date, giving consideration to the voluntary, mandatory and potential accelerated redemption scenarios. The risk-free interest rate is determined by reference to the U.S. Treasury yield curve in effect at the time of measurement for time periods approximately equal to the time to expiration. Probability of default is estimated using Bloomberg's Default Risk function which uses our financial information to calculate a default risk specific to the Company.

May 2025 Convertible Promissory Note

On May 23, 2025 the Company issued two convertible promissory notes (the “May 2025 Notes”) to two separate investors. One of the May 2025 Notes had a principal amount of $235,000 and the other had a principal amount of $75,000. The May 2025 Notes accrue interest at 10%. Beginning on the 180th day after the issuance date, the investors shall have the right to convert the May 2025 Notes into common stock at a conversion price equal to 75% of the lowest trading price of the Company’s common stock during the ten trading day period ending on the latest trading day prior to the conversion date. The May 2025 Notes may be prepaid before maturity, however, they are subject to the following prepayment terms: 1) if the note is prepaid during the period beginning on the issuance date and ending on the 60 th day following issuance, the outstanding principal and accrued interest must be repaid at 115% of the outstanding balance, 2) if the note is prepaid during the period beginning on 61 st day following issuance and ending on the 120 th day following issuance, the outstanding principal and accrued interest owed shall be repaid at 120% of the outstanding balance, and 3) if the note is repaid during the period beginning on the 121 st day after issuance and ending on the 180 th day after issuance, the outstanding principal and accrued interest owed shall be repaid at 125% of the outstanding balance.

Due to certain embedded features within the May 2025 Notes, the Company elected to account for the May 2025 Notes and all the embedded features at fair value at inception. Subsequent changes in fair value are recorded as a component of non-operating income (loss) in the consolidated statements of operations. As a result of electing the fair value option, $13,100 of direct costs and fees related to the issuance of the May 2025 Notes were expensed immediately.

The fair value of the May 2025 notes was estimated using a Monte Carlo simulation model. Key assumptions included a stock price of $0.42, expected annualized volatility of 89.0%, risk-free interest rate of 3.96%, dividend yield of 0%, and a discount rate of 22.0%. The model incorporated a one-year forecast horizon with 52 weekly steps and 50,000 simulation trials. Event assumptions included an 80% probability of prepayment (assumed August 18, 2025), 15% probability of payment at maturity (May 23, 2026), and 5% probability of default, with valuation as of June 30, 2025.

For the three and six months ended June 30, 2025 the Company recorded a loss of $8,728 and $8,728, respectively, related to the change in fair value of the May 2025 Notes which was recognized in other income (expense) in the unaudited condensed consolidated statements of operations and comprehensive loss.

Interest expense on the May 2025 Notes totaled $3,250 for the three and six months ended June 30, 2025.

June 2025 Convertible Promissory Note

On June 9, 2025 the Company issued a secured convertible promissory note (the “June 2025 Note”) to an investor. The June 2025 Note has a principal amount of $1,304,347.83 and was issued with an 8% original issue discount. As a result the Company received proceeds of $1,200,000 from the investor in exchange for the June 2025 Note. Interest accrues at a rate of 18% per annum on the June 2025 Note, however, the first six months of interest accrue on the June 2025 Note immediately. The June 2025 Note has a maturity date of June 9, 2026. The June 2025 Note is convertible into common stock at a conversion price of $0.40 per share.

Due to certain embedded features within the June 2025 Note, the Company elected to account for the June 2025 Note and all the embedded features at fair value at inception. Subsequent changes in fair value are recorded as a component of non-operating income (loss) in the consolidated statements of operations. As a result of electing the fair value option, $300,870 of direct costs and fees related to the issuance of the June 2025 Note were expensed immediately.

The fair value of the convertible notes was estimated using a Monte Carlo simulation model. Significant assumptions included a stock price of $0.42, expected annualized volatility of 89.0%, risk-free interest rate of 3.96%, dividend yield of 0%, and a discount rate of 22.0%. The simulation used a one-year forecast horizon with 52 weekly steps and 50,000 trials. Event assumptions included an 80% probability of prepayment (assumed August 18, 2025), 10% probability of a qualified financing event (assumed December 8, 2025), 5% probability of payment at maturity (June 29, 2026), and 5% probability of default (assumed June 9, 2026), with a valuation date of June 30, 2025.

For the three and six months ended June 30, 2025 the Company recorded a gain of $26,584 and $26,584, respectively, related to the change in fair value of the June 2025 Note which was recognized in other income (expense) in the consolidated statements of operations.

Interest expense on the June 2025 Note totaled $13,696 for the three and six months ended June 30, 2025.

The following table presents the change in the balances of the May 2025 Notes and the June 2025 Note for the periods identified:

NOTE 12 – NOTES PAYABLE

A summary of the Company’s third-party debt as of and for period ended June 30, 2025, and the year ended December 31, 2024 is presented below:

Our outstanding debt as of June 30, 2025 is repayable as follows:

Trade Facility Agreements

On May 12, 2017, SkyPharm entered into a Trade Finance Facility Agreement (the “TFF”) with Synthesis Structured Commodity Trade Finance Limited (the “Lender”) as amended on November 16, 2017, and May 16, 2018.

During the six-month period ended June 30, 2025, the Company made principal repayments totaling €200,000 (approximately $235,400). As of June 30, 2025, the Company had an outstanding principal balance of €1,150,000 ($1,353,550), which is fully classified as “Notes Payable” in the Company’s consolidated balance sheets.

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 outstanding balance was €29,412 ($34,618) and €88,235 ($91,232) as of June 30, 2025 and December 31, 2024, respectively, of which $34,618 and $91,232 was classified as “Notes payable” respectively, on the accompanying consolidated balance sheets. During the six-month period ended June 30, 2025, the Company repaid €58,824 ($69,235) 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). During the six-month period ended June 30, 2025 the Company repaid €55,556 ($65,389) of the principal and as of June 30, 2025 the Company has accrued interest of €5,375($6,326) related to this note and a principal balance of €55,556 ($65,389), all of which is classified as “Notes payable” on the accompanying consolidated balance sheets.

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). During the isx-month period ended June 30, 2025, the Company repaid €57,279 ($67,417) of the principal. As of June 30, 2025 the Company had accrued interest of €16,727 ($19,688), principal of €149,064 ($175,448), of which $37,786 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”. During the six-month period ended June 30, 2025 the Company repaid €40,000 ($47,080) of the principal. As of June 30, 2025 and December 31, 2024 the Company has accrued interest of €2,316 ($2,726) and €8,352 ($8,645), respectively, and an outstanding balance of €140,000 ($164,780) and €180,000 ($186,318), respectively, of which $68,061 and $103,510, 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”. During the six-month period ended June 30, 2025 the Company repaid €108,633 ($127,861) of the principal. As of June 30, 2025 and December 31, 2024 the Company has accrued interest of €6,083 ($7,160) and €16,735 ($17,322), respectively, and an outstanding balance of €706,117 ($831,099) and €814,750 ($843,348), of which $569,511 and $618,616, respectively, are classified as “Notes payable – long term portion” on the accompanying consolidated balance sheets.

Cloudscreen Promissory Note

On January 23, 2024, the Company completed the acquisition of Cloudscreen, a cutting-edge Artificial Intelligence (AI) powered platform. 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. During the six-month period ended June 30, 2025 the Company repaid $22,421 of the principal. As of June 30, 2025, and December 31, 2024, the Company had an outstanding balance of $294,250 and $279,348 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”. During the six-month period ended June 30, 2025, the Company repaid principal of €22,222($26,156). As of June 30, 2025, and December 31, 2024 the Company had an outstanding balance of €377,778 ($444,644) and €400,000 ($414,040), of which $340,022 and $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”. During the six-month period ended June 30, 2025, the Company repaid principal of €66,667($78,467). As of June 30, 2025, and December 31, 2024 the Company has accrued interest of €1,641 ($1,932) and €794 ($821), respectively, and an outstanding balance of €333,333 ($392,333) and €400,000 ($414,040), of which $247,843 and $276,027 is classified as “Notes payable - long term portion” on the accompanying consolidated balance sheets.

January 27, 2025 Debt Agreement

On January 27, 2025, the Company entered into a bond loan agreement with Attica Bank, providing for maximum borrowings of up to €2,200,000 ($2,357,120). Under the terms of the facility, the Company received initial proceeds of €700,000 ($749,600), which were classified as Notes Payable in the Company’s consolidated financial statements. The remaining borrowing capacity of €1,500,000 ($1,619,400) is available to the Company on a revolving basis, subject to the provision of qualifying checks receivable as collateral. These subsequent drawdowns are classified as Lines of Credit due to their secured and contingent nature. The facility bears interest at a floating rate of 2.95% plus the applicable 6-month Euribor (2.331% as of June 30, 2025). The Note Payable portion of the facility is to be repaid in 10 equal semiannual installments of €70,000 commencing on July 27, 2026. During the 3-month period ended June 30, 2025, the Company repaid no principal. As of June 30, 2025, and December 31, 2024 the Company has accrued interest of €12,091($14,231) and €0 ($0), respectively, and an outstanding balance of €700,000 ($755,720) and €0 ($0), of which $659,120 and $0 is classified as “Notes payable - long term portion” on the accompanying consolidated balance sheets.

COVID-19 Loans

On May 12, 2020, the Company’s wholly owned subsidiary, SkyPharm SA, was granted a loan from the Greek government in the amount of €300,000 (approximately $366,900). During the six-month period ended June 30, 2025, an additional principal repayment of €4,688 (approximately $5,061) was made. As of June 30, 2025, and December 31, 2024 the Company has an outstanding balance of €98,438 ($115,861) and €103,125 ($106,745), of which $86,031 and $87,337 is classified as “Notes payable - long term portion” on the accompanying consolidated balance sheets.

On June 24, 2020, the Company’s subsidiary, Decahedron, received a loan £50,000 ($68,310) from the UK government. As of June 30, 2025, and December 31, 2024 the Company has an outstanding balance of £38,320 ($52,583) and £ 38,144 ($47,761), of which $34,329 and $43,239 is classified as “Notes payable - long term portion” on the accompanying consolidated balance sheets.

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 10 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 3.51 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 June 30, 2025:

The Company incurred lease expense, due to amortization of operating lease right-of-use assets, of $69,554 and $82,263 and $130,222 and $159,430, which was included in “General and administrative expenses,” for the three and six months ended June 30, 2025 and 2024, respectively.

Finance Leases

The Company’s weighted-average remaining lease term relating to its finance leases is 0.85 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 finance leases as of June 30, 2025:

The Company had financing cash flows used in finances leases of $5,156 and $17,353 for the six months ended June 30, 2025 and 2024, respectively.

The Company incurred interest expense on its finance leases of $137 and $583 and interest expense of $332 and $1,308 which was included in “Interest expense”, for the three and six months ended June 30, 2025 and 2024, respectively. The Company incurred amortization expense on its finance leases of $0 and $7,429 and $4,110 and $14,918 which was included in “Depreciation and amortization expense,” for the three and six months ended June 30, 2025 and 2024, respectively.

NOTE 14 – OTHER LIABILITIES

As of June 30, 2025 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:

Liabilities that are due within 12 months from the balance sheet date are classified under “Other Current Liabilities. “Obligations that extend beyond 12 months are classified as “Other Non-Current Liabilities.”

NOTE 15 – COMMITMENTS AND CONTINGENCIES

Legal Matters

From time to time, the Company may be involved in litigation relating to claims arising out of the Company’s operations in the normal course of business. As of June 30, 2025, the following litigations were pending. None is expected to have a material financial or operational impact.

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 June 30, 2025, the trial remains pending.

Criminal Cases Related to Dishonored Checks

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.

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 June 30, 2025.

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.

On April 28, 2025, the Company entered into a settlement agreement with a former employee, acknowledging its obligation to pay €62,500 ($83,719) gross (€62,250 net after applicable severance tax) as termination compensation in nine scheduled installments from April to December 2025, with any additional tax, social security, or other charges to be borne solely by the Company; upon timely and full payment of all installments, the former employee agreed to accept the settlement and confirm the lawfulness and validity of the February 23, 2018 termination.

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 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.

On June 3, 2025, the Company entered into a consulting agreement with a third-party consultant, under which the consultant will provide non-exclusive business advisory services, growth strategy guidance, and networking support through October 30, 2025. As consideration, the Company issued 150,000 shares of common stock, fully earned on the effective date. If the closing price of the common stock six months after the effective date is lower than the closing price on the effective date (subject to adjustment for corporate actions), the Company will issue additional shares such that the total value of shares issued equals $70,000 based on the six-month market price. The stock-based consideration was valued at a total of $68,550 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 three-month periods ended June 30, 2025 and 2024 the Company has recorded $288,110 and $231,750, respectively, as stock-based compensation for the above agreements, classified as “General and administrative expenses” in the Company’s condensed consolidated statements of operations and comprehensive Income (loss). For the six months ended June 30, 2025 and 2024 the equivalent stock-based compensation was $533,420 and $463,500, respectively.

Research and Development Agreements

The Company entered into a Research & Development agreement with Doc Pharma S.A. on May 17, 2021. Under this agreement, Doc Pharma is responsible for the research, development, design, registration, copy rights and licenses of 250 nutritional supplements for the final products called Sky Premium Life®. More specifically, Doc Pharma is responsible for the product development and the Company has added 165 of such products codes in its portfolio as of June 30, 2025. The licenses purchased by Doc Pharma SA are capitalized and included in “Goodwill and intangible assets, net” of the Company’s Unaudited Condensed Consolidated Balance Sheets as of June 30, 2025. Thus, no relevant R&D expense had been charged to the Company’s Unaudited Condensed Consolidated Statements of Operations and Comprehensive income (Loss), concerning this agreement.

On June 25, 2022, the Company signed a research and development (“R&D”) agreement with a third party (CloudPharm PC), through which the Company assigned to the third party the development of new products and services in the field of health, focusing on the human intestinal microbiome. The project includes two phases. Phase 1 has a 20-month duration and its cost amounts to EUR 758,000 ($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 6-month periods ended June 30, 2025 and 2024, the Company incurred $22,966 in costs relating to this agreement.

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 six-month period ended June 30, 2025, the Company incurred EUR 40,000 ($50,052) concerning this agreement, which were included in “Research and Development costs” in the Company’s Consolidated Statements of Operations and Comprehensive Income (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 June 30, 2025, 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 six-month period ended June 30, 2025, the Company did not incur any royalties under this agreement; however, it incurred $17,218 in patent-related expenses, including renewal fees, agency payments, and similar costs.

NOTE 16 – STOCK OPTIONS AND WARRANTS

Omnibus Equity Incentive Plan

On September 19, 2022, the Company held a Board of Directors meeting, whereas, the Board of Directors had elected to adopt an Omnibus Equity Incentive Plan (the “2022 Plan”), that includes reserving 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.

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. For the three and six-month periods ended June 30, 2025 and 2024, the Company recorded share-based compensation expense of $0 and $108,297 and $0 and $216,889, respectively, in connection with the “2022 Plan.”

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 June 30, 2025, 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 during the three and six month periods ended June 30, 2025, the Company recorded share-based compensation expense of $314,760 and $626,062, respectively, in connection with the “2023 Plan”. 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

As of June 30, 2025, 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.

A summary of the Company’s warrant activity for the nine months ended June 30, 2025 and the year ending December 31, 2024 is as follows:

NOTE 17 – 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 three months ended:

The following table presents our revenue disaggregated by country for the six months ended:

NOTE 18 – 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.

B. Information about reportable segments

The table below presents information about the Company's reportable segments for the three-month period ended June 30, 2025. The accounting policies followed in the preparation of the reportable segments are the same with those followed in the preparation of the Company's condensed consolidated financial statements.

Six-month period ended June 30, 2025

The following summary describes the operations of each reportable segment:

NOTE 19 – SUBSEQUENT EVENTS

On July 1, 2025, the Company entered into a 12-month consulting agreement with a third party, for advisory, investor relations, corporate communications, and marketing services. As compensation, the Company agreed to issue 240,000 restricted shares of common stock, vesting at 20,000 shares per month, subject to clawback for unvested months if the agreement is terminated early.

On July 9, 2025, the Company issued two convertible promissory notes (the “July 2025 Notes”) to two separate investors. One of the July 2025 Notes had a principal amount of $150,000 and the other had a principal amount of $75,000. The July 2025 Notes accrue interest at 10%. Beginning on the 180th day after the issuance date, the investors shall have the right to convert the July 2025 Notes into common stock at a conversion price equal to 75% of the lowest trading price of the Company’s common stock during the ten trading day period ending on the latest trading day prior to the conversion date.

On July 24, 2025, the Company entered into a six-month agreement with a third party, to provide marketing and distribution services aimed at increasing company awareness and investor engagement through social media, online communities, and influencer content. As consideration, the Company agreed to issue $100,000 worth of common stock on the effective date.

On August 5, 2025, the Company entered into a Securities Purchase Agreement with an institutional investor to issue up to $300 million of 9% original issue discount senior secured convertible promissory notes. The initial note of $8 million closed on August 6, 2025, with further issuances of up to $292 million available in multiple closings subject to specified conditions. The proceeds are primarily intended to acquire digital assets as treasury holdings and to support working capital and general corporate purposes. The notes are secured by the digital assets purchased and other collateral, rank senior to all other Company indebtedness (other than permitted indebtedness), and are convertible into common stock under defined terms.

Pursuant to its August 5, 2025 financing facility of up to $300 million with a U.S.-based institutional investor, the Company completed its initial $1 million purchase of Ethereum (“ETH”). More specifically, on August 8, 2025, the Company purchased 123.6 units of ETH at a price of $4,045 per unit, for an aggregate notional amount of $500,000 and on August 11, 2025 purchased 117.7 units of ETH at a price of $4,248 per unit, for an additional aggregate notional amount of $500,000.