Cosmos Health Inc.

Previous wording

As used in this prospectus, the terms “we,” “us” “our” and the “Company” mean Cosmos Health Inc. unless the context requires otherwise. The following discussion and analysis should be read in conjunction with our audited (and unaudited) financial statements and the related notes that appear elsewhere in this prospectus. All dollar amounts in this registration statement refer to U.S. dollars unless otherwise indicated.

Current wording

As used in this prospectus, the terms “we,” “us” “our” “Cosmos”, “Cosmo Health” and the “Company” mean Cosmos Health Inc. unless the context requires otherwise. The following discussion and analysis should be read in conjunction with our audited (and unaudited) financial statements and the related notes that appear elsewhere in this prospectus. All dollar amounts in this registration statement refer to U.S. dollars unless otherwise indicated.

Previous wording

We have created and developed our own proprietary branded nutraceutical products, named “Sky Premium Life®” which was launched in 2018 and “Mediterranation®” which was launched in 2022. Utilizing unique formulations, and specialized extraction processes which follow strict pharmaceutical standards, our proprietary lines of nutraceuticals aim for excellence. We have a full portfolio of fast-moving and specialty formulas with more than 160 product codes including vitamins, minerals and other herbal extracts. Our nutraceutical products are manufactured exclusively by Doc Pharma. Our nutraceutical products have penetrated several markets within 2022 and 2023 through digital channels such as Amazon and Tmall. We focus on nutraceutical products because we foresee it as a market with high growth opportunities due to its large market size and margin contribution as the demand for nutraceutical products is increasing globally.

Current wording

We have created and developed our own proprietary branded nutraceutical products, named “Sky Premium Life®” which was launched in 2018 and “Mediterranation®” which was launched in 2022. Utilizing unique formulations, and specialized extraction processes which follow strict pharmaceutical standards, our proprietary lines of nutraceuticals aim for excellence. We have a full portfolio of fast-moving and specialty formulas with more than 160 product codes including vitamins, minerals and other herbal extracts. Our nutraceutical products are manufactured exclusively by Doc Pharma. We focus on nutraceutical products because we foresee it as a market with high growth opportunities due to its large market size and margin contribution as the demand for nutraceutical products is increasing globally.

Previous wording

For the year ended December 31, 2024, the Company had a net loss of $16,183,018 on revenue of $54,426,402, versus a net loss of $18,542,654 on revenue of $53,376,874, for the year ended December 31, 2023.

Current wording

For the year ended December 31, 2025, the Company had a net loss of $19,144,998 on revenue of $65,271,815, versus a net loss of $16,183,018 on revenue of $54,426,402, for the year ended December 31, 2024.

Previous wording

For the 12-month period ended December 31, 2024, the Company’s total revenue increased by 1.97%, reaching $54,426,402, compared to $53,376,874 for the prior year period ended December 31, 2023. This growth was primarily driven by the following factors:

Current wording

For the twelve-month period ended December 31, 2025, the Company's total revenue increased by 19.9%, reaching $65,271,815, compared to $54,426,402 for the prior year period ended December 31, 2024. This growth was primarily driven by the following factors:

Previous wording

Our future revenue growth will continue to be affected by various factors such as industry growth trends, including drug utilization, the introduction of new innovative brand therapies, the likely increase in the number of generic drugs that will be available over the next few years as a result of the expiration of certain drug patents held by brand-name pharmaceutical manufacturers and the rate of conversion from brand products to those generic drugs, price increases and price deflation, general economic conditions in the member states of European Union, competition within the industry, customer consolidation, changes in pharmaceutical manufacturer pricing and distribution policies and practices, increased downward pressure on government and other third party reimbursement rates to our customers, and changes in government rules and regulations.

Current wording

The combination of these factors contributed to the overall revenue growth for the period. Our future revenue growth will continue to be affected by various factors such as industry growth trends, including drug utilization, the introduction of new innovative brand therapies, the likely increase in the number of generic drugs available over the next few years as a result of the expiration of certain drug patents held by brand-name pharmaceutical manufacturers, price increases and price deflation, general economic conditions in the member states of the European Union, competition within the industry, customer consolidation, changes in pharmaceutical manufacturer pricing and distribution policies and practices, increased downward pressure on government and other third-party reimbursement rates to our customers, and changes in government rules and regulations.

Previous wording

For the year ended December 31, 2024, our cost of goods sold (“COGS”) was $50,115,079, representing a 2.22% increase compared to $49,027,305 for the prior fiscal year ended December 31, 2023.

Current wording

For the year ended December 31, 2025, our cost of goods sold ("COGS") was $57,376,240, representing a 14.5% increase compared to $50,115,079 for the prior fiscal year ended December 31, 2024.

Previous wording

For the year ended December 31, 2024, our gross profit was $4,311,323, representing a decrease of $38,246, or 0.88%, compared to $4,349,569 for the prior fiscal year ended December 31, 2023.

Current wording

For the year ended December 31, 2025, our gross profit was $7,895,575, representing an increase of $3,584,252, or 83.1%, compared to $4,311,323 for the prior fiscal year ended December 31, 2024.

Previous wording

For the year ended December 31, 2024, total operating expenses were $19,856,153, compared to $26,180,786 for the prior fiscal year ended December 31, 2023, representing a decrease of $6,324,633, or 24.16%. The decrease in operating expenses was primarily attributable to the following factors:

Current wording

For the year ended December 31, 2025, total operating expenses were $24,599,179, compared to $19,856,153 for the prior fiscal year ended December 31, 2024, representing an increase of $4,743,026, or 23.9%. The change in operating expenses was primarily attributable to the following factors:

Previous wording

For the year ended December 31, 2024, the Company recorded a net comprehensive loss of $24,093,129, compared to a net comprehensive loss of $25,071,043 for the year ended December 31, 2023. This change in net comprehensive loss was primarily due to the unrealized foreign currency translation loss and a change in deemed dividends, as detailed below:

Current wording

For the year ended December 31, 2025, the Company recorded a total comprehensive loss of $16,678,564, compared to a total comprehensive loss of $24,093,129 for the year ended December 31, 2024. The improvement was primarily attributable to the following factors:

Previous wording

The significant fluctuation in the unrealized foreign currency results was the primary factor influencing the difference in comprehensive loss between the two years. For a comprehensive understanding of the key accounting policies and assumptions underlying these changes, readers are encouraged to review the relevant Notes to the Financial Statements, as indicated above.

Current wording

The combination of the above factors, most notably the elimination of deemed dividends and the favorable foreign currency translation swing, drove the overall improvement in total comprehensive loss year-over-year. For a comprehensive understanding of the key accounting policies and assumptions underlying these changes, readers are encouraged to review the relevant Notes to the Financial Statements as indicated above.

Previous wording

The Company’s consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”), which contemplates the continuation of the Company as a going concern. For the year ended period December 31, 2024, the Company had revenue of $54,426,402, net loss of $16,183,018 and net cash used in operations of $7,717,034. Additionally, as of December 31, 2024, the Company had negative working capital of $296,193, an accumulated deficit of $114,022,275, and stockholders’ equity of $24,532,929. It is management’s opinion that these conditions raise substantial doubt about the Company’s ability to continue as a going concern for a period of 12 months from the date of this filing.

Current wording

The Company's consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States of America ("U.S. GAAP"), which contemplates the continuation of the Company as a going concern.

Previous wording

The Company’s revenues are not able to sustain its operations, and concerns exist regarding the Company’s ability to meet its obligations as they become due. The Company is subject to a number of risks to those of smaller commercial companies, including dependence on key individuals and products, the difficulties inherent in the development of a commercial market, the need to obtain additional capital, competition from larger companies, and other pharmaceutical and health care companies.

Current wording

The Company's revenues are not able to sustain its operations, and concerns exist regarding the Company's ability to meet its obligations as they become due. The Company is subject to a number of risks similar to those of smaller commercial companies, including dependence on key individuals and products, the difficulties inherent in the development of a commercial market, the need to obtain additional capital, competition from larger companies, and other pharmaceutical and health care companies.

Previous wording

Management evaluated the above conditions which raise substantial doubt about the Company’s ability to continue as a going concern to determine if it can meet its obligations for the subsequent 12 months from the date of this filing. Management considered its ability to access future capital, curtail expenses if needed, expand product lines, and acquire new products.

Current wording

Management evaluated the above conditions which raise substantial doubt about the Company's ability to continue as a going concern to determine if it can meet its obligations for the subsequent 12 months from the date of this filing. Management considered its ability to access future capital, curtail expenses if needed, expand product lines, and acquire new products. Management's plans include expansion of brand name products to the market, expanding the current product portfolio, and evaluating acquisition targets to expand distribution. The exclusive distribution agreement signed for its Sky Premium Life products in the United Arab Emirates ("UAE") and the significant orders already received are expected to substantially strengthen its operating cash flow. Furthermore, the Company intends to vertically integrate its supply chain distribution network.

Previous wording

Management’s plans include expansion of brand name products to the market, expanding the current product portfolio, and evaluating acquisition targets to expand distribution. The exclusive distribution agreement signed for its Sky Premium Life products in the United Arab Emirates (“UAE”) and the significant orders already received, are expected to substantially strengthen its operating cash flow. Furthermore, the Company intends to vertically integrate the supply chain distribution network. On top of that, the Company plans to access the capital markets further in order to raise additional funds through equity offerings. More specifically, commencing from August 2025, the Company will be eligible to utilize an S-3 registration statement, (12 months following the date that the Company had regained compliance with Listing Rule 5250(c)(1) (the “Filing Rule”)), to be in a position to raise equity capital more efficiently in conjunction with utilizing potential equity proceeds by its outstanding warrants. Management’s plans also include postponing certain debt repayments, through achieving favorable amendments to its debt facilities and in parallel intends to make substantial efforts to receive additional debt financing. Moreover, the Company’s management is considering of postponing certain repayments of suppliers and creditors. However, management cannot provide any assurances that the Company will be successful in accomplishing any of its plans. The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described herein and eventually secure other sources of financing and attain profitable operations.

Current wording

Management's plans also include postponing certain debt repayments through achieving favourable amendments to its debt facilities and making substantial efforts to secure additional debt financing. Additionally, the Company's management is considering postponing certain repayments to suppliers and creditors as necessary.

Previous wording

As of December 31, 2024, the Company had negative working capital of $296,193, compared to a positive working capital of $12,285,310 as of December 31, 2023. The decrease in working capital is primarily attributable to the significant cash used in operating activities during the year ended December 31, 2024. In addition, the reduction in working capital was influenced by the significant allowances for doubtful accounts recorded for the 12-month period ended December 31, 2024. The cash used in operating activities, as detailed in the liquidity section, led to a reduction in the Company’s available current assets, while the increase in allowances for doubtful accounts reflects the Company’s prudent assessment of its receivables. The Company continues to closely manage its working capital to ensure adequate liquidity for operations and strategic investments. Going forward, management is focused on improving collections and reducing allowances for doubtful accounts, which are expected to have a positive impact on working capital and overall liquidity in the coming periods.

Current wording

The increase in net cash used in operating activities was primarily driven by the following factors:

Previous wording

On June 23, 2020, the Company’s subsidiary, Cosmofarm, entered into an agreement with the National Bank of Greece S.A. (the “Bank”) to borrow a maximum of €500,000 ($611,500). The note has a maturity date of 60 months from the date of the first disbursement, which includes a grace period of nine months. The total amount of the initial proceeds was received in three equal monthly installments. The note is interest bearing from the date of receipt and is payable every three months at an interest rate of 3.06% plus 3-month Euribor (2.92% as of December 31, 2024). The outstanding balance was €88,235 ($91,232) and €205,882 ($227,747) as of December 31, 2024 and 2023, respectively, of which $91,232 and $97,606 was classified as “Notes payable – long-term portion” respectively, on the accompanying consolidated balance sheets. During the year ended December 31, 2024, the Company repaid €117,647 ($121,776) of the principal balance.

Current wording

On June 23, 2020, the Company’s subsidiary, Cosmofarm, entered into an agreement with the National Bank of Greece S.A. (the “Bank”) to borrow a maximum of €500,000 ($611,500). The note has a maturity date of 60 months from the date of the first disbursement, which includes a grace period of nine months. The total amount of the initial proceeds was received in three equal monthly installments. The note is interest bearing from the date of receipt and is payable every three months at an interest rate of 3.06% plus 3-month Euribor (2.06% as of December 31, 2025). The outstanding balance was €0 ($0) and €88,235 ($91,332) as of December 31, 2025 and 2024, respectively, of which $0 and $91,332 was classified as “Notes payable – long-term portion” respectively, on the accompanying consolidated balance sheets. During the year ended December 31, 2025, the Company repaid €88,235 ($103,553) of the principal balance.

Previous wording

On November 19, 2020, the Company entered into an agreement with a third-party lender in the principal amount of €500,000 ($611,500). The note matures on November 18, 2025 and bears an annual interest rate, based on a 360-day year, of 3% plus 0.6% plus 6-month Euribor when Euribor is positive (2.68% as of December 31, 2024). The principal is to be repaid in 18 quarterly installments of €27,778 ($30,333). During the year ended December 31, 2023, the Company repaid €111,111 ($122,911) of the principal and as of December 31, 2023, the Company had accrued interest of €11,191 ($12,379) related to this note and a principal balance of €222,222 ($245,822), of which $122,911 is classified as “Notes payable – long term portion” on the accompanying consolidated balance sheets. During the year ended December 31, 2024, the Company repaid €111,111 ($115,011) of the principal and as of December 31, 2024, the Company has accrued interest of €7,570 ($7,836) related to this note and a principal balance of €111,111 ($115,011), all of which is classified as “Notes payable” on the accompanying consolidated balance sheets.

Current wording

On November 19, 2020, the Company entered into an agreement with a third-party lender in the principal amount of €500,000 ($611,500). The note matures on November 18, 2025 and bears an annual interest rate, based on a 360-day year, of 3% plus 0.6% plus 6-month Euribor when Euribor is positive (2.12% as of December 31, 2025). The principal is to be repaid in 18 quarterly installments of €27,778 ($30,333). During the year ended December 31, 2025, the Company repaid €111,111 ($130,400) of the principal and as of December 31, 2025, the Company had accrued interest of €3,387 ($3,975) related to this note and an outstanding principal balance of €0 ($0) and €111,111 ($115,011) as of December 31, 2025 and December 31 2024, respectively.

Previous wording

On July 30, 2021, the Company entered into an agreement with a third-party lender in the principal amount of €500,000 ($578,850). The note matures on August 5, 2026 and bears an annual interest rate that applies to 60% of the principal of the note that is based on a 365-day year, of 5.84% plus 3-month Euribor when Euribor is positive (2.92% as of December 31, 2023). Pursuant to the terms of the agreement, there is a nine-month grace period for principal repayment during which interest is accrued. The principal is to be repaid in 18 quarterly installments of €27,778 commencing three months from the end of the grace period During the year ended December 31, 2023, the Company repaid €105,747 ($109,459) of the principal. As of December 31, 2023, the Company had accrued interest of €10,905 ($12,063), principal of €316,900 ($350,555), of which $227,065 is classified as “Notes payable – long term portion” on the accompanying consolidated balance sheets. During the year ended December 31, 2024, the Company repaid €109,926 ($113,784) of the principal. As of December 31, 2024, the Company had accrued interest of €15,778 ($16,332), principal of €206,343 ($213,585), of which $94,612 is classified as “Notes payable – long term portion” on the accompanying consolidated balance sheets.

Current wording

On July 30, 2021, the Company entered into an agreement with a third-party lender in the principal amount of €500,000 ($578,850). The note matures on August 5, 2026 and bears an annual interest rate that applies to 60% of the principal of the note that is based on a 365-day year, of 5.84% plus 3-month Euribor when Euribor is positive (2.06% as of December 31, 2025). Pursuant to the terms of the agreement, there is a nine-month grace period for principal repayment during which interest is accrued. The principal is to be repaid in 18 quarterly installments of €27,778 commencing three months from the end of the grace period During the year ended December 31, 2025, the Company repaid €105,747 ($109,459) of the principal. As of December 31, 2025, the Company had accrued interest of €20,038 ($23,517), principal of €90,345 ($106,029), of which $0 is classified as “Notes payable – long term portion” on the accompanying consolidated balance sheets. As of December 31, 2024, the Company had accrued interest of €15,778 ($16,332), principal of €206,343 ($213,585). During the year ended December 31, 2025, the Company repaid €115,998 ($136,135) of the principal.

Previous wording

On June 9, 2022, the Company entered into an agreement with a third-party lender in the principal amount of €320,000 ($335,008). The note matures on June 16, 2027 and bears an annual interest rate of 3.89% plus an additional rate of 0.60%, plus the 3-month Euribor (2.92% as of December 31, 2024). Pursuant to the agreement, there is a 12-month grace period for principal repayment during which interest is accrued. The principal is to be repaid in 17 equal quarterly installments of €18,824. During the year ended December 31, 2024, the Company repaid €80,000 ($82,808) of the principal. As of December 31, 2024 and 2023 the Company has accrued interest of €8,352 ($8,645)and €11,043 ($12,215), respectively, and an outstanding balance of €180,000 ($186,318) of which $103,510 and $204,322, respectively, are classified as “Notes payable – long term portion” on the accompanying consolidated balance sheets.

Current wording

On June 9, 2022, the Company entered into an agreement with a third-party lender in the principal amount of €320,000 ($335,008). The note matures on June 16, 2027 and bears an annual interest rate of 2.64% plus an additional rate of 0.60%, plus the 3-month Euribor (2.06% as of December 31, 2025). Pursuant to the agreement, there is a 12-month grace period for principal repayment during which interest is accrued. The principal is to be repaid in 17 equal quarterly installments of €18,824. During the year ended December 31, 2025, the Company repaid €80,000 ($93,888) of the principal. As of December 31, 2025 the Company had accrued interest of €4,262 ($5,002) and an outstanding balance of €100,000 ($117,360) of which $23,472 is classified as “Notes payable – long term portion” on the accompanying consolidated balance sheets. As of December 31, 2024 the outstanding balance was €180,000 ($186,318).

Previous wording

On July 14, 2023, the Company entered into an agreement with a third-party lender in the principal amount of €1,000,000 ($1,123,700). The note matures on July 31, 2028, and bears an annual interest rate of 2.46% plus the 3-month Euribor (2.92% as of December 31, 2024). Pursuant to the agreement, there is a nine-month grace period for interest and principal repayment. The principal is to be repaid in 18 equal quarterly installments of €55,556 commencing on May 2, 2024. During the year ended December 31, 2024, the Company repaid €162,950 ($168,670) of the principal. As of December 31, 2024 and 2023, the Company has accrued interest of €16,735 ($17,322) and €19,820 ($21,925), respectively, and an outstanding balance of €814,750 ($843,348) and $€977,00 ($1,081,532), of which $618,616 and $897,864, respectively, are classified as “Notes payable – long term portion” on the accompanying consolidated balance sheets.

Current wording

On July 14, 2023, the Company entered into an agreement with a third-party lender in the principal amount of €1,000,000 ($1,123,700). The note matures on July 31, 2028, and bears an annual interest rate of 4.1% plus the 3-month Euribor (2.06% as of December 31, 2025). Pursuant to the agreement, there is a nine-month grace period for interest and principal repayment. The principal is to be repaid in 18 equal quarterly installments of €55,556 commencing on May 2, 2024. During the year ended December 31, 2025, the Company repaid €217,267 ($254,984) of the principal. As of December 31, 2025, the Company has accrued interest of €19,879 ($23,330) and an outstanding balance of €597,483 ($701,206) of which $446,405 is classified as “Notes payable – long term portion” on the accompanying consolidated balance sheets. As of December 31, 2024 the outstanding balance was €814,750 ($843,348).

Previous wording

On January 23, 2024, the Company completed the acquisition of Cloudscreen, a cutting-edge Artificial Intelligence (AI) powered platform. The acquisition is pursuant to the purchase agreement announced on October 11, 2023. Cloudscreen is a multimodal platform specialized in drug repurposing, a process that involves uncovering new target proteins or indications for existing drugs for use in treating different diseases. The total purchase price amounted to $637,080 and consisted of 280,000 shares of common stock with a fair value of $319,200 and an amount of $317,880 to be settled in cash during 2024 based on the Promissory Note signed on October 10, 2023. As of December 31, 2024, and December 31, 2023, the Company had an outstanding balance of $279,348 and $317,880 all of which is classified as “Notes payable” on the accompanying consolidated balance sheets.

Current wording

On January 23, 2024, the Company completed the acquisition of Cloudscreen, a cutting-edge Artificial Intelligence (AI)-powered platform, pursuant to the purchase agreement announced on October 11, 2023. Cloudscreen is a multimodal platform specialized in drug repurposing, a process that involves identifying 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 the Company's common stock with a fair value of $319,200 and $317,880 to be settled in cash pursuant to the Promissory Note signed on October 10, 2023.

Previous wording

On July 29, 2024 the Company entered into an agreement with a third-party lender in the principal amount of €400,000 ($432,760). The note matures on July 31, 2029 and bears an annual interest rate of 2.58% plus the 3-month Euribor (2.92% as of December 31, 2024). Pursuant to the agreement, there is a six-month grace period for principal and interest repayment. The principal is to be repaid in 18 equal quarterly installments of €22,222 commencing on April 30, 2025. During the 12 months ended December 31, 2024, the Company repaid no principal and accrued interest of €5,957 ($6,445). As of December 31, 2024, and December 31, 2023, the Company had an outstanding balance of €400,000 ($414,040) and €0 ($0), of which $345,033 is classified as “Notes payable - long term portion” on the accompanying consolidated balance sheets.

Current wording

On July 29, 2024 the Company entered into an agreement with a third-party lender in the principal amount of €400,000 ($432,760). The note matures on July 31, 2029 and bears an annual interest rate of 2.58% plus the 3-month Euribor (2.06% as of December 31, 2025). Pursuant to the agreement, there is a six-month grace period for principal and interest repayment. The principal is to be repaid in 18 equal quarterly installments of €22,222 commencing on April 30, 2025. During the year ended December 31, 2025, the Company repaid principal of €44,444 ($52,160). As of December 31, 2025, and December 31, 2024, the Company had an outstanding balance of €355,556 ($417,080) and €400,000 ($414,040) of which $312,960 is classified as “Notes payable - long term portion” on the accompanying consolidated balance sheets.

Previous wording

On December 20, 2024 the Company entered into an agreement with a third-party lender in the principal amount of €400,000 ($414,040). The note matures on December 20, 2027, and bears an annual interest rate of 6% (including the 3-month Euribor of 2.92% as of December 31, 2024). Pursuant to the agreement, there is a six-month grace period for principal repayment. The principal is to be repaid in 6 equal semiannual installments of €66,667 commencing on June 20, 2025. During the 12 months ended December 2024, the Company repaid no principal and had not accrued any interest. As of December 31, 2024, and December 31, 2023, the Company an outstanding balance of €400,000 ($414,040) and €0 ($0), of which $276,027 is classified as “Notes payable - long term portion” on the accompanying consolidated balance sheets.

Current wording

On December 20, 2024 the Company entered into an agreement with a third-party lender in the principal amount of €400,000 ($414,040). The note matures on December 20, 2027 and bears an annual interest rate of 2.5% plus an additional rate of 0.60% plus the 3-month Euribor (2.06% as of December 31, 2025). Pursuant to the agreement, there is a six-month grace period for principal repayment. The principal is to be repaid in 6 equal semiannual installments of €66,667 commencing on June 20, 2025. During the 12 months ended December 2025, the Company repaid principal of €133,333($156,480). As of December 31, 2025, and December 31, 2024, the Company an outstanding balance of €266,667 ($312,960) and €400,000 ($414,040), of which $156,480 is classified as “Notes payable - long term portion” on the accompanying consolidated balance sheets.

Previous wording

On December 21, 2022, the USD Loan was assigned to GIB Fund Solutions ICAV (the “Fund”). On January 31, 2023, the Company paid $1,100,000 to the Fund under a full and final settlement agreement for the USD Loan, recording a gain on extinguishment of debt of $306,637 relating to the waiver of the unpaid balance. Additionally, the Company repaid €50,000 ($50,310) of the EURO Loan during the year ended December 31, 2023. As of December 31, 2023, the Company had an outstanding principal balance of €1,725,000 ($1,908,195), of which $1,327,440 is classified as “Notes payable – long term portion” on the consolidated balance sheets. As of December 31, 2023, the Company had accrued $161,274 in interest expense related to these agreements.

Current wording

On December 21, 2022, the USD Loan was assigned to GIB Fund Solutions ICAV (the “Fund”). On January 31, 2023, the Company paid $1,100,000 to the Fund under a full and final settlement agreement for the USD Loan, recording a gain on extinguishment of debt of $306,637 relating to the waiver of the unpaid balance. Additionally, the Company repaid €50,000 ($50,310) of the EURO Loan during the year ended December 31, 2024.

Previous wording

The Company repaid €375,000 ($388,163) of the EURO Loan during the 12 months ended December 31, 2024. As of December 31, 2024, the Company had an outstanding principal balance of €1,350,000 ($1,397,385), all of which $1,086,638 is classified as “Notes payable” on the consolidated balance sheets. For the 12 months ended December 31, 2024, the Company had accrued $155,822, in interest expense related to these agreements.

Current wording

The Company repaid €300,000 ($352,080) of the EURO Loan during the 12 months ended December 31, 2025. As of December 31, 2025, the Company had an outstanding principal balance of €1,050,000 ($1,232,280), all of which is classified as “Notes payable” on the consolidated balance sheets. For the year ended December 31, 2025, the Company had accrued $113,962, in interest expense related to these agreements.

Previous wording

On May 12, 2020, the Company’s subsidiary, SkyPharm, was granted loan from the Greek government and, on May 22, 2020, received the amount of €300,000 ($366,900). The loan would be repaid in 40 equal monthly installments beginning on July 29, 2022. As a condition to the loan, the Company was required to retain the same number of employees until October 31, 2020. As of December 31, 2023, the principal balance was €121,875 ($134,818). During the year ended December 31, 2024, the Company repaid €18,750 ($19,408) of the principal balance. The outstanding balance is €103,125 ($106,745) as of December 31, 2024.

Current wording

On May 12, 2020, the Company’s subsidiary, SkyPharm, was granted loan from the Greek government and, on May 22, 2020, received the amount of €300,000 ($366,900). The loan would be repaid in 40 equal monthly installments beginning on July 29, 2022. As a condition to the loan, the Company was required to retain the same number of employees until October 31, 2020. As of December 31, 2025, the principal balance was €87,500 ($102,690). During the year ended December 31, 2025, the Company repaid €15,625 ($18,338) of the principal balance. The outstanding balance as of December 31, 2024 was €103,125 ($106,745).

Previous wording

On June 24, 2020, the Company’s subsidiary, Decahedron, received a loan £50,000 ($68,310) from the UK government. The loan has a ten-year maturity and bears interest at a rate of 2.5% per annum beginning 12 months after the initial disbursement, which was on July 10, 2020. The Company may prepay this loan without penalty at any time. As of December 31, 2023, the principal balance was £40,858 ($52,066). As of December 31, 2024, the principal balance was £38,144 ($47,761).

Current wording

On June 24, 2020, the Company’s subsidiary, Decahedron, received a loan £50,000 ($68,310) from the UK government. The loan has a ten-year maturity and bears interest at a rate of 2.5% per annum beginning 12 months after the initial disbursement, which was on July 10, 2020. The Company may prepay this loan without penalty at any time. As of December 31, 2025, the principal balance was £34,330 ($46,164). As of December 31, 2024, the principal balance was £38,144 ($47,761).

Previous wording

During the 12-month period ended December 31, 2023, the Company had an outstanding principal balance under these loans of $13,257 in loans payable to Grigorios Siokas. As of December 31, 2024, the Company had an outstanding principal balance of $8,594 related to this payable. During the 12-month period ended December 31, 2024, the Company received $46,232 and repaid $49,842 of such loans.

Current wording

During the 12-month period ended December 31, 2024, the Company had an outstanding principal balance under these loans of $13,257 in loans payable to Grigorios Siokas. As of December 31, 2025, the Company had an outstanding principal balance of $0 related to this payable. During the 12-month period ended December 31, 2025, there were no additional receipts regarding this loan.

Previous wording

On November 21, 2014, the Company entered into an agreement with Dimitrios Goulielmos, as amended on November 4, 2016. Pursuant to the amendment, this loan has no maturity date and is non-interest bearing. As of December 31, 2024 and 2023, the Company had a principal balance of €10,200 ($10,558) and €10,200 ($11,283), respectively.

Current wording

On November 21, 2014, the Company entered into an agreement with Dimitrios Goulielmos, as amended on November 4, 2016. Pursuant to the amendment, this loan has no maturity date and is non-interest bearing. As of December 31, 2024 and 2023, the Company had a principal balance of €10,200 ($11,971) and €10,200 ($10,558), respectively. The above balances are adjusted for the foreign currency rate as of the balance sheet date.

Previous wording

The Company has net operating loss carry-forwards in our parent, Cosmos Health Inc., which are applicable to future taxable income in the United States (if any). Additionally, the Company has income tax liabilities in the United Kingdom. The income tax assets and liabilities are not able to be netted. We therefore reserve the income tax assets applicable to the United States but recognize the income tax liabilities in Greece and the United Kingdom. Losses may also be subject to limitation under certain rules regarding change of ownership.

Current wording

The Company has net operating loss carry-forwards in our parent, Cosmos Health Inc., which are applicable to future taxable income in the United States (if any). Additionally, the Company has income tax liabilities in the United Kingdom and Greece. The income tax assets and liabilities are not able to be netted. We therefore reserve the income tax assets applicable to the United States but recognize the income tax liabilities in Greece and the United Kingdom. Losses may also be subject to limitation under certain rules regarding change of ownership.

Previous wording

Our merchandise inventories are made up of finished goods, manufacturing products, raw materials and other products and are valued at the lower of cost or market using the weighted-average cost method. However, the net realizable value (“NRV”) will always be higher than our inventory’s cost, once most of our inventory is fast moving and the vast majority of our products is pharmaceuticals, which have standard selling prices that could not result to the NRV being higher than the average cost. Moreover, our efficient inventory management which has led to minimum obsolete and slow-moving inventory also indicates that the NRV is higher than its average cost. Thus, an NRV assessment would have no material, if any, to our inventory’s cost. Average cost includes the direct purchase price, net of vendor allowances and cash discounts, of merchandise inventory. We record valuation reserves on an annual basis for merchandise damage and defective returns, merchandise items with slow-moving or obsolescence exposure and merchandise that has a carrying value that exceeds market value. These reserves are estimates of a reduction in value to reflect inventory valuation at the lower of cost or market. The reserve for merchandise returns is based upon the determination of the historical net realizable value of products sold from our returned goods inventory or returned to vendors for credit. Our reserve for merchandise returns includes amounts for returned product on-hand as well as for new merchandise on-hand that we estimate will ultimately become returned goods inventory after being sold based on historical return rates.

Current wording

Our merchandise inventories are made up of finished goods, manufacturing products, raw materials and other products and are valued at the lower of cost or market using the weighted-average cost method. However, the net realizable value (“NRV”) will always be higher than our inventory’s cost, once most of our inventory is fast moving and the vast majority of our products is pharmaceuticals, which have standard selling prices that could not result to the NRV being higher than the average cost. Moreover, our efficient inventory management which has led to minimum obsolete and slow-moving inventory also indicates that the NRV is higher than its average cost. Thus, an NRV assessment would have no material, if any, to our inventory’s cost. Average cost includes the direct purchase price, net of vendor allowances and cash discounts, of merchandise inventory. We record valuation reserves on an annual basis for merchandise damage, expired and defective returns and merchandise items with slow-moving or obsolescence exposure. These reserves are estimates of a reduction in value to reflect inventory valuation at the lower of cost or market. The reserve for merchandise returns is based upon the determination of the historical net realizable value of products sold from our returned goods inventory or returned to vendors for credit. Our reserve for merchandise returns includes amounts for returned product on-hand as well as for new merchandise on-hand that we estimate will ultimately become returned goods inventory after being sold based on historical return rates.

Previous wording

In December 2023, the FASB issued Accounting Standards Update (“ASU”) 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. This guidance is intended to enhance the transparency and decision-usefulness of income tax disclosures. The amendments in ASU 2023-09 address investor requests for enhanced income tax information primarily through changes to disclosure regarding rate reconciliation and income taxes paid both in the U.S. and in foreign jurisdictions. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, on a prospective basis, with the option to apply the standard retrospectively. Early adoption is permitted. The Company is currently evaluating this guidance to determine the impact it may have on its consolidated financial statements disclosures.

Current wording

In December 2023, the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The amendments enhance the transparency and decision usefulness of income tax disclosures by requiring additional information about the effective tax rate reconciliation and income taxes paid by jurisdiction. The amendments are effective for public business entities for annual periods beginning after December 15, 2024. The Company adopted this guidance on January 1, 2025. The adoption of this standard did not have a material impact on the Company’s consolidated financial statements.