cosm_10q.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2024

☐ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT

For the transition period from __________ to __________

Commission file number: 000-54436

COSMOS HEALTH INC.

(Exact name of registrant as specified in its charter)

Nevada		27-0611758
(State or other jurisdiction of Company or organization)		(I.R.S. Employer Identification No.)

5 Agiou Georgiou Str, Pilea, Thessaloniki, Greece		55438
(Address of principal executive offices)		(Zip Code)

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

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

Title of each class		Name of each exchange on which registered
Common Stock, par value $0.001		The Nasdaq Capital Market

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

Title of each class		Name of each exchange on which registered

Check whether the Issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. 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.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated Filer	☐	Smaller reporting company	☒
(Do not check if a smaller reporting company)		Emerging growth company	☐

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

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

Applicable only to Corporate Issuers:

Indicate the number of shares outstanding of each of the issuers’ classes of common stock, as of the latest practicable date: 17,834,023 as of August 19, 2024.

TABLE OF CONTENTS

PART I

Item 1.	Financial Statements (Unaudited).	3

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	39

Item 3.	Quantitative and Qualitative Disclosures about Market Risk.	50

Item 4.	Controls and Procedures.	50

PART II

Item 1.	Legal Proceedings.	52

Item 1A.	Risk Factors.	52

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	52

Item 3.	Defaults Upon Senior Securities.	52

Item 4.	Mine Safety Disclosures.	52

Item 5.	Other Information.	52

Item 6.	Exhibits.	53

SIGNATURES		54

Table of Contents

Item 1. Financial Statements and Supplementary Data

COSMOS HEALTH INC.
CONDENSED CONSOLIDATED BALANCE SHEETS

	March 31, 2024			December 31, 2023
	(Unaudited)
ASSETS

CURRENT ASSETS:
Cash and cash equivalents	$	865,099		$	3,833,195
Accounts receivable, net		19,070,104			19,759,254
Accounts receivable - related party		1,418,267			1,099,098
Marketable securities		21,328			20,075
Inventory		4,871,349			4,789,054
Loans receivable		407,318			411,858
Loans receivable - related party		431,640			442,480
Prepaid expenses and other current assets		1,895,857			1,811,911
Prepaid expenses and other current assets - related party		5,305,981			4,440,855

TOTAL CURRENT ASSETS		34,286,943			36,607,780

Property and equipment, net		10,170,328			10,455,499
Goodwill and intangible assets, net		7,962,908			7,684,183
Loans receivable - long term portion		3,319,296			3,509,200
Loans receivable - related party - long term		3,345,210			3,539,840
Operating lease right-of-use asset		772,949			1,131,552
Financing lease right-of-use asset		36,465			28,790
Advances for building's acquisition		2,000,020			2,000,020
Other assets		451,076			1,057,947

TOTAL ASSETS	$	62,345,195		$	66,014,811

LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
Accounts payable and accrued expenses	$	11,080,006			11,911,978
Accounts payable and accrued expenses - related party		547,897			231,564
Accrued interest		100,288			166,348
Lines of credit		6,426,197			6,630,273
Notes payable		1,445,303			1,570,886
Notes payable - related party		11,007			11,283
Loans payable - related party		5,379			13,257
Operating lease liability, current portion		262,967			285,563
Financing lease liability, current portion		30,193			27,222
Other current liabilities		3,646,959			3,474,096

TOTAL CURRENT LIABILITIES		23,556,196			24,322,470

Share settled debt obligation		-
Notes payable - long term portion		2,700,349			3,035,341
Operating lease liability, net of current portion		508,887			844,866
Financing lease liability, net of current portion		10,129			5,261
Other liabilities		1,022,952			1,763,845
TOTAL LIABILITIES		27,798,513			29,971,783

Commitments and Contingencies (see Note 14)		-			-

STOCKHOLDERS' EQUITY:
Common stock, $0.001 par value; 300,000,000 shares authorized; 17,834,023 and 15,982,472 shares issued and 17,747,526 and 15,895,975 outstanding as of March 31, 2024 and December 31, 2023, respectively		17,834			15,983
Additional paid-in capital		129,976,070			129,008,301
Subscription receivable		(20	)		(20	)
Treasury stock, at cost, 86,497 shares as of March 31, 2024, and December 31, 2023		(917,159	)		(917,159	)
Accumulated deficit		(93,510,923	)		(91,644,233	)
Accumulated other comprehensive loss		(1,019,120	)		(419,844	)

TOTAL STOCKHOLDERS' EQUITY		34,546,682			36,043,028

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	62,345,195		$	66,014,811

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

Table of Contents

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

	Three Months Ended March 31,
	2024			2023

REVENUE	$	14,584,473		$	12,349,777

COST OF GOODS SOLD		13,250,847			11,392,700

GROSS PROFIT		1,333,626			957,077

OPERATING EXPENSES
General and administrative expenses		1,418,138			2,089,014
Salaries and wages		1,258,179			949,451
Sales and marketing expenses		173,630			467,263
Depreciation and amortization expense		319,787			102,521
TOTAL OPERATING EXPENSES		3,169,734			3,608,249

LOSS FROM OPERATIONS		(1,836,108	)		(2,651,172	)

OTHER INCOME (EXPENSE)
Other income, net		191,824			5,743
Interest expense		(168,672	)		(134,373	)
Interest income		105,765			183,416
Gain on equity investments, net		1,755			1,293
Gain on extinguishment of debt		-			1,908,513
Change in fair value of derivative liability		-			3,384
Foreign currency transaction, net		(161,254	)		196,035
TOTAL OTHER INCOME (EXPENSE), NET		(30,582	)		2,164,011

LOSS BEFORE INCOME TAXES		(1,866,690	)		(487,161	)

INCOME TAX EXPENSE		-			27,298

NET LOSS		(1,866,690	)		(459,863	)

Deemed dividend on issuance of warrants

NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS		(1,866,690	)		(459,863	)

OTHER COMPREHENSIVE INCOME (LOSS)
Foreign currency translation adjustment, net		(599,276	)		336,463

TOTAL COMPREHENSIVE LOSS	$	(2,465,966	)	$	(123,400	)

BASIC NET LOSS PER SHARE	$	(0.11	)	$	(0.04	)
DILUTED NET LOSS PER SHARE	$	(0.11	)	$	(0.04	)

WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING
Basic		16,851,747			10,615,075
Diluted		16,851,747			10,615,075

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

Table of Contents

COSMOS HEALTH INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY AND MEZZANINE EQUITY

SEC Form 10-Q filed by Cosmos Health Inc.