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STATES**\n\n**SECURITIES AND EXCHANGE COMMISSION**\n\n**WASHINGTON, D.C. 20549**\n\n \n\n**FORM 10-Q**\n\n \n\n**☒******\n\n**QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**\n\n \n\nFor the quarterly period ended **March 31, 2026**\n\n \n\n☐\n\n**TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT**\n\n \n\nFor the transition period from __________ to __________\n\n \n\nCommission file number: **000-54436**\n\n \n\n**COSMOS HEALTH INC.**\n\n(Exact name of registrant as specified in its charter)\n\n \n\n**Nevada**\n\n \n\n**27-0611758**\n\n(State or other jurisdiction of\n\nCompany or organization)\n\n \n\n(I.R.S. Employer\n\nIdentification No.)\n\n \n\n**5 Agiou Georgiou Str, Pilea, Thessaloniki, Greece**\n\n \n\n**55438**\n\n(Address of principal executive offices)\n\n \n\n(Zip Code)\n\n \n\nRegistrant’s telephone number: **(312) 536-3102**\n\n \n\nSecurities registered under Section 12(b) of the Exchange Act:\n\n \n\nTitle of each class\n\n \n\nName of each exchange on which registered\n\n**Common Stock, par value $0.001**\n\n**The Nasdaq Capital Market**\n\n \n\nSecurities registered under Section 12(g) of the Exchange Act:\n\n \n\nTitle of each class\n\n \n\nName of each exchange on which registered\n\n \n\nCheck 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 ☐\n\n \n\nIndicate 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 ☐\n\n \n\nIndicate 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.\n\n \n\nLarge accelerated filer\n\n☐\n\nAccelerated filer\n\n☐\n\nNon-accelerated Filer\n\n☐\n\nSmaller reporting company\n\n☒\n\n(Do not check if a smaller reporting company) \n\nEmerging growth company\n\n☐\n\n \n\nIf 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. ☐\n\n \n\nIndicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐     No ☒\n\n \n\nApplicable only to Corporate Issuers:\n\n \n\nIndicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 54,428,491 as of May 18, 2026.\n\n \n\n \n\n \n\n**TABLE OF CONTENTS**\n\n \n\nPART I\n\n[Item 1.](#I1)\n\n[Condensed Consolidated Financial Statements (Unaudited).](#I1)\n\n3\n\n \n\n[Item 2.](#I2)\n\n[Management’s Discussion and Analysis of Financial Condition and Results of Operations.](#I2)\n\n45\n\n \n\n[Item 3.](#I3)\n\n[Quantitative and Qualitative Disclosures about Market Risk.](#I3)\n\n56\n\n \n\n \n\n \n\n \n\n \n\n[Item 4.](#I4)\n\n[Controls and Procedures.](#I4)\n\n \n\n56\n\n \n\n \n\n[PART II](#P2)\n\n \n\n[Item 1.](#IT1)\n\n[Legal Proceedings.](#IT1)\n\n58\n\n \n\n[Item 1A.](#IT1A)\n\n[Risk Factors.](#IT1A)\n\n58\n\n \n\n[Item 2.](#IT2)\n\n[Unregistered Sales of Equity Securities and Use of Proceeds](#IT2)\n\n58\n\n \n\n[Item 3.](#IT3)\n\n[Defaults Upon Senior Securities.](#IT3)\n\n58\n\n[Item 4.](#IT4)\n\n[Mine Safety Disclosures.](#IT4)\n\n58\n\n[Item 5.](#IT5)\n\n[Other Information.](#IT5)\n\n58\n\n \n\n[Item 6.](#IT6)\n\n[Exhibits.](#IT6)\n\n59\n\n \n\n[SIGNATURES](#SIG)\n\n \n\n60\n\n \n\n \n\n2\n\n*Table of Contents*\n\n   \n\n**COSMOS HEALTH INC.**\n\n**UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS**\n\n \n\n \n\n \n\n**March 31,**\n\n**2026**\n\n \n\n \n\n**December 31,**\n\n**2025**\n\n \n\n \n\n \n\n \n\n \n\n \n\n (Audited)\n\n \n\n**ASSETS**\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n**CURRENT ASSETS:**\n\n \n\n \n\n \n\n \n\n \n\n \n\nCash and cash equivalents\n\n \n$514,702\n \n\n \n$715,674\n \n\nRestricted cash\n\n \n\n \n1,644,219\n \n\n \n\n \n2,744,219\n \n\nAccounts receivable, net\n\n \n\n \n18,186,637\n \n\n \n\n \n19,628,825\n \n\nAccounts receivable - related party\n\n \n\n \n2,365,955\n \n\n \n\n \n2,443,975\n \n\nMarketable securities\n\n \n\n \n34,225\n \n\n \n\n \n46,158\n \n\nInventory\n\n \n\n \n5,650,458\n \n\n \n\n \n5,778,142\n \n\nLoans receivable\n\n \n\n \n485,191\n \n\n \n\n \n487,638\n \n\nLoans receivable - related party\n\n \n\n \n-\n \n\n \n\n \n-\n \n\nPrepaid expenses and other current assets\n\n \n\n \n2,336,367\n \n\n \n\n \n2,007,442\n \n\nPrepaid expenses and other current assets - related party\n\n \n\n \n5,671,568\n \n\n \n\n \n4,536,183\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n**TOTAL CURRENT ASSETS**\n\n \n\n \n**36,889,322**\n \n\n \n\n \n**38,388,256**\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nProperty and equipment, net\n\n \n\n \n10,280,203\n \n\n \n\n \n10,578,858\n \n\nGoodwill and intangible assets, net\n\n \n\n \n7,225,011\n \n\n \n\n \n7,569,695\n \n\nDigital assets\n\n \n\n \n2,068,645\n \n\n \n\n \n1,411,084\n \n\nLoans receivable - long term portion\n\n \n\n \n3,120,197\n \n\n \n\n \n3,146,201\n \n\nLoans receivable - related party - long term\n\n \n\n \n-\n \n\n \n\n \n-\n \n\nOperating lease right-of-use asset\n\n \n\n \n669,144\n \n\n \n\n \n596,779\n \n\nFinancing lease right-of-use asset\n\n \n\n \n2,127\n \n\n \n\n \n3,831\n \n\nAdvances for building's acquisition\n\n \n\n \n200,191\n \n\n \n\n \n600,000\n \n\nOther assets\n\n \n\n \n1,107,911\n \n\n \n\n \n1,539,774\n \n\nOther assets - related party\n\n \n\n \n806,260\n \n\n \n\n \n1,643,040\n \n\n**TOTAL ASSETS**\n\n \n**$****62,369,011**\n \n\n \n**$****65,477,518**\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n**LIABILITIES AND STOCKHOLDERS' EQUITY**\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n**CURRENT LIABILITIES:**\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nAccounts payable and accrued expenses\n\n \n$13,938,594\n \n\n \n$14,624,006\n \n\nAccounts payable and accrued expenses - related party\n\n \n\n \n878,507\n \n\n \n\n \n2,002,470\n \n\nAccrued interest\n\n \n\n \n871,960\n \n\n \n\n \n786,497\n \n\nLines of credit\n\n \n\n \n7,856,208\n \n\n \n\n \n9,177,684\n \n\nNotes payable\n\n \n\n \n2,111,574\n \n\n \n\n \n2,191,274\n \n\nNotes payable - related party\n\n \n\n \n11,748\n \n\n \n\n \n11,971\n \n\nConvertible notes payable\n\n \n\n \n646,963\n \n\n \n\n \n2,137,804\n \n\nDerivative liability - convertible note\n\n \n\n \n1,060,230\n \n\n \n\n \n1,292,198\n \n\nOperating lease liability, current portion\n\n \n\n \n204,588\n \n\n \n\n \n222,115\n \n\nFinancing lease liability, current portion\n\n \n\n \n1,907\n \n\n \n\n \n3,854\n \n\nOther current liabilities\n\n \n\n \n6,494,556\n \n\n \n\n \n5,821,971\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n**TOTAL CURRENT LIABILITIES**\n\n \n\n \n**34,076,835**\n \n\n \n\n \n**38,271,844**\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nNotes payable - long term portion\n\n \n\n \n1,339,023\n \n\n \n\n \n1,584,063\n \n\nConvertible notes payable - long term portion\n\n \n\n \n4,785,274\n \n\n \n\n \n4,267,774\n \n\nOperating lease liability, net of current portion\n\n \n\n \n463,388\n \n\n \n\n \n373,473\n \n\nOther liabilities\n\n \n\n \n1,878,132\n \n\n \n\n \n2,555,735\n \n\n**TOTAL LIABILITIES**\n\n \n\n \n**42,542,652**\n \n\n \n\n \n**47,052,889**\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n**Commitments and Contingencies (see Note 14)**\n\n \n\n \n-\n \n\n \n\n \n-\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n**STOCKHOLDERS' EQUITY:**\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nCommon stock, $0.001 par value;1,500,000,000 shares authorized; 41,153,809 and 23,689,135 shares issued and 41,067,312 and 23,602,638 outstanding as of December 31, 2025 and December 31, 2024, respectively\n\n \n\n \n49,868\n \n\n \n\n \n41,154\n \n\nAdditional paid-in capital\n\n \n\n \n156,629,904\n \n\n \n\n \n152,136,404\n \n\nTreasury stock, at cost, 86,497 shares as of December 31, 2025 and December 31, 2024\n\n \n\n \n(917,159)\n \n\n \n(917,159)\n\nAccumulated deficit\n\n \n\n \n(135,972,696)\n \n\n \n(133,167,273)\n\nAccumulated other comprehensive income/(loss)\n\n \n\n \n36,442\n \n\n \n\n \n331,503\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n**TOTAL STOCKHOLDERS' EQUITY**\n\n \n\n \n**19,826,359**\n \n\n \n\n \n**18,424,629**\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n**TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY**\n\n \n**$****62,369,011**\n \n\n \n**$****65,477,518**\n \n\n \n\nThe accompanying notes are an integral part of these unaudited condensed consolidated financial statements.\n\n \n\n \n\n3\n\n*Table of Contents*\n\n \n\n**COSMOS HEALTH INC.**\n\n**UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS**\n\n \n\n \n\n \n\n**Three months ended**\n\n**March 31,**\n\n \n\n \n\n \n\n**2026**\n\n \n\n \n\n**2025**\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n**REVENUE**\n\n \n\n$ \n17,927,892\n \n\n \n$13,712,528\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n**COST OF GOODS SOLD**\n\n \n\n \n16,546,721\n \n\n \n\n \n11,662,729\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n**GROSS PROFIT**\n\n \n\n \n1,381,171\n \n\n \n\n \n2,049,799\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n**OPERATING EXPENSES**\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nGeneral and administrative expenses\n\n \n\n \n1,800,162\n \n\n \n\n \n1,478,702\n \n\nSalaries and wages\n\n \n\n \n1,397,657\n \n\n \n\n \n1,040,019\n \n\nSales and marketing expenses\n\n \n\n \n19,352\n \n\n \n\n \n28,155\n \n\nResearch and development costs\n\n \n\n \n-\n \n\n \n\n \n15,629\n \n\nDepreciation and amortization expense\n\n \n\n \n348,179\n \n\n \n\n \n320,439\n \n\n**TOTAL OPERATING EXPENSES**\n\n \n\n \n3,565,350\n \n\n \n\n \n2,882,944\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n**LOSS FROM OPERATIONS**\n\n \n\n \n(2,184,179)\n \n\n \n(833,145)\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n**OTHER INCOME (EXPENSE)**\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nOther income (expense), net\n\n \n\n \n441,062\n \n\n \n\n \n(68,137)\n\nInterest expense\n\n \n\n \n(423,229)\n \n\n \n(187,107)\n\nInterest income\n\n \n\n \n46,673\n \n\n \n\n \n91,326\n \n\nGain on equity investments, net\n\n \n\n \n(11,252)\n \n\n \n3,142\n \n\nNon-cash interest expense\n\n \n\n \n(390,350)\n \n\n \n-\n \n\nChange in fair value of derivative liability\n\n \n\n \n231,968\n \n\n \n\n \n-\n \n\nGain/(Loss) on digital assets\n\n \n\n \n(442,439)\n \n\n \n-\n \n\nChange in fair value of convertible notes\n\n \n\n \n239,480\n \n\n \n\n \n-\n \n\nForeign currency transaction, net\n\n \n\n \n(313,157)\n \n\n \n175,824\n \n\n**TOTAL OTHER INCOME (EXPENSE), NET**\n\n \n\n \n(621,244)\n \n\n \n15,048\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n**LOSS BEFORE INCOME TAXES**\n\n \n\n \n(2,805,423)\n \n\n \n(818,097)\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n**INCOME TAX EXPENSE**\n\n \n\n \n-\n \n\n \n\n \n-\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n**NET LOSS**\n\n \n\n \n(2,805,423)\n \n\n \n(818,097)\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n**NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS**\n\n \n\n \n(2,805,423)\n \n\n \n(818,097)\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n**OTHER COMPREHENSIVE INCOME (LOSS)**\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nForeign currency translation adjustment, net\n\n \n\n \n(295,061)\n \n\n \n1,031,268\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n**TOTAL COMPREHENSIVE LOSS**\n\n \n\n$ \n(3,100,484)\n \n$213,171\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n**BASIC NET LOSS PER SHARE**\n\n \n\n$ \n(0.06)\n \n$(0.03)\n\n**DILUTED NET LOSS PER SHARE**\n\n \n\n$ \n(0.06)\n \n$(0.03)\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n**WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING**\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n**Basic**\n\n \n\n \n47,087,621\n \n\n \n\n \n26,037,608\n \n\n**Diluted**\n\n \n\n \n47,087,621\n \n\n \n\n \n26,037,608\n \n\n \n\nThe accompanying notes are an integral part of these unaudited condensed consolidated financial statements.\n\n \n\n \n\n4\n\n*Table of Contents*\n\n \n\n**COSMOS HEALTH INC.**\n\n**UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY**\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n** Accumulated**\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n**Additional**\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n**Other**\n\n \n\n \n\n**Total**\n\n \n\n \n\n \n\n**Common Stock**\n\n \n\n \n\n**Paid-in**\n\n \n\n \n\n** Subscription**\n\n \n\n \n\n**Treasury Stock**\n\n \n\n \n\n**Accumulated**\n\n \n\n \n\n**Comprehensive Income/**\n\n \n\n \n\n**Stockholders'**\n\n \n\n \n\n \n\n**No. of Shares**\n\n \n\n \n\n**Value**\n\n \n\n \n\n**Capital**\n\n \n\n \n\n** Receivable**\n\n \n\n \n\n**No. of Shares**\n\n \n\n \n\n**Value**\n\n \n\n \n\n**Deficit**\n\n \n\n \n\n**(Loss)**\n\n \n\n \n\n**Equity**\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n**Balance at January 1, 2025**\n\n \n\n \n23,689,135\n \n\n \n\n$ \n23,689\n \n\n \n$141,583,625\n \n\n \n$(20)\n \n\n \n86,497\n \n\n \n$(917,159)\n \n$(114,022,275)\n \n$(2,134,931)\n \n$24,532,930\n \n\nForeign currency translation adjustment, net\n\n \n\n \n-\n \n\n \n\n \n-\n \n\n \n\n \n-\n \n\n \n\n \n-\n \n\n \n\n \n-\n \n\n \n\n \n-\n \n\n \n\n \n-\n \n\n \n\n \n1,031,268\n \n\n \n\n \n1,031,268\n \n\nStock-based compensation\n\n \n\n \n-\n \n\n \n\n \n-\n \n\n \n\n \n556,611\n \n\n \n\n \n-\n \n\n \n\n \n-\n \n\n \n\n \n-\n \n\n \n\n \n-\n \n\n \n\n \n-\n \n\n \n\n \n556,611\n \n\nShares issued pursuant to warrant exchange agreement\n\n \n\n \n2,542,126\n \n\n \n\n \n2,542\n \n\n \n\n \n(2,542)\n \n\n \n-\n \n\n \n\n \n-\n \n\n \n\n \n-\n \n\n \n\n \n-\n \n\n \n\n \n-\n \n\n \n\n \n-\n \n\nDebt exchanges\n\n \n\n \n1,053,372\n \n\n \n\n \n1,053\n \n\n \n\n \n647,947\n \n\n \n\n \n-\n \n\n \n\n \n-\n \n\n \n\n \n-\n \n\n \n\n \n-\n \n\n \n\n \n-\n \n\n \n\n \n649,000\n \n\nNet loss\n\n \n\n \n-\n \n\n \n\n \n-\n \n\n \n\n \n-\n \n\n \n\n \n-\n \n\n \n\n \n-\n \n\n \n\n \n-\n \n\n \n\n \n(818,097)\n \n\n \n-\n \n\n \n\n \n(818,097)\n\n**Balance at March 31, 2025**\n\n \n\n \n27,284,633\n \n\n \n$27,284\n \n\n \n$142,785,641\n \n\n \n$(20)\n \n\n \n86,497\n \n\n \n$(917,159)\n \n$(114,840,372)\n \n$(1,103,663)\n \n$25,951,712\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n **Accumulated**\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n**Additional**\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n**Other**\n\n \n\n \n\n**Total**\n\n \n\n \n\n \n\n**Common Stock**\n\n \n\n \n\n**Paid-in**\n\n \n\n \n\n**Subscription**\n\n \n\n \n\n**Treasury Stock**\n\n \n\n \n\n**Accumulated**\n\n \n\n \n\n**Comprehensive Income/**\n\n \n\n \n\n**Stockholders'**\n\n \n\n \n\n \n\n**No. of Shares**\n\n \n\n \n\n**Value**\n\n \n\n \n\n**Capital**\n\n \n\n \n\n**Receivable**\n\n \n\n \n\n**No. of Shares**\n\n \n\n \n\n**Value**\n\n \n\n \n\n**Deficit**\n\n \n\n \n\n**(Loss)**\n\n \n\n \n\n**Equity**\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n**Balance at January 1, 2026**\n\n \n\n \n41,153,809\n \n\n \n$41,154\n \n\n \n$152,136,404\n \n\n \n$-\n \n\n \n\n \n86,497\n \n\n \n$(917,159)\n \n$(133,167,273)\n \n$331,503\n \n\n \n$18,424,629\n \n\nForeign currency translation adjustment, net\n\n \n\n \n-\n \n\n \n\n \n-\n \n\n \n\n \n-\n \n\n \n\n \n-\n \n\n \n\n \n-\n \n\n \n\n \n-\n \n\n \n\n \n-\n \n\n \n\n \n(295,061)\n \n\n \n(295,061)\n\nStock-based compensation - consultants\n\n \n\n \n-\n \n\n \n\n \n-\n \n\n \n\n \n80,201\n \n\n \n\n \n-\n \n\n \n\n \n-\n \n\n \n\n \n-\n \n\n \n\n \n-\n \n\n \n\n \n-\n \n\n \n\n \n80,201\n \n\nStock-based compensation - employees\n\n \n\n \n-\n \n\n \n\n \n-\n \n\n \n\n \n455,585\n \n\n \n\n \n-\n \n\n \n\n \n-\n \n\n \n\n \n-\n \n\n \n\n \n-\n \n\n \n\n \n-\n \n\n \n\n \n455,585\n \n\nShares issued in settlement of default interest on convertible notes\n\n \n\n \n159,856\n \n\n \n\n \n160\n \n\n \n\n \n58,188\n \n\n \n\n \n-\n \n\n \n\n \n-\n \n\n \n\n \n-\n \n\n \n\n \n-\n \n\n \n\n \n-\n \n\n \n\n \n58,347\n \n\nDebt exchanges\n\n \n\n \n2,145,143\n \n\n \n\n \n2,145\n \n\n \n\n \n977,855\n \n\n \n\n \n-\n \n\n \n\n \n-\n \n\n \n\n \n-\n \n\n \n\n \n-\n \n\n \n\n \n-\n \n\n \n\n \n980,000\n \n\nProceeds from issuance of common stock, net of issuance costs\n\n \n\n \n3,985,509\n \n\n \n\n \n3,986\n \n\n \n\n \n1,773,562\n \n\n \n\n \n-\n \n\n \n\n \n-\n \n\n \n\n \n-\n \n\n \n\n \n-\n \n\n \n\n \n-\n \n\n \n\n \n1,777,548\n \n\nConversion of convertible debt into common stock\n\n \n\n \n2,423,433\n \n\n \n\n \n2,423\n \n\n \n\n \n1,148,109\n \n\n \n\n \n-\n \n\n \n\n \n-\n \n\n \n\n \n-\n \n\n \n\n \n-\n \n\n \n\n \n-\n \n\n \n\n \n1,150,533\n \n\nNet loss\n\n \n\n \n-\n \n\n \n\n \n-\n \n\n \n\n \n-\n \n\n \n\n \n-\n \n\n \n\n \n-\n \n\n \n\n \n-\n \n\n \n\n \n(2,805,423)\n \n\n \n-\n \n\n \n\n \n(2,805,423)\n\n**Balance at March 31, 2026**\n\n \n\n \n49,867,750\n \n\n \n$49,868\n \n\n \n$156,629,904\n \n\n \n$-\n \n\n \n\n \n86,497\n \n\n \n$(917,159)\n \n$(135,972,696)\n \n$36,442\n \n\n \n$19,826,359\n \n\n \n\nThe accompanying notes are an integral part of these unaudited condensed consolidated financial statements.\n\n \n\n \n\n5\n\n*Table of Contents*\n\n \n\n**COSMOS HEALTH INC.**\n\n**UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS**\n\n \n\n \n\n \n\n**Three Months Ended**\n\n**March 31,**\n\n \n\n \n\n \n\n**2026**\n\n \n\n \n\n**2025**\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n**CASH FLOWS FROM OPERATING ACTIVITIES:**\n\n \n\n \n\n \n\n \n\n \n\n \n\nNet Loss\n\n \n$(2,805,423)\n \n$(818,097)\n\nAdjustments to Reconcile Net Loss to Net Cash Used In Operating Activities:\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nDepreciation and amortization expense\n\n \n\n \n346,520\n \n\n \n\n \n315,836\n \n\nAmortization of right-of-use assets\n\n \n\n \n1,659\n \n\n \n\n \n4,603\n \n\nBad debt expense\n\n \n\n \n-\n \n\n \n\n \n(18,687)\n\nChange in fair value of derivative liability\n\n \n\n \n(231,968)\n \n\n \n-\n \n\nGain/(Loss) on crypto assets\n\n \n\n \n442,439\n \n\n \n\n \n-\n \n\nLease expense\n\n \n\n \n74,117\n \n\n \n\n \n63,236\n \n\nInterest on finance leases\n\n \n\n \n43\n \n\n \n\n \n195\n \n\nStock based compensation\n\n \n\n \n535,786\n \n\n \n\n \n556,611\n \n\nDeferred income taxes\n\n \n\n \n(3,326)\n \n\n \n7,392\n \n\nNon-cash financing expense\n\n \n\n \n448,697\n \n\n \n\n \n-\n \n\nChange in fair value of convertible notes\n\n \n\n \n(239,480)\n \n\n \n-\n \n\nGain on net change in fair value of equity investments\n\n \n\n \n11,252\n \n\n \n\n \n(3,142)\n\nInterest on loan receivable\n\n \n\n \n(39,671)\n \n\n \n-\n \n\nRevenue reversals\n\n \n\n \n375,337\n \n\n \n\n \n-\n \n\nChanges in assets and liabilities:\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nAccounts receivable, net\n\n \n\n \n755,723\n \n\n \n\n \n(170,948)\n\nAccounts receivable - related party\n\n \n\n \n33,245\n \n\n \n\n \n(134,483)\n\nInventory\n\n \n\n \n21,690\n \n\n \n\n \n(192,792)\n\nPrepaid expenses and other current assets\n\n \n\n \n154,709\n \n\n \n\n \n92,249\n \n\nPrepaid expenses and other current assets - related party\n\n \n\n \n(426,495)\n \n\n \n(134,754)\n\nAccounts payable and accrued expenses\n\n \n\n \n(514,942)\n \n\n \n83,627\n \n\nAccounts payable and accrued expenses - related party\n\n \n\n \n(133,056)\n \n\n \n(18,934)\n\nAccrued interest\n\n \n\n \n119,648\n \n\n \n\n \n23,308\n \n\nLease liabilities\n\n \n\n \n(74,118)\n \n\n \n(63,238)\n\nOther current liabilities\n\n \n\n \n720,716\n \n\n \n\n \n169,429\n \n\nOther liabilities\n\n \n\n \n(640,168)\n \n\n \n52,272\n \n\n**NET CASH USED IN OPERATING ACTIVITIES**\n\n \n\n \n(1,067,066)\n \n\n \n(186,316)\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n**CASH FLOWS FROM INVESTING ACTIVITIES:**\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nProceeds from loan receivable\n\n \n\n \n-\n \n\n \n\n \n6,734\n \n\nReturn of advances for acquisition of property\n\n \n\n \n399,809\n \n\n \n\n \n-\n \n\nPurchase of digital assets\n\n \n\n \n(1,100,000)\n \n\n \n-\n \n\nPurchase of intangible assets\n\n \n\n \n2,627\n \n\n \n\n \n(1,273)\n\nPurchase of property and equipment\n\n \n\n \n(11,399)\n \n\n \n(12,530)\n\n**NET CASH USED IN INVESTING ACTIVITIES**\n\n \n\n \n(708,963)\n \n\n \n(7,069)\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n**CASH FLOWS FROM FINANCING ACTIVITIES:**\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nProceeds from convertible note payable\n\n \n\n \n-\n \n\n \n\n \n-\n \n\nPayment of note payable\n\n \n\n \n(258,640)\n \n\n \n(184,153)\n\nProceeds from note payable\n\n \n\n \n-\n \n\n \n\n \n737,177\n \n\nPayment of related party loan\n\n \n\n \n-\n \n\n \n\n \n(6,302)\n\nProceeds from related party loan\n\n \n\n \n-\n \n\n \n\n \n-\n \n\nPayment of lines of credit\n\n \n\n \n(9,142,284)\n \n\n \n(6,756,201)\n\nProceeds from lines of credit\n\n \n\n \n7,972,951\n \n\n \n\n \n6,775,739\n \n\nProceeds from the sale of common stock\n\n \n\n \n1,832,524\n \n\n \n\n \n-\n \n\nProceeds from the exercise of warrants\n\n \n\n \n-\n \n\n \n\n \n-\n \n\nPayments of financing fees\n\n \n\n \n(54,976)\n \n\n \n-\n \n\nPayments of finance lease liability\n\n \n\n \n(1,948)\n \n\n \n(5,398)\n\n**NET CASH PROVIDED BY FINANCING ACTIVITIES**\n\n \n\n \n347,627\n \n\n \n\n \n560,862\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nEffect of exchange rate changes on cash\n\n \n\n \n127,430\n \n\n \n\n \n60,299\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n**NET CHANGE IN CASH**\n\n \n\n \n(1,300,972)\n \n\n \n427,776\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n**CASH AND RESTRCITED CASH AT BEGINNING OF PERIOD**\n\n \n\n \n3,459,893\n \n\n \n\n \n315,105\n \n\n**CASH AND RESTRICTED CASH AT END OF PERIOD**\n\n \n$2,158,921\n \n\n \n$742,881\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n**Cash and Restricted Cash Reconciliation**\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n**Description**\n\n \n\n**March 31,**\n\n**2026**\n\n \n\n \n\n**March 31,**\n\n**2025**\n\n \n\nCash\n\n \n\n \n514,702\n \n\n \n\n \n742,881\n \n\nRestricted Cash\n\n \n\n \n1,644,219\n \n\n \n\n \n-\n \n\n**Total Cash and Restricted Cash**\n\n \n\n \n**2,158,921**\n \n\n \n\n \n**742,881**\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n**Supplemental Disclosure of Cash Flow Information**\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n**Cash paid during the year:**\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n     Interest\n\n \n$92,340\n \n\n \n$104,800\n \n\n     Income tax\n\n \n$-\n \n\n \n$-\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n**Supplemental Disclosure of Non-Cash Investing and Financing Activities**\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nCommon stock issued for convertible notes payable\n\n \n$1,124,211\n \n\n \n$-\n \n\nCommon Stock issued in settlement of default interest on convertible notes\n\n \n$58,347\n \n\n \n$-\n \n\nDebt exchanges\n\n \n$980,000\n \n\n \n$-\n \n\nCommon stock issued to employees\n\n \n$455,585\n \n\n \n$311,301\n \n\nCommon stock issued to consultants\n\n \n$80,201\n \n\n \n$245,310\n \n\n \n\nThe accompanying notes are an integral part of these unaudited condensed consolidated financial statements.\n\n \n\n \n\n6\n\n*Table of Contents*\n\n \n\n**COSMOS HEALTH INC.**\n\n**Notes to Unaudited Condensed Consolidated Financial Statements**\n\n**March 31, 2026**\n\n \n\n**NOTE 1 – BASIS OF PRESENTATION**\n\n \n\nThe 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 March 31, 2026 and unaudited condensed consolidated statements of operations and comprehensive income (loss) for the three months ended March 31, 2026 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 March 31, 2026, are not necessarily indicative of the results that may be expected for the year ending December 31, 2026, 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, 2025, included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025 (“Form 10-K”). The accompanying condensed consolidated balance sheet as of December 31, 2025 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.\n\n \n\n**Going Concern**\n\n \n\nThe 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 three-month period ended March 31, 2026, the Company generated revenue of $17,927,892, incurred a net loss of $2,805,423, and used $1,067,067 of net cash in operating activities. As of March 31, 2026, the Company had cash and cash equivalents of $514,702 and restricted cash of $1,644,219, compared to $715,674 and $2,744,219 as of December 31, 2025. The Company also had positive working capital of $2,812,487, an accumulated deficit of $135,972,696, and stockholders’ equity of $19,826,359.\n\n \n\nThese 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.\n\n \n\nManagement 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.\n\n \n\nFrom a financing perspective, during the three-month period ended March 31, 2026, the Company raised capital through its At-the-Market (“ATM”) program, generating gross proceeds of approximately $1,832,524, which enhanced its liquidity position. In addition, 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, and potential additional tranches subject to certain conditions; this agreement remains in effect. The Company may also enter into new convertible financing arrangements and intends to continue and potentially expand its ATM program to support future liquidity needs.\n\n \n\nThe proceeds from the ATM sales provide additional working capital and mitigate, to some extent, the Company’s liquidity constraints.\n\n \n\nAs noted above, the accompanying unaudited condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern. However, the Company’s ability to continue as a going concern is dependent upon its ability to obtain additional financing to fund its operations and meet its obligations as they become due. Considering the Company’s significant net loss and negative operating cash flows for the reporting period, management has concluded that substantial doubt exists about the Company’s ability to continue as a going concern within one year after the date that the condensed consolidated financial statements are issued.\n\n \n\nThe condensed consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. Such adjustments could include the realization of assets and settlement of liabilities at amounts that may differ materially from those reflected in the accompanying condensed consolidated financial statements. \n\n \n\n \n\n7\n\n*Table of Contents*\n\n \n\n**COSMOS HEALTH INC.**\n\n**Notes to Unaudited Condensed Consolidated Financial Statements**\n\n**March 31, 2026**\n\n \n\n**NOTE 2 – ORGANIZATION AND NATURE OF BUSINESS**\n\n \n\nCosmos 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.\n\n \n\nThe 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.\n\n \n\n**Acquisition Accounting**\n\n \n\n*Cloudscreen*\n\n \n\nOn 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. The total purchase price amounted to $637,080. 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.\n\n \n\n*ZipDoctor*\n\n \n\nOn 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.\n\n \n\nDuring the year ended December 31, 2024, the Company recognized an impairment charge of $131,032 related to the technology platform. As a result, the unamortized balance of the intangible asset was effectively written off.\n\n \n\n \n\n8\n\n*Table of Contents*\n\n \n\n**COSMOS HEALTH INC.**\n\n**Notes to Unaudited Condensed Consolidated Financial Statements**\n\n**March 31, 2026**\n\n \n\n*Bikas*\n\n \n\nOn 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 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.\n\n \n\n*Real Estate Acquisitions*\n\n \n\nOn April 24, 2023, Cosmos Health Inc. purchased a building for a total purchase price of $1,054,872 in cash. The Company accounted for the acquisition as an asset acquisition in accordance with ASC 805 Business Combinations and recorded the cost of the building within “Property, plant and equipment” on the condensed consolidated balance sheets. The building is used as the operational facilities of the Company’s subsidiary Cosmofarm S.A., which operates as a pharmaceutical wholesaler in Greece.\n\n \n\nOn January 6, 2023, the Company entered into an agreement to purchase land and a building located at 1570 rue Richardson, Montreal, Quebec, Canada from 4423607 Canada Inc. (the \"Seller\") for a total purchase price of $3,950,000. The agreement was subsequently amended on July 19, 2023, February 9, 2024, and December 31, 2024. As of December 31, 2024, the Company had made prepayments totaling $2,000,020, classified as \"Advances for building acquisition\" on the Company's condensed consolidated balance sheets.\n\n \n\nAs the parties were unable to progress toward completion of the transaction, the Company determined that recovery of the advances would occur through repayment rather than through closing of the purchase and sale. During the year ended December 31, 2025, management assessed the recoverability of these advances and recorded a provision of $1,400,020, representing the portion of the advances for which no repayment had been received as of the filing date of this Annual Report. The remaining $600,000 was not impaired as the Company received full repayment of that amount from the Seller prior to filing.\n\n \n\nSubsequent to December 31, 2025, on March 17, 2026, the Seller provided a formal, signed repayment commitment letter confirming that the full outstanding balance of the advances will be repaid to the Company according to the following schedule:\n\n \n\n \n\n·\n\nOn or before April 10, 2026: USD $600,000 – received\n\n \n\n·\n\nOn or before December 31, 2026: USD $600,000\n\n \n\n·\n\nOn or before March 31, 2027: Remaining outstanding balance\n\n \n\n*Cana*\n\n \n\nOn 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.\n\n \n\n \n\n9\n\n*Table of Contents*\n\n \n\n**COSMOS HEALTH INC.**\n\n**Notes to Unaudited Condensed Consolidated Financial Statements**\n\n**March 31, 2026**\n\n \n\n \n\nDuring the prior year period, Cana had minimal operations as it was in financial difficulties and seeking for an investor.\n\n \n\n**Basis of Financial Statement Presentation**\n\n \n\nThe accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. GAAP.\n\n \n\n**Principles of Consolidation**\n\n \n\nOur 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 unaudited condensed 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.\n\n \n\n**Transactions in and Translations of Foreign Currency**\n\n \n\nThe 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 unaudited condensed consolidated statements of changes in stockholders’ equity.\n\n \n\n**Use of Estimates**\n\n \n\nThe 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.\n\n \n\n \n\n10\n\n*Table of Contents*\n\n \n\n**COSMOS HEALTH INC.**\n\n**Notes to Unaudited Condensed Consolidated Financial Statements**\n\n**March 31, 2026**\n\n \n\n \n\n**Credit Losses**\n\n \n\nIn 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 condensed 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.\n\n \n\n**Cash and Cash Equivalents**\n\n \n\nFor 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.\n\n \n\nThe 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).\n\n \n\n**Accounts Receivable, net**\n\n \n\nAccounts 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 March 31, 2026 and December 31, 2025, the Company’s allowance for doubtful accounts was $30,074,112 and $30,645,763, respectively. Below is the summary of changes in the allowance for doubtful accounts:\n\n \n\n \n\n \n\n**March 31,**\n\n**2026**\n\n \n\n \n\n \n\n \n\n \n\n**Balance as of January 1, 2026**\n\n \n$30,645,763\n \n\nProvisions for credit losses\n\n \n\n \n-\n \n\nWrite-offs\n\n \n\n \n-\n \n\nForeign exchange adjustments\n\n \n\n \n(571,652 )\n\nOther adjustments\n\n \n\n \n-\n \n\n**Balance as of March 31, 2026**\n\n \n$30,074,112\n \n\n \n\n**Tax Receivables**\n\n \n\nThe 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 March 31, 2026 and December 31, 2025, the Company had a VAT net receivable balance of $417,359 and $453,619 respectively, recorded in the condensed consolidated balance sheet as prepaid expenses and other current assets and accounts payable and accrued expenses, respectively.\n\n \n\n \n\n11\n\n*Table of Contents*\n\n \n\n**COSMOS HEALTH INC.**\n\n**Notes to Unaudited Condensed Consolidated Financial Statements**\n\n**March 31, 2026**\n\n \n\n \n\n**Inventory**\n\n \n\nInventory 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.\n\n \n\nThe 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.\n\n \n\n**Property and Equipment, net**\n\n \n\nProperty 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:\n\n \n\n \n\n**Estimated**\n\n**Useful Life**\n\nLeasehold improvements and technical works\n\n \n\nLesser of lease term or 25 years\n\nBuildings\n\n \n\n \n\n25-30 years\n\n \n\nVehicles\n\n \n\n6 years\n\nMachinery\n\n \n\n20 years\n\nFurniture, fixtures and equipment\n\n \n\n5–10 years\n\n \n\nComputers and software\n\n \n\n3-5 years\n\n \n\nDepreciation expense was $112,519 and $97,539 for the three months ended March 31, 2026 and 2025, respectively.\n\n \n\n*Property and Equipment additions*\n\n \n\nProperty 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.\n\n \n\n \n\n12\n\n*Table of Contents*\n\n \n\n**COSMOS HEALTH INC.**\n\n**Notes to Unaudited Condensed Consolidated Financial Statements**\n\n**March 31, 2026**\n\n \n\n \n\n**Intangibles, net**\n\n \n\nIntangible 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 5 as “Licenses”. A useful life of 10 years is also used for the platforms included in Note 5 as “Software” and the customer base. 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 March 31, 2026 and December 31, 2025, no revision to the remaining amortization period of the intangible assets was made.\n\n \n\nAmortization expense was $234,001 and $218,297 for the three months ended March 31, 2026 and 2025, respectively.\n\n \n\n**Impairment of Long-Lived Assets**\n\n \n\nIn 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 months ended March 31, 2026, and 2025, the Company has recorded no impairment charge.\n\n \n\n \n\n13\n\n*Table of Contents*\n\n \n\n**COSMOS HEALTH INC.**\n\n**Notes to Unaudited Condensed Consolidated Financial Statements**\n\n**March 31, 2026** \n\n \n\n \n\n**Equity Method Investment**\n\n \n\nFor 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 unaudited condensed 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.\n\n \n\n**Investments in Equity Securities**\n\n \n\nInvestments 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 condensed 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 condensed 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.\n\n \n\nAs of March 31, 2026, investments consisted of 1,667 shares which traded at a closing price of $15.24 per share or value of $25,396 of National Bank of Greece. Additionally, the Company has $8,829 in equity securities of CrediaBank S.A. (formerly Pancreta Bank), which are revalued annually.\n\n \n\n**Fair Value Measurement**\n\n \n\nThe 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.\n\n \n\nASC 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:\n\n \n\nLevel 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities.\n\n \n\nLevel 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.\n\n \n\nLevel 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.\n\n \n\nIn 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.\n\n \n\nThe following tables presents assets and liabilities that are measured and recognized at fair value as of March 31, 2026 and 2025, on a recurring basis:\n\n \n\n \n\n \n\n**March 31, 2026**\n\n \n\n \n\n**Total Carrying**\n\n \n\n**Assets**\n\n \n\n**Level 1**\n\n \n\n \n\n**Level 2**\n\n \n\n \n\n**Level 3**\n\n \n\n \n\n**Value**\n\n \n\nMarketable securities – National Bank of Greece\n\n \n$25,396\n \n\n \n\n \n-\n \n\n \n\n \n-\n \n\n \n$25,396\n \n\nDigital assets\n\n \n\n \n2,068,645\n \n\n \n\n \n-\n \n\n \n\n \n-\n \n\n \n\n \n2,068,645\n \n\n \n\n \n$2,094,041\n \n\n \n\n \n-\n \n\n \n\n \n-\n \n\n \n$2,094,041\n \n\n \n\n \n\n \n\n**March 31, 2026**\n\n \n\n \n\n**Total Carrying**\n\n \n\n**Liabilities**\n\n \n\n**Level 1**\n\n \n\n \n\n**Level 2**\n\n \n\n \n\n**Level 3**\n\n \n\n \n\n**Value**\n\n \n\nConvertible notes payable\n\n \n$-\n \n\n \n\n \n-\n \n\n \n\n \n931,693\n \n\n \n$931,693\n \n\nDerivative liability - convertible note\n\n \n\n \n-\n \n\n \n\n \n-\n \n\n \n\n \n1,060,230\n \n\n \n\n \n1,060,230\n \n\n \n\n \n$-\n \n\n \n\n \n-\n \n\n \n\n \n1,992,193\n \n\n \n$1,992,193\n \n\n \n\n \n\n \n\n**December 31, 2025**\n\n \n\n \n\n**Total Carrying**\n\n \n\n**Assets**\n\n \n\n**Level 1**\n\n \n\n \n\n**Level 2**\n\n \n\n \n\n**Level 3**\n\n \n\n \n\n**Value**\n\n \n\nMarketable securities – National Bank of Greece\n\n \n$37,163\n \n\n \n\n \n-\n \n\n \n\n \n-\n \n\n \n$37,163\n \n\nDigital assets\n\n \n\n \n1,411,084\n \n\n \n\n \n-\n \n\n \n\n \n-\n \n\n \n\n \n1,411,084\n \n\n \n\n \n$1,448,247\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n$1,448,247\n \n\n \n\n \n\n \n\n**December 31, 2025**\n\n \n\n \n\n**Total Carrying**\n\n \n\n**Liabilities**\n\n \n\n**Level 1**\n\n \n\n \n\n**Level 2**\n\n \n\n \n\n**Level 3**\n\n \n\n \n\n**Value**\n\n \n\nConvertible notes payable\n\n \n$-\n \n\n \n\n \n-\n \n\n \n\n \n2,137,804\n \n\n \n$2,137,804\n \n\nDerivative liability - convertible note\n\n \n\n \n-\n \n\n \n\n \n-\n \n\n \n\n \n1,292,198\n \n\n \n\n \n1,292,198\n \n\n \n\n \n$-\n \n\n \n\n \n-\n \n\n \n\n \n3,430,002\n \n\n \n$3,430,002\n \n\n \n\nDigital assets consist of cryptocurrency holdings measured at fair value using quoted prices on active exchanges and are therefore classified as Level 1 (Note 20). For information regarding convertible notes and derivative liabilities measured at fair value, refer to Note 11 — Convertible Debt.\n\n \n\nIn 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 option for any of its qualifying financial instruments other than as described in Note 11 — Convertible Debt.\n\n \n\nOur financials also included the following financial instruments as of March 31, 2026 and December 31, 2025: 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.\n\n \n\n \n\n14\n\n*Table of Contents*\n\n \n\n**COSMOS HEALTH INC.**\n\n**Notes to Unaudited Condensed Consolidated Financial Statements**\n\n**March 31, 2026**\n\n \n\n \n\n**Convertible Promissory Note**\n\n \n\nAs 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 condensed 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 condensed 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.\n\n \n\nThe 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.\n\n \n\n**Digital Assets**\n\n \n\nIn December 2023, FASB issued ASU 2023-08, Intangibles—Goodwill and Other—Crypto Assets (Subtopic 350-60): Accounting for and Disclosure of Crypto Assets. ASU 2023-08 requires certain crypto assets to be measured at fair value separately on the balance sheet with gains and losses from changes in the fair value reported as unrealized gains or losses in the condensed consolidated statement of income (loss) and comprehensive income (loss) each reporting period. ASU 2023-08 also enhances the other intangible asset disclosure requirements by requiring the name, cost basis, fair value, and number of units for each significant crypto asset holding. The Company adopted ASU 2023-08 during 2025 in conjunction with its initial acquisition of digital assets.\n\n \n\nThe Company's digital assets are initially recorded at cost and are subsequently measured at fair value as of each reporting period. The Company determines the fair value of its digital assets in accordance with ASC 820, Fair Value Measurement, based on quoted prices in its principal market for Ethereum (Level 1). Changes in fair value are recognized as incurred in the Company's unaudited condensed consolidated statement of operations and comprehensive loss, as “Gain (loss) on digital assets,” within non-operating (income) and expenses, net.\n\n \n\n**Customer Advances**\n\n \n\nThe 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.\n\n \n\n \n\n15\n\n*Table of Contents*\n\n   \n\n**COSMOS HEALTH INC.**\n\n**Notes to Unaudited Condensed Consolidated Financial Statements**\n\n**March 31, 2026**\n\n \n\n \n\n**Revenue Recognition**\n\n \n\nIn 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:\n\n \n\n \n\n1)\n\nIdentification of the Contract: The Company identifies a contract with a customer when it enters into an agreement that creates enforceable rights and obligations.\n\n \n\n \n\n \n\n \n\n2)\n\nIdentification of Performance Obligations: The Company identifies distinct performance obligations within each contract, which represent promises to transfer goods or services to the customer.\n\n \n\n \n\n \n\n \n\n3)\n\nDetermination of Transaction Price: The Company determines the transaction price, which represents the amount of consideration to which it expects to be entitled in exchange for transferring promised goods or services to the customer, excluding any amounts collected on behalf of third parties.\n\n \n\n \n\n \n\n \n\n4)\n\nAllocation of Transaction Price: The Company allocates the transaction price to each distinct performance obligation based on its standalone selling price. If the standalone selling price is not observable, the Company estimates it using an appropriate method.\n\n \n\n \n\n \n\n \n\n5)\n\nRecognition of Revenue: Revenue is recognized when (or as) the Company satisfies a performance obligation by transferring a promised good or service to the customer. This typically occurs at a point in time or over time, depending on the nature of the performance obligation.\n\n \n\n*Wholesale revenue and sales of own branded nutraceutical and pharmaceutical products*\n\n \n\nThe 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 March 31, 2026 and 2025 and deemed that it had no material effect.\n\n \n\n*Pharma manufacturing*\n\n \n\nThe 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 March 31, 2026 and 2025 there were no products or batches of products for which the production or packaging phase was in progress.\n\n \n\n*Medihelm SA*\n\n \n\nEffective 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 includes variable consideration. In accordance with ASC 606, Revenue from Contracts with Customers, and specifically ASC 606-10-32-5, the Company applies 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 reassesses the collectability of receivables from the distributor at each reporting date and considers changes in facts and circumstances in determining the amount of revenue that should be constrained.\n\n \n\nBased on this assessment, the Company deferred $367,000 of revenue related to sales to Medihelm during the year ended December 31, 2024. Due to significantly limited sales activity with Medihelm and the substantial allowance for doubtful accounts recorded in prior periods, the Company determined that the cumulative revenue constraint was no longer necessary and reversed the $367,000, which was recorded in \"Other income (expense), net\" in the condensed Consolidated Statements of Operations for the year ended December 31, 2024.\n\n \n\nDuring 2025, Medihelm continued to represent a significant and concentrated trade receivable exposure for the Company across its subsidiaries SkyPharm S.A., Cosmofarm S.A., and Decahedron Ltd. Historical credit performance has been weak, with cumulative bad debt allowances recorded during 2023–2024 representing a substantial portion of the total historical gross exposure to the distributor. The commercial relationship with Medihelm encompasses multiple transaction streams, including sales of proprietary nutraceutical products through SkyPharm S.A., wholesale pharmaceutical sales through Cosmofarm S.A., and legacy receivables at Decahedron Ltd. arising from historical sales of personal protective equipment that predate 2020 and for which the underlying business relationship is no longer active.\n\n \n\nDuring the year ended December 31, 2025, the Company generated approximately $1,700,000 in gross revenue from Medihelm and collected approximately $593,000 in cash. The Company's subsidiaries also recorded an additional allowance of $812,952 on Medihelm's receivables, comprising a provision of $526,562 against Cosmofarm S.A.'s prepayment and checks receivable balances — reflecting a full 100% allowance on a prepayment for which the related goods had not been received as of December 31, 2025, and a partial allowance on the portion of checks receivable not yet cashed — and an incremental bad debt reserve of $286,390 under ASC 326 applied to SkyPharm S.A.'s remaining net trade receivable exposure, reflecting a conservative impairment rate based on historical loss experience and the elevated lifetime expected credit loss profile of the counterparty. Medihelm operates under extended credit terms of approximately ten months, which increases the duration and liquidity risk associated with the receivable.\n\n \n\nFor the three months ended March 31, 2026, the Company generated revenue of $679,227 from Medihelm and collected $128,553 in cash. Due to the history of limited collectability with this counterparty, the Company reverses revenue recognized from Medihelm to the extent that the related amounts have not been collected within the period, in order to properly monitor and present the net trade receivable balance in accordance with the variable consideration constraint principles of ASC 606. Accordingly, a revenue reversal of $550,674 was recorded for the three months ended March 31, 2026. The cumulative revenue reversal as of March 31, 2026, inclusive of the prior year reversal of $804,697, amounts to $1,331,788.\n\n \n\nManagement will continue to monitor the customer's payment performance. If collection trends improve during 2026, any corresponding recovery will be recognized as increases to revenue in the period of collection.\n\n \n\n \n\n16\n\n*Table of Contents*\n\n \n\n**COSMOS HEALTH INC.**\n\n**Notes to Unaudited Condensed Consolidated Financial Statements**\n\n**March 31, 2026**\n\n \n\n \n\n**Stock-based Compensation**\n\n \n\nThe 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.\n\n \n\nThe 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.”\n\n \n\n**Income Taxes**\n\n \n\nThe 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.\n\n \n\nThe 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.\n\n \n\nWe 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 March 31, 2026, 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, 2025.\n\n \n\n**Leases**\n\n \n\nThe 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. \n\n \n\n \n\n17\n\n*Table of Contents*\n\n \n\n**COSMOS HEALTH INC.**\n\n**Notes to Unaudited Condensed Consolidated Financial Statements**\n\n**March 31, 2026**\n\n \n\n \n\n**Retirement and Termination Benefits**\n\n \n\nUnder Greek labor law, employees are entitled to lump-sum compensation in the event of termination or retirement. The amount depends on the employee’s years of service and remuneration at the date of termination or retirement. If an employee remains with the Company until full retirement eligibility, the employee is entitled to a lump-sum equal to 40% of the compensation that would be payable upon termination on the same date.\n\n \n\nThe Company periodically evaluates the uncertainties and judgments related to the application of the relevant labor law regulations to determine retirement and termination benefit obligations of its Greek subsidiaries.\n\n \n\nDuring the year ended December 31, 2025, the Company engaged an actuarial expert and updated the liability based on a new actuarial valuation prepared in accordance with ASC 715, Compensation—Retirement Benefit. As a result, the Company recorded a retirement and termination benefits liability of $383,393 as of December 31, 2025, which is presented as a long-term liability within “Other liabilities” in the Company’s condensed consolidated balance sheets.\n\n \n\nNo new actuarial valuation was obtained during the three months ended March 31, 2026, as management determined that no significant events or changes in underlying assumptions had occurred that would materially affect the obligation. As of March 31, 2026, the liability remained at $376,271, with any movement during the period attributable solely to foreign currency translation adjustments.\n\n \n\n**Basic and Diluted Net Loss per Common Share**\n\n \n\nBasic 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-month period ended March 31, 2026 and 2025.\n\n \n\n \n\n \n\n**Three months ended,**\n\n \n\n \n\n \n\n**March 31,**\n\n**2026**\n\n \n\n \n\n**March 31,**\n\n**2025**\n\n \n\nWeighted average number of common shares outstanding Basic\n\n \n\n \n47,087,621\n \n\n \n\n \n26,037,608\n \n\nPotentially dilutive common stock equivalents\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nWeighted average number of common and equivalent shares outstanding – Diluted\n\n \n\n \n47,087,621\n \n\n \n\n \n26,037,608\n \n\n \n\nThe following table summarizes potential common shares that were excluded as their effect is anti-dilutive:\n\n \n\n \n\n \n\n**March 31,**\n\n**2026**\n\n \n\n \n\n**March 31,**\n\n**2025**\n\n \n\nWarrants\n\n \n\n \n12,926,506\n \n\n \n\n \n12,926,506\n \n\nShares issuable upon conversion of convertible debt\n\n \n\n \n26,890,412\n \n\n \n\n \n-\n \n\nTotal\n\n \n\n \n39,816,918\n \n\n \n\n \n12,926,506\n \n\n \n\nCommon 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.\n\n \n\n \n\n18\n\n*Table of Contents*\n\n  \n\n**COSMOS HEALTH INC.**\n\n**Notes to Unaudited Condensed Consolidated Financial Statements**\n\n**March 31, 2026**\n\n \n\n \n\n**Recent Accounting Pronouncements**\n\n \n\n**ASU 2025‑01 – Income Statement: Clarifying Effective Date of Expense Disaggregation (Subtopic 220‑40)**\n\n \n\nIssued January 7, 2025\n\n \n\nThis 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.\n\n \n\n**ASU 2025‑03 – Business Combinations: Identifying the Accounting Acquirer in a VIE Transaction (Topics 805 and 810)**\n\n \n\nIssued May 12, 2025\n\n \n\nThis 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. \n\n \n\n**ASU 2025-04, Compensation — Stock Compensation (Topic 718) and Revenue from Contracts with Customers (Topic 606): Clarifications to Share-Based Consideration Payable to a Customer**\n\n \n\nIssued May 15, 2025\n\n \n\nThe FASB issued ASU 2025-04, clarifying the accounting for share-based non-cash consideration payable to a customer.  The update revises the definition of a “performance condition”, eliminates the forfeitures-as-incurred election in this context, and clarifies the interaction with variable consideration under ASC 606. The amendments are effective for annual reporting periods beginning after December 15, 2026, including interim periods, with early adoption permitted. The Company is currently assessing the potential impact of this standard.\n\n \n\n**ASU 2025-05, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets**\n\n \n\nIssued July 30, 2025\n\n \n\nThe FASB issued ASU 2025-05, introducing a practical expedient and policy election for estimating expected credit losses on current accounts receivable and contract assets arising from ASC 606 contracts. The amendments are effective for annual reporting periods beginning after December 15, 2025, including interim periods, with early adoption permitted. The Company has evaluated the effect of these amendments on its financial position, results of operations and cash flows and concluded that they do not have a material impact.\n\n \n\n**ASU 2025-06, Intangibles — Goodwill and Other — Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software**\n\n \n\nIssued September 30, 2025\n\n \n\nThe FASB issued ASU 2025-06 to modernize the accounting for internal-use software costs and enhance related disclosure requirements. The amendments are effective for annual reporting periods beginning after December 15, 2027, including interim periods within those annual reporting periods, with early adoption permitted. The Company is in the process of evaluating the effect of these amendments on its financial position and results of operations.\n\n \n\n**ASU 2025-07, Derivatives and Hedging (Topic 815) and Revenue from Contracts with Customers (Topic 606): Derivatives Scope Refinements and Scope Clarification for Share-Based Noncash Consideration from a Customer in a Revenue Contract**\n\n \n\nIssued September 30, 2025\n\n \n\nThe FASB issued ASU 2025-07 to expand the derivatives scope exception for certain contracts and clarify the accounting for share-based noncash consideration received from customers in revenue contracts. The amendments are effective for annual reporting periods beginning after December 15, 2026, including interim periods within those annual reporting periods, with early adoption permitted. The Company is in the process of evaluating the effect of these amendments on its financial position and results of operations.\n\n \n\n**ASU 2025-09, Derivatives and Hedging (Topic 815): Hedge Accounting Improvements**\n\n \n\nIssued November 24, 2025\n\n \n\nThe FASB issued ASU 2025-09 to simplify and clarify certain aspects of hedge accounting. The amendments are effective for annual reporting periods beginning after December 15, 2026, including interim periods within those annual reporting periods, with early adoption permitted. The Company is in the process of evaluating the effect of these amendments on its financial position and results of operations.\n\n \n\n**ASU 2025-10, Government Grants (Topic 832): Accounting for Government Grants Received by Business Entities**\n\n \n\nIssued December 18, 2025\n\n \n\nThe FASB issued ASU 2025-10 to establish guidance for the recognition, measurement, presentation, and disclosure of government grants received by business entities. The amendments are effective for annual reporting periods beginning after December 15, 2028, including interim periods within those annual reporting periods, with early adoption permitted. The Company is in the process of evaluating the effect of these amendments on its financial position and results of operations.\n\n \n\n**ASU 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements**\n\n \n\nIssued December 18, 2025\n\n \n\nThe FASB issued ASU 2025-11 to clarify interim reporting disclosure requirements and improve the navigability of interim reporting guidance. The amendments are effective for interim reporting periods within fiscal years beginning after December 15, 2027. The Company is in the process of evaluating the effect of these amendments on its financial position and results of operations.\n\n \n\n \n\n19\n\n*Table of Contents*\n\n \n\n**COSMOS HEALTH INC.**\n\n**Notes to Unaudited Condensed Consolidated Financial Statements**\n\n**March 31, 2026**\n\n \n\n**NOTE 3 – EQUITY METHOD INVESTMENTS**\n\n \n\n*CosmoFarmacy LP*\n\n \n\nIn 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 and wrote off the entire carrying amount. 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 March 31, 2026 and December 31, 2025, was $0.\n\n \n\n**NOTE 4 – PROPERTY AND EQUIPMENT, NET**\n\n \n\nProperty and equipment, net consists of the following at March 31, 2026 and December 31, 2025: \n\n \n\n \n\n \n\n**March 31,**\n\n**2026**\n\n \n\n \n\n**December 31,**\n\n**2025**\n\n \n\nLand\n\n \n$3,697,399\n \n\n \n\n \n3,767,379\n \n\nBuildings and improvements\n\n \n\n \n5,027,339\n \n\n \n\n \n5,302,616\n \n\nLeasehold improvements\n\n \n\n \n3,789\n \n\n \n\n \n3,861\n \n\nVehicles\n\n \n\n \n242,328\n \n\n \n\n \n246,914\n \n\nFurniture, fixtures and equipment\n\n \n\n \n3,209,728\n \n\n \n\n \n3,375,930\n \n\n \n\n \n\n \n12,180,583\n \n\n \n\n \n12,696,700\n \n\nLess: Accumulated depreciation and amortization\n\n \n\n \n(1,900,380 )\n \n\n \n(2,117,842 )\n\nTotal\n\n \n$10,280,203\n \n\n \n\n \n10,578,858\n \n\n \n\n \n\n20\n\n*Table of Contents*\n\n \n\n**COSMOS HEALTH INC.**\n\n**Notes to Unaudited Condensed Consolidated Financial Statements**\n\n**March 31, 2026**\n\n \n\n**NOTE 5 – INTANGIBLE ASSETS**\n\n \n\nGoodwill and intangible, net assets consist of the following at March 31, 2026 and December 31, 2025:\n\n \n\n \n\n \n\n**March 31,**\n\n**2026**\n\n \n\n \n\n**December 31,**\n\n**2025**\n\n \n\nLicense\n\n \n$8,018,865\n \n\n \n$8,180,160\n \n\nTrade name / mark\n\n \n\n \n355,200\n \n\n \n\n \n355,200\n \n\nCustomer base\n\n \n\n \n626,397\n \n\n \n\n \n626,397\n \n\nSoftware\n\n \n\n \n1,228,569\n \n\n \n\n \n1,270,937\n \n\n \n\n \n\n \n10,229,031\n \n\n \n\n \n10,432,694\n \n\nLess: Accumulated amortization & impairment\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nLicense\n\n \n\n \n(2,169,476 )\n \n\n \n(2,063,556 )\n\nTrade name / mark\n\n \n\n \n(36,997 )\n \n\n \n(36,997 )\n\nCustomer base\n\n \n\n \n(467,484 )\n \n\n \n(457,259 )\n\nSoftware\n\n \n\n \n(379,760 )\n \n\n \n(354,884 )\n\nSubtotal\n\n \n\n \n7,175,314\n \n\n \n\n \n7,519,998\n \n\nGoodwill\n\n \n\n \n49,697\n \n\n \n\n \n49,697\n \n\nTotal\n\n \n$7,225,011\n \n\n \n$7,569,695\n \n\n \n\nAt March 31, 2026, the estimated aggregate amortization expense for intangible assets subject to amortization for each of the succeeding fiscal years is as follows:\n\n \n\n**Year**\n\n \n\n**Amount**\n\n \n\n2027\n\n \n$920,841\n \n\n2028\n\n \n\n \n921,686\n \n\n2029\n\n \n\n \n918,023\n \n\n2030\n\n \n\n \n894,177\n \n\n2031\n\n \n\n \n885,274\n \n\nThereafter\n\n \n\n \n2,280,113\n \n\nTotal\n\n \n$6,820,114\n \n\n \n\n**NOTE 6 – LOAN RECEIVABLE**\n\n \n\nOn October 30, 2021, the Company entered into a ten-year loan agreement with Medihelm S.A. to formalize €4,284,521 ($4,849,221) of prepayments previously made by the Company. The prepayments had been made in connection with the Company’s former parallel export business, pursuant to which Medihelm S.A. supplied branded pharmaceutical products to SkyPharm S.A. As this business activity is no longer operational, the parties entered into the loan agreement to provide for settlement of the outstanding balance. Interest accrues at a rate of 5.5% per annum calculated on a 360-day year basis. Under the terms of the agreement, the Company is entitled to receive 120 equal monthly instalments over the term of the loan. During the three-month period ended March 31, 2026, the Company recognized interest income of €101,749 ($119,061) related to the note receivable. During the three-month period ended March 31, 2026, the Company did not receive any principal or interest payments under the agreement. As of March 31, 2026, management considers the note receivable to be fully recoverable and expects the outstanding balance to become current during the second quarter of 2026.\n\n \n\n \n\n21\n\n*Table of Contents*\n\n \n\n**COSMOS HEALTH INC.**\n\n**Notes to Unaudited Condensed Consolidated Financial Statements**\n\n**March 31, 2026**\n\n \n\n**NOTE 7 – INCOME TAXES**\n\n \n\nThe 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 March 31, 2026, and 2025.\n\n \n\nThe 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.\n\n \n\nThe 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.\n\n \n\nAs of March 31, 2026, and 2025, 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.\n\n \n\nWe 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 March 31, 2026, and December 31, 2025, the Company has maintained a valuation allowance against all net deferred tax assets in the United States, Greece, and the UK.\n\n \n\nFor the three months ended March 31, 2026, and 2025, the Company has not recorded any tax benefits/expenses in any jurisdiction where it is subject to income tax.\n\n \n\n**NOTE 8 – CAPITAL STRUCTURE**\n\n \n\nOn September 30, 2025, the Company amended its Articles of Incorporation to increase the number of authorized shares of capital stock of the Company to 1,500,000,000 shares of Common Stock and 300,000,000 shares of “blank check” Preferred Stock.\n\n \n\n*Preferred Stock*\n\n \n\nThe Company is authorized to issue 300 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 March 31, 2026 and December 31, 2025, no preferred shares were issued and outstanding.\n\n \n\n*Treasury stock*\n\n \n\nAs of March 31, 2026 and December 31, 2025, 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 months ended March 31, 2026.\n\n \n\n \n\n22\n\n*Table of Contents*\n\n \n\n**COSMOS HEALTH INC.**\n\n**Notes to Unaudited Condensed Consolidated Financial Statements**\n\n**March 31, 2026**\n\n \n\n \n\nOn 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.\n\n \n\n*Common Stock*\n\n \n\nThe Company is authorized to issue 1,500,000,000 shares of common stock. As of March 31, 2026, and December 31, 2025, the Company had 49,867,750 and 41,153,809 shares of our common stock issued, respectively, and 49,781,253 and 41,067,312 shares outstanding, respectively.\n\n \n\nIssuance of Common Stock\n\n \n\nDuring the three-month period ended March 31, 2026 the Company issued an aggregate of 3,985,509 shares of its common stock under its At-the-Market (“ATM”) sales program, pursuant to the Company’s Shelf Registration Statement on Form S-3 (File No. 333-267550). The shares were sold for gross proceeds of $1,832,524 and net proceeds of $1,774,389, after deducting the underwriter’s commissions and other offering expenses.\n\n \n\nDuring the three-month period ended March 31, 2026, the Company issued an aggregate of 2,145,143 shares of its common stock to Mr. Grigorios Siokas, the Company’s Chief Executive Officer, in settlement of outstanding obligations totaling $980,000. The obligations related to unpaid salaries and performance-based bonuses previously accrued and owed to Mr. Siokas. The shares were issued at the fair market value of the Company’s common stock on the respective dates of issuance. The transaction was accounted for as a non-cash settlement of related party liabilities. \n\n \n\nDuring the three-month period ended March 31, 2026, the Company issued an aggregate of 659,172 shares of its common stock upon the conversion of the Company’s July 2025 Convertible Promissory Notes (the “July 2025 Notes”), resulting in the full settlement of the notes. The conversions satisfied total obligations of $237,822, consisting of $225,000 of outstanding principal and $12,822 of accrued interest, in accordance with the conversion terms of the July 2025 Notes. The conversions were completed pursuant to the provisions of the respective note agreements. Further information regarding the May 2025 Notes is included in Note 11 – Convertible Debt.\n\n \n\nDuring the three-month period ended March 31, 2026, the Company issued an aggregate of 874,641 shares of its common stock upon the conversion of the Company’s August 2025 Convertible Promissory Note (the “August 2025 Note”), resulting in the partial settlement of the note. The conversions satisfied aggregate obligations of $298,501 in accordance with the conversion terms of the August 2025 Note ($285,000 of outstanding principal and interest). The conversions and related share issuances were completed pursuant to the provisions of the applicable note agreements. Further information regarding the August 2025 Note is included in Note 11 – Convertible Debt.\n\n \n\nDuring the three-month period ended March 31, 2026, the Company issued an aggregate of 889,620 shares of its common stock upon the conversion of the Company’s June 2025 Convertible Promissory Note (the “June 2025 Note”), resulting in the partial settlement of the note. The conversions satisfied aggregate obligations of $354,348 in accordance with the conversion terms of the June 2025 Note. In addition, the Company issued 159,856 shares of its common stock in satisfaction of accrued default interest obligations totaling $58,347 related to the June 2025 Note. The conversions and related share issuances were completed pursuant to the provisions of the applicable note agreements. Further information regarding the June 2025 Note is included in Note 11 – Convertible Debt.\n\n \n\nDuring the period from September 22 to December 31, 2025, the Company issued an aggregate of 5,997,256 shares of its common stock under its At-the-Market (“ATM”) sales program, pursuant to the Company’s Shelf Registration Statement on Form S-3 (File No. 333-267550). The shares were sold for gross proceeds of $5,417,396 and net proceeds of $5,254,875, after deducting the underwriter’s commissions and other offering expenses.\n\n \n\nDuring the year ended December 31, 2025, the Company issued an aggregate of 3,654,841 shares of its common stock to Mr. Grigorios Siokas, the Company’s Chief Executive Officer, in settlement of outstanding obligations totaling $1,741,978. The obligations related to unpaid salaries and performance-based bonuses previously accrued and owed to Mr. Siokas. The shares were issued at the fair market value of the Company’s common stock on the respective dates of issuance. The transaction was accounted for as a non-cash settlement of related party liabilities.\n\n \n\nOn December 31, 2025, the Company issued 451,385 shares of its common stock pursuant to a debt exchange agreement to fully settle the outstanding promissory note related to the Cloudscreen acquisition. The exchange resulted in the conversion of $293,400 of outstanding debt into equity at an exchange price of $0.65 per share. As the exchange price exceeded the Company’s closing stock price of $0.498 on the exchange date, the Company recognized a gain on debt extinguishment of $68,610 in connection with the transaction. Additional information regarding this obligation is included in Note 12 – Notes Payable.\n\n \n\nOn December 30, 2025, the Company granted an aggregate of 2,350,000 shares of restricted common stock to the Chief Executive Officer, the Chief Financial Officer, certain officers and directors, and other key employees pursuant to the Cosmos Health Inc. 2024 Omnibus Equity Incentive Plan. The restricted shares vest in two equal instalments, with 50% vesting on December 31, 2026 and the remaining 50% vesting on December 31, 2027. No share-based compensation expense related to these awards was recognized during the year ended December 31, 2025, as amortization of the grant-date fair value will commence on January 1, 2026.\n\n \n\n \n\n23\n\n*Table of Contents*\n\n \n\n**COSMOS HEALTH INC.**\n\n**Notes to Unaudited Condensed Consolidated Financial Statements**\n\n**March 31, 2026**\n\n \n\n \n\nDuring the period from November 24, 2025 through December 7, 2025, the Company issued an aggregate of 783,430 shares of its common stock upon the conversion of the Company’s May 2025 Convertible Promissory Notes (the “May 2025 Notes”), resulting in the full settlement of the notes. The conversions satisfied total obligations of $327,661, consisting of $310,000 of outstanding principal and $17,661 of accrued interest, in accordance with the conversion terms of the May 2025 Notes. The conversions were completed pursuant to the provisions of the respective note agreements. Further information regarding the May 2025 Notes is included in Note 11 – Convertible Debt.\n\n \n\nOn September 5, 2025, the Company entered into a marketing services agreement with a third-party advisor, pursuant to which it issued 300,000 shares of its common stock in exchange for stock awareness, investor relations, and digital marketing services. The shares carry full voting rights and vest at a rate of 150,000 shares per month over the 2-month term of the agreement. The fair value of the shares on the issuance date was $0.649 per share, resulting in a total fair value of $194,700. During the year ended December 31, 2025, the Company recognized stock-based compensation expense of $194,700 in the condensed consolidated statements of operations.\n\n \n\nOn August 5, 2025, the Company issued an additional 500,000 shares of common stock (the “Incentive Stock”) to the lender of the June 9, 2025 secured convertible loan agreement as incentive consideration in connection with the lender’s agreement to subordinate its position to another senior convertible note. The fair value of the Incentive Stock on the issuance date was $0.878 per share, resulting in a total fair value of $439,000. This amount was recognized in “Change in fair value of convertible notes” in the condensed consolidated statement of operations for the year ended December 31, 2025.\n\n \n\nOn July 24, 2025, the Company entered into a marketing services agreement with a third-party advisor, pursuant to which it issued 169,549 shares of its common stock in exchange for marketing and distribution services. The shares carry full voting rights and vest at a rate of 28,258 shares per month over the 6-month term of the agreement. In accordance with the terms of the agreement, if the Company terminates the arrangement, any unvested shares as of the termination date will be subject to clawback. The fair value of the shares on the issuance date was $0.5898 per share, resulting in a total fair value of $100,000. During the year ended December 31, 2025, the Company recognized stock-based compensation expense of $83,333 in the condensed consolidated statements of operations.\n\n \n\nOn July 1, 2025, the Company entered into a consulting agreement with a third-party advisor, pursuant to which it issued 240,000 shares of its common stock in exchange for general advisory services. The shares carry full voting rights and vest at a rate of 20,000 shares per month over the 12-month term of the agreement. In accordance with the terms of the agreement, if the Company terminates the arrangement under Section 19 (Termination), any unvested shares as of the termination date will be subject to clawback. The fair value of the shares on the issuance date was $0.3939 per share, resulting in a total fair value of $94,536. During the year ended December 31, 2025, the Company recognized stock-based compensation expense of $39,390 in the condensed consolidated statements of operations.\n\n \n\nOn 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 $156,196. This amount was recognized as other finance costs, included in “Non-cash interest expense” in the condensed consolidated statement of operations for the year ended December 31, 2025.\n\n \n\nOn June 3, 2025 (the “Effective Date”), the Company issued 150,000 shares of its common stock to a consultant in consideration for such consultant’s 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.\n\n \n\nOn September 26, 2024, the Company had entered into a Warrant Inducement 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.\n\n \n\n \n\n24\n\n*Table of Contents*\n\n \n\n**COSMOS HEALTH INC.**\n\n**Notes to Unaudited Condensed Consolidated Financial Statements**\n\n**March 31, 2026**\n\n \n\n \n\nWarrant Classification\n\n \n\nThe 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. \n\n \n\n**NOTE 9 – RELATED PARTY TRANSACTIONS**\n\n \n\n*Doc Pharma S.A.*\n\n \n\nDoc 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.\n\n \n\n*Prepaid expenses and other current assets – related party*\n\n \n\nAs of March 31, 2026 and December 31, 2025, the Company had a prepaid balance of $5,587,010 and $4,642,853, respectively, to Doc Pharma. A reserve of $104,689 has been recorded against this balance as of March 31, 2026 effectively offsetting it.\n\n \n\nThe increase in the prepaid balance primarily reflects higher prepayments related to the increased demand for exports in the UAE and other related countries (refer to the “Distribution Agreements” section).\n\n \n\nFor the three-month period ended March 31, 2026  approximately $4.9 million of the prepayment relates to purchases of inventory pursuant to the CMO agreement signed between the Company and Doc Pharma SA on October 10, 2020; $310,000 relates to the purchase of pharmaceutical and nutraceutical licenses under the May 17, 2021 Research and Development agreement (refer to the “Research and Development agreements” section); and the remaining $403,000 represents the current portion of the Royalty Agreement signed on December 31, 2024 (refer to the “Research and Development agreements” section). The non-current portion of the Royalty Agreement of $806,260 is included in “Other Assets – Related Party” in the Company’s Unaudited Condensed Consolidated Balance Sheets as of March 31, 2026.\n\n \n\nThe remaining balance of Prepaid Expenses and Other Current Assets – Related Party relates to Panagiotis Kozaris, former General Operational Manager and current employee of Cosmofarm S.A., as further described in this related party disclosure.\n\n \n\n*Accounts payable and accrued expenses - related party*\n\n \n\nAs of March 31, 2026 and December 31, 2025, the Company had an accounts payable balance to Doc Pharma of $560,793 and $671,148, respectively. The March 31, 2026 balance concerns a trade payable balance that our subsidiary wholesaler, Cosmofarm SA, owes to Doc Pharma SA, concerning purchases of certain pharmaceutical products.\n\n \n\nThe remaining balance of Accounts Payable and Accrued Expenses – Related Party relates to compensation payable to management as further described in this related party disclosure (“Other Related Parties” section).\n\n \n\n*Accounts receivable - related party*\n\n \n\nAdditionally, the Company had a receivable balance of $3,359,959 and $3,340,275 from Doc Pharma S.A. as of March 31, 2026, and December 31, 2025, respectively, which concerns trading receivables balances with the Company’s Greek and UK subsidiaries. As of December 31, 2025, a cumulative allowance for doubtful accounts of approximately $1.7 million has been recognized, effectively offsetting this balance.\n\n \n\nThe remaining balance of Accounts Receivable – Related Party relates to amounts due from Maria Kozari’s wholly owned pharmacy (Maria Kozari is the daughter of Panagiotis Kozaris, a former General Operational Manager and current employee of Cosmofarm S.A.), as further described in this related party disclosure.\n\n \n\n*Sales and Purchases*\n\n \n\nDuring the three-month periods ended March 31, 2026 and 2025, the Company purchased products totaling $183,735 and $300,208, respectively, from Doc Pharma S.A., and sold products totaling $194,010 and $130,362, respectively, to Doc Pharma S.A.\n\n \n\n*Other Agreements*\n\n \n\nOn 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 of Greece 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 three-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.\n\n \n\n \n\n25\n\n*Table of Contents*\n\n \n\n**COSMOS HEALTH INC.**\n\n**Notes to Unaudited Condensed Consolidated Financial Statements**\n\n**March 31, 2026**\n\n \n\n \n\nFor the three months ended March 31, 2026 and 2025, the Company has purchased $189,655 and $219,645 respectively, in inventory related to this agreement.\n\n \n\nOn 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 three months ended March 31, 2026, no additional licenses were acquired, as the agreement had been terminated on December 31, 2025. However, management intends to enter into an extension of the agreement during the second quarter of 2026.\n\n \n\n*Purchase of branded pharmaceuticals*\n\n \n\nOn 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 condensed 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 three-month periods ended March 31, 2026.\n\n \n\nOn 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.\n\n \n\n*Loans receivable - related party*\n\n \n\nAs of December 31, 2022, prepaid expenses due from Doc Pharma totaled €7,103,706 ($7,599,545), primarily reflecting prepayments made by SkyPharm S.A. under the CMO agreement in anticipation of expected sales of SPL products in 2023, particularly through Amazon channels in the UK, Singapore, Canada, and other markets. Since a significant portion of these prepayments was not expected to be realized within 12 months, the Company converted €4,000,000 ($4,279,200) of the prepaid balance into a loan to Doc Pharma. The 10-year loan, maturing December 1, 2032, bears a fixed interest rate of 5.5% payable monthly and is repayable in 120 equal installments of €33,333.33 ($35,660), with optional prepayment at any time without penalty. As of December 31, 2025 and 2024, the loan had a current portion of €1,092,844 ($1,282,561) and €500,000 ($517,550), and a non-current portion of €2,400,000 ($2,816,640) and €2,800,000 ($2,898,280), respectively, presented as “Loans receivable – related party” on the consolidated balance sheets. During 2025, the Company received no principal or interest payments but recognized €181,500 ($205,208) of interest income related to this loan.\n\n \n\nDuring the year ended December 31, 2025, management assessed the recoverability of the outstanding loan balance in light of approximately 18 months of non-payment of both principal and interest. Given the prolonged arrears and the uncertainty surrounding the counterparty's ability to resume scheduled payments, the Company recorded a full allowance of $3,949,085 against the outstanding loan receivable — related party balance as of December 31, 2025. The difference between the allowance recorded in the income statement and the corresponding balance sheet amount reflects the use of different EUR/USD exchange rates — the average rate for the income statement and the closing rate for the balance sheet — with the offset recognized in accumulated other comprehensive income. This allowance is considered non-reversible absent a material change in circumstances and is presented within \"General and administrative expenses\" in the Consolidated Statements of Operations for the year ended December 31, 2025.\n\n \n\nAs of March 31, 2026, there were no changes in relation to the loan receivable from Doc Pharma. The outstanding balance remains fully impaired following the allowance for expected credit losses recorded as of December 31, 2025. No additional repayments, interest receipts, or reversals of impairment were recognized during the three-month period ended March 31, 2026.\n\n \n\n \n\n26\n\n*Table of Contents*\n\n  \n\n**COSMOS HEALTH INC.**\n\n**Notes to Unaudited Condensed Consolidated Financial Statements**\n\n**March 31, 2026**\n\n \n\n \n\n*Panagiotis Kozaris*\n\n \n\nPanagiotis 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.\n\n \n\n*Prepaid Expenses and Other Current Assets - Related Party*\n\n \n\nFrom time to time, the Company repurchases shares owned by Panagiotis Kozaris and records them as treasury shares. The Company makes advance payments to Panagiotis Kozaris for these shares and receives the shares upon execution of a cumulative stock purchase agreement (“SPA”).\n\n \n\nDuring the year ended December 31, 2025, given the prolonged period during which no SPA had been executed and the uncertainty surrounding the timing and completion of the share repurchase, management determined that the advance was no longer recoverable with sufficient certainty. Accordingly, the Company recorded a full allowance of $194,215 against the outstanding balance as of December 31, 2025, presented within \"General and administrative expenses\" in the Unaudited Condensed Consolidated Statements of Operations. Should a cumulative SPA be executed in a subsequent period, the allowance will be reversed at that time to the extent the underlying advance is recovered through the receipt of shares.\n\n \n\nAs of March 31, 2026, there were no changes in relation to the advance payments made to Panagiotis Kozaris for the future repurchase of shares. No additional payments were made during the three-month period, and no cumulative stock purchase agreement (“SPA”) had been executed. The outstanding balance remains fully impaired following the allowance recorded as of December 31, 2025.\n\n \n\n*Maria Kozari*\n\n \n\nMaria 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.\n\n \n\n*Accounts Receivable - Related Party*\n\n \n\nDuring 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-month periods ended March 31, 2026 and 2025 the Company’s net sales to Pharmacy & More amounted to $102,284 and $100,870 respectively. As of March 31, 2026 and December 31, 2025 the Company’s outstanding receivable balance due from the pharmacy amounted to $1,573,315 and $1,721,143, respectively, and are included in “Accounts receivable - related party”, on the accompanying consolidated balance sheets. As of March 31, 2026, a cumulative allowance for doubtful accounts of approximately $834,000 has been recognized, effectively offsetting this balance.\n\n \n\nThe Company plans to acquire Pharmacy & More within fiscal year 2026. 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).\n\n \n\n*Other Related Parties*\n\n \n\nAdditionally, the Company has the following material related-party balances as of March 31, 2026: a) a prepaid balance of $149,273 relating to prepaid salaries to Grigorios Siokas, the CEO of the Company, b) a balance of $450,000 relating to unpaid salaries and bonuses due to George Terzis, the CFO of the Company, c) a balance of $14,218 relating to unpaid bonuses due to Nikolaos Bardakis, the COO of the Company. The net payable balance of the above of $314,945 is classified as “Accounts payable and accrued expenses - related party” in the Company’s condensed consolidated balance sheets.\n\n \n\nFor the three-month period ended March 31, 2026, the Company also accrued $270,000 in salary for the Chief Executive Officer, $30,000 for the Chief Financial Officer, and $23,750 for Board of Directors fees, all in accordance with the respective individual agreements and as approved by the Board of Directors.\n\n \n\n \n\n27\n\n*Table of Contents*\n\n \n\n**COSMOS HEALTH INC.**\n\n**Notes to Unaudited Condensed Consolidated Financial Statements**\n\n**March 31, 2026**\n\n \n\n \n\n*Notes Payable – Related Party*\n\n \n\nA summary of the Company’s related party notes payable as of March 31, 2026 and December 31, 2025 is presented below:\n\n \n\n \n\n \n\n**March 31,**\n\n**2026**\n\n \n\n \n\n**December 31,**\n\n**2025**\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nBeginning Balance\n\n \n$11,971\n \n\n \n$10,558\n \n\nPayments\n\n \n\n \n-\n \n\n \n\n \n-\n \n\nForeign currency translation\n\n \n\n \n(223 )\n \n\n \n1,413\n \n\nEnding Balance\n\n \n$11,748\n \n\n \n$11,971\n \n\n \n\n*Dimitrios Goulielmos*\n\n \n\nDimitris Goulielmos was the Company’s former CEO and a Director of the Company.\n\n \n\nOn 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 March 31, 2026 and December 31, 2025, the Company had a principal balance of €10,200 ($11,748) and €10,200 ($11,971), respectively.\n\n \n\nThe above balances are adjusted for the foreign currency rate as of the balance sheet date.\n\n \n\n*Loans Payable – Related Party*\n\n \n\nA summary of the Company’s related party loans payable as of March 31, 2026 and December 31, 2025 is presented below:\n\n \n\n \n\n \n\n**March 31,**\n\n**2026**\n\n \n\n \n\n**December 31,**\n\n**2025**\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nBeginning balance\n\n \n$-\n \n\n \n$6,194\n \n\nProceeds\n\n \n\n \n-\n \n\n \n\n \n-\n \n\nSet-offs\n\n \n\n \n133,609\n \n\n \n\n \n774,371\n \n\nPayments\n\n \n\n \n(133,609 )\n \n\n \n(781,394 )\n\nForeign currency translation\n\n \n\n \n-\n \n\n \n\n \n829\n \n\nEnding balance\n\n \n$-\n \n\n \n$-\n \n\n \n\n \n\n28\n\n*Table of Contents*\n\n \n\n**COSMOS HEALTH INC.**\n\n**Notes to Unaudited Condensed Consolidated Financial Statements**\n\n**March 31, 2026**\n\n \n\n \n\n*Grigorios Siokas*\n\n \n\nFrom time to time, Grigorios Siokas loans the Company funds in the form of non-interest bearing, no-term loans. As of March 31, 2026 and December 31, 2025 the Company had an outstanding principal balance under these loans of $0 and $0, respectively.\n\n \n\nThe above balances are adjusted for the foreign currency rate as of the balance sheet date.\n\n \n\nExcept as set forth above, we have not entered into any material transactions with any director, executive officer, promoter, beneficial owner of more than five percent of our common stock, or any family members of such persons, other than compensation arrangements for officers and members of the Board of Directors, which are annually approved by the Board of Directors. For related balances, please refer to the “Other Related Parties” section above.\n\n \n\n**NOTE 10 – LINES OF CREDIT**\n\n \n\nA summary of the Company’s lines of credit as of March 31, 2026 and December 31, 2025 is presented below:\n\n \n\n \n\n \n\n**March 31,**\n\n**2026**\n\n \n\n \n\n**December 31,**\n\n**2025**\n\n \n\nNational\n\n \n$5,330,528\n \n\n \n$6,516,307\n \n\nAlpha\n\n \n\n \n960,926\n \n\n \n\n \n946,426\n \n\nCredia Bank SA\n\n \n\n \n1,104,034\n \n\n \n\n \n1,232,875\n \n\nEFG\n\n \n\n \n460,720\n \n\n \n\n \n482,076\n \n\nEnding balance\n\n \n$7,856,208\n \n\n \n$9,177,684\n \n\n \n\nThe 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 three-month Euribor rate and any contributions currently in force by law on certain lines of credit (the \"COSME 1 Facility\").\n\n \n\nThe maximum borrowing allowed for the 6% line of credit was $5,759,000 and $5,868,000 as of March 31, 2026 and December 31, 2025, respectively. During the year ended December 31, 2025, the Company increased the maximum borrowing capacity under this line of credit. This amendment was executed to enhance financial flexibility and support the Company’s operational and strategic initiatives. The outstanding balance of the facility was $4,360,995 and $5,463,862, as of March 31, 2026 and December 31, 2025, respectively.\n\n \n\nThe cumulative maximum borrowing allowed for the COSME 1 Facility and COSME 2 Facility (collectively, the \"Facilities\") was $1,151,800 and $1,173,600 as of March 31, 2026 and December 31, 2025, respectively. The outstanding balance of the Facilities was $907,628 and $895,987 as of March 31, 2026 and December 31, 2025, respectively. \n\n \n\nThe 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 $1,151,800 and $1,173,600 as of March 31, 2026 and December 31, 2025, respectively. The outstanding balance of the Alpha LOC was $960,926 and $946,226, as of March 31, 2026 and December 31, 2025, respectively.\n\n \n\nThe Company holds a line of credit with CrediaBank S.A. (formerly Pancreta Bank, renamed following its merger with Attica Bank during 2025) which is renewed annually and has a current interest rate of 4.49%. The maximum borrowing allowed as of March 31, 2026 and December 31, 2025 was $1,727,700 and $1,760,400, respectively. The outstanding balance of the CrediaBank LOC as of March 31, 2026 and December 31, 2025, was $198,142 and $309,839, respectively.\n\n \n\nThe 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 March 31, 2026 and December 31, 2025, was $460,720 and $469,440, respectively. The outstanding balance of the EFG LOC as of March 31, 2026 and December 31, 2025 was $460,720 and $482,076 respectively.\n\n \n\nOn January 27, 2025, the Company entered into a bond loan agreement with CrediaBank S.A. (formerly Attica Bank, renamed following its merger with Pancreta Bank during 2025), 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, which were classified as Notes Payable. The remaining borrowing capacity of €1,500,000 is available on a revolving basis, subject to qualifying checks receivable as collateral, classified as Lines of Credit. 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 loan is further secured by a preliminary mortgage of €2,640,000 ($3,040,752) registered on Company’s owned warehouse facilities. The maximum borrowing available under the CrediaBank LOC as of March 31, 2026 and December 31, 2025 was $1,727,700 and $1,760,400, respectively. The outstanding balance as of March 31, 2026 and December 31, 2025 was $905,891 and $923,036, respectively.\n\n \n\n \n\n29\n\n*Table of Contents*\n\n \n\n**COSMOS HEALTH INC.**\n\n**Notes to Unaudited Condensed Consolidated Financial Statements**\n\n**March 31, 2026**\n\n \n\n \n\nUnder the aforementioned line of credit agreements, the Company is required to maintain certain financial ratios and covenants. As of March 31, 2026, and December 31, 2025, the Company was in compliance with these ratios and covenants.\n\n \n\nAll 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.\n\n \n\nInterest expense on the Company’s outstanding lines of credit balances for the three months ended March 31, 2026 and 2025, was $60,811 and $79,663, respectively.\n\n \n\n**NOTE 11 – CONVERTIBLE DEBT**\n\n \n\nA summary of the Company’s convertible debt during the 3-month period ended March 31, 2026 and the year ended December 31, 2025 is presented below:\n\n \n\n \n\n \n\n**March 31,**\n\n**2026**\n\n \n\n \n\n**December 31,**\n\n**2025**\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nBeginning balance convertible notes\n\n \n$10,137,804\n \n\n \n\n$ \n-\n \n\nIssuance of new convertible notes\n\n \n\n \n-\n \n\n \n\n \n9,839,348\n \n\nFair value adjustment\n\n \n\n \n(626,493 )\n \n\n \n608,456\n \n\nPayments\n\n \n\n \n-\n \n\n \n\n \n-\n \n\nConversion to common stock\n\n \n\n \n(864,348)\n \n\n \n(310,000 )\n\nSubtotal notes\n\n \n\n \n8,646,963\n \n\n \n\n \n10,137,804\n \n\nUnamortized debt discount\n\n \n\n \n(3,214,726 )\n \n\n \n(3,732,226 )\n\nConvertible note payable, net of fair value adjustment and unamortized debt disc\n\n \n5,432,237\n \n\n \n\n \n6,405,578\n \n\nConvertible Notes payable – long-term\n\n \n\n \n4,785,274\n \n\n \n\n \n4,267,774\n \n\nConvertible Notes payable - short-term\n\n \n\n$ \n646,963\n \n\n \n\n$ \n2,137,804\n \n\n \n\nAs 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 condensed 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 condensed 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.\n\n \n\nThe 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.\n\n \n\n \n\n30\n\n*Table of Contents*\n\n \n\n**COSMOS HEALTH INC.**\n\n**Notes to Unaudited Condensed Consolidated Financial Statements**\n\n**March 31, 2026**\n\n \n\n \n\n*May & July 2025 Convertible Promissory Notes*\n\n \n\nOn 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-day 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 60th 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 61st day following issuance and ending on the 120th 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 121st day after issuance and ending on the 180th day after issuance, the outstanding principal and accrued interest owed shall be repaid at 125% of the outstanding balance.\n\n \n\nOn July 9, 2025 the Company issued two convertible promissory notes; one convertible promissory note was issued to Boot (the “Second Boot Note”) and other was issued to Vanquish Funding Group, Inc. (the “Vanquish Note”). Together, the two notes are referred to as the “July 2025 Notes”. The Second Boot Note has a principal amount of $75,000 and the Vanquish Note has a principal amount of $150,000. The July 2025 Notes have identical terms to the May 2025 Notes.\n\n \n\nDue to certain embedded features within the May and July 2025 Notes, the Company elected to account for the May and July 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 condensed consolidated statements of operations. As a result of electing the fair value option, $23,100 of direct costs and fees related to the issuance of the May 2025 Notes were expensed immediately. There were no direct costs and fees related to the issuance of the July 2025 Notes.\n\n \n\nDuring the period from November 24, 2025 through December 7, 2025, the Company issued an aggregate of 783,430 shares of its common stock upon the conversion of the Company’s May 2025 Convertible Promissory Notes (the “May 2025 Notes”), resulting in the full settlement of the notes. The conversions satisfied total obligations of $327,661, consisting of $310,000 of outstanding principal and accrued interest, in accordance with the conversion terms of the May 2025 Notes.\n\n \n\nDuring the three-month period ended March 31, 2026, the Company issued an aggregate of 659,172 shares of its common stock upon the conversion of the Company’s July 2025 Convertible Promissory Notes (the “July 2025 Notes”), resulting in the full settlement of the notes. The conversions satisfied total obligations of $237,822, consisting of $225,000 of outstanding principal and $12,822 of accrued interest, in accordance with the conversion terms of the July 2025 Notes.\n\n \n\nFor the year ended December 31, 2025, the Company recorded a loss of $52,425 related to the change in fair value of the July 2025 Notes, recognized in “Change in fair value of convertible notes” in the condensed consolidated statements of operations. The loss includes the July 2025 Notes, which were fully converted during the first quarter of 2026. The Company measured the fair value of the common stock issued at each respective conversion date, and the related profit and loss impact, including amounts associated with the fair value of the July Notes as of March 31, 2026, was recognized in the statement of operations.\n\n \n\nInterest expense on the July 2025 Notes totaled $1,897 for the three months ended March 31, 2026, and is included within Interest expense in the condensed consolidated statement of operations.  \n\n \n\n*June 2025 Convertible Promissory Note*\n\n \n\nOn 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 three 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.\n\n \n\nDue 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 condensed consolidated statements of operations. As a result of electing the fair value option, $274,783 of direct costs and fees related to the issuance of the June 2025 Note were expensed immediately.\n\n \n\nThe fair value of the convertible notes was estimated using a Monte Carlo simulation model. Significant assumptions included a stock price of $0.32, expected annualized volatility of 66.8%, risk-free interest rate of 3.70%, dividend yield of 0%, and a discount rate of 25.0%. The simulation used a one-year forecast horizon with 52 weekly steps and 50,000 trials. Event assumptions included a 5% probability of prepayment, 10% probability of a qualified financing event, 80% probability of payment at maturity (June 29, 2026), and 5% probability of default (assumed June 9, 2026), with a valuation date of March 31, 2026.\n\n \n\n \n\n31\n\n*Table of Contents*\n\n \n\n**COSMOS HEALTH INC.**\n\n**Notes to Unaudited Condensed Consolidated Financial Statements**\n\n**March 31, 2026**\n\n \n\n \n\nOn August 5, 2025, the Company entered into an amendment to its June 2025 Note. The amendment was executed following the Company’s failure to make its initial interest payment, which constituted an event of default under the original agreement. Under the terms of the amendment, the Company issued 500,000 shares of common stock to the investor as consideration for curing the default and agreeing to subordinate its lien position to that of the August 2025 Note (as defined below) investor, which provided subsequent financing to the Company. The Company also paid $19,565 of accrued interest, curing the prior default in full.\n\n \n\nThe amendment further introduced provisions requiring the Company to apply 30% of any proceeds from future At-The-Market (“ATM”) equity offerings with A.G.P. toward repayment of the June 2025 Note, established a 24% default interest rate and a $500 daily penalty in the event of future payment defaults, and added a new Nasdaq listing compliance clause that would constitute an event of default upon delisting or failure to maintain listing standards. All other terms of the June 2025 Note, including its principal balance, stated interest rate, conversion features, and maturity date, remained unchanged.\n\n \n\nThe issuance of shares to the investor was accounted for as a non-cash debt modification expense, measured at the fair value of the shares on the amendment date of $439,000 and recorded in change in fair value of convertible notes in the condensed consolidated statements of operations. The amendment did not represent a substantial modification or extinguishment of the existing debt under ASC 470-50, as the primary economic terms of the June 2025 Note remained intact.\n\n \n\nDuring the three-month period ended March 31, 2026, the Company issued an aggregate of 889,620 shares of its common stock upon the conversion of the Company’s June 2025 Convertible Promissory Note (the “June 2025 Note”), resulting in the partial settlement of the note. The conversions satisfied aggregate obligations of $354,348 in accordance with the conversion terms of the June 2025 Note. In addition, the Company issued 159,856 shares of its common stock in satisfaction of accrued default interest obligations totaling $58,347 related to the June 2025 Note.\n\n \n\nFor the three and three months ended March 31, 2026 the Company recorded a gain of $461,735, related to the change in fair value of the June 2025 Note which was recognized within change in fair value of the convertible notes in the condensed consolidated statements of operations.\n\n \n\nInterest expense on the June 2025 Note totaled $44,917 for the three months ended March 31, 2026, and is included within Interest expense in the condensed consolidated statement of operations.  \n\n \n\n*August 2025 Convertible Promissory Note*\n\n \n\nOn August 5, 2025 the Company issued a senior secured convertible promissory note (the “August 2025 Note”) to an investor. The August 2025 Note has a principal amount of $8,000,000, an original issue discount of $720,000 and incurs interest at a rate of 9% per annum. Interest is payable in shares of common stock or in cash, at the Company’s election. The August 2025 Note may be converted by the investor at any time following issuance into shares of the Company’s common stock. The conversion price is set as the lower of $1.05 or a market price, equal to 92% of the lowest daily VWAP during the ten preceding trading days immediately preceding the conversion date. The terms of the August 2025 Note stipulate certain covenants, including commencing on March 31, 2026, on the final day of each fiscal quarter, the Company shall have an available cash and cash equivalents balance of at least $400,000.\n\n \n\nThe Company identified certain embedded features within the August 2025 Note that were required to bifurcated as derivative liabilities in accordance with ASC 815-40. Upon issuance, the Company recognized the fair value of the derivative liability of $2,817,218 which was included as a debt discount. Subsequent changes in the fair value of the derivative liability are recorded as a component of non-operating income (loss) in the condensed consolidated statements of operations. Upon issuance, the Company capitalized $736,250 of direct costs and fees related to the issuance of the August 2025 Notes as additional debt discount which are amortized over the life of the August 2025 Note.\n\n \n\nDuring the three-month period ended March 31, 2026, the Company issued an aggregate of 874,641 shares of its common stock upon the conversion of the Company’s August 2025 Convertible Promissory Note (the “August 2025 Note”), resulting in the partial settlement of the note. The conversions satisfied aggregate obligations of $298,501 in accordance with the conversion terms of the August 2025 Note ($285,000 of outstanding principal and interest).\n\n \n\nIn connection with the conversions during the three-month period ended March 31, 2026, the Company recognized a conversion loss of approximately $169,829 related to the excess of the fair value of the shares issued over the carrying value of the converted obligations under the August 2025 Note. The conversion loss was classified within change in fair value of convertible notes in the accompanying condensed consolidated statements of operations.\n\n \n\nFor the three ended March 31, 2026 the Company recorded a gain of $231,968 related to the change in fair value of the derivative liability which was recognized in change in fair value of convertible notes in the condensed consolidated statements of operations.\n\n \n\nInterest expense on the August 2025 Note totaled $567,625 for the three and three months ended March 31, 2026, comprised of $177,275 for the amortization of debt discount and $390,350 for coupon interest.\n\n \n\nThe following table presents the change in fair value of the derivative liability for the periods identified:\n\n \n\nBalance, January 1, 2026\n\n \n$1,292,198\n \n\nChange in fair value of the derivative liability\n\n \n\n \n(231,968 )\n\nBalance, March 31, 2026\n\n \n$1,060,230\n \n\n \n\n \n\n32\n\n*Table of Contents*\n\n \n\n**COSMOS HEALTH INC.**\n\n**Notes to Unaudited Condensed Consolidated Financial Statements**\n\n**March 31, 2026**\n\n \n\n \n\n**NOTE 12 – NOTES PAYABLE**\n\n \n\nA summary of the Company’s third-party debt as of and for period ended March 31, 2026, and the year ended December 31, 2025 is presented below:\n\n \n\n**March 31, 2026**\n\n \n\n**Trade**\n\n**Facility**\n\n \n\n \n\n**Third**\n\n**Party**\n\n \n\n \n\n**COVID**\n\n**Loans**\n\n \n\n \n\n**Total**\n\n \n\nBeginning balance, December 31, 2025\n\n \n$1,232,280\n \n\n \n\n \n2,394,203\n \n\n \n\n \n148,854\n \n\n \n\n \n3,775,337\n \n\nPayments\n\n \n\n \n-\n \n\n \n\n \n(251,778 )\n \n\n \n(2,788 )\n \n\n \n(254,566 )\n\nForeign currency translation\n\n \n\n \n(22,890 )\n \n\n \n(44,473 )\n \n\n \n(2,811 )\n \n\n \n(70,274 )\n\nEnding balance, March 31, 2026\n\n \n\n \n1,209,390\n \n\n \n\n \n2,097,952\n \n\n \n\n \n143,255\n \n\n \n\n \n3,450,597\n \n\nNotes payable - long-term\n\n \n\n \n-\n \n\n \n\n \n(1,268,835 )\n \n\n \n(70,188 )\n \n\n \n(1,339,023 )\n\nNotes payable - short-term\n\n \n$1,209,390\n \n\n \n\n \n829,117\n \n\n \n\n \n73,067\n \n\n \n\n \n2,111,574\n \n\n \n\n**December 31, 2025**\n\n \n\n**Trade**\n\n**Facility**\n\n \n\n \n\n**Third**\n\n**Party**\n\n \n\n \n\n**COVID**\n\n**Loans**\n\n \n\n \n\n**Total**\n\n \n\nBeginning balance, January 1, 2025\n\n \n\n \n1,397,385\n \n\n \n\n \n2,557,023\n \n\n \n\n \n154,505\n \n\n \n\n \n4,108,913\n \n\nProceeds\n\n \n\n \n-\n \n\n \n\n \n2,328,190\n \n\n \n\n \n-\n \n\n \n\n \n2,328,190\n \n\nPayments\n\n \n\n \n(352,080 )\n \n\n \n(2,563,444 )\n \n\n \n(23,467 )\n \n\n \n(2,938,991 )\n\nDebt exchanges\n\n \n\n \n-\n \n\n \n\n \n(293,400 )\n \n\n \n-\n \n\n \n\n \n(293,400 )\n\nRecapitalization of debt\n\n \n\n \n-\n \n\n \n\n \n25,000\n \n\n \n\n \n-\n \n\n \n\n \n25,000\n \n\nForeign currency translation\n\n \n\n \n186,975\n \n\n \n\n \n340,834\n \n\n \n\n \n17,816\n \n\n \n\n \n545,625\n \n\nEnding balance, December 31, 2025\n\n \n\n \n1,232,280\n \n\n \n\n \n2,394,203\n \n\n \n\n \n148,854\n \n\n \n\n \n3,775,337\n \n\nNotes payable – long-term\n\n \n\n \n-\n \n\n \n\n \n(1,514,379 )\n \n\n \n(69,684 )\n \n\n \n(1,584,063 )\n\nNotes payable - short-term\n\n \n\n \n1,232,280\n \n\n \n\n \n879,824\n \n\n \n\n \n79,170\n \n\n \n\n \n2,191,274\n \n\n \n\nOur outstanding debt as of March 31, 2026 is repayable as follows:\n\n \n\n \n\n \n\n**March 31, 2026**\n\n \n\n2027\n\n \n$2,111,574\n \n\n2028\n\n \n\n \n703,758\n \n\n2029\n\n \n\n \n413,824\n \n\n2030\n\n \n\n \n221,441\n \n\n2031 and thereafter\n\n \n\n \n-\n \n\n**Total debt**\n\n \n\n \n3,450,597\n \n\nLess: notes payable - current portion\n\n \n\n \n(2,111,574 )\n\nNotes payable - long term portion\n\n \n$1,339,023\n \n\n \n\n \n\n33\n\n*Table of Contents*\n\n \n\n**COSMOS HEALTH INC.**\n\n**Notes to Unaudited Condensed Consolidated Financial Statements**\n\n**March 31, 2026**\n\n \n\n \n\n \n\nTrade Facility Agreements\n\n \n\nOn 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.\n\n \n\nNo principal repayments were made during the three-month period ended March 31, 2026. As of March 31, 2026, the Company had an outstanding principal balance of €1,050,000 ($1,209,390), which is fully classified as “Notes Payable” in the Company’s unaudited condensed consolidated balance sheets.\n\n \n\nJune 23, 2020 Debt Agreement\n\n \n\nOn June 23, 2020, the Company’s subsidiary, Cosmofarm, entered into an agreement with the National Bank of Greece S.A. (the “Bank”) to borrow up to €500,000 ($611,500). The note had a maturity date of 60 months from the date of the first disbursement, including a grace period of nine months. The outstanding balance was €0 ($0) as of March 31, 2026, and December 31, 2025, respectively, following the full repayment of the remaining principal balance of €88,235 ($103,553) during the year ended December 31, 2025.\n\n \n\nNovember 19, 2020 Debt Agreement\n\n \n\nOn 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. The principal is to be repaid in 18 quarterly installments of €27,778 ($30,333 During the three months ended March 31, 2026, there were no repayments related to this note, as the outstanding principal balance was fully repaid during 2025. As of March 31, 2026, the outstanding principal balance was €0 ($0), compared to €0 ($0) as of December 31, 2025.\n\n \n\nJuly 30, 2021 Debt Agreement\n\n \n\nOn July 30, 2021, the Company entered into an agreement with a third-party lender in the principal amount of €500,000 ($568,850). During the three-month period ended March 31, 2026, the Company repaid €29,834 ($34,363) of the principal balance. As of March 31, 2026 and December 31, 2025, the outstanding principal balance was €60,511 ($69,697) and €90,345 ($106,029), respectively, and accrued interest related to the note amounted to €1,336 ($1,539) and €20,038 ($23,517), respectively, all of which was classified as “Notes payable” on the accompanying unaudited condensed consolidated balance sheets.\n\n \n\nJune 9, 2022 Debt Agreement\n\n \n\nOn June 9, 2022, the Company entered into an agreement with a third-party lender in the principal amount of €320,000 ($335,008). During the three-month period ended March 31, 2026, the Company repaid €20,000 ($23,036) of the principal balance. As of March 31, 2026 and December 31, 2025, the Company had accrued interest of €2,106 ($2,425) and €4,262 ($5,002), respectively, and outstanding principal balances of €80,000 ($92,144) and €100,000 ($117,360), respectively, all of which was classified as “Notes payable” on the unaudited accompanying condensed consolidated balance sheets.\n\n \n\n \n\n34\n\n*Table of Contents*\n\n \n\n**COSMOS HEALTH INC.**\n\n**Notes to Unaudited Condensed Consolidated Financial Statements**\n\n**March 31, 2026**\n\n \n\n \n\n \n\nJuly 14, 2023 Debt Agreement\n\n \n\nOn 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 three-month period ended March 31, 2026 the Company repaid €54,317 ($62,562) of the principal. As of March 31, 2026 and December 31, 2025 the Company has accrued interest of €15,443 ($17,787) and €19,879 ($23,330) and an outstanding balance of €543,167 ($625,619) and €597,483 ($701,206), of which $250,069 is classified as “Notes payable” on the accompanying unaudited condensed consolidated balance sheets as of March 31, 2026.\n\n \n\nCloudscreen Promissory Note\n\n \n\nOn January 23, 2024, the Company completed the acquisition of Cloudscreen, an AI-powered drug repurposing platform, for total consideration of $637,080, consisting of 280,000 shares of the Company’s common stock and a promissory note of $317,880. During the year ended December 31, 2025, the Company repaid $22,421 of the outstanding balance, and the remaining balance of $293,400 was converted into shares of the Company’s common stock pursuant to a debt exchange agreement, resulting in a gain on extinguishment of debt of $68,610. As of March 31, 2026 and December 31, 2025, there was no outstanding balance related to this obligation.\n\n \n\nJuly 29, 2024 Debt Agreement\n\n \n\nOn 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 three-month period ended March 31, 2026, the Company repaid principal of €44,444($51,191). As of March 31, 2026, and December 31, 2025, the Company had an outstanding balance of €311,111 ($358,338) and €355,556 ($417,080), respectively, of which $102,382 is classified as “Notes payable” on the accompanying unaudited condensed consolidated balance sheets as of March 31, 2026. The Company also had accrued interest of $5,412 as of March 31, 2026 and $7,932 as of December 31, 2025.\n\n \n\nDecember 20, 2024 Debt Agreement\n\n \n\nOn 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 three-month period ended March 31, 2026, the Company repaid no principal. As of March 31, 2026, and December 31, 2025 the Company has accrued interest of €4,135 ($4,763) and €7,728 ($9,070), respectively, and an outstanding balance of € 266,667 ($307,147) and €266,667 ($312,960), of which $153,573 is classified as “Notes payable” on the accompanying unaudited condensed consolidated balance sheets as of March 31, 2026.\n\n \n\nJanuary 27, 2025 Debt Agreement\n\n \n\nOn 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 ($821,520), while the remaining borrowing capacity of €1,500,000 ($1,619,400) is available on a revolving basis subject to the provision of qualifying checks receivable as security for each drawing. The facility bears interest at a floating rate of 2.95% plus the applicable 6-month Euribor. During the three-month period ended March 31, 2026, the Company repaid €70,000 ($80,626**)**of the principal balance. As of March 31, 2026 and December 31, 2025, the Company had accrued interest of €36,557 ($42,106) and €28,702 ($33,685), respectively, and outstanding principal balances of €560,000 ($645,008) and €630,000 ($739,368), respectively, of which $161,252 is classified as “Notes payable” on the accompanying unaudited condensed consolidated balance sheets as of March 31, 2026. The loan is secured by a preliminary mortgage of €2,640,000 ($3,040,752) registered on the Company’s owned warehouse facilities.\n\n \n\nMay 29, 2025 Debt agreement\n\n \n\nOn May 29, 2025, the Company entered into a business loan agreement with a third-party lender in the principal amount of $525,000. The Note carried debt issuance fees of $25,000, which are being amortized over the life of the loan, and bore fixed total interest of $231,000, accrued evenly over the term and payable together with principal installments. The loan was scheduled to be fully repaid by December 15, 2025 through weekly installments, and during the year ended December 31, 2025 the Company made aggregate principal and interest repayments totaling $756,000, resulting in a zero outstanding balance as of December 31, 2025 and March 31, 2026.\n\n \n\nCOVID-19 Loans\n\n \n\nOn 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 three-month period ended March 31, 2026, no principal repayments were made. As of March 31, 2026, and December 31, 2025 the Company has an outstanding balance of 87,500 ($100,783) and 87,500 ($102,690), of which $30,595 is classified as “Notes payable” on the accompanying unaudited condensed consolidated balance sheets as of March 31, 2026.\n\n \n\nOn June 24, 2020, the Company’s subsidiary, Decahedron, received a loan £50,000 ($68,310) from the UK government. As of March 31, 2026, and December 31, 2025 the Company has an outstanding balance of £32,215 ($42,472) and £34,330 ($46,164), all of which is classified as “Notes payable” on the accompanying unaudited condensed consolidated balance sheets as of March 31, 2026.\n\n \n\nNone of the above loans were made by any related parties.\n\n \n\n \n\n35\n\n*Table of Contents*\n\n \n\n**COSMOS HEALTH INC.**\n\n**Notes to Unaudited Condensed Consolidated Financial Statements**\n\n**March 31, 2026**\n\n \n\n**NOTE 13 – LEASES**\n\n \n\nThe Company has various operating and finance lease agreements with terms up to 10 years, for various types of property and equipment (such as office space and vehicles) etc. Some leases include options to purchase, terminate or extend for one or more years. These options are included in the lease term when it is reasonably certain that the option will be exercised. Leases with an initial term of 12 months or less are not recorded on the balance sheet; we recognize lease expense for these leases on a straight-line basis over the lease term.\n\n \n\n*Operating Leases*\n\n \n\nThe Company’s weighted-average remaining lease term relating to its operating leases is 0.81 years, with a weighted-average discount rate of 6.74%.\n\n \n\nThe following table presents information about the amount, timing and uncertainty of cash flows arising from the Company’s operating leases as of March 31, 2026:\n\n \n\n**Maturity of Operating Lease Liability**\n\n \n\n \n\n \n\n2027\n\n \n\n$ \n212,727\n \n\n2028\n\n \n\n \n208,369\n \n\n2029\n\n \n\n \n146,674\n \n\n2030 and thereafter\n\n \n\n \n156,531\n \n\nTotal undiscounted operating lease payments\n\n \n$724,301\n \n\nLess: Imputed interest\n\n \n\n \n(56,325 )\n\n**Present value of operating lease liabilities**\n\n \n$667,976\n \n\n \n\nThe Company incurred lease expense, due to amortization of operating lease right-of-use assets, of $74,117 and $60,668, which was included in “General and administrative expenses,” for the three months ended March 31, 2026 and 2025, respectively. \n\n \n\n*Finance Leases*\n\n \n\nThe Company’s weighted-average remaining lease term relating to its finance leases is 0.17 years, with a weighted-average discount rate of 6.74%.\n\n \n\nThe following table presents information about the amount, timing and uncertainty of cash flows arising from the Company’s finance leases as of March 31, 2026:\n\n \n\n**Maturity of Lease Liability**\n\n \n\n \n\n \n\n2027\n\n \n\n$ \n1,918\n \n\nTotal undiscounted finance lease payments\n\n \n$1,918\n \n\nLess: Imputed interest\n\n \n\n \n(11 )\n\n**Present value of finance lease liabilities**\n\n \n$1,907\n \n\n \n\n \n\n36\n\n*Table of Contents*\n\n \n\n**COSMOS HEALTH INC.**\n\n**Notes to Unaudited Condensed Consolidated Financial Statements**\n\n**March 31, 2026**\n\n \n\n \n\nThe Company had financing cash flows used in finances leases of $1,948 and $5,398 for the three months ended March 31, 2026 and 2025, respectively.\n\n \n\nThe Company incurred interest expense on its finance leases of $43 and $195 which was included in “Interest expense”, for the three months ended March 31, 2026, and 2025, respectively. The Company incurred amortization expense on its finance leases of $1,659 and $4,603 which was included in “Depreciation and amortization expense,” for the three months ended March 31, 2026 and 2025, respectively.\n\n \n\n**NOTE 14 – OTHER LIABILITIES**\n\n \n\nAs of March 31, 2026 the Company’s other liabilities primarily consist of obligations to local tax authorities, payroll taxes, fines, and other miscellaneous liabilities.\n\n \n\nThe significant components of other liabilities are as follows:\n\n \n\n \n\n·\n\nThe Company’s Greek subsidiaries have $2,928,951 and $3,618,875 in settled tax liabilities as March 31, 2026 and December 31, 2025, respectively, which are payable in installments to the tax authorities.\n\n \n\n \n\n \n\n \n\n·\n\nPayroll and other tax-related current liabilities amount to $2,693,530 and $2,570,839 as of March 31, 2026 and December 31, 2025, respectively, and represent obligations due to tax authorities within the next 12 months.\n\n \n\n \n\n \n\n \n\n·\n\nA provision of $666,358 has been recorded for potential tax liabilities related to the unaudited tax years of SkyPharm S.A., in accordance with ASC 450-20, as the Company has assessed that a loss is probable and reasonably estimable.\n\n \n\n \n\n \n\n \n\n·\n\nA provision of $376,271 has been recognized for staff leaving compensation, based on actuarial valuations performed in accordance with ASC 715-30 (Defined Benefit Plans – Pension).\n\n \n\n \n\n \n\n \n\n·\n\nCustomer prepayments totaling $1,533,027 and $912,331 as of March 31, 2026 and December 31, 2025, respectively, are included in “Other Current Liabilities” in accordance with ASC 606-10-45-2 (Revenue Recognition – Contract Liabilities). Approximately $1.3 million of the March 31, 2026 balance relates to deferred revenue recorded in connection with uncollected amounts from Medihelm S.A., the Company’s exclusive distributor of its branded nutraceutical products in Greece.\n\n \n\nLiabilities 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.” \n\n \n\n**NOTE 15 – COMMITMENTS AND CONTINGENCIES**\n\n \n\n**Legal Matters**\n\n \n\nFrom 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 March 31, 2026, the following proceedings were pending. None is expected to have a material financial or operational impact upon the Company.\n\n \n\n**Urban Planning Compensation Claim – Cana Laboratories**\n\n \n\nIn October 2023, the Company’s subsidiary, Cana Laboratories, was approached by an attorney representing two clients seeking compensation of €39,211 related to 34.70 square meters of urban sprawl, for which an Act of Imputation had been issued by the Department of Urban Planning. The Company’s legal counsel has advised that Cana is not obligated to accept the compensatory value as agreed and has suggested exploring an out-of-court settlement. As of the date of this report, the clients’ attorney has not provided further communication.\n\n \n\n**Pending Lawsuits Against Hospitals – Cana Laboratories SA**\n\n \n\nCana Laboratories SA v. Evangelismos Hospital (Case No. ΑΓ1530/2022) — Cana Laboratories SA filed a lawsuit seeking recovery of approximately €278,054 ($326,852) plus accrued interest for unpaid invoices. The court issued Decision No. 2161/2025 rejecting the claim, against which the Company has filed an appeal before the Council of State. The ultimate outcome of the appeal remains uncertain at this time.\n\n \n\nCana Laboratories SA v. Evangelismos Hospital (Case No. ΑΓ1225/2023) — Cana Laboratories SA filed a lawsuit seeking recovery of approximately €248,382 ($291,501) plus accrued interest for unpaid invoices. The hearing, originally scheduled for April 8, 2025, has been postponed to May 19, 2026. Legal counsel assesses the likelihood of success and collection of the claimed amount as probable.\n\n \n\nCana Laboratories SA v. Konstantopouleio Hospital (Case No. ΑΓ1234/2023) — Cana Laboratories SA had initiated legal proceedings to recover approximately €1,291 ($1,515) plus accrued interest for unpaid invoices. This matter has been subsequently resolved through full repayment of the outstanding balance by the defendant.\n\n \n\nCana Laboratories SA v. Papanikolaou Hospital (Case No. ΑΓ575/2024) — Cana Laboratories SA had initiated legal proceedings to recover approximately €89,948 ($105,563) plus accrued interest for unpaid invoices. This matter has been subsequently resolved through full repayment of the outstanding balance by the defendant.\n\n \n\nCana Laboratories SA v. Theageneio Hospital (Case No. ΑΓ574/2024) — Cana Laboratories SA had initiated legal proceedings to recover approximately €16,272 ($19,097) plus accrued interest for unpaid invoices. This matter has been subsequently resolved through full repayment of the outstanding balance by the defendant. \n\n \n\nAll above claims have been classified under “Other assets” within non-current assets in the Company’s consolidated balance sheets as of March 31, 2026. \n\n \n\n \n\n37\n\n*Table of Contents*\n\n \n\n**COSMOS HEALTH INC.**\n\n**Notes to Unaudited Condensed Consolidated Financial Statements**\n\n**March 31, 2026**\n\n \n\n \n\n**Employment Dispute – Cana Laboratories**\n\n \n\nA lawsuit filed on April 5, 2018, by a former employee against the Company’s subsidiary, Cana, before the Athens Court of First Instance, sought the nullification of the termination of employment and compensation for unpaid wages and moral damages. Following multiple appeals, Judgment No. 1192/2024 was issued on September 26, 2023, requiring Cana to reinstate the former employee, with a penalty of €200 per day for non-compliance. According to the Company’s legal counsel, for the penalty to be enforceable, the former employee must file a new lawsuit requesting reinstatement. As of the date of this report, no such lawsuit or request for reinstatement has been received.\n\n \n\nOn 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. As of March 31, 2026, the Company had not executed the last three installments, resulting in an outstanding balance of €24,208 ($27,883). The two remaining installments expected to be settled by the end of the second quarter of 2026.\n\n \n\n**Neiada A., Neiadas B. v. Cana Laboratories SA**\n\n \n\nIn February 2025, plaintiffs filed a lawsuit against the Company’s subsidiary, Cana Laboratories SA before the Single-Member First Instance Court of Athens, seeking restitution of a leased property and recovery of approximately €21,678 ($25,441) in outstanding rent and compensation for use. The monetary claims have been subsequently settled by the Company. The claim for restitution of the leased property is expected to be resolved through voluntary surrender of the premises, thereby avoiding forced execution.\n\n \n\n**DA Melissotopi Ltd v. Cana Laboratories SA**\n\n \n\nIn July 2025, plaintiff filed a lawsuit against Cana Laboratories SA before the Single-Member First Instance Court of Athens, asserting claims of approximately €17,868 ($20,970) related to storage and safekeeping fees, custodial and maintenance services, and electronic platform management. The hearing is currently estimated to be scheduled in 2027. Based on the assessment of legal counsel, a significant portion of the claim is expected to be dismissed as inadmissible, with maximum estimated exposure of approximately €4,000 ($4,607).\n\n \n\n**Claims for Recovery of Receivables**\n\n \n\nCosmofarm SA v. Papaleka E. — Cosmofarm SA has initiated legal proceedings before the Single-Member First Instance Court of Athens to recover approximately €20,301 ($23,825) in unpaid invoices. The hearing is estimated to be scheduled in the second half of 2026. Legal counsel assesses the claim as likely to be upheld.\n\n \n\nCosmofarm SA v. Katsanis G. — Cosmofarm SA has initiated legal proceedings before the Single-Member First Instance Court of Athens to recover approximately €15,143 ($17,772) in unpaid invoices. The hearing is estimated to be scheduled in the second half of 2026. Legal counsel assesses the claim as likely to be upheld.\n\n \n\nCosmofarm SA v. Renieris A. — Cosmofarm SA has initiated legal proceedings before the Single-Member First Instance Court of Athens to recover approximately €15,255 ($17,903) in unpaid invoices. The hearing is estimated to be scheduled in the second half of 2026. Legal counsel assesses the claim as likely to be upheld.\n\n \n\n**Tax Assessments — SkyPharm S.A.**\n\n \n\nIn February 2026, the Greek tax authorities issued corrective assessments against the Company's subsidiary SkyPharm S.A. relating to corporate income tax for fiscal years 2017 and 2018 and VAT for fiscal year 2018, aggregating approximately €955,430 ($1,100,464) plus statutory interest. The Company has appealed the assessments through the applicable administrative process and based on the advice of legal counsel, believes it has strong grounds for a favorable resolution on both procedural and substantive grounds.\n\n \n\n \n\n38\n\n*Table of Contents*\n\n \n\n**COSMOS HEALTH INC.**\n\n**Notes to Unaudited Condensed Consolidated Financial Statements**\n\n**March 31, 2026**\n\n \n\n \n\n**Advisory Agreements**\n\n \n\nThe Company has entered into various advisory and consulting agreements with third-party advisors, under which the advisors provide marketing, investor relations, digital marketing, and general business advisory services. As consideration, the Company issues common stock, with the number of shares, fair value, and vesting schedules established at the grant date. Certain agreements include clawback provisions for unvested shares if the arrangement is terminated prior to full vesting. Stock-based compensation expense related to these agreements is recognized evenly over the respective service periods and is classified as “General and administrative expenses” in the consolidated statements of operations and comprehensive income (loss).\n\n \n\nOn July 24, 2025, the Company entered into a marketing services agreement with a third-party advisor, pursuant to which it issued 169,549 shares of its common stock in exchange for marketing and distribution services. The shares carry full voting rights and vest at a rate of 28,258 shares per month over the 6-month term of the agreement. In accordance with the terms of the agreement, if the Company terminates the arrangement, any unvested shares as of the termination date will be subject to claw back. The fair value of the shares on the issuance date was $0.5898 per share, resulting in a total fair value of $100,000. For the three-month period ended March 31, 2026, the Company recorded share-based compensation expense of $16,667 related to this agreement.\n\n \n\nOn 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 agreement’s date. For the three-month period ended March 31, 2026, the Company recorded share-based compensation expense of $39,900 related to these agreements.\n\n \n\nOn 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 July 1, 2025, the Company entered into a new consulting agreement with the above third-party advisor, pursuant to which it issued 240,000 shares of its common stock in exchange for general advisory services. The shares carry full voting rights and vest at a rate of 20,000 shares per month over the 12-month term of the agreement. In accordance with the terms of the agreement, if the Company terminates the arrangement under Section 19 (Termination), any unvested shares as of the termination date will be subject to claw back. The fair value of the shares on the issuance date was $0.3939 per share, resulting in a total fair value of $94,536. For the three-month period ended March 31, 2026, the Company recorded share-based compensation expense of $23,634 related to these agreement.\n\n \n\nThe corresponding stock-based compensation expense is accrued evenly over the term of the agreements. For the three months ended March 31, 2026 and 2025 the Company has recorded $80,201 and $245,310, respectively, as stock-based compensation for the above agreements, classified as “General and administrative expenses” in the Company’s consolidated statements of operations and comprehensive Income (loss).\n\n \n\n \n\n39\n\n*Table of Contents*\n\n \n\n**COSMOS HEALTH INC.**\n\n**Notes to Unaudited Condensed Consolidated Financial Statements**\n\n**March 31, 2026**\n\n \n\n \n\n**Research and Development Agreements**\n\n \n\nThe 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 March 31, 2026. 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 March 31, 2026. 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.\n\n \n\nOn 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 3-month period ended March 31, 2026, the Company incurred no costs relating to this agreement.\n\n \n\nOn 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 condensed Consolidated Balance Sheets.\n\n \n\nOn 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 be paid by the Company amounts to €60,000 plus VAT, payable in three installments. For the three-month period ended March 31, 2026, the Company incurred no fee concerning this agreement.\n\n \n\nOn 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 March 31, 2026, and thus the Company has incurred no expenses as of the end of the period.\n\n \n\nOn December 31, 2025, 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 three-month period ended March 31, 2026, the Company did not incur any royalties under this agreement.\n\n \n\n**NOTE 16 – STOCK OPTIONS AND WARRANTS**\n\n \n\nOmnibus Equity Incentive Plan\n\n \n\nOn 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.\n\n \n\nOn 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. As of March 31, 2026, no shares remained reserved and available for future issuance under the Company's 2022 Plan.\n\n \n\n \n\n40\n\n*Table of Contents*\n\n \n\n**COSMOS HEALTH INC.**\n\n**Notes to Unaudited Condensed Consolidated Financial Statements**\n\n**March 31, 2026**\n\n \n\n \n\nOn 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 March 31, 2026, no shares remained reserved and available for future issuance under the Company's 2023 Plan.\n\n \n\nOn 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 For the three month periods ended March 31, 2026 and 2025, the Company recorded share-based compensation expense of $269,795 and $311,301, 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 condensed Consolidated Statement of Operations.\n\n \n\nOn September 16, 2024, the Board adopted, subject to stockholder approval, the Cosmos Health Inc. 2024 Omnibus Equity Incentive Plan (the “2024 Plan”). The 2024 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 2024 Plan) and exception (as provided in Section 5.6(b) of the 2024 Plan), the maximum number of shares reserved for issuance under the Plan (including incentive share options) is 3,500,000 shares. The 2024 Plan was approved by the Company’s stockholders at the Annual Meeting of Stockholders held on November 19, 2024. As of March 31, 2026, 1,150,000 shares remained reserved and available for future issuance under the Company's 2024 Plan.\n\n \n\nOn December 30, 2025, the Company’s Board of Directors approved incentive stock awards for the Chief Executive Officer, the Chief Financial Officer, certain officers and directors, and other key employees of the Company pursuant to the 2024 Plan. The awards were granted in the form of restricted stock and vest in two installments, with 50% vesting on December 31, 2026 and the remaining 50% vesting on December 31, 2027. A total of 2,350,000 shares were granted under this program For the three month periods ended March 31, 2026 the Company recorded share-based compensation expense of $147,490 in connection with the “2024 Plan”. The expense was recorded in accordance with ASC 718 (Compensation—Stock Compensation) and is included in the Company’s condensed Consolidated Statement of Operations.\n\n \n\nOn August 5, 2025, the Board adopted, subject to stockholder approval, the Cosmos Health Inc. 2025 Omnibus Equity Incentive Plan (the “2025 Plan”). The 2025 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 2025 Plan) and exception (as provided in Section 5.6(b) of the 2025 Plan), the maximum number of shares reserved for issuance under the Plan (including incentive share options) is 6,000,000 shares. The 2025 Plan was approved by the Company’s stockholders at the Annual Meeting of Stockholders held on March 31, 2026. As of March 31, 2026, 6,000,000 shares remained reserved and available for future issuance under the Company's 2025 Plan.\n\n \n\nWarrant Anti-Dilution Adjustment and Deemed Dividend\n\n \n\nAs of March 31, 2026, there were 12,926,506 warrants outstanding and 12,926,506 warrants exercisable with 12,913,172 warrants having expiration dates from May 2026 through October 2029 and 13,334 warrants with no expiration date.\n\n \n\nA summary of the Company’s warrant activity for the three months ended March 31, 2026 and the year ending December 31, 2025 is as follows:\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n**Weighted**\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n**Weighted**\n\n \n\n \n\n**Average**\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n**Average**\n\n \n\n \n\n**Remaining**\n\n \n\n \n\n**Aggregate**\n\n \n\n \n\n \n\n**Number of**\n\n \n\n \n\n**Exercise**\n\n \n\n \n\n**Contractual**\n\n \n\n \n\n**Intrinsic**\n\n \n\n**Warrants**\n\n \n\n**Shares**\n\n \n\n \n\n**Price**\n\n \n\n \n\n**Term**\n\n \n\n \n\n**Value**\n\n \n\nBalance Outstanding, January 1, 2025\n\n \n\n \n12,926,506\n \n\n \n$2.63\n \n\n \n\n \n3.24\n \n\n \n$8,920\n \n\nGranted\n\n \n\n \n-\n \n\n \n\n \n-\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nForfeited\n\n \n\n \n-\n \n\n \n\n \n-\n \n\n \n\n \n-\n \n\n \n\n \n-\n \n\nExercised\n\n \n\n \n-\n \n\n \n\n \n-\n \n\n \n\n \n-\n \n\n \n\n \n-\n \n\nExpired\n\n \n\n \n-\n \n\n \n\n \n-\n \n\n \n\n \n-\n \n\n \n\n \n-\n \n\nBalance Outstanding, December 31, 2025\n\n \n\n \n12,926,506\n \n\n \n$2.63\n \n\n \n\n \n2.24\n \n\n \n$6,640\n \n\nGranted\n\n \n\n \n-\n \n\n \n\n \n-\n \n\n \n\n \n-\n \n\n \n\n \n-\n \n\nForfeited\n\n \n\n \n-\n \n\n \n\n \n-\n \n\n \n\n \n-\n \n\n \n\n \n-\n \n\nExercised\n\n \n\n \n-\n \n\n \n\n \n-\n \n\n \n\n \n-\n \n\n \n\n \n-\n \n\nExpired\n\n \n\n \n-\n \n\n \n\n \n-\n \n\n \n\n \n-\n \n\n \n\n \n-\n \n\nBalance Outstanding, March 31, 2026\n\n \n\n \n12,926,506\n \n\n \n\n \n2.63\n \n\n \n\n \n2.00\n \n\n \n$4,230\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nExercisable, March 31, 2026\n\n \n\n \n12,913,172\n \n\n \n\n$ \n2.63\n \n\n \n\n \n2.00\n \n\n \n$4,230\n \n\n \n\n \n\n41\n\n*Table of Contents*\n\n  \n\n**COSMOS HEALTH INC.**\n\n**Notes to Unaudited Condensed Consolidated Financial Statements**\n\n**March 31, 2026**\n\n \n\n**NOTE 17 – DIGITAL ASSETS**\n\n \n\nThe Company holds digital assets consisting of Ethereum (ETH) and Bitcoin (BTC) that are measured at fair value on a recurring basis. Digital assets with quoted prices in active markets for identical assets are classified as Level 1 within the fair value hierarchy as established under ASC 820, Fair Value Measurement.\n\n \n\nDuring the three months ended March 31, 2026, the Company purchased 15.66 units of Bitcoin (BTC) for aggregate consideration of $1,100,000.The following table summarizes the Company's digital asset holdings as of March 31, 2026:\n\n \n\n \n\n \n\n***Quantity***\n\n \n\n \n\n***Cost Basis***\n\n \n\n \n\n***Fair Value***\n\n \n\n \n\n***Cumulative Unrealized Loss***\n\n \n\nEthereum\n\n \n\n \n474.85\n \n\n \n$2,000,000\n \n\n \n$999,712\n \n\n \n$(1,000,288 )\n\nBitcoin\n\n \n\n \n15.66\n \n\n \n\n \n1,100,000\n \n\n \n\n \n1,068,933\n \n\n \n\n \n(31,067 )\n\nTotal digital assets\n\n \n\n \n490.51\n \n\n \n$3,100,000\n \n\n \n$2,068,645\n \n\n \n$(1,031,355 )\n\n \n\nA summary of the movements in digital assets during the three-month period ended March 31, 2026, is presented below, disaggregated by each individual digital asset.\n\n \n\n**DIGITAL ASSET ROLLFORWARD**\n\n \n\nFor the three months ended March 31, 2026\n\n \n\n \n\n \n\n**Number**\n\n**of Units**\n\n \n\n \n\n**Weighted**\n\n**Average Cost**\n\n**Per Unit ($)**\n\n \n\n \n\n**Cost**\n\n**Basis ($)**\n\n \n\n \n\n**Fair Value ($)**\n\n \n\n \n\n**Unrealized**\n\n**Loss ($)**\n\n \n\n**Ethereum (ETH)**\n\n \n\nBeginning Balance, January 1, 2026\n\n \n\n \n474.85\n \n\n \n\n \n4,212\n \n\n \n\n \n2,000,000\n \n\n \n\n \n1,411,084\n \n\n \n\n \n(588,916 )\n\nPurchases\n\n \n\n \n—\n \n\n \n\n \n—\n \n\n \n\n \n—\n \n\n \n\n \n—\n \n\n \n\n \n—\n \n\nSales / Transfers\n\n \n\n \n—\n \n\n \n\n \n—\n \n\n \n\n \n—\n \n\n \n\n \n—\n \n\n \n\n \n—\n \n\n**Ending Balance, March 31, 2026**\n\n \n\n \n**474.85**\n \n\n \n\n \n**4,212**\n \n\n \n\n \n**2,000,000**\n \n\n \n\n \n**999,712**\n \n\n \n\n \n**(1,000,288****)**\n\n \n\n \n\n \n\n**Number**\n\n**of Units**\n\n \n\n \n\n**Weighted**\n\n**Average Cost**\n\n**Per Unit ($)**\n\n \n\n \n\n**Cost Basis ($)**\n\n \n\n \n\n**Fair Value ($)**\n\n \n\n \n\n**Unrealized**\n\n**Loss ($)**\n\n \n\n**Bitcoin (BTC)**\n\n \n\nBeginning Balance, January 1, 2026\n\n \n\n \n—\n \n\n \n\n \n—\n \n\n \n\n \n—\n \n\n \n\n \n—\n \n\n \n\n \n—\n \n\nPurchases\n\n \n\n \n15.66\n \n\n \n\n \n70,259\n \n\n \n\n \n1,100,000\n \n\n \n\n \n1,068,933\n \n\n \n\n \n(31,067 )\n\nSales / Transfers\n\n \n\n \n—\n \n\n \n\n \n—\n \n\n \n\n \n—\n \n\n \n\n \n—\n \n\n \n\n \n—\n \n\n**Ending Balance, March 31, 2026**\n\n \n\n \n**15.66**\n \n\n \n\n \n**70,259**\n \n\n \n\n \n**1,100,000**\n \n\n \n\n \n**1,068,933**\n \n\n \n\n \n**(31,067****)**\n\n \n\n**NOTE 18 – DISAGGREGATION OF REVENUE**\n\n \n\nASC 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.\n\n \n\nThe Company disaggregates revenue by country to depict the nature and economic characteristics affecting revenue.\n\n \n\n \n\n42\n\n*Table of Contents*\n\n \n\n**COSMOS HEALTH INC.**\n\n**Notes to Unaudited Condensed Consolidated Financial Statements**\n\n**March 31, 2026**\n\n \n\n \n\nThe following table presents our revenue disaggregated by country for the three months ended March 31, 2026 and March 31, 2025:\n\n \n\n**Country**\n\n \n\n**March 31,**\n\n**2026**\n\n \n\n \n\n**March 31,**\n\n**2025**\n\n \n\nCroatia\n\n \n$-\n \n\n \n\n \n3,093\n \n\nCyprus\n\n \n\n \n36,796\n \n\n \n\n \n52,562\n \n\nBulgaria\n\n \n\n \n-\n \n\n \n\n \n12,183\n \n\nGreece\n\n \n\n \n17,336,366\n \n\n \n\n \n13,322,494\n \n\nAlbania\n\n \n\n \n33,094\n \n\n \n\n \n36,332\n \n\nUK\n\n \n\n \n521,636\n \n\n \n\n \n285,864\n \n\n**Total**\n\n \n**$****17,927,892**\n \n\n \n\n \n**13,712,528**\n \n\n \n\n**NOTE 19 – SEGMENT REPORTING**\n\n \n\n**A. Basis for segmentation**\n\n \n\nThe 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, including, but not limited to, costs related to SEC legal and compliance matters, executive compensation, audit and review fees, and other corporate overhead expenses.\n\n \n\n**B. Information about reportable segments**\n\n \n\nThe table below presents information about the Company's reportable segments for the 3-month periods ended March 31, 2026 and March 31, 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.\n\n \n\n*Three-month period ended March 31, 2026*\n\n \n\n \n\n \n\n**Wholesale**\n\n \n\n \n\n**Pharma**\n\n**manufacturing**\n\n \n\n \n\n**Nutraceuticals & Pharmaceuticals**\n\n \n\n \n\n**Other**\n\n \n\n \n\n**Total**\n\n \n\nREVENUE\n\n \n\n \n16,892,895\n \n\n \n\n \n238,199\n \n\n \n\n \n796,313\n \n\n \n\n \n485\n \n\n \n\n \n17,927,892\n \n\nCOST OF GOODS SOLD\n\n \n\n \n(15,882,080 )\n \n\n \n(144,783 )\n \n\n \n(519,556 )\n \n\n \n(302 )\n \n\n \n(16,546,721 )\n\nGeneral and Administrative expenses\n\n \n\n \n(195,415 )\n \n\n \n(169,972 )\n \n\n \n(383,508 )\n \n\n \n(515,481 )\n \n\n \n(1,264,376 )\n\nSalaries and wages\n\n \n\n \n(479,869 )\n \n\n \n(435,525 )\n \n\n \n(154,058 )\n \n\n \n(328,205 )\n \n\n \n(1,397,657 )\n\nSales and Marketing expenses\n\n \n\n \n(64 )\n \n\n \n(724 )\n \n\n \n(12,282 )\n \n\n \n(6,282 )\n \n\n \n(19,352 )\n\nNet finance costs\n\n \n\n \n(139,218 )\n \n\n \n-\n \n\n \n\n \n45,098\n \n\n \n\n \n(282,436 )\n \n\n \n(376,556 )\n\n**Segment profit / (loss)**\n\n \n\n \n196,247\n \n\n \n\n \n(512,804 )\n \n\n \n(227,994 )\n \n\n \n(1,132,220 )\n \n\n \n(1,676,771 )\n\n**Reconciling items:**\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nDepreciation and amortization\n\n \n\n \n(58,520 )\n \n\n \n(149,401 )\n \n\n \n(104,596 )\n \n\n \n(35,662 )\n \n\n \n(348,179 )\n\nStock based compensation\n\n \n\n \n-\n \n\n \n\n \n-\n \n\n \n\n \n-\n \n\n \n\n \n(535,786 )\n \n\n \n(535,786 )\n\nNon-cash interest\n\n \n\n \n-\n \n\n \n\n \n-\n \n\n \n\n \n-\n \n\n \n\n \n(390,350 )\n \n\n \n(390,350 )\n\nChange in fair value of derivative liability\n\n \n\n \n-\n \n\n \n\n \n-\n \n\n \n\n \n-\n \n\n \n\n \n231,968\n \n\n \n\n \n231,968\n \n\nGain/(Loss) on digital assets\n\n \n\n \n-\n \n\n \n\n \n-\n \n\n \n\n \n-\n \n\n \n\n \n(442,439 )\n \n\n \n(442,439 )\n\nChange in fair value of convertible notes\n\n \n\n \n-\n \n\n \n\n \n-\n \n\n \n\n \n-\n \n\n \n\n \n239,480\n \n\n \n\n \n239,480\n \n\nOther income (expense), net\n\n \n\n \n(1,739 )\n \n\n \n333,455\n \n\n \n\n \n(219,136 )\n \n\n \n4,073\n \n\n \n\n \n116,653\n \n\n**Net profit/(loss) before Income Taxes**\n\n \n\n \n135,988\n \n\n \n\n \n(328,750 )\n \n\n \n(551,726 )\n \n\n \n(2,060,935 )\n \n\n \n(2,805,423 )\n\n \n\n*Three-month period ended March 31, 2025*\n\n \n\n \n\n \n\n**Wholesale**\n\n \n\n \n\n**Pharma**\n\n**manufacturing**\n\n \n\n \n\n**Nutraceuticals & Pharmaceuticals**\n\n \n\n \n\n**Other**\n\n \n\n \n\n**Total**\n\n \n\nRevenues                                        \n\n \n\n \n12,504,562\n \n\n \n\n \n268,557\n \n\n \n\n \n939,409\n \n\n \n\n \n-\n \n\n \n\n \n13,712,528\n \n\nCost of Sales\n\n \n\n \n(11,320,936 )\n \n\n \n(70,975 )\n \n\n \n(270,818 )\n \n\n \n-\n \n\n \n\n \n(11,662,729 )\n\n**Gross Profit**\n\n \n\n \n**1,183,626**\n \n\n \n\n \n**197,582**\n \n\n \n\n \n**668,591**\n \n\n \n\n \n**-**\n \n\n \n\n \n**2,049,799**\n \n\nGeneral and Administrative expenses\n\n \n\n \n(162,269 )\n \n\n \n(155,454 )\n \n\n \n(243,227 )\n \n\n \n(361,140 )\n \n\n \n(922,090 )\n\nSalaries\n\n \n\n \n(378,595 )\n \n\n \n(363,670 )\n \n\n \n(297,499 )\n \n\n \n(255 )\n \n\n \n(1,040,019 )\n\nSales and Marketing expenses\n\n \n\n \n(715 )\n \n\n \n(428 )\n \n\n \n(27,012 )\n \n\n \n0 )\n \n\n \n(28,155 )\n\nResearch and Development costs\n\n \n\n \n-\n \n\n \n\n \n-\n \n\n \n\n \n-\n \n\n \n\n \n(15,629 )\n \n\n \n(15,629 )\n\nNet finance costs\n\n \n\n \n(149,274 )\n \n\n \n-\n \n\n \n\n \n53,493\n \n\n \n\n \n-\n \n\n \n\n \n(95,781 )\n\n**Segment profit / (loss)**\n\n \n\n \n492,773\n \n\n \n\n \n(321,970 )\n \n\n \n154,346\n \n\n \n\n \n(377,024 )\n \n\n \n(51,875 )\n\n**Reconciling items:**\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nDepreciation and amortization\n\n \n\n \n(52,880 )\n \n\n \n(131,974 )\n \n\n \n(99,807 )\n \n\n \n(35,778 )\n \n\n \n(320,439 )\n\nStock based compensation\n\n \n\n \n-\n \n\n \n\n \n-\n \n\n \n\n \n-\n \n\n \n\n \n(556,613 )\n \n\n \n(556,613 )\n\nForeign currency adjustments\n\n \n\n \n59,428\n \n\n \n\n \n-\n \n\n \n\n \n109,943\n \n\n \n\n \n6,454\n \n\n \n\n \n175,825\n \n\nOther income and expenses\n\n \n\n \n27,556\n \n\n \n\n \n12,341\n \n\n \n\n \n88,701\n \n\n \n\n \n(193,593 )\n \n\n \n(64,995 )\n\n**Net profit/(loss) before Income Taxes**\n\n \n\n \n526,877\n \n\n \n\n \n(441,603 )\n \n\n \n253,184\n \n\n \n\n \n(1,156,555 )\n \n\n \n(818,097 )\n\n \n\n43\n\n*Table of Contents*\n\n \n\n**COSMOS HEALTH INC.**\n\n**Notes to Unaudited Condensed Consolidated Financial Statements**\n\n**March 31, 2026**\n\n \n\n \n\nThe following summary describes the operations of each reportable segment:\n\n \n\n**Reportable segments**\n\n \n\n**Operations**\n\nWholesale\n\n \n\nDistribution and export of pharmaceutical products\n\nPharma manufacturing\n\n \n\nProduction of pharmaceutical products\n\nNutraceutical and pharmaceuticals\n\n \n\nTrade of owned nutraceutical & pharmaceutical products\n\n \n\n**NOTE 20 – SUBSEQUENT EVENTS**\n\n \n\nFollowing March 31, 2026 the Company issued an aggregate of 735,483 shares of its common stock under its At-the-Market (“ATM”) sales program pursuant to the Company’s Shelf Registration Statement on Form S-3 (File No. 333-267550). The shares were sold for gross proceeds of $230,675 and net proceeds of approximately $223,258, after deducting the underwriter’s commissions and other offering expenses.\n\n \n\nDuring the subsequent period, the Company issued an aggregate of 3,825,233 shares of its common stock upon the partial conversion of the Company’s August 2025 Convertible Promissory Note (the “August 2025 Note”). The conversion satisfied total obligations of $1,065,988, consisting of $1,002,500 of outstanding principal and accrued interest, in accordance with the conversion terms of the August 2025 Note. The conversion was completed pursuant to the provisions of the respective note agreement.\n\n \n\n \n\n44\n\n*Table of Contents*"}