What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2025-11-19 compared with 2025-08-19 · 790 added, 640 removed, 503 unchanged (74% of the section changed)

Financial Statements.

CONSOLIDATED BALANCE SHEETS

BALANCE SHEETS

September 30,

Current assets:

5 unchanged sentences

Due from related parties

Subscription receivable

Deferred offering costs

10 unchanged sentences

Accounts payable

Accrued expenses and other current liabilities

Accrued expenses and other liabilities

Other short-term advances

Due to related parties

10 unchanged sentences

Stockholders’ equity:

Common stock, $ 0.0001 par value, 500,000,000 shares authorized, 72,881,535 and 51,055,508 shares issued and 63,144,817 and 51,055,508 shares outstanding as of June 30, 2025 and December 31, 2024, respectively

Common stock, $ 0.0001 par value, 500,000,000 shares authorized, 91,406,962 and 51,055,508 shares issued and 89,452,911 and 51,055,508 shares outstanding as of September 30, 2025 and December 31, 2024, respectively

Additional paid-in capital

5 unchanged sentences

the accompanying notes to the unaudited condensed consolidated financial statements

CONSOLIDATED STATEMENTS OF OPERATIONS

STATEMENTS OF OPERATIONS

Three Months Ended

Six Months Ended

Cost of revenues

Gross profit (loss)

Nine Months Ended

September 30,

Cost of net revenues

Operating expenses:

6 unchanged sentences

( 1,744,820 )

( 68,397,073 )

( 2,397,600 )

Other income/(expense):

2 unchanged sentences

( 3,703,837 )

Loss on debt extinguishment

( 1,353,663 )

Total other expense, net

4 unchanged sentences

( 1,867,027 )

( 73,421,571 )

( 2,524,474 )

Provision for income taxes

6 unchanged sentences

the accompanying notes to the unaudited condensed consolidated financial statements

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

STATEMENTS OF STOCKHOLDERS’ EQUITY

Stockholders’

Equity (Deficit)

Balance at December 31, 2023

10 unchanged sentences

$ ( 3,147,881 )

Shares issued pursuant to business combination

( 1,867,027 )

Balance at September 30, 2024

$ ( 5,425,408 )

Balance at December 31, 2024

$ ( 9,757,160 )

Common stock issued pursuant to public offering

Common stock issued pursuant to IPO

Common stock issued pursuant to consulting agreements

9 unchanged sentences

$ ( 42,188,063 )

Common stock issued pursuant to equity purchase agreement

8 unchanged sentences

$ ( 48,860,527 )

Common stock issued pursuant to equity purchase agreement

Common stock issued pursuant to public offering

Common stock issued in partial settlement of due to seller

Common stock issued for services

Common stock cancelled

Vesting of restricted stock - Acceleration

Vested restricted stock granted to employees

Vested restricted stock granted to consultants

Offering costs

( 34,318,204 )

Balance at September 30, 2025

$ ( 83,178,731 )

the accompanying notes to the unaudited condensed consolidated financial statements

CONSOLIDATED STATEMENTS OF CASH FLOWS

Six Months Ended

STATEMENTS OF CASH FLOWS

Nine Months Ended

September 30,

Cash flows from operating activities:

2 unchanged sentences

Adjustments to reconcile net loss to net cash used in operating activities:

Allowance for credit losses

Allowances for credit losses

Loss on debt extinguishment

Amortization of debt discount

7 unchanged sentences

Due from / to related parties, net

Net cash (used in) provided by operating

Net cash (used in) provided by operating activities

( 4,561,776 )

1 unchanged sentence

Cash acquired in business combinations

Purchase price consideration of business combination

( 1,000,000 )

Investments in capitalized software

5 unchanged sentences

Proceeds from revolving line of credit

Repayments of revolving line of credit

Repayment of revolving line of credit

( 22,627,509 )

Proceeds from merchant cash advance

Repayment of merchant cash advance

Proceeds from common stock issued pursuant to equity purchase agreement

Proceeds from common stock issued pursuant to IPO

Proceeds from common stock issued pursuant to public offering

10 unchanged sentences

Supplemental disclosure of non-cash investing and financing activities:

Subscription receivable

Issuance of commitment shares under equity purchase agreement

Derecognition of promissory note and accrued interest pursuant to debt extinguishment

Common stock issued in partial settlement of seller’s note

Common stock issued pursuant to business combination

Shares issued pursuant to business combination

Promissory note issued pursuant to business combination

Debt assigned to related party

the accompanying notes to the unaudited condensed consolidated financial statements

TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

TO THE CONSOLDIATED FINANCIAL STATEMENTS

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Company was initially organized in the name of Ayan Sponsors LLC on September 6, 2022.

Subsequently the Company incorporated under

the name Danam Health, Inc.

(together with the subsidiaries below, the “Company”/ “us”/ “we”/

“our”) as a Delaware Corporation that was registered on November 15, 2022, The Company’s headquarters are in

Tampa, Florida.

In January 2023 and May 2023, the Company

entered into separate definitive agreements with the owners of Wood Sage LLC (“ Wood Sage ”) and Wellgistics

LLC, respectively, whereby the Company would acquire all of the respective outstanding membership interests of Wood Sage (the “ Wood

Sage Acquisition ”)and Wellgistics, LLC (the “ Wellgistics Acquisition ”).

In June 2024, the Company

and Wood Sage entered into an amended and revised definitive agreement and closed on the Wood Sage Acquisition, thereby making Wood Sage

a wholly owned subsidiary.

In connection with the Wood Sage Acquisition, the Company acquired two of its operating subsidiaries, Alliance

Pharma Solutions LLC d/b/a DelivMeds (n/k/a Wellgistics Tech & Hub, LLC) (“DelivMeds”)—a pharmaceutical technology

hub—and Community Specialty Pharmacy, LLC (n/k/a Wellgistics Pharmacy, LLC) (“Wellgistics Pharmacy”)—a retail

community specialty pharmacy.

Company was initially organized in the name of Ayan Sponsors LLC on September 6, 2022, and subsequently incorporated in the name Danam

(the “Company”/ “us”/ “we”/ “our”) as a Delaware Corporation that was registered

on November 15, 2022, The Company’s headquarters are in Tampa, Florida.

January 2023 and May 2023, the Company entered into separate definitive agreements with the owners of Wood Sage LLC (“Wood Sage”)

and Wellgistics LLC, respectively, whereby the Company would acquire all of the respective outstanding membership interests of Wood Sage

and Wellgistics LLC.

In June 2024, the Company and Wood Sage entered into an amended and revised definitive agreement and closed on the

Wood Sage Acquisition, thereby making Wood Sage a wholly owned subsidiary.

In connection with the Wood Sage Acquisition, the Company

acquired two of its operating subsidiaries, Alliance Pharma Solutions LLC d/b/a DelivMeds (n/k/a Wellgistics Tech & Hub, LLC) (“DelivMeds”)—a

pharmaceutical technology hub—and Community Specialty Pharmacy, LLC (n/k/a Wellgistics Pharmacy, LLC) (“Wellgistics Pharmacy”)—a

retail community specialty pharmacy.

August 30, 2024, the Company closed on the Wellgistics Acquisition, thereby making Wellgistics LLC—a company focused on wholesale

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to improve market access to and patient outcomes regarding the medications—a wholly owned subsidiary.

As such, the Company currently exists as a holding

company with Wood Sage as a directly held intermediate holding company subsidiary, Wellgistics Tech & Hub, LLC and Wellgistics Pharmacy,

LLC as indirect operating subsidiaries, and Wellgistics, LLC as a direct operating subsidiary.

such, the Company currently exists as a holding company with Wood Sage as a directly held intermediate holding company subsidiary, Wellgistics

Tech & Hub, LLC and Wellgistics Pharmacy, LLC as indirect operating subsidiaries, and Wellgistics, LLC as a direct operating subsidiary.

October 4, 2024, the Company changed its corporate name to “Wellgistics Health, Inc.” (referred as “Wellgistics Health/WGRX/”the

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Capital Management LLC as representatives of the several underwriters (the “ Underwriters ”), relating to the

Company’s initial public offering (the “Offering” or “IPO”) of 888,889

shares of common stock, par value $ 0.0001 per share, at a public

offering price of $ 4.50

per share, generating gross proceeds of approximately $ 4 million and net

proceeds of approximately $ 3.1 million, after deducting underwriting discounts and commissions and other estimated offering expenses.

Company’s initial public offering (the “Offering” or “IPO”) of 888,889 shares of common stock, par value

$ 0.0001 per share, at a public offering price of $ 4.50 per share, generating gross proceeds of approximately $ 4 million and net proceeds

of approximately $ 3.1 million, after deducting underwriting discounts and commissions and other estimated offering expenses.

shares of common stock were offered and sold pursuant to the Company’s Registration Statement on Form S-1 (File No.

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of Significant Accounting Policies

description of the Company’s significant accounting policies and other financial information is included in the

Company’s audited consolidated financial statements filed on March 25, 2025, with the SEC in the Company’s Annual Report

on Form 10-K for the year ended December 31, 2024 (the “ Form 10-K ”).

These policies have been applied consistently in these unaudited condensed

consolidated interim financial statements.

description of the Company’s significant accounting policies and other financial information is included in the Company’s

audited consolidated financial statements filed on March 25, 2025, with the SEC in the Company’s Annual Report on Form 10-K for

the year ended December 31, 2024 (the “ Form 10-K ”).

These policies have been applied consistently in these

unaudited condensed consolidated interim financial statements.

Interim Financial Information

The accompanying unaudited condensed consolidated financial statements

have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S.

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 disclosures required by U.S.

GAAP for complete financial statements.

In the opinion of management, such statements

include all adjustments (consisting only of normal recurring items) which are considered necessary for a fair presentation of the condensed

consolidated financial statements of the Company as of June 30, 2025 and for the three and six months then ended.

accompanying unaudited interim financial statements should be read in conjunction with the Company’s audited financial statements

and the notes thereto for the year ended December 31, 2024 included in the Form 10-K with the SEC on March 25, 2025.

Principles of Consolidation

The condensed consolidated financial statements include the accounts of

the Company and its wholly-owned subsidiaries.

All intercompany balances and transactions have been eliminated in consolidation.

The preparation of the condensed consolidated financial statements and

related disclosures 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 condensed consolidated financial statements

and the reported amounts of revenues and expenses reported in those condensed consolidated financial statements.

Descriptions of our significant

accounting policies are discussed in the notes to the consolidated financial statements in our Annual Report on Form 10-K for the year

ended December 31, 2024.

Management evaluates the related estimates and assumptions on an ongoing basis using historical experience and

other factors, including the current economic environment, and makes adjustments when facts and circumstances dictate.

As future events

and their effects cannot be determined with precision, actual results could differ significantly from those estimates and assumptions.

Significant changes, if any, in those estimates and assumptions resulting from continuing changes in the economic environment will be

reflected in the consolidated financial statements in future periods.

In accordance with Accounting

Standards Codification (“ASC”) 280, Segment Reporting (“ASC 280”), we identify our operating segments according

to how our business activities are managed and evaluated.

ASC 280 establishes standards for companies to report financial statement information

about operating segments, products, services, geographic areas, and major customers.

Operating segments are defined as components

of an enterprise for which separate financial information is available that is regularly evaluated by the Company’s chief operating

decision maker (“CODM”), or group, in deciding how to allocate resources and assess performance.

The CODM has been identified

as the Chief Executive Officer, who reviews the operating results for the Company as a whole to make decisions about allocating resources

and assessing financial performance.

Accordingly, management has determined that the Company only has one operating and reportable

The key measures of segment profit or

loss reviewed by our CODM are revenue and operating costs.

These metrics are reviewed and monitored by the CODM to manage and forecast

The CODM also reviews operating costs to manage, maintain and enforce all contractual agreements to ensure costs are aligned with

all agreements and budget.

Note 12 for further detail.

accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally

accepted in the United States of America (“U.S.

GAAP”) 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 disclosures required by U.S.

complete financial statements.

In the opinion of management, such statements include all adjustments (consisting only of normal recurring

items) which are considered necessary for a fair presentation of the condensed consolidated financial statements of the Company as of

September 30, 2025 and for the three and nine months then ended.

accompanying unaudited interim financial statements should be read in conjunction with the Company’s audited financial

statements and the notes thereto for the year ended December 31, 2024 included in the Form 10-K filed with the SEC on March 25,

of Consolidation

condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries.

All intercompany balances

and transactions have been eliminated in consolidation.

preparation of the condensed consolidated financial statements and related disclosures 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 condensed consolidated financial statements and the reported amounts of revenues and expenses reported

in those condensed consolidated financial statements.

Descriptions of our significant accounting policies are discussed in the notes

to the consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2024.

Management evaluates

the related estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic

environment, and makes adjustments when facts and circumstances dictate.

As future events and their effects cannot be determined with

precision, actual results could differ significantly from those estimates and assumptions.

Significant changes, if any, in those estimates

and assumptions resulting from continuing changes in the economic environment will be reflected in the consolidated financial statements

in future periods.

accordance with Accounting Standards Codification (“ASC”) 280, Segment Reporting (“ASC 280”), we identify our

operating segments according to how our business activities are managed and evaluated.

ASC 280 establishes standards for companies to

report financial statement information about operating segments, products, services, geographic areas, and major customers.

segments are defined as components of an enterprise for which separate financial information is available that is regularly evaluated

by the Company’s chief operating decision maker (“CODM”), or group, in deciding how to allocate resources and assess

CODM has been identified as the Chief Executive Officer, who reviews the operating results for the Company as a whole to make decisions

about allocating resources and assessing financial performance.

Accordingly, management has determined that the Company only has one

operating and reportable segment.

key measures of segment profit or loss reviewed by our CODM are revenue and operating costs.

These metrics are reviewed and monitored

by the CODM to manage and forecast cash.

The CODM also reviews operating costs to manage, maintain and enforce all contractual agreements

to ensure costs are aligned with all agreements and budget.

Note 12 for further details.

Concentration

of Credit Risks and Major Customers

of Credit Risks, Major Customers and Vendors

instruments that potentially subject the Company to credit risk consist principally of cash and cash equivalents and receivables.

1 unchanged sentence

Deposits are insured to Federal Deposit Insurance Corp limits.

For the six months ended June 30, 2025, one customer accounted for approximately 15 %

of total revenue.

The Company’s reliance on this and other major customers presents a concentration risk.

The loss of this customer

or a significant reduction in their orders could have a material adverse effect on the Company’s financial performance.

continues to focus on efforts to diversify its customer base to mitigate such risks.

the nine months ended September 30, 2025, one customer accounted for approximately 14 % of total revenue.

As of September 30, 2025,

one customer accounted for approximately 22 % of gross accounts receivable.

The Company’s reliance on this and other major

customers presents a concentration risk.

The loss of this customer or a significant reduction in their orders could have a material

adverse effect on the Company’s financial performance.

The Company continues to focus on efforts to diversify its customer

base to mitigate such risks.

Value of Financial Instruments

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Actual write-offs may be in excess of the Company’s estimated allowance.

The Company uses a loss rate method to estimate its

allowance for credit losses.

The determination of the current expected credit loss rate begins with our review of historical loss experience

as a percentage of accounts receivable.

To determine the current allowance for credit losses, we combine the historical and expected credit

loss rates and apply them to our period end accounts receivable.

Company uses a loss rate method to estimate its allowance for credit losses.

The determination of the current expected credit loss rate

begins with our review of historical loss experience as a percentage of accounts receivable.

To determine the current allowance for credit

losses, we combine the historical and expected credit loss rates and apply them to our period end accounts receivable.

Company provides for a 95 %

loss rate of the accounts receivable which are due over the period of 90 days.

The Company recognized a provision for credit

losses of $ 200,454

within general and administrative expenses for the six months ended June 30, 2025 and 2024, respectively.

As of June 30, 2025 and December 31, 2024, allowance for credit losses

was $ 1,111,824 and $ 940,596 , respectively.

For the three months ended September 30, 2025 and

2024, the Company recognized a provision for credit losses of $ 65,128 and $ 26,666 , respectively, within general and administrative

For the nine months ended September 30, 2025 and 2024, the Company recognized a provision for credit losses of $ 265,582

and $ 26,666 , respectively,

within general and administrative expenses

of September 30, 2025, and December 31, 2024, allowance for credit losses was $ 1,187,288 and $ 940,596 , respectively.

are stated at the lower of cost and net realizable value.

Cost is determined on a first in first out (“ FIFO ”)

Cost of inventory is determined as the sum of the applicable expenditures and charges directly or indirectly incurred in bringing

an article to its existing condition and location.

On a quarterly basis, we evaluate inventory for net realizable value using estimates

based on historical experience, current or projected pricing trends, specific categories of inventory, age and expiration dates of on-hand

inventory and manufacturer return policies.

If actual conditions are less favorable than our assumptions, additional inventory write-downs

may be required, and no reserve is maintained as obsolete or expired inventories are written off.

Cost is determined on a first in first out (“FIFO”) basis.

of inventory is determined as the sum of the applicable expenditures and charges directly or indirectly incurred in bringing an article

to its existing condition and location.

On a quarterly basis, we evaluate inventory for net realizable value using estimates based on

historical experience, current or projected pricing trends, specific categories of inventory, age and expiration dates of on-hand inventory

and manufacturer return policies.

If actual conditions are less favorable than our assumptions, additional inventory write-downs may

be required, and no reserve is maintained as obsolete or expired inventories are written off.

We believe that the inventory valuation

provides a reasonable approximation of the current value of inventory.

Capitalized Software

The Company complies with the guidance of ASC

350-40, “ Intangibles—Goodwill and Other—Internal Use Software ”, in accounting for our internally

developed system projects that it utilizes to provide our services to customers.

These system projects generally relate to software

of the Company that is not intended for sale or otherwise marketed.

Internal and external costs incurred during the preliminary

project stage are expensed as they are incurred.

Once a project has reached the development stage, the Company capitalizes direct

internal and external costs until the software is substantially complete and ready for our intended use.

Costs for upgrades and

enhancements are capitalized, whereas costs incurred for maintenance are expensed as incurred.

These capitalized software costs are

amortized on a project-by-project basis over the expected economic life of the underlying software on a straight-line basis, which

is generally three to five years.

Company complies with the guidance of ASC 350-40, “ Intangibles—Goodwill and Other—Internal Use Software ”,

in accounting for our internally developed system projects that it utilizes to provide our services to customers.

These system projects

generally relate to software of the Company that is not intended for sale or otherwise marketed.

Internal and external costs incurred

during the preliminary project stage are expensed as they are incurred.

Once a project has reached the development stage, the Company

capitalizes direct internal and external costs until the software is substantially complete and ready for our intended use.

upgrades and enhancements are capitalized, whereas costs incurred for maintenance are expensed as incurred.

These capitalized software

costs are amortized on a project-by-project basis over the expected economic life of the underlying software on a straight-line basis,

which is generally three to five years.

Amortization commences when the software is available for our intended use.

of June 30, 2025 and December 31, 2024, the Company capitalized $ 2,023,076 and $ 1,618,017 , respectively, in software

development pertaining to the Delivmeds platform via its DelivMeds subsidiary.

To date, the Delivmeds platform is not yet been placed

in service and therefore amortization has not commenced.

The Company recognizes revenue from contracts with customers under ASC

606, Revenue from Contracts with Customers (“ASC 606”).

of September 30, 2025 and December 31, 2024, the Company capitalized $ 2,244,161 and $ 1,618,017 , respectively, in software development

pertaining to the Delivmeds platform via its DelivMeds subsidiary.

date, the Delivmeds platform is not yet been placed in service and therefore amortization has not commenced.

Company recognizes revenue from contracts with customers under ASC 606, Revenue from Contracts with Customers (“ASC 606”).

determine revenue recognition for arrangements that the Company determines are within the scope of ASC 606, the Company performs the

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been given terms extending out to 45 days.

Wellgistics, LLC provides distribution and third party logistics services

to both pharmaceutical manufacturers and independent retail pharmacies.

Company recognizes revenue when goods are delivered to the customer.

LLC provides distribution and third party logistics services to both pharmaceutical manufacturers and independent retail pharmacies.

The Company recognizes revenue when goods are delivered to the customer.

The gross product revenues are subject to a variety of deductions,

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from customers for goods not yet delivered is recorded as a contract liability.

Company is in the retail pharmacy business, which fills prescriptions for medication written by a doctor and recognizes revenue at

the time the patient confirms delivery of the prescription.

Company is in the retail pharmacy business.

and fills prescriptions for drugs written by a doctor and recognizes revenue at the time

the patient confirms delivery of the prescription.

Customer returns are not material.

The following are the steps taken to

recognize revenue.

The following are the steps taken to recognize

Identify the contract with the customer — The prescription is written by a doctor for a customer and delivered to the Company.

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Disaggregation of Revenue

following is a summary of the disaggregation of revenue for the three and six months ended June 30, 2025 and 2024:

following is a summary of the disaggregation of revenue for the three and nine months ended September 30, 2025 and 2024:

SCHEDULE OF DISAGGREGATION OF REVENUE

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Product revenue - distribution services

1 unchanged sentence

Third party logistics services

All revenue for the six months ended

June 30, 2025 and 2024 were within the United States.

revenue for the three and nine months ended September 30, 2025 and 2024 were within the United States.

Assets and Liabilities

4 unchanged sentences

and are included in contract liabilities on the condensed consolidated balance sheets.

June 30, 2025 and December 31, 2024, the Company had unearned revenue of 245,765 included

in accrued expenses and other current liabilities.

September 30, 2025 and December 31, 2024, the Company had unearned revenue of $ 56,000 and $ 245,765 , respectively,

included in accrued expenses and other current liabilities.

is an asset representing the excess cost over the fair market value of net assets acquired in business combinations.

Goodwill is not amortized but is tested annually for impairment or on an interim basis

In accordance with

Intangibles - Goodwill and Other (Topic 350), goodwill is not amortized but is tested annually for impairment or on an interim basis

when indicators of potential impairment exist.

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to that reporting unit.

the three and six months ended June 30, 2025, the Company did not identify any events or changes in circumstances that would indicate

the three and nine months ended September 30, 2025, the Company did not identify any events or changes in circumstances that would indicate

potential impairment of goodwill.

6 unchanged sentences

of the carrying amount over the fair value of the assets.

There were no triggering events to test intangibles

for impairment loss during the three and six months ended June 30, 2025 and 2024.

The Company accounts for its

leases under ASC 842, Leases .

Under this guidance, arrangements meeting the definition of a lease are classified as operating

or financing leases, and are recorded on the consolidated balance sheet as both a right of use asset and lease liability, calculated by

discounting fixed lease payments over the lease term at the rate implicit in the lease or the Company’s incremental borrowing rate.

Lease liabilities are increased by interest and reduced by payments each period, and the right of use asset is amortized over the lease

For operating leases, interest on the lease liability and the amortization of the right of use asset result in straight-line rent

expense over the lease term.

For finance leases, interest on the lease liability and the amortization of the right of use asset results

in front-loaded expense over the lease term.

were no triggering events to test intangibles for impairment loss during the three and nine months ended September 30, 2025 and 2024.

Company accounts for its leases under ASC 842, Leases .

Under this guidance, arrangements meeting the definition of a lease are

classified as operating or financing leases, and are recorded on the consolidated balance sheet as both a right of use asset and lease

liability, calculated by discounting fixed lease payments over the lease term at the rate implicit in the lease or the Company’s

incremental borrowing rate.

Lease liabilities are increased by interest and reduced by payments each period, and the right of use asset

is amortized over the lease term.

For operating leases, interest on the lease liability and the amortization of the right of use asset

result in straight-line rent expense over the lease term.

For finance leases, interest on the lease liability and the amortization of

the right of use asset results in front-loaded expense over the lease term.

Variable lease expenses are recorded when incurred.

In calculating the right of use asset and lease liability, the Company

has elected to combine lease and non-lease components.

The Company excludes short-term leases having initial terms of 12 months or less

from the new guidance as an accounting policy election, and recognizes rent expense on a straight-line basis over the lease term.

The Company complies with the requirements of ASC 340-10-S99-1.

the completion of an offering, offering costs are capitalized if they are directly related to an equity financing that is probable of

successful completion until such financing is consummated .

The deferred offering costs are charged to stockholders’ equity upon

the completion of an offering or to expense if the offering is abandoned, terminated, or significantly delayed in the period of determination.

Deferred offering costs includes professional fees incurred including legal, accounting, underwriting and advisory services in connection

with the Company’s equity offering.

As of June 30, 2025 and December 31, 2024, the Company had capitalized $ 0 and $ 875,385 , respectively, in deferred

offering costs.

During the six months ended June 30, 2025, a total of $ 875,385 in previously

capitalized offering costs was charged to stockholders’ equity upon the completion of the IPO.

Stock-Based Compensation

The Company accounts for stock-based

compensation in accordance with ASC 718, Compensation – Stock Compensation.

The Company measures all stock-based

awards granted to employees, directors and non-employee consultants based on the fair value on the date of the grant and recognizes compensation

expense for those awards over the requisite service period, which is generally the vesting period of the respective award.

with service-based vesting conditions, the Company records the expense for using the straight-line method.

For awards with performance-based

vesting conditions, the Company records the expense if and when the Company concludes that it is probable that the performance condition

will be achieved.

The Company classifies stock-based

compensation expenses in its statement of operations in the same manner in which the award recipient’s costs are classified.

calculating the right of use asset and lease liability, the Company has elected not to combine lease and non-lease components.

The non-lease

components are accounted for separately and recognized as expenses when incurred.

The Company excludes short-term leases having initial

terms of 12 months or less from the new guidance as an accounting policy election, and recognizes rent expense on a straight-line basis

over the lease term.

Company complies with the requirements of ASC 340-10-S99-1.

Prior to the completion of an offering, offering costs are capitalized if

they are directly related to an equity financing that is probable of successful completion until such financing is consummated.

offering costs are charged to stockholders’ equity upon the completion of an offering or to expense if the offering is abandoned,

terminated, or significantly delayed in the period of determination.

Deferred offering costs includes professional fees incurred including

legal, accounting, underwriting and advisory services in connection with the Company’s equity offering.

of September 30, 2025 and December 31, 2024, the Company had capitalized $ 0 and $ 875,385 , respectively, in deferred offering costs.

the nine months ended September 30, 2025, a total of $ 875,385 in previously capitalized offering costs was charged to stockholders’

equity upon the completion of the IPO.

During the nine months ended September 30, 2025, the Company capitalized total offering costs of $ 971,792 related

to the IPO and public offering, all of which were charged to stockholders’ equity upon the completion of the respective offerings.

Company accounts for stock-based compensation in accordance with ASC 718, Compensation – Stock Compensation.

measures all stock-based awards granted to employees, directors and non-employee consultants based on the fair value on the date of the

grant and recognizes compensation expense for those awards over the requisite service period, which is generally the vesting period of

the respective award.

For awards with service-based vesting conditions, the Company records the expense for using the straight-line method.

For awards with performance-based vesting conditions, the Company records the expense if and when the Company concludes that it is probable

that the performance condition will be achieved.

Company classifies stock-based compensation expenses in its statement of operations in the same manner in which the award recipient’s

costs are classified.

Loss per Share

6 unchanged sentences

net loss per share if their inclusion would be anti-dilutive.

As all potentially dilutive securities are anti-dilutive as of June 30,

As all potentially dilutive securities are anti-dilutive as of September

30, 2025, diluted net loss per share is the same as basic net loss per share for each period.

For the three and six months ended June 30, 2025 and 2024, the following

items have been excluded from the computation of diluted net loss per share because the effect of including these would have been anti-dilutive:

For the three and nine months ended September

30, 2025 and 2024, following items have been excluded from the computation of diluted net loss per share because the effect of including

these would have been anti-dilutive:

SCHEDULE OF POTENTIALLY DILUTIVE ITEMS OUTSTANDING

September 30,

Unvested restricted common stock issued not outstanding

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Accounting Pronouncements

December 2023, Financial Accounting Standards Board (“FASB”) issued ASU 2023-09, Income Taxes (Topic 740):

December 2023, Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-09,

Income Taxes (Topic 740):

Improvements to Income Tax Disclosure s (“ASU 2023-09”).

ASU 2023-09 focuses on income tax disclosures around

effective tax rates and cash income taxes paid and requires public business entities to disclose, on an annual basis, a

rate reconciliation presented in both dollars and percentages.

The guidance requires the rate reconciliation to include specific

categories and provides further guidance on disaggregation of those categories based on a quantitative threshold equal to 5 %

or more of the amount determined by multiplying pretax income (loss) from continuing operations by the applicable statutory rate.

For entities reconciling to the US statutory rate of 21 %,

this would generally require disclosing any reconciling items that impact the rate by 1.05 %

ASU 2023-09 is effective for public business entities for annual periods beginning after December 15, 2024 (generally,

calendar year 2025) and effective for all other business entities one year later.

Entities should adopt this guidance on a

prospective basis, though retrospective application is permitted.

The adoption of ASU 2023-09 is expected to have a financial

statement disclosure impact only and is not expected to have a material impact on the Company’s condensed consolidated

financial statements.

In March 2024, the FASB issued ASU 2024-03, which

provides new accounting guidance for certain crypto assets.

Under the ASU, entities are required to subsequently measure qualifying crypto

assets at fair value, with changes in fair value recognized in net income each reporting period.

The ASU also establishes specific disclosure

requirements, including information about significant crypto asset holdings, contractual sale restrictions, and changes in such holdings.

The guidance applies to crypto assets that meet all

of the following criteria:

The ASU focuses on income tax disclosures

around effective tax rates and cash income taxes paid.

ASU 2023-09 requires public business entities to disclose, on an annual basis,

a rate reconciliation presented in both dollars and percentages.

The guidance requires the rate reconciliation to include specific categories

and provides further guidance on disaggregation of those categories based on a quantitative threshold equal to 5% or more of the amount

determined by multiplying pretax income (loss) from continuing operations by the applicable statutory rate.

For entities reconciling

to the US statutory rate of 21%, this would generally require disclosing any reconciling items that impact the rate by 1.05% or more.

ASU 2023-09 is effective for public business entities for annual periods beginning after December 15, 2024 (generally, calendar year

2025) and effective for all other business entities one year later.

Entities should adopt this guidance on a prospective basis, though

retrospective application is permitted.

The adoption of ASU 2023-09 is expected to have a financial statement disclosure impact only

and is not expected to have a material impact on the Company’s condensed consolidated financial statements.

March 2024, the FASB issued ASU 2024-03, which provides new accounting guidance for certain crypto assets.

Under the ASU, entities are

required to subsequently measure qualifying crypto assets at fair value, with changes in fair value recognized in net income each reporting

The ASU also establishes specific disclosure requirements, including information about significant crypto asset holdings, contractual

sale restrictions, and changes in such holdings.

guidance applies to crypto assets that meet all of the following criteria:

the definition of intangible assets as defined in the ASC Master Glossary.

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not created or issued by the reporting entity or its related parties.

The ASU is effective for fiscal years beginning after

December 15, 2024, including interim periods within those fiscal years.

Early adoption is permitted.

The Company is currently evaluating the

impact of ASU 2024-03 on its condensed consolidated financial statements.

While the Company does not currently hold material amounts

of crypto assets, it is assessing the implications of the guidance in the event of future crypto asset acquisitions or changes in investment

ASU is effective for fiscal years beginning after December 15, 2024, including interim periods within those fiscal years.

Early adoption

is permitted.

Company is currently evaluating the impact of ASU 2024-03 on its condensed consolidated financial statements.

While the Company does

not currently hold material amounts of crypto assets, it is assessing the implications of the guidance in the event of future crypto

asset acquisitions or changes in investment strategy.

LIQUIDITY AND GOING CONCERN

Company had a net loss of $ 39,103,367 for the six months ended June 30, 2025 and an accumulated deficit of $ 48,860,527 as of June 30,

Furthermore, the Company had net cash used in operating activities of $ 3,426,447 for the six months ended June 30, 2025.

These factors raise a substantial doubt on whether the Company can continue as a going concern from the date these unaudited interim condensed consolidated financial

statements are issued.

Company’s ability to continue as a going concern in the next twelve months following the date the condensed consolidated

financial statements were available to be issued is dependent upon its ability to produce revenues and/or obtain financing

sufficient to meet current and future obligations and deploy such to produce profitable operating results.

On April 9, 2025, the Company entered into the Hudson

Equity Purchase Agreement (“EPA”).

Under the agreement, the Company may, at its discretion and subject to certain conditions, issue and sell shares of its common stock

to Hudson over a 24-month commitment period, providing a potential source of additional capital to support the Company’s ongoing

operations and growth initiatives.

As of June 30, 2025, the Company had sold 1,155,030 shares of common stock under the Hudson EPA, resulting

in net proceeds of $ 1,149,417 .

The Company subsequently terminated the Hudson EPA effective August 13, 2025.

is no assurance, however, that the Company will be able to sell shares on favorable terms or that additional capital will be

available from other sources when needed.

If the Company is unable to obtain sufficient amount of additional capital, it may be

required to reduce the scope of its planned development, which could harm its business, financial condition, and operating results.

The accompanying condensed consolidated financial statements do not include any adjustments that might result from these

uncertainties.

As a result of the above, in connection with our assessment of going concern

considerations in accordance with FASB ASU 2014-15, “Disclosures of Uncertainties about an Entity’s Ability to Continue as

a Going Concern,” management has determined that our liquidity condition raises substantial doubt about our ability to continue

as a going concern through twelve months from the date these unaudited interim condensed consolidated financial statements are issued.

These unaudited interim condensed consolidated financial statements do not include any adjustments relating to the recovery of the recorded

assets or the classification of the liabilities that might be necessary should we be unable to continue as a going concern

Company has a net loss of $ 73,421,571 for the nine months ended September 30, 2025 and an accumulated deficit of $ 83,178,731 as of September

Furthermore, the Company has net cash used in operating activities of $ 4,561,776 for the nine months ended September 30, 2025.

These factors raise a substantial doubt on whether the Company can continue as a going concern from the date these unaudited interim

condensed consolidated financial statements are issued.

Company’s ability to continue as a going concern in the next twelve months following the date the financial statements were available

to be issued is dependent upon its ability to produce revenues and/or obtain financing sufficient to meet current and future obligations

and deploy such to produce profitable operating results.

April 9, 2025, the Company entered into the Hudson Equity Purchase Agreement (“EPA”).

Under the agreement, the Company may,

at its discretion and subject to certain conditions, issue and sell shares of its common stock to Hudson over a 24-month commitment period,

providing a potential source of additional capital to support the Company’s ongoing operations and growth initiatives.

As of September

30, 2025, the Company had sold 3,426,254 shares of common stock under the Hudson EPA, resulting in net proceeds of $ 2,838,787 .

subsequently terminated the Hudson EPA effective August 13, 2025.

September 29, 2025, the Company filed a prospectus supplement with the U.S.

Securities and Exchange Commission (“SEC”) pursuant

to Rule 424(b)(5) in connection with a public offering of 7,142,862 shares of common stock and warrants to purchase up to 7,142,862 shares

of common stock (the “Warrants”).

The Warrants are exercisable immediately upon issuance at an exercise price of $ 0.70 per

share and will expire five years from the date of issuance.

The offering generated net proceeds of approximately $ 4.5 million after

deducting placement agent fees and other offering expenses.

In October 2025, approximately 3.1 million Warrants were exercised for $ 2.2

million in proceeds.

believes that the net proceeds from this offering, together with existing cash resources and anticipated revenue, will enhance the Company’s

liquidity position.

However, there is no assurance that the Company will be able to sell shares on favorable terms or that additional

capital will be available from other sources when needed.

If the Company is unable to obtain sufficient amount of additional capital,

it may be required to reduce the scope of its planned development, which could harm its business, financial condition, and operating

The accompanying condensed consolidated financial statements do not include any adjustments that might result from these uncertainties.

a result of the above, in connection with our assessment of going concern considerations in accordance with FASB ASU 2014-15, “Disclosures

of Uncertainties about an Entity’s Ability to Continue as a Going Concern,” management has determined that our liquidity

condition raises substantial doubt about our ability to continue as a going concern through twelve months from the date these unaudited

interim condensed consolidated financial statements are issued.

These unaudited interim condensed consolidated financial statements do

not include any adjustments relating to the recovery of the recorded assets or the classification of the liabilities that might be necessary

should we be unable to continue as a going concern

ACCOUNTS RECEIVABLE, NET

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SCHEDULE OF ACCOUNTS RECEIVABLE, NET

September 30,

Billed – Third Party

Billed – Affiliates

Total Accounts Receivable

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SCHEDULE OF INVENTORY

September 30,

First Defense Nasal Screen Corp (“FDNS”)

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SCHEDULE OF PROPERTY, PLANT AND EQUIPMENT, NET

September 30,

Leasehold improvements

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Property, plant and equipment, net

expense for the three and six months ended June 30, 2025 and 2024 amounted to $ 39,731 , $ 0 , $ 79,538

respectively.

expense was $ 39,731 and $ 27,174 for the three months ended September 30, 2025 and 2024, respectively, and $ 119,269 and $ 27,174 for the

nine months ended September 30, 2025 and 2024, respectively.

INTANGIBLE ASSETS

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SCHEDULE OF INTANGIBLE ASSETS

September 30,

Software development costs - Delivmeds

Customer relationships - Wood Sage acquisition

Customer relationships - WoodSage acquisition

Customer relationships - Wellgistics acquisition

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( 1,047,048 )

Intangible assets, net

assets of $ 393,853 represent customer relationships identified and measured at fair value pursuant to the Wood Sage Acquisition

Other intangible assets, net

assets of $ 393,853 represent customer relationships identified and measured at fair value pursuant to the Wood Sage business combination

in June 2024.

The Company recorded amortization of $ 12,308 and $ 24,616 for the three and six months ended June 30, 2025, respectively, pertaining to

these intangible assets.

The Company recorded amortization of $ 12,308 and $ 36,924 for the three and nine months ended September 30, 2025, respectively,

pertaining to these intangible assets.

assets of $ 11,256,067 and $ 10,143,137 represent customer relationships and trademarks, respectively, identified and measured at fair

value pursuant to the Wellgistics, LLC Acquisition in August 2024.

value pursuant to the Wellgistics, LLC business combination in August 2024.

The Company recorded amortization of $ 496,003 and $ 1,407,008

pertaining to customer relationships, and $ 281,754 and $ 563,508 pertaining to the trademark for the three and six months ended June 30,

pertaining to customer relationships, and $ 281,754 and $ 845,261 pertaining to the trademark for the three and nine months ended September

30, 2025, respectively.

following table represents the future amortization of intangibles assets:

following table represents the future amortization of intangible assets:

SCHEDULE OF FUTURE AMORTIZATION OF INTANGIBLES ASSETS

Year Ended December 31,

2025 (remaining six months)

2025(remaining three months)

Intangible assets

ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

ACCRUED EXPENSES AND OTHER LIABILITIES

expenses and other liabilities consist of the following:

SCHEDULE OF ACCRUED EXPENSES AND OTHER LIABILITIES

September 30,

Accrued personnel costs

Accrued professional fees

Accrued expenses

Credit card obligation

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Accrued interest

Other accrued expenses

Accrued expenses and

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SCHEDULE OF OUTSTANDING DEBT

Merchant cash advance, net of debt discount

Note payable - sellers of Wellgistics

Note payable, net of debt discount

September 30,

Merchant cash advance

Note payable - owners of Wellgistics

Note payable - Integral Health

Note payable - third party, net of debt discount

Revolving line of credit

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Note payable - Integral Health

Note payable - sellers of Wellgistics

Note payable - owners of Wellgistics

Long-term debt

As of June 30, 2025 and December 31, 2024, unamortized debt discount was

$ 880,601 and $ 519,430 , respectively.

of September 30, 2025 and December 31, 2024, unamortized debt discount was $ 776,928 and $ 519,430 , respectively.

(“Integral Health”)

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party with common ownership and board members, pursuant to which Integral made a certain loan to Wood Sage in the amount of $ 1,300,000

to satisfy the purchase price under the agreements by which Wood Sage acquired

Wellgistics Pharmacy and DelivMeds.

No later than 30 days after a change in control to Wood Sage, the aggregate unpaid principal balance

of the Note became due and payable by Wood Sage, which occurred upon the consummation of the Company’s acquisition

of Wood Sage.

As of the date of issuance of these condensed consolidated financial statements, the note is still outstanding and the parties

mutually agreed for an extension.

to satisfy the purchase price under the agreements by which Wood Sage acquired Wellgistics Pharmacy and DelivMeds.

No later than 30 days

after a change in control to Wood Sage, the aggregate unpaid principal balance of the Note became due and payable by Wood Sage, which

occurred upon the consummation of the Company’s acquisition of Wood Sage.

October 30, 2025, the Company entered into a Debt Conversion Agreement (the “Integra Health DCA”), by and among the Company,

Integra Health Inc., a Florida corporation (“Integra Health”), and WoodSage.

The Integra Health DCA addressed the conversion

of indebtedness in the amount of $ 1,300,000 due pursuant to a promissory note issued by WoodSage in favor of Integra Health, dated as

of August 22, 2023 (the “ Note ”).

Under the Integra Health DCA, the indebtedness in the among of $ 1,300,000 was converted

into shares of the Company’s common stock at a price per share of $ 0.70 for an aggregate number of shares of 1,857,143 in full

satisfaction of the obligations of WoodSage outstanding under the Note.

March 18, 2025, the Company entered into a merchant cash advance agreement with a third-party lender.

Pursuant to the agreement, the

Company received gross funding of $ 1,900,000

in exchange for the sale of future receivables totaling $ 2,840,000 .

Of the $ 1,900,000

in funding, $ 1,118,250

was directly applied by the lender to settle existing obligations under

a prior agreement with the same lender, effectively refinancing the earlier balance.

The remaining $ 781,750

was disbursed to the Company for working capital and operational needs.

The MCA Agreement resets the Purchased Amount (as defined), repayment terms,

and structure under a new contract.

The Company is obligated to remit weekly payments of $ 56,800

until the full Purchased Amount of $ 2,840,000

The Company accounts for the merchant cash advance as a debt obligation.

The Company recorded a liability equal to the full Purchased Amount of $ 2,840,000 , with a corresponding debt discount of $ 940,000 representing the difference between the repayment

obligation and the net proceeds received.

The debt discount will be amortized to interest expense over the term of the arrangement.

of June 30, 2025, the carrying amount of the loan, net of the remaining unamortized discount of $ 552,943 , was $ 1,548,657 .

May 14, 2025, the Company entered into a Business Loan and Security Agreement with Agile Capital Funding, LLC for a principal amount of $ 756,000 .

The Company received

$ 500,000 in cash proceeds and recorded a debt discount of $ 256,000 .

The loan does not bear a stated interest rate;

instead, the debt

discount represents the implied borrowing cost.

The loan matures in December 2025, and is repayable in weekly installments of $ 27,000 .

The loan is secured by certain assets of the Company not otherwise secured in its other

financing arrangements and was used for general working capital purposes.

The Company is amortizing the debt discount using the effective

interest method over the 28 week term.

Amortization of debt discount recorded to interest expense

was $ 45,542 for the three and six months ended June 30, 2025.

As of June 30, 2025,

the carrying amount of the loan, net of the remaining unamortized discount of $ 210,458 , was $ 464,542 .

June 25, 2025, the Company entered into an Agreement for the Purchase and Sale of Future Receipts with Agile Capital Funding, LLC

for a total purchased amount of $ 367,200 .

The Company received $ 255,000

in cash proceeds and recorded a debt discount of $ 112,200 .

The agreement assigns 15% of proceeds of future sales to the buyer, with weekly repayment installments of $ 13,114

over 28 weeks based on estimated average monthly sales projections.

Proceeds were used for general working capital purposes.

Company is amortizing the debt discount using the effective interest method over the 28 week term.

As of June 30, 2025, the carrying

amount of the arrangement, net of the remaining unamortized discount of $ 112,200 ,

was $ 238,824 .

Note payable – owners of Wellgistics, LLC

On August 23, 2024, the Company and the sellers of Wellgistics LLC entered

into the Fourth Amendment to the Wellgistics MIPA.

Pursuant to the amended agreement, Wellgistics Health agreed to pay Wellgistics LLC

a promissory note in the aggregate principal amount of $ 15,000,000 plus simple interest accruing annually equal to the “Prime Rate”

as published by the Wall Street Journal on January 1 of the applicable year, together payable in three equal annual installments

commencing on the first anniversary of the date that IPO registration statement becomes effective.

For 2025, the interest rate was 7.5 %.

the three and six months ended June 30, 2025, the Company recorded interest expense of $ 318,750

Company received gross funding of $ 1,900,000 in exchange for the sale of future receivables totaling $ 2,840,000 .

Of the $ 1,900,000 in

funding, $ 1,118,250 was directly applied by the lender to settle existing obligations under a prior agreement with the same lender, effectively

refinancing the earlier balance.

The remaining $ 781,750 was disbursed to the Company for working capital and operational needs.

MCA Agreement resets the Purchased Amount, repayment terms, and structure under a new contract.

The Company is obligated to remit weekly

payments of $ 56,800 until the full Purchased Amount of $ 2,840,000 is repaid.

Company accounts for the merchant cash advance as a debt obligation.

On restructuring, the Company recorded a liability equal to the

full Purchased Amount of $ 2,840,000 ,

with a corresponding debt discount of $ 940,000

representing the difference between the repayment obligation

and the net proceeds received.

During the nine months ended September 30, 2025, the Company made repayments totaling $ 1,147,363 .

considering the net proceeds received of $ 781,750 , the Company recorded a net repayment of $ 365,613 for the period.

In connection with

the refinancing of the prior MCA arrangement, the Company recognized a non-cash charge of $ 205,261 related to the write-off of the remaining

unamortized debt discount.

This amount is included in interest expense and presented as a non-cash adjustment within the operating section

of the Company’s Statement of Cash Flows.

The debt discount is being amortized to interest expense over the term of the arrangement.

For the three and nine months ended September 30, 2025, interest expense recorded was $ 281,091

and $ 1,187,579 ,

respectively, pertaining to the note.

As of June 30, 2025 and December 31, 2024, accrued interest on the note totaled $ 1,062,500

respectively.

As of September 30, 2025, the carrying amount of the loan, net of the remaining unamortized discount of $ 271,852 ,

was $ 1,154,148 .

August 26, 2025, the Company entered into a Business Loan and Security Agreement with Agile Capital Funding, LLC (as Collateral Agent)

and Agile Lending, LLC (as Lead Lender) for a secured term loan of $ 1,300,000 (the “Agile Term Loan”).

The loan bears an

imputed interest charge of $ 572,000 , resulting in a total repayment obligation of $ 1,872,000 , payable in weekly installments of $ 58,500

commencing September 3, 2025 through April 8, 2026.

The loan carries an effective borrowing cost and does not bear a separately stated

interest rate.

inception, the Company received net proceeds of $ 500,074 after deduction of (i) repayment of the prior Agile loans originated

in May 2025, $ 459,300 and June 2025, $ 275,626 , and (ii) an administrative agent fee of $ 65,000 .

Accordingly, the Company recorded a debt

discount of $ 637,000 , representing the difference between the total repayment obligation and the proceeds received.

The debt discount

is being amortized to interest expense using the effective interest method over the 32-week term of the loan.

During the nine months ended September 30, 2025, the Company received total cash proceeds of $ 1,250,074 from Agile loan arrangements,

consisting of proceeds from loans originated in May 2025, July 2025, and August 2025.

Total repayments made during the period were $ 318,260 ,

resulting in net cash received of $ 931,814 , which is presented within financing activities in the Company’s Statement of Cash Flows.

In connection with the repayment of the May and July 2025 Agile loans, the Company recognized a non-cash charge of $ 201,110 related to

the write-off of the remaining unamortized debt discount.

This amount is included in interest expense and presented as a non-cash adjustment

within the operating section of the Statement of Cash Flows.

For the three and nine

months ended September 30, 2025, the Company recorded interest expense $ 131,924 and $ 554,228 , respectively.

As of September 30, 2025,

the carrying amount of the loan, net of the remaining unamortized discount of $ 505,076 , was $ 1,132,924 .

payable – sellers of Wellgistics, LLC

August 23, 2024, Wellgistics Health and Wellgistics LLC entered into the Fourth Amendment to the Wellgistics MIPA.

Pursuant to the amended

agreement, Wellgistics Health agreed to pay Wellgistics LLC a promissory note in the aggregate principal amount of $ 15,000,000 plus simple

interest accruing annually equal to the “Prime Rate” as published by the Wall Street Journal on January 1 of the applicable

year, together payable in three equal annual instalments commencing on the first anniversary of the date that registration statement

becomes effective.

July 24, 2025, the parties executed the Eighth Amendment to the MIPA, which increased the principal amount of the promissory note from

million to $ 17.5

million and modified the repayment schedule whereby $ 5,000,000

of principal shall be payable on the first and second anniversaries

and $ 7,500,000

respectively, and is included in accrued expenses and other

current liabilities on the accompanying condensed consolidated balance sheets.

As of June 30, 2025, $ 5,000,000 was included as a current

liability on the consolidated balance sheet and the remaining $ 10,000,000

was classified as non-current.

of principal shall be payable on the third anniversary, of

the effective date of Promissory Note, In accordance with ASC 470-50, this resulted in an debt extinguishment of the original note.

part of the extinguishment, accrued interest of $ 1,146,337

on the original note was derecognized, and the Company recorded

a non-cash loss on debt extinguishment of $ 1,353,663 .

the three and nine months ended September 30, 2025, the Company recorded total interest expenses of $ 277,123

related to the amended note.

As of September 30, 2025, accrued interest on the note totaled $ 277,123 ,

which is included in accrued expenses and other current liabilities on the accompanying condensed consolidated balance sheet.

September 30, 2025, $ 5,000,000 of

the amended note was classified as a current liability on the consolidated balance sheet and the remaining $ 12,500,000 was

classified as non-current.

Payable – Third party

On January 2, 2025, the Company entered into an unsecured promissory note

agreement for a principal amount of $ 448,411 .

The promissory note bears interest at a rate of 10 %

per annum, with both principal and accrued interest due in full on May 15, 2025.

In the event of default, interest accrues at a default

In connection with this note, the Company received net proceeds of $ 415,000 ,

with the remaining $ 33,411

recognized as a debt discount.

For the three months ended June 30, 2025, the Company recorded

interest expense of $ 11,210

and amortization of debt discount of $ 11,304

related to this note.

For the six months ended June 30, 2025, the Company

recorded total interest expense of $ 22,021

and amortization of debt discount of $ 33,411 .

As of June 30, 2025,

accrued interest payable on this note was $ 22,021 , and the outstanding principal of $ 448,411 is classified under current

As of the issuance date of these condensed consolidated financial statements, the parties are

currently working on an extension.

February 2, 2025, the Company entered into an unsecured promissory note agreement for a principal amount of $ 100,000 .

The promissory note bears interest at a rate of 10 %

per annum, with both principal and accrued interest due in full on August 15, 2025.

In the event of default, interest accrues at a

default rate of 12 %

For the three months ended June 30, 2025, the Company recorded interest expense of $ 2,500 related

to this note.

For the six months ended June 30, 2025, the Company recorded total interest expense of $ 4,062 .

As of June 30, 2025, accrued interest payable on this note was $ 4,062 , and the outstanding principal of $ 100,000 is

classified under current liabilities.

February 2, 2025, the Company entered into another unsecured promissory note agreement in the principal amount of $ 100,000 .

The promissory note bears interest at a rate of 10 %

per annum, with both principal and accrued interest due in full on August 15, 2025.

In the event of default, interest accrues at a

default rate of 12 %

For the six months ended June 30, 2025, the Company recorded interest expense of $ 4,062

January 2, 2025, the Company entered into an unsecured promissory note agreement for a principal amount of $ 448,411 .

The promissory note

bears interest at a rate of 10 % per annum, with both principal and accrued interest due in full on May 15, 2025.

In the event of default,

interest accrues at a default rate of 12 % per annum.

In connection with this note, the Company received net proceeds of $ 415,000 , with

the remaining $ 33,411 recognized as a debt discount.

For the three and nine months ended September 30, 2025, the Company recorded interest

expense of $ 11,210 and $ 33,232 , respectively.

For the same periods, the Company recognized amortization of debt discount of $ 0 and $ 33,411

related to this promissory note.

As of June 30, 2025, the outstanding principal of $ 100,000

is classified under current liabilities.

As of the issuance date of these condensed consolidated financial statements, the parties

are currently working on an extension.

Payable – Related Party

On April 7, 2025, the Company issued an unsecured promissory note (the

“April 2025 Note”) to Sansur Associates, LLC, a related party entity beneficially owned by Surendra Ajjarapu, the Chairman

of the Company’s Board of Directors, in the principal amount of $ 500,000 .

The April 2025 Note bears interest at a rate of 10 % per

annum and matures on October 7, 2025 .

The Company may prepay any portion of the outstanding principal and accrued interest at any time

without penalty.

In the event of a default, the note provides for acceleration of the outstanding balance and an increase in the interest

rate to 12 % per annum.

As of June 30, 2025, the principal amount had not been funded and no interest expense had accrued.

The April 2025

Note was subsequently canceled in August 2025.

line of credit

In November 2024, the Company

entered into a new credit agreement for a line of credit of $ 10,000,000 .

new line of credit has interest annual rate equal to the Term Standard Overnight Financing Rate (“SOFR”) plus 11.5%,

calculated and prorated daily on the daily balance (an aggregate rate of 16.84% per annum).

The line of credit is collateralized by

accounts receivable and inventory balances.

Interest related to the line of credit amounted to $ 332,439

and $ 614,199

for the three and six months ended June 30, 2025, respectively.

The outstanding balance on the line of credit as of June 30, 2025

and December 31, 2024 was $ 3,979,766

and $ 5,531,260 ,

As of September 30, 2025, accrued interest payable on this note was $ 33,232 and the outstanding principal

of $ 448,411 is classified under current liabilities.

As of the issuance date of these financial statements, the parties are currently

working on an extension.

February 2, 2025, the Company entered into an unsecured promissory note agreement for a principal amount of $ 100,000 .

The promissory

note bears interest at a rate of 10 % per annum, with both principal and accrued interest due in full on August 15, 2025.

of default, interest accrues at a default rate of 12 % per annum.

Under the terms of the promissory note, an event of default occurs only if the maker fails to pay any amount due

within five (5) days after receipt of written notice from the payee.

As of September 30, 2025, the Company had not received any such written

notice and, accordingly, no event of default had occurred.

For the three and nine months ended September 30, 2025, the Company

recorded interest expense of $ 2,500 and $ 6,562 related to this note.

As of September 30, 2025, accrued interest payable on this note

was $ 6,562 , and the outstanding principal of $ 100,000 is classified under current liabilities.

February 2, 2025, the Company entered into another unsecured promissory note agreement a principal amount of $ 100,000 .

The promissory

note bears interest at a rate of 10 % per annum, with both principal and accrued interest due in full on August 15, 2025.

of default, interest accrues at a default rate of 12 % per annum.

Under the terms of the promissory note, an event of default occurs only if the maker fails to pay any amount due

within five (5) days after receipt of written notice from the payee.

As of September 30, 2025, the Company had not received any such written

notice and, accordingly, no event of default had occurred.

For the three and nine months ended September 30, 2025, the Company

recorded interest expense of $ 2,500 and $ 6,562 related to this note.

As of September 30, 2025, accrued interest payable on this note

was $ 6,562 , and the outstanding principal of $ 100,000 is classified under current liabilities.

of September 30, 2024, the $ 100,000 short-term note entered into in September 2023 with third party investor remains outstanding.

note bears interest at 8 % per annum and provides that the lender will be issued 35,000 shares of common stock upon the consummation of

a SPAC transaction or merger.

For the three and nine months ended September 30, 2024, the Company recorded interest expense of $ 2,000

and $ 6,000 , respectively related to this note.

As of September 30, 2025, accrued interest payable on this note was $ 17,666 , and the outstanding

principal of $ 100,000 is classified under non-current liabilities.

line of credit – Wellgistics

November 2024, Wellgistics, LLC entered into a new credit agreement with for a line of credit of $ 10,000,000 .

The new line of credit

has interest annual rate equal to the Term Secured Overnight Financing Rate (“SOFR”) plus 11.5%, calculated and prorated

daily on the daily balance (an aggregate rate of 16.84% per annum).

The line of credit is collateralized by accounts receivable and inventory

Interest expense related to the line of credit amounted to $ 262,558 and $ 876,757 for the three and nine months ended September

30, 2025, respectively.

The outstanding balance on the line of credit as of September 30, 2025 and December 31, 2024 was $ 2,973,751 and

$ 5,531,260 respectively, which is included as a current liability on the condensed consolidated balance sheet.

Promissory Note - Wellgistics

In May 2022, the Company entered into a promissory note agreement in the

amount of $ 1.2

The promissory note was part of the consideration to the seller in connection

with its acquisition of American Pharmaceutical Ingredients, LLC (a subsidiary of Wellgistics LLC).

The promissory note bore interest

at a rate of 2 %

per annum and scheduled to mature on April 1, 2025.

The Company assumed this debt as part of the Wellgistics Acquisition.

of June 30, 2025, the promissory note had been fully repaid, and the outstanding balance was $ 0 , compared to $ 137,141 as of December 31, 2024.

Interest expense related to the promissory note

was immaterial for the six months ended June 30, 2025.

May 2022, Wellgistics, LLC entered into a promissory note agreement in the amount of $ 1.2 million.

The promissory note was part of the

consideration to the seller in connection with its acquisition of American Pharmaceutical Ingredients, LLC.

The promissory note bore interest at a rate of 2 % per annum and was scheduled to mature on April 1, 2025.

Company assumed this debt as part of the acquisition of Wellgistics.

As of September 30, 2025, the promissory note had been fully repaid,

and the outstanding balance was $ 0 , compared to $ 137,141 as of December 31, 2024.

Interest expense related to the promissory note was

immaterial for the nine months ended September 30, 2025.

following table is a summary of annual principal payments of the Company’s outstanding debt:

SCHEDULE OF ANNUAL PRINCIPAL PAYMENTS

2025 (remaining three months)

Principal Payment

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Public Offering

February 24, 2025, the Company closed its IPO of 888,889 shares of common stock at a public offering

price of $ 4.50 per share.

The IPO generated gross proceeds of $ 4.0 million and net proceeds of approximately $ 3.1 million after deducting

underwriting discounts, commissions, and other offering expenses.

February 24, 2025, the Company closed its IPO of 888,889 shares of common stock at a public offering price of $ 4.50 per share.

generated gross proceeds of $ 4.0 million and net proceeds of approximately $ 3.1 million after deducting underwriting discounts, commissions,

and other offering expenses.

2025 Offering

September 29, 2025, the Company filed a prospectus supplement with the U.S.

Securities and Exchange Commission (“SEC”) pursuant

to Rule 424(b)(5) under the Securities Act of 1933, as amended, in connection with a registered public offering of its securities.

to the offering, the Company issued an aggregate of 7,142,862 shares of its common stock, together with warrants to purchase up to 7,142,862

shares of common stock (the “Warrants”).

The combined public offering price was $ 0.70 per share of common stock and accompanying

The Warrants are exercisable immediately upon issuance at an exercise price of $ 0.70 per share and will expire five years from

the date of issuance.

The offering closed shortly thereafter, resulting in net proceeds of $ 4,534,053 after deducting placement agent

fees and other offering expenses.

All Warrants remained outstanding as of September 30, 2025.

and Consulting Agreements

February 25, 2025, the Company entered into a consulting agreement with Hudson to provide business advisory services, growth

strategy guidance, and networking support for a 30-day period.

As consideration for these services, the Company agreed to pay Hudson

a cash fee of $ 250,000 and

to issue 52,000 shares

of restricted common stock.

February 25, 2025, the Company entered into a consulting agreement with Hudson to provide business advisory services, growth strategy

guidance, and networking support for a 30-day period.

As consideration for these services, the Company agreed to pay Hudson a cash fee

of $ 250,000 and to issue 52,000 shares of restricted common stock.

The Company recognized stock-based compensation expense of $ 0 and

during the three and six months ended June 30, 2025, respectively, in connection

with the equity issuance.

This expense was recorded within general and administrative expenses in the condensed consolidated statements

of operations.

The fair value of the restricted stock was determined based on the market price of the Company’s common stock on

the grant date.

$ 143,520 during the three and nine months ended September 30, 2025, respectively, in connection with the equity issuance.

was recorded within general and administrative expenses in the condensed consolidated statements of operations.

The fair value of the

restricted stock was determined based on the market price of the Company’s common stock on the grant date.

March 17, 2025, the Company entered into consulting agreement with Draper, Inc.

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As consideration for services under the initial three-month term

of the agreement, the Company issued 100,000

shares of restricted common stock to Draper.

The consulting

agreement automatically renews on a month-to-month basis unless terminated by either party with at least seven days’ notice prior

to the end of the current term.

The Company will be obligated to issue an additional 100,000

restricted shares of common stock for each renewal period.

The Company subsequently terminated this consulting agreement on June 16, 2025.

Based on the market price of the Company’s

common stock on the grant date, the total fair value of the shares issued to Draper was determined to be $ 400,000 .

For the three and

six months ended June 30, 2025, the Company recognized stock-based compensation expense of $ 65,217 and $ 400,000 ,

respectively, in connection with this agreement.

This expense was recorded within sales and marketing expenses in the condensed consolidated

statements of operations.

Directors and Former Employees

As previously disclosed on the Company’s Current

Report on Form 8-K filed with the SEC on April 11, 2025, the Company’s board of directors appointed Michael L.

Peterson to fill

the vacancy created as a result of the resignation of Sajid Sayed.

In consideration for his board services and to further align his interests

with those of the Company and its stockholders, the Company’s board of directors determined, after his appointment, to issue 200,000

restricted shares of the Company’s common stock that vest in equal amounts over a three-year period beginning on the first anniversary

date of the grant.

Vesting of Mr.

Peterson’s shares of common stock accelerates if or when he leaves the Company.

In June 2025, the Company also granted former chief

executive officer Timothy Canning 750,000 restricted shares of the Company’s common stock in fulfillment of the sign-on bonus to

which he had been entitled pursuant to the terms of his employment agreement with the Company.

The shares vest on the six-month anniversary

of the grant date.

As previously disclosed on the Company’s Current Report on Form 8-K filed with the SEC on March 6, 2025, Mr.

of the agreement, the Company issued 100,000 shares of restricted common stock to Draper.

The consulting agreement automatically renews

on a month-to-month basis unless terminated by either party with at least seven days’ notice prior to the end of the current term.

The Company will be obligated to issue an additional 100,000 restricted shares of common stock for each renewal period.

The Company subsequently

terminated this consulting agreement on June 16, 2025.

Based on the market price of the Company’s common stock on the grant date,

the total fair value of the shares issued to Draper was determined to be $ 400,000 .

For the three and nine months ended September 30,

2025, the Company recognized stock-based compensation expense of $ 0 and $ 400,000 , respectively, in connection with this agreement.

expense was recorded within sales and marketing expenses in the condensed consolidated statements of operations.

August 4, 2025, the Company issued 243,428 shares of its common stock to a third party as consideration for advisory services rendered

to the Company.

The fair value of the shares, determined based on the market closing price of the Company’s common stock on the

grant date, was $ 200,000 .

The total fair value of $ 200,000 was recognized as stock-based compensation expense for the three and nine

months ended September 30, 2025, and recorded within general and administrative expenses in the accompanying condensed consolidated statements

of operations.

August 26, 2025, the Company issued an aggregate of 200,000 shares of its common stock to a third party as consideration for

marketing services rendered to the Company.

The fair value of the shares was determined based on the closing market price of $ 1.73

per share on the grant date, resulting in a total fair value of $ 346,000 .

The entire amount was recognized as stock-based

compensation expense during the three and nine months ended September 30, 2025, and included within sales and marketing expenses in the accompanying condensed consolidated statements of operations.

and Former Employees

previously disclosed on the Company’s Current Report on Form 8-K filed with the SEC on April 11, 2025, the Company’s board

of directors appointed Michael L.

Peterson to fill the vacancy created as a result of the resignation of Sajid Sayed.

In consideration

for his board services and to further align his interests with those of the Company and its stockholders, On July 2, 2025, after his

appointment, the Company’s board of directors determined to issue 200,000 restricted shares of the Company’s common stock.

The fair value of the award, determined based on the market closing price of the Company’s common stock on the grant date, was

Of the total shares granted , 66,000 shares vest immediately and the remaining 134,000 shares vest in equal annual installment

on July 2, 2026 and July 2, 2027, subject to continued services as a director.

Peterson resigned from the Board effective October

As a result, his unvested restricted shares were forfeited upon resignation in accordance with the terms of his award agreement.

For the three and nine months ended September 30, 2025, the Company recognized stock-based compensation expense of $ 75,341 in connection

with this award, which is included in general and administrative expense in the accompanying condensed consolidated statements of operations.

June 2025, the Company also granted former chief executive officer Timothy Canning 750,000 restricted shares of the Company’s common

stock in fulfillment of the sign-on bonus to which he had been entitled pursuant to the terms of his employment agreement with the Company.

The shares vest on the six-month anniversary of the grant date.

As previously disclosed on the Company’s Current Report on Form

8-K filed with the SEC on March 6, 2025, Mr.

Canning tendered his resignation to the Company effective February 28, 2025.

The fair value

of the award, determined based on the market closing price of the Company’s common stock on the grant date, was $ 832,500 .

three and nine months ended September 30, 2025, the Company recognized stock-based compensation expense of $ 436,721 in connection with

this award, which is included in general and administrative expense in the accompanying condensed consolidated statements of operations.

Purchase Agreement

April 9, 2025, the Company entered into the Hudson EPA pursuant to which Hudson committed

to purchase, upon the Company’s request, up to $ 50 million of the Company’s common stock over a 24-month period, subject

to certain conditions.

Under the terms of the agreement, the Company may, from time to time and at its sole discretion, issue “put

notices” requiring Hudson to purchase shares at a price based on a formula tied to the market price of the Company’s common

stock, as defined in the Hudson EPA.

of June 30, 2025, the Company had issued a total of 1,155,030 shares of common stock pursuant to put notices under the agreement, resulting

in net proceeds of $ 1,149,417 .

As of June 30, 2025, the Company had a subscription receivable of $ 581,595 pertaining to shares issued

under the Hudson EPA for which proceeds were received in July 2025.

connection with entering into the Hudson EPA, the Company also issued 152,000

commitment shares to Hudson, which were valued

at a fair value of $ 594,320

based on the closing price of the Company’s common stock

on the agreement date.

The amount was recorded as stock-based compensation and was included within general and administrative expenses

in the condensed consolidated statements of operations.

April 9, 2025, the Company entered into the Hudson EPA pursuant to which Hudson committed to purchase, upon the Company’s request,

up to $ 50 million of the Company’s common stock over a 24-month period, subject to certain conditions.

Under the terms of the agreement,

the Company may, from time to time and at its sole discretion, issue “put notices” requiring Hudson to purchase shares at

a price based on a formula tied to the market price of the Company’s common stock, as defined in the Hudson EPA.

connection with entering into the Hudson EPA, the Company also issued 152,000 commitment shares to Hudson, which were valued at a fair

value of $ 594,320 based on the closing price of the Company’s common stock on the agreement date.

For the three and nine months

ended September 30, 2025, $ 0 and $ 594,320 , respectively, was recorded as stock-based compensation and was included within general and

administrative expenses in the condensed consolidated statements of operations.

of September 30, 2025, the Company had issued a total of 3,426,254 shares of common stock pursuant to put notices under the agreement,

resulting in net proceeds of $ 2,838,787 .

The Company subsequently terminated the Hudson EPA effective August 13, 2025.

April 14, 2025, the Company and sellers of Wellgistics LLC further amended the Wellgistics MIPA.

Pursuant to the amendment, the portion

of the closing cash payment payable to one of the sellers, Strategix Global LLC, was reduced by $ 1,500,000 ,

and in lieu of such payment, Strategix was issued 333,333

shares of the Company’s common stock.

These shares will

be subject to a 12-month lock-up period consistent with the terms applicable to management and large shareholders at the time of the

Company’s IPO.

of the closing cash payment payable to one of the sellers, Strategix Global LLC, was reduced by $ 1,500,000 , and in lieu of such payment,

Strategix was issued 333,333 shares of the Company’s common stock.

These shares will be subject to a 12-month lock-up period consistent

with the terms applicable to management and large shareholders at the time of the Company’s IPO.

July 24, 2025, the Company entered into the Eighth Amendment to the Membership Interest Purchase Agreement (“MIPA”) with

the sellers of Wellgistics LLC, including Strategix Global LLC, Nomad Capital LLC, and Jouska Holdings LLC.

Pursuant to the terms of

the Eighth Amendment, the Company agreed to satisfy a portion of the remaining closing cash consideration payable to the sellers through

the issuance of 7,606,785 shares of the Company’s common stock (the “Conversion Shares”).

The Conversion Shares were

issued at a conversion price of $ 1.07 per share, representing the agreed-upon fair value of the Company’s common stock at the time

of the transaction.

The total fair value of the shares issued, amounting to approximately $ 8.50 million, was recorded as a reduction

of the purchase consideration payable in connection with the Wellgistics LLC acquisition.

Equity Incentive Plan

Company adopted the 2023 Equity Incentive Plan (the “Plan”), which provides the issuance of up to 43,506,064 shares

of the Company’s common stock (the “Initial Limit”).

Beginning on January 1, 2025, and on each January 1 thereafter,

the number of shares reserved for issuance under the Plan will automatically increase by an amount equal to three percent (3%) of the

number of shares of the Company’s common stock outstanding on the immediately preceding December 31, or such lesser amount as may

be determined by the Plan’s administrator (the “Annual Increase”).

Shares issued under the Plan may be newly issued

shares or reacquired shares.

Company adopted the 2023 Equity Incentive Plan (the “Plan”), which provides the issuance of up to 43,506,064 shares of the

Company’s common stock (the “Initial Limit”).

Beginning on January 1, 2025, and on each January 1 thereafter, the number

of shares reserved for issuance under the Plan will automatically increase by an amount equal to three percent (3%) of the number of

shares of the Company’s common stock outstanding on the immediately preceding December 31, or such lesser amount as may be determined

by the Plan’s administrator (the “Annual Increase”).

Shares issued under the Plan may be newly issued shares or reacquired

Plan permits the grant of various types of stock-based awards, including incentive stock options, non-qualified stock options, stock

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(i) $ 1,000,000 in the first calendar year of service and (ii) $ 750,000 in any subsequent calendar year.

The fair value of such

awards is determined based on grant date fair value in accordance with ASC Topic 718, excluding the impact of estimated forfeitures related

The fair value of such awards

is determined based on grant date fair value in accordance with ASC Topic 718, excluding the impact of estimated forfeitures related

to service-based vesting conditions.

4 unchanged sentences

Amended and Restated 2023 Equity Incentive Plan (the “Plan”).

These shares of restricted common stock vest in three equal

annual installments over a three-year period, contingent upon the achievement of specified gross revenue and gross profit targets established

by the Company’s Compensation Committee.

As of June 30, 2025, none of the performance targets had been determined to be probable

of achievement.

Accordingly, no stock-based compensation expense was recognized in connection with this grant during the six months ended

June 30, 2025.

The Company will begin recognizing stock-based compensation expense on a prospective basis in the period in which the

performance conditions are deemed probable of achievement.

The shares were valued based on the market price of the Company’s common stock on the grant date.

March 14, 2025, the Company granted a total of 10,764,108 shares

of restricted stock under the Plan to directors, employees, and consultants.

The shares granted had varying vesting terms, ranging

from immediate vesting to vesting over a five-year period.

As of June 30, 2025, 9,560,057

of these shares had vested and are included in the total outstanding common stock reported in the consolidated statement of

stockholders’ equity.

of June 30, 2025, a total of 134,000 shares

were forfeited and cancelled and the remaining 10,070,051 shares were

unvested as of June 30, 2025.

summary of information related to restricted common stocks for the six months ended June 30, 2025 is as follows:

The shares were originally scheduled to vest in three equal

annual installments over a three-year period, contingent upon the achievement of specified gross-revenue and gross-profit performance

targets established by the Company’s Compensation Committee.

On July 24, 2025, the Compensation Committee approved, and the Board

of Directors ratified on September 4, 2025, the acceleration of vesting of these restricted shares, resulting in immediate vesting of

all 9,000,000 shares as of the approval date.

In accordance with ASC 718, Compensation—Stock Compensation, the Company recognized

the full $ 24.3 million of stock-based compensation expense related to this award during the three and nine months ended September 30,

2025, which is reflected in general and administrative expenses.

The fair value of the shares was determined based on the market price

of the Company’s common stock on the grant date, February 28, 2025, and no incremental fair value arose as a result of the acceleration.

Following this vesting event, there is no remaining unrecognized compensation cost related to Mr.

Norton’s restricted stock award.

March 14, 2025, the Company granted an aggregate of 10,612,108 shares of restricted common stock under the Plan to certain directors,

employees, and consultants.

On June 26, 2025, the Company granted an additional 750,000 shares of restricted stock to former Chief Executive

Officer Timothy Canning, and on July 2, 2025, the Company granted 200,000 shares of restricted stock to director Michael L.

The shares granted had varying vesting terms, ranging from immediate vesting to vesting over a five-year period.

As of September 30,

2025, 9,626,057 of these shares had vested and are included in the total outstanding common stock reported in the consolidated statement

of stockholders’ equity.

As of September 30, 2025, a total of 134,000 shares were forfeited and cancelled and the remaining 1,954,051

shares were unvested as of September 30, 2025.

summary of information related to restricted common stocks for the nine months ended September 30, 2025 is as follows:

SCHEDULE OF RESTRICTED COMMON STOCKS

2 unchanged sentences

Forfeited and cancelled

Unvested shares as of June 30, 2025

the three and six months ended June 30, 2025, the Company recognized $ 935,222

Unvested shares as of September 30, 2025

the three and nine months ended September 30, 2025, the Company recognized $ 25,716,523

and $ 54,438,827 ,

respectively, in stock-based compensation expense in accordance with ASC 718, Compensation – Stock Compensation, based

on the grant-date fair value of the restricted stock.

For the three and six months ended June 30, 2025, stock-based compensation

expense included in sales and marketing expense was $ 65,217 and $ 400,000 , respectively.

For the three and six months ended June 30,

2025, stock-based compensation expense included in general and administrative expense was $ 870,005 and $ 28,308,643 , respectively.

As of June 30, 2025, total unrecognized compensation expense related to the 10,070,051

respectively, in stock-based compensation expense in accordance with ASC 718, Compensation – Stock Compensation, based on

the grant-date fair value of the restricted stock.

following table summarizes stock-based compensation expense recognized for the three and nine months ended September 30, 2025:

OF STOCK-BASED COMPENSATION EXPENSE

Three Months Ended

Nine Months Ended

September 30,

Sales and marketing expenses

General and administrative expenses

Total expenses

of September 30, 2025, total unrecognized compensation expense related to the 1,954,051

non-vested restricted stock awards was $ 2,955,802 ,

which is expected to be recognized over a weighted-average period of 2.54 years.

Total unrecognized compensation related to unvested performance-based shares was $ 26,100,000 as of June 30, 2025.

which is expected to be recognized over a weighted-average period of 2.54

LEASE OBLIGATIONS

is classified by function on the condensed consolidated statements of operations as general and administrative.

is classified by function on the consolidated statements of operations as general and administrative.

following is the summary of operating lease assets and liabilities:

SCHEDULE OF OPERATING LEASE ASSETS AND LIABILITIES

September 30,

Operating Leases

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Company had transactions with Scienture Holdings, Inc.

(f/k/a/ TrXade Health, Inc / TRG / TrXade Health / Scienture) and group which

included Integra Pharma Solutions, LLC (“ IPS ”), in which board members of the Company were also members of

Scienture’s management and board at the time the transactions occurred.

and group (f/k/a/ TrXade Health, Inc / TRG / TrXade Health / Scienture) and group

which included Integra Pharma Solutions, LLC (“ IPS ”), in which the board members of the Company were also members

of Scienture’s management and board at the time the transactions occurred.

Tollo Health, LLC acquired IPS from Scienture in April

Tollo Health, LLC was owned in part by Integral Health, Inc., in which certain board members of the Company also had a beneficial ownership

At that time Tollo Health, LLC was owned in part by Integral Health, Inc., in which certain board members of the Company also had

a beneficial ownership interest.

Integral Health acquired IPS from Tollo Health, LLC in June 2025.

The common management between the entities at the time the

transactions occurred classifies Scienture, IPS, and Integral as related parties.

Wellgistics, LLC was previously partly owned by

a private equity company, Nomad Capital LLC, which has ownership interest in a few portfolio companies and Wellgistics, LLC had

transactions with some of the affiliated companies of Nomad Capital.

Operating expenses with affiliated companies, which include

software expenses and marketing expenses, are recorded within general and administrative expenses.

Cingo Solutions provides IT,

cyber security and compliance services;

and RxERP provides serialized ERP for pharma as a software-as-a-service

(“ SaaS ”) to the Company.

Wellgistics, LLC is charged a managerial service and software fee by Cingo and

RxERP, respectively, which is recorded within general and administrative expenses.

The common management between the

entities at the time the transactions occurred classifies Scienture, IPS, and Integral as related parties.

the first quarter of 2025, the Company purchased $ 500,000

of inventories from Tollo Health, LLC, which was a related

party until June.

August 2025, Integral Health, including its subsidiary IPS, were acquired by third parties.

Therefore, at September 30, 2025, Integral

Health and Tollo was no longer considered a related party.

As of September 30, 2025, the amounts owed to Integral Health were $ 4,019,859 ,

which was reclassified from due to related parties to other short-term advances on the consolidated balance sheet.

October 30, 2025, the Company entered into a Debt Conversion Agreement (the “Integra Pharma DCA”), by and among, the Company,

Integra Pharma Solutions, LLC, a Florida limited liability company (“Integra Pharma”), and WoodSage.

The Integra Pharma DCA

addressed the conversion of indebtedness in the amount of $ 4,019,859 due to Integra Pharma by WoodSage in connection with the Sale of

Goods Agreement by and between Integra Pharma and WoodSage, dated as of August 2023 (the “Sale Agreement”).

Under the Integra

Pharma DCA, the indebtedness in the among of $ 4,019,859 was converted into shares of the Company’s common stock at a price per

share of $ 0.70 for an aggregate number of 5,742,656 shares in full satisfaction of the obligations of WoodSage outstanding under the

Sale Agreement.

LLC was previously partly owned by a private equity company, Nomad Capital LLC, which has ownership interest in a few portfolio companies

and Wellgistics, LLC had transactions with some of the affiliated companies of Nomad Capital.

Operating expenses with affiliated companies,

which include software expenses and marketing expenses, are recorded within general and administrative expenses.

Cingo Solutions provides

IT, cyber security and compliance services;

and RxERP provides serialized ERP for pharma as a software-as-a-service (“ SaaS ”)

to the Company.

Wellgistics, LLC is charged a managerial service and software fee by Cingo and RxERP, respectively, which is recorded

within general and administrative expenses.

Company had transactions with Scietech, LLC where a significant investor is the spouse of one of the directors of the Company, which

qualifies as a related party.

following is a summary of due from and to related parties, as well as accounts receivable and accounts payable, as of June 30, 2025 and

December 31, 2024:

following is a summary of due from and to related parties, as well as accounts receivable and accounts payable, as of September 30, 2025

and December 31, 2024:

SCHEDULE OF SUMMARY OF DUE FROM AND TO RELATED PARTIES

Due from Integral Health/IPS *

Due from Tollo**

September 30,

Due from Scienture Holdings

Due from related parties

Due to Integral Health/IPS *

Due to former Chief Executive Officer

Due to Scienture Holdings

Due to related parties

Health acquired IPS in June 2025 and the parties are currently working on an agreement to settle the net balance owed by the Company

for equity consideration.

This is inclusive of the accounts receivable held by the Company to IPS as noted below.

** Tollo had common ownership with the Company’s significant stockholders

and board members through June 2025.

Accounts receivable – IPS (Integral Health)

September 30,

Accounts receivable - IPS *

Accounts receivable

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Accounts payable

Company had the following transactions with related parties during the three and six months ended June 30, 2025 and 2024:

* IPS is no longer a related

party as of September 30, 2025 and its receivable balance of $ 492,117 is included in accounts receivable, net in the consolidated

balance sheet.

Company had the following transactions with related parties during the three and nine months ended September 30, 2025 and 2024:

SCHEDULE OF RELATED PARTY TRANSACTION

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Sales to Integra Pharma Solutions, LLC

IT expenses paid to Cingo Solutions (common management)

SaaS expenses paid to RxERP (common management)

IT expenses paid to RxERP (common management)

IT expenses paid

3 unchanged sentences

Company operates as one operating segment.

The Company’s CODM is its chief executive officer, who reviews financial

information presented on a consolidated basis.

The CODM uses consolidated gross margin, operating income and net income to assess

financial performance and allocate resources.

These financial metrics are used by the CODM to make key operating decisions, such as

the determination of the rate at which the Company seeks to grow operating income and the allocation of budget between cost of

revenues, sales and marketing, general and administrative expenses or technology and development.

The following table presents selected financial information

with respect to the Company’s single operating segment for the three and six months ended June 30, 2025 and 2024:

The Company’s CODM is its chief executive officer, who reviews financial information

presented on a consolidated basis.

The CODM uses consolidated gross margin, operating income and net income to assess financial performance

and allocate resources.

These financial metrics are used by the CODM to make key operating decisions, such as the determination of the

rate at which the Company seeks to grow operating income and the allocation of budget between cost of revenues, sales and marketing,

general and administrative expenses or technology and development.

following table presents selected financial information with respect to the Company’s single operating segment for the three and

nine months ended September 30, 2025 and 2024:

SCHEDULE OF SEGMENT AND GEOGRAPHIC INFORMATION

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Cost of net revenues

Gross profit (loss)

Operating expenses:

6 unchanged sentences

( 1,744,820 )

( 68,397,073 )

( 2,397,600 )

Other income/(expense):

Interest expense, net

Loss on debt extinguishment

Other (expense), net

1 unchanged sentence

( 5,024,498 )

Net loss before income taxes

Provision for income taxes

$ ( 34,318,204 )

3 unchanged sentences

revenues were within the U.S.

See Note 1, Organization and Summary of Significant Accounting Policies - Revenue Recognition for

additional information about disaggregated revenue.

See Note 1, Organization and Summary of Significant Accounting Policies - Revenue Recognition

for additional information about disaggregated revenue.

Company’s long-lived tangible assets, as well as the Company’s operating lease right-of-use assets recognized on the condensed

consolidated balance sheets were located as follows:

September 30,

United States

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which would, individually or in the aggregate, have a material adverse effect on its results of operations, cash flows, or financial

On August 21, 2024, Blythe Global Advisors, LLC

filed a demand for arbitration against the Company and Suren Ajjarapu for breach of contract, breach of the implied covenant of good faith

and fair dealing, and breach of personal guaranty.

Blythe claims to have performed accounting services for the Company in the amount of

$ 377,947.36 for which it has not been paid and that Ajjarapu personally guaranteed payment of Blythe’s invoices.

The Company has

answered the arbitration demand and is vigorously defending the matter.

Relatedly, in early 2025, Wellgistics, LLC, Wood Sage, LLC, Alliance

Pharma Solutions, LLC, and Community Specialty Pharmacy, LLC, all subsidiaries of the Company, sued Blythe Global Advisors, LLC in the

Circuit Court of the Thirteenth Judicial Circuit in and for Hillsborough County, Florida, asserting state statutory claims of improper

UCC-1 filings, tortious interference with business relationships, slander of title, and state RICO violations.

The Company claims that

Blythe improperly filed a UCC-1 against the assets of these subsidiaries, when it only had a right file such a lien against the Company

and that the filing impeded Wellgistics, LLC’s ability to secure a necessary credit line, causing substantial damages.

a motion to dismiss that remains pending.

The Company is vigorously prosecuting its claims.

SUBSEQUENT EVENTS

Amendment to MIPA dated July 24, 2025

July 24, 2025, the Company and the other parties to the Wellgistics MIPA further amended the Wellgistics MIPA to convert a cash

payment of $ 8,139,259 owed

by the Company to the former owners of Wellgistics, LLC, into approximately 7,606,785 shares

of the Company’s common stock at the prevailing 3-day average weighted market price of $ 1.07 per

share (the “Converted Shares”).

The Company issued the Converted Shares effective July 24, 2025.

Amendment also increased the principal amount of the promissory notes issuable to the Wellgistics sellers from $ 15 million to $ 17.5

million, payable over three years with final maturity in July 2028.

of July 25, 2025, the Company had exercised its put right to the aggregate 3,426,254

shares issuable to the investor currently registered for resale on its active Form S-1 Registration Statement

(SEC File No.

On August 13, 2025, the Company delivered written notice to the Investor of its election to terminate the Hudson

Payable issued by Tollo Health, LLC, Tollo Health Inc.

and Gerald Commissiong

Health, LLC, Tollo Health Inc.

and Gerald Commissiong (“ Borrowers ”), issued a Revolving Credit Note to

Testing123, LLC dated March 12, 2025, in the original principal amount of up to $ 750,000 (the

“Note”), pursuant to a Revolving Line of Credit Agreement.

The obligations of the Borrowers under the Note were

secured pursuant to the terms of the Pledge and Security Agreement of even date therewith and guaranteed by the Company pursuant to

that certain Corporate Guaranty of even date therewith (the “ Guaranty ” and collectively with the Note, the

Agreement, the Security Agreement, and the other documents executed in connection therewith, the “ Transaction

Documents ”).

to the Transaction Documents, the initial advance under the Agreement in the amount of $ 444,600

was made on March 12, 2025.

The term of the loan for this draw

is two (2) months from the funding date, with a contractual maturity date of May 12, 2025.

Interest accrues at the rate of five percent

per month, compounding monthly, and in the event of default, the applicable interest rate increases to ten percent ( 10 %)

August 21, 2024, Blythe Global Advisors, LLC filed a demand for arbitration against the Company and Suren Ajjarapu for breach of contract,

breach of the implied covenant of good faith and fair dealing, and breach of personal guaranty.

Blythe claims to have performed accounting

services for the Company in the amount of $ 377,947 for which it has not been paid and that Ajjarapu personally guaranteed payment

of Blythe’s invoices.

The Company has answered the arbitration demand and is vigorously defending the matter.

in early 2025, Wellgistics, LLC, Wood Sage, LLC, Alliance Pharma Solutions, LLC, and Community Specialty Pharmacy, LLC, all subsidiaries

of the Company, sued Blythe Global Advisors, LLC in the Circuit Court of the Thirteenth Judicial Circuit in and for Hillsborough County,

Florida, asserting state statutory claims of improper UCC-1 filings, tortious interference with business relationships, slander of title,

and state RICO violations.

The Company claims that Blythe improperly filed a UCC-1 against the assets of these subsidiaries, when it

only had a right file such a lien against the Company and that the filing impeded Wellgistics, LLC’s ability to secure a necessary

credit line, causing substantial damages.

Blythe filed a motion to dismiss that remains pending.

The Company is vigorously prosecuting

March 12, 2025, Tollo Health, LLC, Tollo Health Inc., and Gerald Commissiong (collectively, the “Borrowers”) entered into

a Revolving Credit Agreement and issued a Revolving Credit Note to Testing123, LLC (the “Lender”) in the original principal

amount of up to $ 750,000 .

The obligations of the Borrowers were secured pursuant to a Pledge and Security Agreement and guaranteed by

the Company under a Corporate Guaranty.

to the Transaction Documents, the initial advance of $ 444,600 was funded on March 12, 2025.

The term of the loan for this draw was two

months, maturing on May 12, 2025, and bore interest at 5 % per month, compounding monthly.

Upon default, the interest rate increased to

10% per month, also compounding monthly.

Failure to pay any amount due on or before its maturity constitutes an event of default.

The Borrowers defaulted on payment thereby migrating the liability to the Company as guarantor.

July 25, 2025, the Company paid the total amount owing under the obligation as Guarantors for the Borrowers in the amount of $ 640,647

in principal and interest directly to Testing123, LLC.

One Big Beautiful Bill Act

On July 4, 2025, President Donald J.

into law H.R.

1, the “One Big Beautiful Bill Act” (“The Act”).

The Act includes many significant provisions, such

as permanent extension of certain provisions of the Tax Cuts and Jobs Act, modifications to international tax provisions, and restoration

of expensing for domestic research and development, among others.

Certain provisions which impact the Company are effective starting in

2025, while others are not effective until 2026.

The Company is currently evaluating the impact that The Act will have on its consolidated

financial statements.

Failure to pay any amount when due constituted an event of default under the Note.

Borrowers defaulted on their payment obligations, thereby triggering the Company’s liability as guarantor.

On July 25, 2025, the

Company satisfied its obligations under the Guaranty and paid $ 640,647 —representing principal and accrued interest—directly

to Testing123, LLC.

As a result, the Company recognized a loss on guarantee of $ 640,647 in its condensed consolidated statements of operations

for the nine months ended September 30, 2025, which is included in general and administrative expenses.

SUBSEQUENT EVENTS

Removal of Directors

Effective as of October 1, 2025, stockholders of the

Company holding a majority of the Company’s common stock, par value $ 0.0001 per share, acted by consent in lieu of a stockholder

meeting under Section 228 of the General Corporation Law of the State of Delaware (the “ DGCL ”) to remove Rebecca Shanahan

and Michael Peterson from the board of directors, effective immediately.

At the time of their respective removals, Ms.

Shanahan served

on the Ethics Committee and Mr.

Peterson served as the chair of the Audit Committee.

Director Resignations

On October 2, 2025, Donald Anderson advised the Company

that he was resigning from his position as a member of the board of directors effective immediately.

Anderson indicated that his decision

to resign was a result of his inability commit the time and focus needed to serve on the board of directors going forward.

did not advise the Company of any dispute or disagreement with the Company, the Company’s management or the Company’s board

of directors on any matter relating to the Company’s operations, policies, or practices.

At the time of his resignation, Mr.

served on the Nominating Committee.

Election of Directors

Effective as of October 2, 2025, the remaining member

of the board of directors acted by consent in lieu of a meeting of the board of directors under Section 141(f) of the DGCL to elect Donald

Fell, Prashant Patel, Steven D.

Lee, and Howard Doss (together, the “Newly Elected Directors”) to the board of directors to

serve as directors.

The board of directors has since appointed Mr.

Fell to serve on the Nominating Committee and Compensation Committee

of the board of directors, Mr.

Lee to serve on the Ethics Committee of the board of directors, and Mr.

Doss to serve as the chairman on

the Audit Committee of the board of directors.

Doss will be “independent” directors as defined

under applicable rules of NASDAQ and the SEC.

Officer Resignations

On October 6, 2025, Brian Norton advised the Company that he was resigning

from his position as Chief Executive Officer of the Corporation effective Monday, October 6, 2025, at 5:00 p.m.

On October 6, 2025, Tony Madsen advised the Company that he was resigning

from his position as Chief Operating Officer of the Corporation effective Monday, October 6, 2025, at 8:00 p.m.

On October 6, 2025, Mark DiSiena advised the Company that he was resigning

from his position as Chief Financial Officer of the Corporation effective Monday, October 6, 2025, at 5:00 p.m.

Appointment of Officer

On October 7, 2025, Eric Sherb was appointed as the interim Chief Financial

Officer of the Company by the board of directors.

Changes in Registrant’s Certifying Accountant

On November 11, 2025, following the resignation of

UHY LLP, the Audit Committee of the Board of Directors approved the engagement of Suri & Co.

(“Suri”) as the Company’s

new independent registered public accounting firm for the fiscal year ending December 31, 2025, effective immediately.

Exercise of Warrants

October 2025, approximately 3.1 million Warrants issued in connection to the September 2025 Offering were exercised for $ 2.2 million

Debt Conversion Agreement

October 30, 2025, the Company entered into a Debt Conversion Agreement (the “Integra Health DCA”), by and among the Company,

Integra Health Inc., a Florida corporation (“Integra Health”), and WoodSage LLC, a Florida limited liability company and

a wholly-owned subsidiary of the Company (“WoodSage”).

The Integra Health DCA addressed the conversion of indebtedness in

the amount of $ 1,300,000 due pursuant to a promissory note issued by WoodSage in favor of Integra Health, dated as of August 22, 2023

(the “ Note ”).

Under the Integra Health DCA, the indebtedness in the among of $ 1,300,000 was converted into shares

of the Corporation’s common stock at a price per share of $ 0.70 for an aggregate number of shares of 1,857,143 in full satisfaction

of the obligations of WoodSage outstanding under the Note.

Pharma Solutions, LLC Debt Conversion Agreement

October 30, 2025, the Company entered into a Debt Conversion Agreement (the “Integra Pharma DCA”), by and among, the Company,

Integra Pharma Solutions, LLC, a Florida limited liability company (“Integra Pharma”), and WoodSage.

The Integra Pharma DCA

addressed the conversion of indebtedness in the amount of $ 4,019,859 due to Integra Pharma by WoodSage in connection with the Sale of

Goods Agreement by and between Integra Pharma and WoodSage, dated as of August 2023 (the “Sale Agreement”).

Under the Integra

Pharma DCA, the indebtedness in the among of $ 4,019,859 was converted into shares of the Corporation’s common stock at a price

per share of $ 0.70 for an aggregate number of shares of 5,742,656 in full satisfaction of the obligations of WoodSage outstanding under

the Sale Agreement.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements