What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2026-03-20 compared with 2025-03-25 · 1310 added, 831 removed, 430 unchanged (83% of the section changed)

3 unchanged sentences

Report of Independent Registered Public Accounting Firm (Firm ID:

Consolidated Balance Sheets

Consolidated Statements of Operations and Comprehensive Loss

Consolidated Statements of Stockholders’ Equity (Deficit)

Consolidated Statements of Cash Flows

Balance Sheets

Statements of Operations and Comprehensive Loss

Statements of Changes in Stockholders’ Equity (Deficit)

Statements of Cash Flows

to the Consolidated Financial Statements

of Independent Registered Public Accounting Firm

the Shareholders and Board of Directors of Wellgistics Health, Inc.

(f/k/a Danam Health, Inc.)

the Stockholders and Board of Directors of Wellgistics Health, Inc.

on the Consolidated Financial Statements

18 unchanged sentences

that might result from the outcome of this uncertainty.

draw attention to Note 4 - Inventories, net, which describes matters related to certain inventory

acquired from First Defense Nasal Screen Corp (“FDNS”).

As discussed in the note,

the inventory has experienced minimal sales activity, and management has determined that

there is no active market and that the inventory is non-moving.

Based on this assessment,

the Company concluded that the carrying value of the inventory was not recoverable and recorded

a reserve for obsolete inventory of $5,988,257, which is included in cost of net revenues

in the consolidated statements of operations.

Our opinion is not modified with respect to

draw attention to Note 9 to the consolidated financial statements, which describes the grant

of 9,000,000 shares of restricted common stock to the Company’s Chief Executive Officer

on February 28, 2025, under the Company’s Amended and Restated 2023 Equity Incentive

As discussed in the note, although the award was originally subject to performance-based

vesting conditions over a three-year period, the Compensation Committee approved an acceleration

of vesting on July 24, 2025, which was subsequently ratified by the Board of Directors, resulting

in full vesting during the third quarter of 2025.

Accordingly, the Company recognized stock-based

compensation expense of approximately $24.3 million for the year ended December 31, 2025,

with no remaining unrecognized compensation cost as of year end.

Our opinion is not modified

with respect to this matter.

draw attention to Note 13 to the consolidated financial statements, which describes litigation

initiated by the Company against certain former officers and directors relating to alleged

breaches of fiduciary duty, contractual matters, and related claims.

As disclosed, obligations

associated with certain arrangements subject to dispute are recorded as liabilities of approximately

$17.5 million as of December 31, 2025.

The outcome of the litigation, including a pending

motion to compel arbitration and additional claims asserted subsequent to year end, is inherently

uncertain and may result in the reversal of all or a portion of the recorded liabilities

in future periods.

Because this matter may give rise to a gain contingency, no amounts have

been recognized for any potential recovery.

Our opinion is not modified with respect to this

consolidated financial statements are the responsibility of the Company’s management.

20 unchanged sentences

We believe that our audit provides a reasonable basis for our opinion.

critical audit matter communicated below is the matter arising from the current period audit of the consolidated financial statements

that was communicated or required to be communicated to the audit committee and that:

to accounts or disclosures that are material to the consolidated financial statements and

our especially challenging, subjective, or complex judgments.

communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole,

and we are not, by communicating the critical audit matter below, providing separate opinions on the critical audit matter or on the

accounts or disclosures to which they relate.

value of identified other intangible assets in acquisition

of the matter

discussed in Note 1 and Note 3 to the consolidated financial statements, on June 16, 2024 and August 30, 2024, the Company acquired Wood

and subsidiaries (Wood Sage) and Wellgistics, LLC.

respectively in transactions accounted for as business combinations.

connection with the Wood Sage acquisition, the Company identified intangible assets, which are solely customer relationships whose acquisition-date

fair value was $393,853.

In connection with Wellgistics, LLC acquisition, the Company identified intangible assets as trademark and customer

relationships whose acquisition-date fair value were $10,143,137 and $11,256,067 respectively.

identified the evaluation of the acquisition-date fair value of these identified intangible assets as a critical audit matter.

degree of subjective auditor judgment was required to evaluate the key assumptions within the discounted cash flows model used to estimate

the acquisition-date fair value of the identified intangible assets, specifically the revenue growth rate, margin, and discount rate.

There was limited observable market information related to these assumptions and the estimated acquisition-date fair value of the identified

intangible assets were sensitive to minor changes in such assumptions.

We Addressed the Matter in our Audit

following are the primary procedures we performed to address this critical audit matter.

evaluated the work of the Company’s specialist, and the methods used for valuation.

evaluated whether the methods used by the specialist were appropriate under the circumstances,

taking into account the requirements of the applicable financial reporting framework.

evaluated if the discount rates used by the specialist were reasonable by comparing it to

the discount rates that were developed using publicly available market data.

evaluated if the useful lives of the intangible assets were reasonable and in accordance

with the applicable financial reporting framework.

determined that there are no other critical audit matters.

/s/ Suri & Co., Chartered

Suri & Co., Chartered Accountants

have served as the Company’s auditors since 2022.

Chennai, India

Bengaluru, India

March 20, 2026

4 unchanged sentences

Accounts receivable, net

Prepaid expenses

Inventories, net

Prepaid expenses

Due from related parties

2 unchanged sentences

Property, plant and equipment, net

Intangible assets under development

Capitalized software

Operating lease, right-of-use-assets

1 unchanged sentence

Note receivable

Investments in unconsolidated entity

LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)

7 unchanged sentences

Due to related parties

Current portion of debt obligations

Current portion of debt obligations, net of debt discount

Operating lease liabilities- current portion

4 unchanged sentences

Total liabilities

Commitments and contingencies (See Note 14)

Commitments and contingencies (Note 13)

Stockholders’ equity (deficit):

Common stock, $ 0.0001 par value, 500,000,000 shares authorized, 51,055,508 and 44,720,000 shares issued and outstanding as of December 31, 2024 and 2023, respectively

Common stock, $ 0.0001 par value, 500,000,000 shares authorized, 102,289,619 and 51,055,508 shares issued and 101,307,498 and 51,055,508 shares outstanding as of December 31, 2025 and December 31, 2024, respectively

Additional paid-in capital

7 unchanged sentences

STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

Cost of sales

Cost of net revenues

Gross profit (loss)

( 6,426,419 )

Operating expenses:

General and administrative

Sales and marketing

Depreciation and amortization

Goodwill and intangible assets impairment

Total operating expenses

4 unchanged sentences

Interest expense, net

Total other income/(expense), net

Loss on debt extinguishment

( 2,987,922 )

Total other expense, net

Net loss before income taxes

11 unchanged sentences

Balance at December 31, 2023

Common stock issued to founders

$ ( 2,900,934 )

$ ( 2,900,434 )

Balance at December 31, 2023

Common stock issued for services

Common stock issued to employees

Common stock issued pursuant to business combinations

( 6,856,226 )

Balance at December 31, 2024

$ ( 9,757,160 )

Common stock issued pursuant to IPO

Common stock issued pursuant to consulting agreements

Common stock issued pursuant to equity purchase agreement

Issuance of commitment shares under equity purchase agreement

Common stock issued in settlement of due to seller

Common stock issued pursuant to public offering

Exercise of warrants pursuant to public offering

Accelerated vesting of restricted stock to former officer

Vested restricted stock granted to consultants

Vested restricted stock granted to directors

Vested restricted stock granted to employees

Common stock issued for services

Common stock issued to employees

Common stock issued pursuant to business combinations

Common stock cancelled

Common stock issued pursuant to debt conversion agreement

Offering costs

( 2,346,526 )

( 101,274,530

Balance at December 31, 2025

1 unchanged sentence

$ ( 12,447,801

$ ( 111,031,690 )

$ ( 12,447,801 )

accompanying notes are an integral part of these financial statements.

4 unchanged sentences

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

Allowances for credit losses and note receivable

Write off of other assets

Loss on debt extinguishment

Amortization of debt discount

Stock-based compensation

Goodwill and intangble assets impairment

Reserve for obsolete inventory

Changes in operating assets and liabilities:

8 unchanged sentences

( 10,855,029 )

( 1,224,993 )

Cash flows from investing activities:

Cash acquired in business combinations

Investments in intangible assets under development

Deposits paid for operating leases

Net cash provided by investing activities

Deposits for operating leases

Investments in capitalized software

Net cash (used in) provided by investing activities

Cash flows from financing activities:

Offering costs incurred and paid

Proceeds from promissory note

Repayment of seller promissory note

Net proceeds received from new revolving line of credit

Proceeds from revolving line of credit

Repayment of revolving line of credit

( 23,957,337 )

Proceeds from Merchant cash advance

Proceeds received from note payable

Proceeds received for common stock issued

Common stock issued to founders

Repayment of merchant cash advance

( 1,513,969 )

Proceeds from term loan

Repayment f term loan

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

Proceeds from exercise of warrants

Proceeds from common stock issued

Offering costs

Net cash provided by financing activities

Net change in cash and cash equivalents

Cash and cash equivalents at beginning of year

Cash and cash equivalents at end of year

Cash and cash equivalents at beginning of period

Cash and cash equivalents at end of period

Supplemental disclosure of cash flow information:

2 unchanged sentences

Supplemental disclosure of non-cash investing and financing activities:

Licence acquired through accounts payable

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 debt settlement

Assets acquired in business combinations

4 unchanged sentences

Liabilities payable pursuant to business combination

Shares issued pursuant to business combination

Promissory note issued pursuant to business combination

Debt assigned to related party

accompanying notes are an integral part of these financial statements.

1 unchanged sentence

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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

It was subsequently incorporated in the name Danam

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.

Company is a parent company for various existing and planned strategic businesses centered around pharmaceuticals and healthcare services.

As a micro health ecosystem, our portfolio of companies consists of a pharmacy, wholesale operations, and a technology division with

a novel platform for hub and clinical services.

We are focused on improving the lives of patients while delivering unique solutions for

pharmacies, providers, pharmaceutical manufacturers, and payors.

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

4 unchanged sentences

In connection with the Wood Sage Acquisition, the Company

acquired Wood Sage’s two 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.

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

1 unchanged sentence

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

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

Company”/ “we”/ “us”/ “our”“) by filing a duly authorized Certificate of Amendment to

its Certificate of Incorporation.

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

DelivMeds and Wellgistics Pharmacy 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 Company”/ “we”/ “us”/ “our”) by filing a duly authorized Certificate of Amendment

to its Certificate of Incorporation.

Public Offering

February 20, 2025, the Company entered into an Underwriting Agreement (the “Underwriting Agreement”) with Craft Capital Management

LLC (the “Underwriters”), relating to the Company’s initial public offering (the “Offering” or “IPO”)

of 888,889 shares of common stock, par value at a public offering price of $ 4.50 per share, generating gross proceeds of $ 4,000,000 .

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.

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

7 unchanged sentences

Company’s common stock commenced trading on the Nasdaq Capital Market LLC on February 21, 2025, under the symbol “WGRX”.

The IPO generated net proceeds to the Company of approximately $ 3.1 million, after deducting underwriting discounts and commissions

and other estimated offering expenses.

The Company intends to use the net proceeds from the offering to increase its capitalization,

provide financial flexibility, and enhance visibility into the marketplace as well as to create a public market for the common stock

and for general corporate purposes, including establishing working capital, funding marketing initiatives, and facilitating capital expenditures.

of membership interest in Wood Sage LLC

January 2023, Wellgistics Health entered into a Membership Interest Purchase Agreement (the “Wood Sage MIPA”) with Nikul

Panchal, an individual resident of the State of Florida (“Seller”).

The Seller owns all of the membership interest in

Wood Sage LLC, a Florida limited liability company (the “Company”).

Upon the closing of the transaction contemplated in

the Wood Sage MIPA, Seller will own one hundred percent ( 100 %)

of the membership interests in Wellgistics Pharmacy and DelivMeds which the Seller will sell and Wellgistics Health will acquire in

exchange for (i) Four Hundred Thousand Dollars ($ 400,000 )

and (ii) all amounts due and payable to Seller from Wellgistics Health under the Management Agreement, (the “Closing

January 2023, the parties above entered into an Amendment to the Wood Sage MIPA, pursuant to which the parties revised the Closing Payment

to Four Hundred Thousand Dollars ($ 400,000 ) plus any amounts owed under the Management Services Agreement (as defined in the Wood Sage

April 2023, the parties above entered into an Amendment to the Wood Sage MIPA, pursuant to which the parties revised the closing of the

said agreement from April 30, 2023 to September 30, 2024.

Upon the closure of the said transaction, Wellgistics Health will own 100 %

of the membership interests in the Company as a part of the business combination (Refer below).

Health and Mr.

Panchal amended and restated this agreement in June 2024, whereby the parties revised the closing payment to be made by

Wellgistics Health to Mr.

Panchal to be 173,961 (after giving effect to the stock split effected by the Company on October 30, 2024 and

the reverse stock split on December 05, 2024) shares of Wellgistics Health common stock.

The shares issued by Wellgistics Health to Mr.

Panchal were meant to approximate total cash compensation of $ 400,000 with a 20 % discount.

Panchal currently is WGRX’s President

of Healthcare Operations in addition to being a Wellgistics Health stockholder.

June 16, 2024, Wellgistics Health completed its acquisition of Wood Sage.

Sage was formed as a limited liability company on June 26, 2014.

Tech & Hub, LLC (DelivMeds)

was founded in 2017 as a holding company for technology solutions, wholly owned by Integral Health, Inc.

(“Integral”).

In 2020, APS recommissioned its DelivMeds project so that it would serve as a pharmaceutical hub, facilitating prescription transfer

and clinical concierge services to a network of independent pharmacies.

After conducting an extensive market research survey

focusing on competition, established several key differentiators for the DelivMeds hub.

These differentiators included various

integrations of the hub with pharmacy management software systems and pharmacy point of sale systems, among others such that

DelivMeds would serve as an end-to-end patient-centric solution automating the prescription journey.

pharmacy, DelivMeds is the frontend technology serving as the middleware between all key stakeholders referenced in what is referred

to as the 5P-Model:

Patients, Providers, Pharmacies, Payors or PBMs, and Pharmaceutical Manufacturing Companies.

aims to preserve patient autonomy, improve price transparency, and aide in making a meaningful impact on patient outcomes by eliminating

barriers to therapy while simultaneously boosting adherence.

Delivmeds works with channel partners such as pharmaceutical manufacturers,

provider groups and accountable care organizations, telehealth companies, and employer groups to offer full suite of patient-centered

pharmacy services.

DelivMeds’ business-to-business strategy approach enables prescriptions to be sent directly to Wellgistics Pharmacy and subsequently

transferred to an eligible in-network independent pharmacy.

Each channel partner is equipped with de-identified data to improve its respective

business operation and or improve its renumeration from the value-based services the clinical concierge arm provides.

Wood Sage acquired

DelivMeds in August 2023 and Wellgistics Health acquired Wood Sage in June 2024 as discussed above.

DelivMeds now serves as the middleware technology

arm to Wellgistics Health’s integrated healthcare ecosystem.

Pharmacy, LLC

Wellgistics Pharmacy, was founded in 2011 as a retail community specialty

Specializing in HIV/AIDS, the pharmacy obtained URAC and ACHC accreditations for Specialty Pharmacy and also performed general

pharmacy services in its community.

In 2018, Integral acquired Wellgistics Pharmacy and relocated Wellgistics Pharmacy to Tampa, Florida.

Subsequently, Wellgistics Pharmacy expanded its business operations to perform 340B services by partnering with local clinics and provider

During this time period, the pharmacy initiated its pursuit of additional pharmacy state licenses to convert Wellgistics Pharmacy’s

business to a mail order pharmacy.

Currently, Wellgistics Pharmacy is licensed in 32 states and the District of Columbia, with superb

license coverage along the east coast.

As a result of this strategic business shift Wellgistics Pharmacy’s leadership team chose

to voluntarily forfeit Wellgistics Pharmacy’s specialty accreditations.

However, Wellgistics Pharmacy maintains specialty internal

standard operating procedures and performs all of the functions of a specialty pharmacy.

Wellgistics Pharmacy provides general and specialty pharmacy services dedicated

to servicing the needs of patients, as well as clinical expertise, technology-driven innovation tools, and administrative efficiencies

that support physicians, payers, and pharmaceutical manufacturers.

Wellgistics Pharmacy purchases pharmaceuticals including specialty

medications from manufacturers and wholesale distributors, fills prescriptions, labels, packages and delivers these pharmaceuticals to

patients’ homes or physicians’ offices through contract couriers or carriers.

Wellgistics Pharmacy maintains a call center

and customer support within its pharmacy located in Tampa, Florida.

Wellgistics Pharmacy has several 340B relationships , acting as the

dispensing pharmacy for these healthcare facilities.

These relationships help drive revenue and prescription volume.

Our relationship

with Wellgistics along with our deep-rooted ties to other wholesalers enables Wellgistics Pharmacy to offer a competitive cash-based formulary

for the uninsured and underinsured patient populations.

Wellgistics Pharmacy continues to see an uptick in utilization, as more patients

elect to pay out of pocket due to our low-cost model, which Wellgistics Pharmacy believes is an opportunity to gain market share with

small- to medium-size employer groups in a partnership model with other consumer driven healthcare companies.

The services that Wellgistics

Pharmacy provides to its patients and other constituents are vital to the revenue and prescription volume generated from this division.

Wood Sage acquired Wellgistics Pharmacy in August 2023 and Wellgistics

Health acquired Wood Sage in June 2024 as discussed above.

Wellgistics Pharmacy now serves as the backbone of Wellgistics Health’s

healthcare ecosystem.

of Wellgistics, LLC

May 11, 2023, Wellgistics Health entered into a membership interest purchase agreement (the “Wellgistics MIPA”) with Wellgistics,

LLC (“Wellgistics”), Strategix, Nomad Capital, LLC , and Jouska Holdings LLC (each, a “Seller” and collectively,

Upon the closing of the transaction contemplated in the Wellgistics MIPA, Sellers will sell and Wellgistics Health

will acquire all of the outstanding membership interests of Wellgistics.

Parties amended the Wellgistics MIPA on August 4, 2023 extending the last day by which the Purchase Agreement (“Amendment”)

could be consummated to December 26, 2023 and the Parties desire to amend the Purchase Agreement and Amendment to modify such date;

Parties amended the Wellgistics MIPA on December 26, 2023 extending the last day by which the Purchase Agreement (“Second Amendment”)

could be consummated to March 29, 2024 and the Parties desire to amend the Purchase Agreement and Amendment to modify such date;

Parties further amended the Wellgistics MIPA on March 22, 2024 (“Third Amendment”) to clarify the language and extend certain

deadlines related to Earn-Out Payments and Bonus Payments.

Additionally, it has been agreed unilaterally by the Sellers in the event

that this Agreement fails to close by August 31,2024, Wellgistics Health may but is not required to pay Seller a non-refundable sum of

One Hundred Fifty Thousand Dollars ($ 150,000.00 ) (“Extension Fee”) which shall automatically extend the Closing deadline

by thirty (30) days.

Buyer may pay the Extension Fee no more than three (3) times for a total of no more than a ninety (90) day extension.

The Extension Fee is Non-Refundable under any circumstances.

The Extension Fee shall be applied to and reduce the cash payable to Sellers

at Close if the sale is completed.

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

purchase price to be paid by Wellgistics Health for acquiring Wellgistics LLC, the closing date of the transaction, and certain other

terms and conditions.

The purchase price that Wellgistics Health agreed to pay Wellgistics LLC under the revised agreement consists of:

closing cash payment of $ 10 million, which is due no later than the earlier of 45 calendar

days following effectiveness of the registration statement filed with SEC and August 30,

promissory note in the aggregate principal amount of $ 15 million 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 the registration statement becomes effective;

payments in the form of Wellgistics Health common stock equaling an aggregate value of $10

million paid in three equal annual installments plus contingent earnout payments in the form

of Wellgistics Health common stock in an aggregate amount of up to $5 million based on certain

financial metrics ;

payments consisting of 50% cash and 50% Wellgistics Health common stock to the extent that

Wellgistics Health’s EBITDA is in excess of 110% of certain established targets for

each of the years ended December 31, 2024, December 31, 2025, and December 31, 2026.

Financial Contingent Bonus Payments will vest, and therefore will no longer be subject to repurchase by Wellgistics Health, according

to the following terms:

the calendar year ending December 31, 2024:

(i) 222,185 shares of Wellgistics Health common

stock if the gross sales of Wellgistics Health are greater than or equal to $47.2 million,

and (ii) 222,185 shares of Wellgistics Health common stock if the net operating income of

Wellgistics Health prior to the provision for (a) interest expense and interest income, (b)

federal, state, local and foreign taxes based on the income or profits, and (c) depreciation

and amortization (“EBITDA”) of Wellgistics Health is greater than or equal to

$4.2 million.

However, each metric will have been deemed to have been met if the final financial

metrics are at least ninety percent (90%) of each target.

Further, the largest number of

shares that can vest in calendar year 2024 is capped at 444,370 shares.

calendar year ending December 31, 2025:

(i) 222,185 shares of Wellgistics Health common stock

if the gross sales of Wellgistics Health are greater than or equal to $57.7 million, and

(ii) 222,185 shares of Wellgistics Health common stock if the EBITDA of Wellgistics Health

is greater than or equal to $6.5 million.

However, each metric will have been deemed to have

been met if the final financial metrics are at least ninety percent (90%) of each target.

Further, the largest number of shares that can vest in calendar year 2025 is capped at 444,370

calendar year ending December 31, 2026:

(i) 222,185 shares of Wellgistics Health common stock

if the gross sales of Wellgistics Health are greater than or equal to $63.5 million, and

(ii) 222,186 shares of Wellgistics Health common stock if the EBITDA of Wellgistics Health

is greater than or equal to $7.5 million.

However, each metric will have been deemed to have

been met if the final financial metrics are at least ninety percent (90%) of each target.

Further, the largest number of shares that can vest in calendar year 2026 is capped at 444,371

August 30, 2024, Wellgistics Health closed on the Wellgistics Acquisition, thereby making Wellgistics LLC a wholly owned subsidiary of

Wellgistics Health.

November 4, 2024, Wellgistics Health and Wellgistics LLC further amended the Wellgistics MIPA to convert the $10 million and $5 million

respective earn-out share awards into an immediate share issuance of 3,999,335 shares of restricted Wellgistics Health common stock.

2,666,223 shares vest in equal annual installments.

1,333,112 shares vest only upon the achievement of certain financial metrics.

the event the stated metrics for the applicable year are not achieved, Wellgistics Health shall repurchase the applicable portion of

the 1,333,112 unvested shares for nominal consideration of $0.0001 per share.

Agreement — Wellgistics Health, Inc.

and Assure Holdings, Corp.

February 12, 2024, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Assure Holdings,

(“Assure”) and Assure Merger Corp., a newly formed wholly-owned subsidiary of Assure (“Assure Merger”).

Upon the terms and subject to the satisfaction of the conditions described in the Merger Agreement, including approval of the transaction

by the stockholders of Assure and Wellgistics Health, Assure Merger would have been merged with and into Wellgistics Health (the “Merger”),

with Wellgistics Health surviving the Merger as a wholly-owned subsidiary of Assure.

April 8, 2024, Assure made a convertible promissory note in the principal amount of $ 1,000,000 in favor of Wellgistics Health (the “Promissory

The note bears interest at 10 % per annum and matured on July 22, 2024 .

The note was convertible upon a financing event

or upon a sale transaction.

June 13, 2024, Wellgistics Health terminated the Merger Agreement and Wellgistics Health management is considering the exercise of its

rights under the Merger Agreement, including, but not limited to, accelerating the maturity date of the Promissory Note, seeking payment

of $ 1,000,000 in termination fees, and any other remedies available pursuant to the Merger Agreement or in law.

As of the issuance date

of these financial statements, no amounts have been received from Assure.

The Company provided a full allowance for credit loss of this

note receivable as of December 31, 2024 as collectability cannot be reasonably assured.

The IPO generated net proceeds to the Company of approximately $ 3.1 million, after deducting underwriting discounts and commissions and

other estimated offering expenses.

The Company intends to use the net proceeds from the offering to increase its capitalization, provide

financial flexibility, and enhance visibility into the marketplace as well as to create a public market for the common stock and for

general corporate purposes, including establishing working capital, funding marketing initiatives, and facilitating capital expenditures.

of Presentation and Principles of Consolidation

Company’s fiscal year ends on December 31.

accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States

of America (“U.S.GAAP”) in all material respects and have been consistently applied in preparing the accompanying financial

consolidated financial statements include the financial statements of Wood Sage since the acquisition on June 16, 2024 and Financial

statements of Wellgistics, LLC since the acquisition on August 30, 2024.

All inter-company balances and transactions are eliminated on

consolidation.

October 30, 2024, the

Company effected a forward stock split of all issued and outstanding shares of common stock at a ratio of 1-to-1,677,000.

Company also amended its Certificate of Incorporation to authorize 500,000,000

shares of common stock, par value $ 0.0001

per share from 10,000 shares of common stock, $ 0.001 par value per share to the amendment.

Accordingly, all share and per share amounts for all periods presented in the accompanying financial statements and

notes thereto have been adjusted retroactively, where applicable, to reflect the stock split.

December 5, 2024, the Company effected a reverse stock split of all issued and outstanding shares of common stock at a ratio of 1-for-3.75.

Accordingly, all share and per share amounts for all periods presented in the accompanying financial statements and notes thereto have

been adjusted retroactively, where applicable, to reflect the reverse stock split.

preparation of the Company’s financial statements in conformity with U.S.GAAP requires the Company to make estimates and assumptions

that affect the reported amounts of certain assets and liabilities;

the reported amounts of revenues and expenses for the periods covered

and certain amounts disclosed in the notes to the financial statements.

These estimates are based on information available through the

date of the issuance of the financial statements and actual results could differ from those estimates.

Areas requiring significant estimates

and assumptions by the Company include, but are not limited to:

accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the

United States of America (“U.S.GAAP”) in all material respects and have been consistently applied in preparing the accompanying

consolidated financial statements.

consolidated financial statements include the consolidated financial statements of Wood Sage since the acquisition on June 16, 2024 and

financial statements of Wellgistics, LLC since the acquisition on August 30, 2024.

All inter-company balances and transactions are eliminated

on consolidation.

preparation of the Company’s Consolidated Financial Statements and related disclosures in conformity with U.S.GAAP requires the

Company to make estimates and assumptions that affect the reported amounts of certain assets and liabilities;

the reported amounts of

revenues and expenses for the periods covered and certain amounts disclosed in the notes to the Financial Statements.

These estimates

are based on information available through the date of the issuance of the financial statements and actual results could differ from

those estimates.

Areas requiring significant estimates and assumptions by the Company include, but are not limited to:

for income taxes and related valuation allowances and tax uncertainties;

combinations and purchase price allocations

● lease tenure

● recoverability

1 unchanged sentence

value of long-term debt and notes receivable

for expected credit losses on financial assets

fair value and valuation of stock-based compensation awards

useful lives of intangible assets and property, plant and equipment

of goodwill for impairment

for estimated liabilities

of equity method investments and

of equity method investments

● net-realizable

1 unchanged sentence

Comprehensive

Comprehensive loss includes net loss as well as other changes in stockholders’

equity that result from transactions and economic events other than those with stockholders.

There was no difference between net loss

and comprehensive loss presented in the financial statements for the year ended December 31, 2024 and 2023.

Company’s chief operating decision-maker is its Chief Executive Officer, who makes resource allocation decisions and assesses performance

based on financial information presented on an aggregate basis.

There are no segment managers who are held accountable by the chief operating

decision-maker, or anyone else, for any planning, strategy and key decision-making regarding operations.

Accordingly, the Company has

a single reportable segment and operating segment structure.

and Cash Equivalents

and cash equivalents consist of cash on hand, certificates of deposits and money market funds that are readily convertible into cash,

all with original maturity dates of three months or less.

Comprehensive

loss includes net loss as well as other changes in stockholders’ equity that result from transactions and economic events other

than those with stockholders.

There was no difference between net loss and comprehensive loss presented in the consolidated financial

statements for the year ended December 31, 2025 and 2024.

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

4 unchanged sentences

Concentration Risk

the year ended December 31, 2024, sales to Wells Pharmacy Network and Axia Medical Solutions exceeds 10 % of the Company’s total

Sales to Wells Pharma represented approximately 19 % of total revenue, and sales to Axia Medical Solutions represented approximately

12 % of total revenue.

The Company’s reliance on these major customers presents a concentration risk.

The loss of either of these

customers 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.

Company uses the liability method of accounting for income taxes as set forth in ASC 740, Income Taxes .

Under the liability method,

deferred taxes are determined based on the temporary differences between the financial statement and tax basis of assets and liabilities

using tax rates expected to be in effect during the years in which the basis differences reverse.

A valuation allowance is recorded when

it is unlikely that the deferred tax assets will not be realized.

The Company assesses its income tax positions and record tax benefits

for all years subject to examination based upon our evaluation of the facts, circumstances and information available at the reporting

In accordance with ASC 740-10, for those tax positions where there is a greater than 50% likelihood that a tax benefit will be

sustained, our policy will be to record the largest amount of tax benefit that is more likely than not to be realized upon ultimate settlement

with a taxing authority that has full knowledge of all relevant information.

For those income tax positions where there is less than

50% likelihood that a tax benefit will be sustained, no tax benefit will be recognized in the financial statements.

the year ended December 31, 2025, one customer accounted for approximately 13 % of the Company’s total revenues.

As of December

31, 2025, two customers accounted for approximately 25 % and 18 %, respectively, of gross accounts receivable.

the year ended December 31, 2024, two customers accounted for approximately 19 % and 12 %, respectively, of the Company’s total revenues.

As of December 31, 2024, one customer accounted for approximately 23 % of gross accounts receivable.

Company’s revenues and accounts receivable are subject to concentration risk due to its reliance on a limited number of significant

The loss of any one of these customers, or a material reduction in purchase volumes from such customers, could have a material

adverse effect on the Company’s business, financial condition, and results of operations.

Management continues to actively pursue

opportunities to broaden and diversify the Company’s customer base in order to reduce its exposure to this concentration risk.

Value of Financial Instruments

10 unchanged sentences

The hierarchy is presented down into three levels based on the reliability of the inputs.

Quoted prices are available in active markets for identical

assets or liabilities.

Observable inputs other than quoted prices in active markets

for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs

that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Unobservable pricing inputs that are generally less observable

from objective sources, such as discounted cash flow models or valuations.

prices are available in active markets for identical assets or liabilities.

Level 2 Observable

inputs other than quoted prices in active markets for identical assets and liabilities, quoted

prices for identical or similar assets or liabilities in inactive markets, or other inputs

that are observable or can be corroborated by observable market data for substantially the

full term of the assets or liabilities.

Level 3 Unobservable

pricing inputs that are generally less observable from objective sources, such as discounted

cash flow models or valuations.

carrying amounts of cash, accounts receivable, note receivable, deposits, accounts payable, accrued liabilities and short-term debt approximate

2 unchanged sentences

because the debt is based on current rates at which the Company could borrow funds with similar maturities.

Receivable, Net

receivable are recorded at the invoiced amount and do not bear interest.

Accounts receivable are due from various customers and are shown

net of applicable reserves for doubtful accounts as shown on the face of the balance sheet.

There were no accounts that had been placed

on non-accrual status.

The allowance for doubtful accounts has been estimated by management based on historical experience, current market

trends and, for larger customer accounts, their assessment of the ability of the customers to pay outstanding balances.

Past due balances

and other higher risk amounts are reviewed individually for collectability.

Changes in circumstances relating to the collectability of

accounts receivable may result in the need to increase or decrease the allowance for doubtful accounts in the future.

company provides for 95 % of the accounts receivable which are due over the period of 90 days.

The Company recognized bad debt expense

of $ 93,378 and $ 0 within general and administrative expenses for the year ended December 31, 2024 and 2023, respectively.

Receivable and Allowances for Credit Losses

receivable are recorded at the net invoiced amount, net of allowance for credit losses, and do not bear interest.

Expected credit losses

include losses expected based on known credit issues with specific customers as well as a general expected credit loss allowance based

on relevant information, including historical loss rates, current conditions, and reasonable economic forecasts that affect collectability.

The Company reserves for any accounts receivable balances that are determined to be uncollectible in the allowance for credit losses.

Account balances are charged off against the allowance when the Company believes that it is probable that the receivable will not be

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

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 % - 100 % loss rate of the accounts receivable which are due over the period of 90 days.

For the year ended December

31, 2025 and 2024, the Company recognized provision for credit losses of $ 723,401 and $ 93,378 , respectively, within general and administrative

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

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.

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 and are presented in cost of net revenues in the accompanying consolidated statements of operations and comprehensive

that the inventory valuation provides a reasonable approximation of the current value of inventory.

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 December 31, 2025 and December 31, 2024, the Company capitalized $ 2,499,553 and $ 1,618,017 , respectively, in software development

cost related to the Delivmeds platform via its DelivMeds subsidiary.

These amounts represent the fair value measurement of the capitalized

the year ended December 31, 2025, the Company recorded an impairment loss of $ 649,185 on its capitalized software, reflecting a decrease

in the carrying value of the DelivMeds platform software to $ 1,850,358 as of December 31, 2025.

The impairment charge was recorded within

goodwill and intangible assets impairment in the consolidated statements of operations.

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

Plant and Equipment, Net

20 unchanged sentences

Company has no t identified any such impairment losses for the year ended December 31, 2025 and 2024.

Assets under Development

expenditures are recognized as an expense and development expenditures that meet specified criteria are recognized as the cost of an

intangible asset.

The Company has begun capitalizing the expenses related to the Delivmeds application as management has determined that

the Company’s application has crossed the research phase and has begun development.

As per ASC 350-40, the Company capitalizes

costs in the application development stage.

Costs related to preliminary project activities and post implementation activities are expensed

of December 31, 2024, the Company capitalized $ 1,618,017 in capitalized intangibles under development pertaining to the Delivmeds platform

via its DelivMeds subsidiary.

Company adopted Accounting Standards Codification (“ASC”) 606 upon inception.

represents the excess of the cost over the fair market value of net assets acquired in business combinations.

In accordance with Intangibles

– Goodwill and Other (Topic 350), goodwill is not amortized but is tested for impairment at least annually, or more frequently

if indicators of potential impairment exist.

Goodwill is tested for impairment at the reporting unit level.

The Company’s reporting

units have discrete financial information available, and management regularly reviews the operating results.

For purposes of impairment

testing, goodwill is allocated to the applicable reporting units based on the Company’s reporting structure.

Company has the option to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting

unit is less than its carrying value.

Qualitative factors assessed for each of the applicable reporting units include, but are not limited

to, changes in macroeconomic conditions, industry and market considerations, cost factors, discount rates, competitive environments,

and financial performance of the reporting units.

If the qualitative assessment indicates that it is more likely than not that the carrying

value of a reporting unit exceeds its estimated fair value, a quantitative test is required.

Alternatively,

the Company may proceed directly to the quantitative test.

Under the quantitative test, the estimated fair value of each reporting unit

is compared to its carrying value, including goodwill.

If the carrying value of the reporting unit, including goodwill, exceeds its fair

value, an impairment charge equal to the excess is recognized, up to the maximum amount of goodwill allocated to that reporting unit.

the year ended December 31, 2025, the Company identified certain events and circumstances that indicated potential impairment of goodwill.

As a result, the Company performed a quantitative impairment test.

The results of the test indicated that the fair value of certain reporting

units was lower than the carrying value, resulting in an impairment charge of $ 2,026,006 for goodwill which is recorded within goodwill

and intangible assets impairment in the consolidated statements of operations.

of Long-Lived Assets

Company continually monitors events and changes in circumstances that could indicate carrying amounts of long-lived assets may not be

When such events or changes in circumstances are present, the Company assesses the recoverability of long-lived assets by

determining whether the carrying value of such assets will be recovered through undiscounted expected future cash flows.

of the future cash flows is less than the carrying amount of those assets, the Company recognizes an impairment loss based on the excess

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

Company evaluates its intangible assets with finite lives for impairment whenever events or changes in circumstances indicate that the

carrying value of the asset may not be recoverable.

In accordance with ASC 350, “Intangibles—Goodwill and Other,” intangible

assets with finite lives, such as trademarks and customer relationships, are amortized over their estimated useful lives.

compares the carrying value of the intangible asset to its fair value, which is determined based on projected future cash flows.

carrying value of the asset exceeds its fair value, an impairment loss is recognized, and the asset is written down to its fair value.

the year ended December 31, 2025, the Company recognized an impairment charge of $ 9,879,075 related to certain intangible assets with

finite lives.

The impairment primarily resulted from a decline in the fair value of customer relationships and trademarks identified

during the acquisitions of Wellgistics LLC and Wood Sage LLC.

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.

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

For the year ended

December 31, 2025, a total of $ 875,385 in previously capitalized offering costs was charged to stockholders’ equity upon the completion

For the year ended December 31, 2025, the Company incurred total offering costs of $ 1,471,141 related to the IPO and public

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

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

21 unchanged sentences

been given terms extending out to 45 days.

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,

6 unchanged sentences

Any amount collected

from customers for goods not yet delivered is recorded as unearned revenue.

The company recognizes a refund liability if it receives

consideration from a customer and expects to refund some or all of that consideration to the customer.

A refund liability is measured

at the amount of consideration received (or receivable) for which the company does not expect to be entitled (that is, amounts not included

in the transaction price).

The refund liability (and corresponding change in the transaction price and, therefore, the contract liability)

is updated at the end of each reporting period for changes in circumstances.

Company is in the retail pharmacy business.

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

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

Pharmacy 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.

23 unchanged sentences

Third party logistics services

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.

calculating the right of use asset and lease liability, the Company has elected to combine lease and non-lease components.

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 accounts for acquisitions in which it obtains control of one or more businesses as a business combination.

The purchase price

of the acquired businesses is allocated to the tangible and intangible assets acquired and liabilities assumed based on their estimated

fair values at the acquisition date.

The excess of the purchase price over those fair values is recognized as goodwill.

During the measurement

period, which may be up to one year from the acquisition date, the Company may record adjustments, in the period in which they are determined,

to the assets acquired and liabilities assumed with the corresponding offset to goodwill.

If the assets acquired are not a business,

the Company accounts for the transaction or other event as an asset acquisition.

Under both methods, the Company recognizes the identifiable

assets acquired, the liabilities assumed, and any noncontrolling interest in the acquired entity.

In addition, for transactions that

are business combinations, the Company evaluates the existence of goodwill or a gain from a bargain purchase.

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

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.

Goodwill is tested for impairment at the reporting unit level.

The Company’s reporting

units discrete financial information is available and management regularly reviews the operating results.

For purposes of impairment

testing, goodwill is allocated to the applicable reporting units based on the reporting structure.

Company has the option to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting

unit is less than its carrying value.

Qualitative factors assessed for each of the applicable reporting units include, but are not limited

to, changes in macroeconomic conditions, industry and market considerations, cost factors, discount rates, competitive environments and

financial performance of the reporting units.

If the qualitative assessment indicates that it is more likely than not that the carrying

value of a reporting unit exceeds its estimated fair value, a quantitative test is required.

Company also has the option to proceed directly to the quantitative test.

Under the quantitative impairment test, the estimated fair

value of each reporting unit is compared to its carrying value, including goodwill.

If the carrying value of the reporting unit including

goodwill exceeds its fair value, an impairment charge equal to the excess would be recognized, up to a maximum amount of goodwill allocated

to that reporting unit.

Management can resume the qualitative assessment in any subsequent period for any reporting unit.

December 2024, management performed a qualitative impairment assessment of our reporting units, of which there were no indications that

it was more likely than not that the fair value of our reporting units were less than their respective carrying values.

As such, a quantitative

goodwill test was not required, and no goodwill impairment was recognized during the year ended December 31, 2024.

connection with the Wood Sage acquisition, the Company identified intangible assets, which are solely customer relationships (see Note

The Company amortizes the customer relationships intangible on a straight-line basis over a useful life of eight years.

connection with Wellgistics, LLC acquisition, the Company identified intangible assets such as trademark and customer relationships (see

The Company amortizes the trademark and customer relationship intangibles on a straight-line basis over a useful life of nine

and six years, respectively.

Company has evaluated the intangible assets acquired and their respective useful lives as per ASC 805.

of Long-Lived Assets

Company continually monitors events and changes in circumstances that could indicate carrying amounts of long-lived assets may not be

When such events or changes in circumstances are present, the Company assesses the recoverability of long-lived assets by

determining whether the carrying value of such assets will be recovered through undiscounted expected future cash flows.

of the future cash flows is less than the carrying amount of those assets, the Company recognizes an impairment loss based on the excess

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

Assets to be disposed of are reported at the lower of the carrying amount or

the fair value less costs to sell.

Company complies with the requirements of ASC 340-10-S999-1.

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

The deferred offering costs are charged to stockholders’ equity upon the completion of an offering or to expense if the offering

is not completed.

As of December 31, 2024, the Company had capitalized $ 875,385 in deferred offering costs.

Deferred offering costs includes

professional fees incurred including legal, accounting, underwriting and advisory in connection with the Company’s equity offering.

of December 31, 2024, management assessed the recoverability of the capitalized deferred offering costs which were incurred throughout

Management believes that these costs should not be impaired as they still provide economic benefits for the Company’s potential

public offering.

All initial offering costs incurred have enabled the Company to achieve and maintain SEC effectiveness, which is a key

component of the Company’s ability to undergo a successful initial public offering.

Management will continue to monitor any further

delay or abandonment of the contemplated public offering.

If any further delays are expected, the Company may have to impair a substantial

portion, or all, of its deferred offering costs.

revenue for the years ended December 31, 2025 and 2024 were within the United States.

Cost of net revenues includes provisions for inventory obsolescence and charges related to vendor shipping advances

for which no supplies have been made and are no longer considered recoverable.

Assets and Liabilities

assets would include costs and services incurred on contracts with open performance obligations.

These amounts would be included in contract

assets on the consolidated balance sheets.

Contract liabilities include payment received for incomplete performance obligations and are

included in Unearned revenue on the consolidated balance sheets.

December 31, 2025 and 2024, the Company had unearned revenue of $ 488,229 and $ 245,765 , respectively, which is included in accrued expenses

and other current liabilities on the consolidated balance sheets.

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

7 unchanged sentences

costs are classified.

There are no outstanding unvested stock-based compensations as at December 31, 2024 and 2023.

See Note 9 for further details.

Loss per Share

loss per share is calculated by dividing the net loss by the weighted-average number of common shares outstanding during the period,

excluding shares subject to redemption or forfeiture.

The Company presents both basic and diluted net loss per share.

Diluted net loss

per share reflects the actual weighted average number of common shares issued and outstanding during the period, adjusted for potentially

dilutive securities outstanding.

dilutive securities are excluded from the calculation of diluted net loss per share if their inclusion would be anti-dilutive.

potentially dilutive securities are considered anti-dilutive as of December 31, 2025 and 2024, the diluted net loss per share is the

same as basic net loss per share for both periods.

the year ended December 31, 2025, the following items were excluded from the computation of diluted net loss per share because including

these securities would have been anti-dilutive:

SCHEDULE OF POTENTIALLY DILUTIVE ITEMS OUTSTANDING

Unvested restricted common stock issued not outstanding

Total potentially dilutive shares

Accounting Pronouncements

Company has implemented all new relevant accounting pronouncements that are in effect through the date of these financial statements.

The pronouncements did not have any material impact on the financial statements unless otherwise disclosed., and the Company does not

believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial

position or results of operations.

Adopted Standards

2023-09 — Income Taxes (Topic 740):

Improvements to Income Tax Disclosures , establishes incremental disaggregation of income tax

disclosures pertaining to the effective tax rate reconciliation and income taxes paid.

This standard is effective for fiscal years beginning

after December 15, 2024, and requires prospective application with the option to apply it retrospectively.

We intend to adopt this standard

in our Annual Report on Form 10-K for the year ending December 31, 2025.

We are currently evaluating the potential impact of adopting

this standard on our disclosures.

ASU 2024-03, Income Statement— Reporting

Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40) :

Disaggregation of Income Statement Expenses, requires

disaggregation of specific expense categories in the notes to the financial statements and a qualitative description of the remaining

expense amounts not separately disaggregated.

This standard is effective for annual reporting periods beginning after December 15, 2026,

and requires prospective application with the option to apply it retrospectively.

We are currently evaluating the potential impact of

adopting this standard on our disclosures and we intend to adopt this as and when applicable.

GOING CONCERN

Company has a net loss of $ 6,856,226 for the year ended December 31, 2024 and an accumulated deficit of $ 9,757,160 as of December 31,

The Company’s situation raises a substantial doubt on whether the entity can continue as a going concern in the next twelve

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.

has evaluated these conditions and plans to generate revenues and raise capital as needed to satisfy its capital needs.

are no assurances that management will be able to raise capital on terms acceptable to the Company.

If it 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 financial statements do not include any adjustments that might result from these uncertainties.

Company has evaluated whether there are certain conditions and events, considered in the aggregate, that raise substantial doubt about

the Company’s ability to continue as a going concern within one year after the date that the financial statements are issued.

BUSINESS COMBINATIONS

Company evaluated the acquisition of Wood Sage, with its subsidiaries DelivMeds and Wellgistics Pharmacy, and Wellgistics, LLC pursuant to ASC 805 and ASU 2017-01,

Topic 805, Business Combinations.

The acquisition method of accounting requires, among other things, that the assets acquired and liabilities

assumed in a business combination be measured at their estimated respective fair values as of the closing date of the acquisition.

recognized in connection with this transaction represents primarily the potential economic benefits that the Company believes may arise

from the acquisition.

Company has made an allocation of the purchase price in regard to the Wood Sage and Wellgistics, LLC acquisition related to the assets

acquired and the liabilities assumed as of the purchase date.

following table summarizes the preliminary purchase price allocation of Wood Sage:

OF PRELIMINARY PURCHASE PRICE ALLOCATION

Cash and cash equivalents

Accounts receivables

Customer relationship - Intangibles

Intangible assets under development

Due to related parties

Accounts payable

( 1,300,000 )

Other current liabilities

Purchase price consideration

June 16, 2024, in connection with the acquisition of Wood Sage, the Company issued 173,961 shares of Wellgistics Health common stock

(after giving effect to the stock split effected by the Company on October 30, 2024 and the reverse stock split on December 05, 2024).

These shares were issued to approximate total cash compensation of $ 400,000 .

following table summarizes the preliminary purchase price allocation of Wellgistics, LLC:

OF PRELIMINARY PURCHASE PRICE ALLOCATION

Cash and cash equivalents

Accounts receivable, net

Customer relationship - Intangibles

Trademark - Intangibles

Note receivable

Prepaid expenses and other assets

Property, plant and equipment, net

Investments in unconsolidated entity

Operating lease, right of use asset

Accounts payable

( 4,649,741 )

Accrued expenses and other liabilities

Current portion of debt obligations

( 5,047,698 )

Operating lease liability

( 1,323,784 )

Purchase price consideration

following is a summary of the preliminary purchase price consideration per the Wellgistics acquisition:

OF PRELIMINARY PURCHASE PRICE CONSIDERATION

Cash payment - due to seller

$ 10,000,000 (1)

15,000,000 (2)

Common stock issued

15,000,000 (3)

Purchase price consideration

(1) Represents

the cash consideration pursuant to the Wellgistics acquisition, which is reflected as due

to seller on the consolidated balance sheet.

As per the Wellgistics agreement, the closing

cash payment of $ 10 million which is due no later than the earlier of 45 calendar days following

effectiveness of the registration statement and August 30, 2025.

The Company’s initial

recognition of this component is recorded as a current liability at its fair value.

(2) Represents

the note payable issued to the Wellgistics sellers.

As per the Wellgistics agreement, the

principal of the note is $ 15,000,000 , payable in three equal annual installments commencing

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

Company’s initial recognition of this component is to record the issuance of the note

payable at fair value, which is estimated to be $ 15,000,000 , out of which $ 5,000,000 is payable

in 2025 and hence classified under current liabilities and the balance $ 10,000,000 under

non-current liabilities.

(3) Represents

the issuance of 3,999,335 shares of restricted common stock pursuant to the Wellgistics MIPA.

This includes 2,666,223 shares of restricted common stock, equaling a value of approximately

$ 10 million, which shall be restricted for transfer for a period of three years .

of these shares shall be vested annually, whereby transfer restrictions no longer exist once

The consideration also includes 1,333,112 shares of restricted common stock, equaling

a value of approximately $ 5 million, whereby the vesting of this tranche is based on the

achievement of certain financial metrics.

The vesting occurs in tranches over 3 years.

1,333,112 shares are subject to repurchase at the option of Wellgistics Health if the said

financial metrics are not achieved.

As of the issuance date of these financial statements,

the Company determined it is probable that the shares shall vest and not be subject to repurchase.

The Company’s initial recognition of this component is to account for the issuance

of 3,999,335 shares of restricted common stock at a fair value of $ 15,000,000 as equity consideration

included within the total purchase price consideration, including the recognition of $ 400

as common stock for the par value of the shares issued and $ 14,999,600 recognized as additional

paid-in capital.

The Company recognized the issuance of the 3,999,335 shares in its statement

of changes in stockholders’ equity, recognized within the issued and outstanding shares.

is primarily attributable to the go-to-market synergies that are expected to arise as a result of the acquisition and other intangible

assets that qualify for separate recognition.

The goodwill is not deductible for tax purposes.

results of Wood Sage, including its subsidiaries DelivMeds and Wellgistics Pharmacy, and Wellgistics, LLC have been included in the consolidated financial statements

since the date of their acquisitions.

Wood Sage’s revenue and net loss included in the consolidated financial statements since

the acquisition date were $ 352,363 and $ 1,029,752 , respectively.

Wellgistics, LLC’s revenue and net loss included in the consolidated

financial statements since the acquisition date were $ 17,776,468 and $ 711,625 respectively.

Pro Forma Financial Information

following unaudited pro forma financial information presents the Company’s financial results as if the Wood Sage and Wellgistics,

LLC acquisition had occurred as of January 1, 2023.

The unaudited pro forma financial information is not necessarily indicative of what

the financial results actually would have been had the acquisitions been completed on this date.

In addition, the unaudited pro forma

financial information is not indicative of, nor does it purport to project, the Company’s future financial results.

The unaudited

pro forma information does not give effect to any estimated and potential cost savings or other operating efficiencies that could result

from the acquisition:

OF UNAUDITED PRO FORMA FINANCIAL INFORMATION

$ ( 11,057,302 )

$ ( 12,772,688 )

Net loss per common share

Improvements to Income Tax Disclosures

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

Income Taxes (Topic 740):

Improvements to Income Tax Disclosures .

The ASU requires public business entities to disclose, on an

annual basis, a rate reconciliation presented in both dollar amounts and percentages, with specific categories and further disaggregation

of those categories based on a quantitative threshold equal to 5% or more of the amount determined by multiplying pre-tax income (loss)

by the applicable statutory rate.

The ASU also requires disclosure of income taxes paid disaggregated by federal, state, and foreign

jurisdictions.

The Company adopted ASU 2023-09 effective January 1, 2025 on a prospective basis.

The adoption had a financial statement

disclosure impact only and did not have a material impact on the Company’s consolidated financial statements.

2023-07 — Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures

November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures .

ASU requires public entities to disclose significant segment expenses that are regularly provided to the chief operating decision maker

(“CODM”) and included within each reported measure of segment profit or loss, as well as other segment items and a description

of its composition.

The ASU also requires entities with a single reportable segment to provide all disclosures required under the standard.

The Company adopted ASU 2023-07 effective January 1, 2025.

The adoption had a financial statement disclosure impact only and did not

have a material impact on the Company’s consolidated financial statements.

Issued Standards Not Yet Adopted

2023-08 — Accounting for and Disclosure of Crypto Assets

December 2023, the FASB issued ASU 2023-08, Intangibles — Goodwill and Other — Crypto Assets (Subtopic 350-60):

for and Disclosure of Crypto Assets .

The ASU requires entities 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 definition of intangible assets as defined in the ASC Master Glossary;

not provide enforceable rights to or claims on underlying goods, services, or other assets;

created or reside on a distributed ledger based on blockchain or similar technology;

secured through cryptography;

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

2023-08 is effective for fiscal years beginning after December 15, 2024, including interim periods within those fiscal years, with early

adoption permitted.

The Company does not currently hold any material crypto assets.

Accordingly, the adoption of ASU 2023-08 is not expected

to have a material impact on the Company’s consolidated financial statements;

however, the Company will continue to monitor its

investment activities and evaluate the impact of the standard should it acquire crypto assets in the future.

2024-03 — Disaggregation of Income Statement Expenses

November 2024, the FASB issued ASU 2024-03, Income Statement — Reporting Comprehensive Income — Expense Disaggregation

Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses .

The ASU requires public business entities to disclose,

in the notes to financial statements, specified information about certain costs and expenses included in expense line items presented

on the face of the income statement.

The guidance is effective for annual reporting periods beginning after December 15, 2026, and interim

periods beginning after December 15, 2027, with early adoption permitted.

The Company is currently evaluating the impact of ASU 2024-03

on its consolidated financial statements and related disclosures.

2025-05 — Measurement of Credit Losses for Accounts Receivable and Contract Assets

July 2025, the FASB issued ASU 2025-05, Financial Instruments — Credit Losses (Topic 326):

Measurement of Credit Losses for

Accounts Receivable and Contract Assets :

The ASU provides a practical expedient permitting entities to assume that conditions at

the balance sheet date remain unchanged over the life of current accounts receivable and current contract assets when estimating expected

credit losses.

The guidance is effective for annual and interim reporting periods beginning after December 15, 2025, with early adoption

The Company does not expect ASU 2025-05 to have a material impact on its consolidated financial statements.

2025-06 — Targeted Improvements to the Accounting for Internal-Use Software

September 2025, the FASB issued ASU 2025-06, Intangibles — Goodwill and Other — Internal-Use Software (Subtopic 350-40):

Targeted Improvements to the Accounting for Internal-Use Software:

The ASU requires entities to begin capitalizing software development

costs when management has authorized and committed to funding the software project and it is probable that the project will be completed

and the software will be used to perform its intended function (the “probable-to-complete recognition threshold”).

The amendments

are effective for annual reporting periods beginning after December 15, 2027, with early adoption permitted.

Entities may apply the amendments

using a prospective, modified retrospective, or retrospective transition approach.

The Company is currently evaluating the impact of

ASU 2025-06 and will assess the impact upon adoption.

2025-11 — Interim Reporting:

Narrow-Scope Improvements

December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270):

Narrow-Scope Improvements :

The ASU requires entities

to disclose events occurring since the end of the last annual reporting period that have a material impact on the entity.

The amendments

apply to all entities that present interim financial statements in accordance with GAAP.

The guidance is effective for annual reporting

periods beginning after December 15, 2027, and interim periods within those annual reporting periods, with early adoption permitted.

The amendments may be applied either prospectively or retrospectively.

The Company expects ASU 2025-11 to impact its disclosures only

and does not expect it to affect its results of operations, financial condition or cash flows.

LIQUIDITY AND GOING CONCERN

the years ended December 31, 2025 and 2024, the Company has a net loss of $ 101,274,530 and $ 6,856,226 , respectively, and had an accumulated

deficit of $ 111,031,690 as of December 31, 2025.

For the year ended December 31, 2025, the Company has net cash used in operating activities

of $ 10,855,029 .

These factors raise substantial doubt about the Company’s ability to continue as a going concern within twelve

months from the date these consolidated financial statements are issued.

Management Plan

Subsequent to December 31, 2025, the Company completed

two private placements of convertible promissory notes raising aggregate gross proceeds of $ 9,000,000 .

On January 5, 2026, the Company

entered into a note purchase agreement with certain investors pursuant to which the Company issued and sold convertible promissory notes

in an aggregate principal amount of $ 3,125,000 for aggregate gross proceeds of $ 2,500,000 , reflecting a 20 % original issue discount.

January 16, 2026, the Company entered into a note purchase agreement with certain investors pursuant to which the Company issued and sold

secured convertible promissory notes in an aggregate principal amount of $ 8,125,000 for aggregate gross proceeds of $ 6,500,000 , reflecting

a 20 % original issue discount, secured by the assets of the Company and its wholly-owned subsidiaries.

The proceeds from these offerings

are being used to fund working capital requirements and general corporate purposes.

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 the aforementioned plans do not sufficiently alleviate the substantial doubt about the Company’s ability to continue

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

There can be no assurance

that the Company will generate sufficient cash flows from operations, successfully refinance or repay its near-term debt obligations,

or secure additional financing on acceptable terms, or at all.

These audited 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

receivable, net consist of the following:

RECEIVABLE, NET

SCHEDULE OF ACCOUNTS RECEIVABLE, NET

Billed – Third Party

1 unchanged sentence

Total Accounts Receivable

Allowance for doubtful accounts

Allowance for credit losses

Total accounts receivable, net

INVENTORIES, NET

consists of stock that was purchased by Wellgistics, LLC in 2020 from First Defense Nasal Screen Corp (“FDNS”).

consists of the following:

SCHEDULE OF INVENTORY

First Defense Nasal Screen Corp (“FDNS”)

Finished goods

Total inventory, at cost

reserve for obsolescence

Inventories, net

consists of products that were purchased by Wellgistics, LLC in 2020 from First Defense Nasal Screen Corp (“FDNS”).

legal dispute between the Company and the supplier has been settled where the Company was awarded $ 4.6 million.

4 unchanged sentences

of $ 3,014 for the FDNS from March 2023 which has been included in other income in the consolidated statements of operations.

consists of the following:

Finished goods

Total inventory, at cost

reserve for expired goods

Inventories, net

PROPERTY, PLANT AND EQUIPMENT, NET

inventory has experienced minimal sales activity, and management determined that there is no active market for the product and that the

inventory is non-moving.

Based on this assessment, the Company concluded that the carrying value was not recoverable.

Accordingly, the

Company recorded a reserve for obsolete inventory of $ 5,988,257 , which is included in cost of net revenues in the consolidated statements of operations.

PROPERTY, PLANT AND EQUIPMENTS, NET

plant and equipment consist of the following:

5 unchanged sentences

( 1,278,460 )

( 1,119,656 )

Property, plant and equipment, net

expense for the year ended December 31, 2024 and 2023 amounted to $ 67,616 and $ 0 , respectively.

expense was $ 158,804 and $ 67,616 for the years ended December 31, 2025 and 2024, respectively.

INTANGIBLE ASSETS

1 unchanged sentence

SCHEDULE OF INTANGIBLE ASSETS

Internal development costs - Delivmeds

Customer relationships – Wood Sage acquisition

Software development costs - Delivmeds

Accumulated impairment

Capitalized software

Customer relationships - Woodsage acquisition

Customer relationships - Wellgistics acquisition

Trademark - Wellgistics acquisition

Trademark - Wellgistics acqusition

License rights

Intangible assets, gross

1 unchanged sentence

( 4,099,307 )

Intangible assets, net

( 1,047,048 )

Accumulated impairment

( 9,879,075 )

Other intangible assets, net

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

(see Note 3).

The Company recorded amortization of $ 26,841 during the year ended December 31, 2024 pertaining to these intangible assets.

completed in June 2024.

Amortization expense related to these intangible assets was $ 49,232 and $ 26,841 for the years ended December

31, 2025 and 2024, respectively.

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 business combination (see Note 3).

The Company recorded amortization of $ 637,330 pertaining to

customer relationships and $ 382,876 pertaining to the trademark during the year ended December 31, 2024.

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

Amortization expense related to customer relationships

was $ 1,876,011 and $ 637,308 for the years ended December 31, 2025 and 2024, respectively.

Amortization expense related to the Wellgistics

trademark was $ 1,127,015 and $ 382,876 for the years ended December 31, 2025 and 2024, respectively.

November 24, 2025, the Company entered into a License Agreement with Datavault AI Inc., pursuant to which the Company obtained a non-transferable

license to certain proprietary technology for use within the United States pharmaceutical distribution market.

In connection with this

agreement, the Company recorded a license right intangible asset of $ 2,500,000 , representing the non-refundable license fee payable under

the agreement.

The license right has been determined to be a finite-lived intangible asset.

As the licensed technology had not yet been

placed into service as of December 31, 2025, no amortization was recorded during the year ended December 31, 2025.

Amortization is expected

to commence upon the technology being placed into service, which is currently anticipated to occur in 2026, and will be recognized on

a straight-line basis over an estimated useful life of seven years .

the year ended December 31, 2025, the Company identified indicators of impairment related to certain intangible assets acquired in connection

with the Wellgistics LLC business combination.

Accordingly, the Company performed a recoverability assessment of the affected assets

and recognized impairment charges of $ 5,314,027 related to Wellgistics customer relationships and $ 4,565,048 related to the Wellgistics

trademark, for a total intangible asset impairment charge of $ 9,879,075 .

These charges were recorded within goodwill and intangible asset

impairment in the consolidated statements of operations and reduced the carrying values of the respective assets to their estimated fair

values as of December 31, 2025.

No impairment charges were recognized during the year ended December 31, 2024.

intangible assets, net as of December 31, 2025 and 2024 were $ 10,314,675 and $ 20,746,009 , respectively, as reflected in the accompanying

consolidated balance sheets.

following table represents the future amortization of intangibles assets:

OF FUTURE AMORTIZATION OF INTANGIBLES ASSETS

SCHEDULE OF FUTURE AMORTIZATION OF INTANGIBLES ASSETS

Year Ended December 31,

Intangible assets

ACCRUED EXPENSES AND OTHER LIABILITIES

expenses and other liabilities consist of the following:

ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

expenses and other current liabilities consist of the following:

EXPENSES AND OTHER LIABILITIES

Accrued personnel costs

Accrued professional and other fees

Accrued professional fees

Accrued expenses

Credit card obligation

6 unchanged sentences

Note payable - owners of Wellgistics

Note payable - third party, net of debt discount

Revolving line of credit

3 unchanged sentences

Third party investor

Related party - shareholder of Wellgistics

Note payable - Scienture Holdings

Note payable - Integral Health

Note payable - owners of Wellgistics

Long-term debt

(formerly Danam)

September 2023, the Company entered into two short-term note agreements for aggregate proceeds of $ 350,000 .

One note for $ 100,000 bears

interest at 8 % per annum and the Company will issue 35,000 shares of common stock upon a SPAC or merger.

The other note for $ 250,000

is non-interest bearing and the Company will issue 5,000 shares of common stock upon a SPAC or merger.

In May 2024, Scienture Holdings,

(f/k/a TrXade Health, Inc.) , a related party, repaid the $ 250,000 note on behalf of the Company, and the note is no longer outstanding

(See Note 12).

In January 2024, the Company entered into a short-term note agreement for proceeds of $ 250,000 .

The note bears interest

at 2 % per annum and matures on May 18, 2024 .

As of the date of these consolidated financial statements, the note was fully repaid and

is no longer outstanding.

August 22, 2023, Wood Sage entered into a non-interest bearing promissory note (“Note”) with Integral Health 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 CSP MIPA and APS MIPA.

No later than 30 days after a change in control to Wood Sage, the

aggregate unpaid principal balance of the Note will be due and payable by Wood Sage.

As of the date of these financial statements,

the note is still outstanding and the parties mutually

agreed for an extension.

October 11, 2024, the Company entered a merchant cash advance agreement with a third-party lender.

This advance is secured by expected

future sales transactions of the Company with expected payments on weekly basis.

The Company received total proceeds of $ 1,500,000 against

future receivables of $ 2,236,500 .

During the year ended December 31, 2024, Company made total cash repayments of $ 402,570 , including

principal repayments of $ 185,500 and interest expense of $ 217,070 .

As of December 31, 2024, $ 1,314,500 remained outstanding, of which

$ 1,259,415 was included as a current liability on the consolidated balance sheet and the remaining $ 55,085 was classified as long-term.

of December 31, 2025 and 2024, total unamortized debt discount was $ 1,568,776 and $ 519,430 , respectively.

(“Integral Health”)

August 22, 2023, Wood Sage entered into a non-interest bearing promissory note (“Note”) with Integral Health, a then related

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.

October 30, 2025, the Company entered into a Debt Conversion Agreement (the “Integra Health DCA”) with Integra Health Inc.,

Blue Cap Acquisitions LLC, and WoodSage.

Pursuant to the agreement, the outstanding indebtedness of $ 1,300,000 under the Note was converted

into 1,857,143 shares of the Company’s common stock at a stated conversion price of $ 0.70 per share.

The fair value of the shares

issued on the conversion date was $ 0.786 per share.

As a result, the total fair value of the equity issued exceeded the carrying amount

of the debt extinguished by approximately $ 159,714 .

Accordingly, the Company recognized a loss on debt extinguishment of $ 159,714 for

the year ended December 31, 2025, which is included in other expense in the consolidated statements of operations.

Upon conversion, the

Note was fully satisfied and extinguished.

Cash Advances

March 18, 2025, the Company entered into a merchant cash advance (“March 2025 MCA”) agreement with Cedar Advance LLC pursuant

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

Of the $ 1,900,000

gross funding, $ 1,118,250 was applied directly to satisfy the amount outstanding under a prior MCA arrangement, and the remaining $ 781,750

was remitted to the Company for working capital purposes.

The Company accounts for the arrangement as a debt obligation.

The difference

between the repayment amount and the net proceeds received was recorded as a debt discount and is amortized to interest expense over

the estimated term of the agreement using the effective interest method.

October 20, 2025, the Company refinanced the March 2025 MCA pursuant to a new agreement with Cedar Advance LLC.

Under the October agreement,

the stated purchase price was $ 2,898,000 .

Of this amount, $ 1,198,800 was applied directly to satisfy outstanding amounts under the prior

MCA, and $ 701,200 was remitted to the Company.

The total repayment obligation under the new arrangement resulted in a principal balance

of $ 1,900,000 , with fixed weekly payments of $ 56,800 over an estimated 51 -week term.

Company evaluated the March 2025 and October 2025 refinancing in accordance with ASC 470 and concluded that the transaction represented

a debt extinguishment.

Accordingly, the remaining unamortized debt discount associated with the refinancing written off, and the Company

recognized a loss on debt extinguishment of $ 402,153 for the year ended December 31, 2025.

the years ended December 31, 2025 and 2024, the Company recognized amortization of debt discount of $ 1,252,211 and $ 217,017 related to

its merchant cash advance arrangements, which is recorded as interest expense in the consolidated statements of operations.

of December 31, 2025, the gross contractual repayment obligation under the merchant cash advance was $ 2,547,200 .

The related unamortized

debt discount was $ 803,066 , resulting in a net carrying amount of $ 1,744,134 , which is classified as a current liability in the consolidated

balance sheets.

As of December 31, 2024, the gross contractual repayment obligation under the merchant cash advance was $ 1,833,930 .

related unamortized debt discount was $ 519,430 , resulting in a net carrying amount of $ 1,314,500 , of which $ 1,259,415 was classified

as a current liability and $ 55,085 was classified as a long-term liability in the consolidated balance sheets.

the year ended December 31, 2025, the Company entered into multiple financing arrangements with Agile Capital Funding LLC (“Agile”)

and the Company accounts for these arrangements as debt obligations.

May 14, 2025, the Company entered into an agreement with Agile pursuant to which it received net proceeds of $ 500,000 in exchange for

total contractual repayments of $ 756,000 .

The agreement required fixed weekly payments over an estimated 24-week term.

The Company recorded

the obligation at the net proceeds received, with the excess of the total contractual repayment amount over the net proceeds recorded

as a debt discount.

The debt discount was amortized to interest expense over the estimated term of the agreement using the effective

interest method.

June 25, 2025, the Company entered into a separate agreement with Agile pursuant to which it received net proceeds of $ 250,000 in exchange

for total contractual repayments of $ 367,200 .

The arrangement required fixed weekly payments over an estimated 28 -week term.

recorded the obligation at the net proceeds received and recognized a corresponding debt discount, which was amortized to interest expense

using the effective interest method.

August 26, 2025, the Company entered into a refinancing arrangement with Agile pursuant to which it received net proceeds of approximately

Total contractual repayments under the August agreement were approximately $ 1,872,000 , with fixed weekly payments over an estimated

33 -week term.

The August 2025 agreement was used to satisfy the outstanding balances of both the May 14, 2025 and June 25, 2025 arrangements.

The Company evaluated the transaction under ASC 470-50 and concluded that the refinancing represented an extinguishment of the prior

debt obligations.

Accordingly, the Company derecognized the carrying amounts of the extinguished debt and recorded a loss on debt extinguishment

related to the write-off of the remaining unamortized debt discount.

October 29, 2025, the Company refinanced the August 2025 arrangement pursuant to a new agreement with Agile.

Under the October agreement,

the Company received net proceeds of $ 533,889 , of which $ 50,000 represented issuance costs to be amortized over the term of the debt.

Total contractual repayments under the October agreement are $ 2,880,000 , with fixed weekly payments of $ 75,789 over an estimated 38 -week

A portion of the proceeds was applied directly to satisfy the outstanding balance of the August 2025 obligation.

The Company accounted

for the October transaction as a debt extinguishment in accordance with ASC 470-50 and recognized a loss related to the write-off of

the remaining unamortized debt discount associated with the extinguished debt.

the year ended December 31, 2025, the Company recognized total losses on debt extinguishment of $ 578,524 related to Agile refinancing.

For the year ended December 31, 2025, the Company recognized $ 765,681 of debt discount amortization, which is included in interest expense

in the consolidated statements of operations.

of December 31, 2025, the gross contractual repayment obligation under the Agile agreement was $ 2,366,766 .

The related unamortized debt

discount was $ 765,710 , resulting in a net carrying amount of $ 1,601,056 , which is classified as a current liability in the consolidated

balance sheets.

payable – owners 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.

As of December 31, 2024, the calculated interest was $ 425,000 .

As of December 31, 2024, $ 5,000,000 was included as

a current liability on the consolidated balance sheet and the remaining $ 10,000,000 was classified as long-term.

August 23, 2024, Wellgistics Health and the owners of Wellgistics LLC entered into the Fourth Amendment to the Membership Interest Purchase

Agreement (“MIPA”).

Pursuant to the amended agreement, the Company issued a promissory note in the aggregate principal amount

of $ 15,000,000 , which bears simple interest at a rate equal to the Prime Rate as published by The Wall Street Journal on January 1 of

the applicable year.

The principal and accrued interest were originally payable in three equal annual installments commencing on the

first anniversary of the effective date of the related registration statement.

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

$ 15.0 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 of principal shall be payable on the third anniversary, of the effective date of Promissory Note,

Company evaluated the amendment in accordance with ASC 470-50, Debt—Modifications and Extinguishments, and concluded that the changes

constituted a debt extinguishment.

As a result, the original note and related accrued interest of $ 1,146,337 were derecognized.

recognized a non-cash loss on debt extinguishment of $ 1,353,663 during the year ended December 31, 2025.

the years ended December 31, 2025 and 2024, the Company recognized interest expenses of $ 1,373,390 and $ 425,000 , respectively, related

to the seller promissory note.

As of December 31, 2025 and 2024, accrued interest on the note totaled $ 652,055 and $ 425,000 , respectively,

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

of December 31, 2025, $ 5,000,000 of the amended promissory note was classified as a current liability and the remaining $ 12,500,000 was

classified as non-current in the consolidated balance sheets.

As of December 31, 2024, $ 5,000,000 was classified as current and the remaining

$ 10,000,000 was classified as long-term.

Payable – Third party

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 year ended December 31, 2025, the Company recorded interest expense of $ 44,442 .

For the same year, the Company recognized amortization of debt discount of $ 33,411 related to this promissory note.

As of December 31,

2025, accrued interest payable on this note was $ 44,442 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.

In the event of default, interest accrues at a

default rate of 12 %

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 December 31, 2025, the Company had not received any such written

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

For the year ended December 31, 2025, the Company recorded interest

expense of $ 9,062

related to this note.

As of December 31, 2025, accrued interest payable on this note was $ 9,062 ,

and the outstanding principal of $ 100,000

is classified under current liabilities.

On April 8, 2025, the Company issued a Promissory Note to Strategic EP, LLC in the principal amount of $ 250,000 .

The note bears interest at a rate of 10 % per annum.

Under the terms of the agreement, the outstanding principal and accrued interest are

payable on the earlier of (i) April 8, 2026, or (ii) within five business days following the Company’s receipt of aggregate gross

proceeds of at least $ 10 million from one or more equity or debt financings.

On February 27, 2026, the Company received a demand letter

from Strategic EP, LLC indicating that the Company was in default under the terms of the promissory note.

As of December 31, 2025, the

Company had accrued interest on the note in accordance with the contractual default interest rate of 18 % amounting to $ 22,122 which is

classified in the accrued expenses and other liabilities and the outstanding principal of $ 250,000 is classified under current liabilities.

The Company is currently engaged in discussions with the lender to repay or otherwise settle the outstanding balance, including accrued

Management is working toward resolving the obligation and addressing the default under the terms of the agreement.

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 December 31, 2025,

the Company had not received any such written notice and, accordingly, no event of default had occurred.

For the year ended December

31, 2025, the Company recorded interest expense of $ 9,062 related to this note.

As of December 31, 2025, accrued interest payable on

this note was $ 9,062 , and the outstanding principal of $ 100,000 is classified under current liabilities.

of December 31, 2025, 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 years ended December 31, 2025 and 2024, the Company recorded interest expense of $ 8,000 for both

the years related to this note.

As of December 31, 2025 and 2024, accrued interest payable on this note was $ 19,666 and $ 11,666 , respectively,

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

line of credit – Wellgistics

1 unchanged sentence

The new line of credit

has interest annual rate equal to the Term SOFR plus 11.5%, calculated and prorated daily on the daily balance.

The new line of credit

is collateralized by accounts receivable and inventory balances.

Interest related to the line of credit amounted to $ 159,740 for the

year ended December 31, 2024.

The outstanding balance on the line of credit as of December 31, 2024 was $ 5,531,260 , which is included

as a current liability on the consolidated balance sheet.

The Company assumed the initial revolving line of credit as part of the Wellgistics

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 $ 1,100,292 and $ 159,740 for the years ended December 31, 2025 and

2024, respectively.

The outstanding balance on the line of credit as of December 31, 2025 and December 31, 2024 was $ 1,643,923 and $ 5,531,260

respectively, which is included as a current liability on the condensed balance sheets.

Promissory Note - Wellgistics

May 2022, Wellgistics, LLC entered into a promissory note agreement with 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 (a subsidiary of Wellgistics

The promissory note bears interest at a rate of 2 % per annum and will mature on April 1, 2025.

Interest expense related to the

promissory note was immaterial for the year ended December 31, 2024.

As of December 31, 2024 the amount outstanding is $ 137,141 , which

is included as a current liability on the consolidated balance sheet.

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

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 December 31, 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 years ended December 31, 2025 and 2024.

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

OF ANNUAL PRINCIPAL PAYMENTS

SCHEDULE OF ANNUAL PRINCIPAL PAYMENTS

Year Ended December 31,

1 unchanged sentence

STOCKHOLDERS’ EQUITY

October 30, 2024, the

Company effected a forward stock split of all issued and outstanding shares of common stock at a ratio of 1-to-1,677,000.

Company also amended its Certificate of Incorporation to authorize 500,000,000

shares of common stock, par value $ 0.0001

per share from 10,000 shares of Common Stock, $ 0.001 par value per share prior to

the amendment.

Accordingly, all share and per share amounts for all periods presented in the accompanying financial statements and

notes thereto have been adjusted retroactively, where applicable, to reflect the stock split.

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.

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 expire five years from the

date of issuance.

The offering closed in September 2025 and resulted in gross proceeds of $ 4,534,053 .

October 2025, holders exercised 3,282,858 Warrants for aggregate proceeds of $ 2,298,000 .

As of December 31, 2025, the remaining 3,860,004

Warrants were outstanding.

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.

The Company recognized stock-based compensation expense of $ 143,520

for the year ended December 31, 2025.

This expense was recorded within general and administrative expenses in the 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.

(“ Draper ”), pursuant to which Draper

agreed to provide investor relations and business development services.

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 year ended December 31, 2025, the Company

recognized stock-based compensation expense of $ 400,000 , in connection with this agreement.

This expense was recorded within sales and

marketing expenses in the consolidated statements of operations.

August 4, 2025, the Company issued 243,428 shares of its common stock to Outside the Box Capital Inc.

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 year ended

December 31, 2025, and recorded within general and administrative expenses in the accompanying consolidated statements of operations.

August 26, 2025, the Company issued an aggregate of 200,000 shares of its common stock to Octagon Media Corp 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 for

the year ended December 31, 2025, and included within sales and marketing expenses in the accompanying consolidated statements of operations.

and Former Employees

April 10, 2025, the Company’s Board of Directors appointed Michael L.

Peterson to fill the vacancy created by the resignation of

On July 2, 2025, in connection with his service as a director, the Company granted Mr.

Peterson 200,000 restricted shares

of common stock.

The grant-date fair value of the award was $ 182,600 , determined based on the closing price of the Company’s common

stock on the date of grant.

Of the total shares granted, 66,000 shares vested immediately on the grant date.

The remaining 134,000 shares

were subject to vesting in equal annual installments on July 2, 2026 and July 2, 2027.

Peterson resigned from the Board effective

October 1, 2025.

For the year ended December 31, 2025, the Company recognized stock-based compensation expense of $ 60,258 related to

the vested shares.

The expense is included in general and administrative expenses in the consolidated statements of operations.

June 2025, the Company granted 750,000 restricted shares of its common stock to former Chief Executive Officer Timothy Canning in satisfaction

of a sign-on bonus obligation under the terms of his employment agreement.

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

Canning resigned from the Company effective February 28, 2025.

The grant-date fair value of the award was $ 832,500 , determined

based on the closing price of the Company’s common stock on the date of grant.

For the year ended December 31, 2025, the Company

recognized stock-based compensation expense of $ 832,500 related to this award, which is included in general and administrative expenses

in the consolidated statements of operations.

Purchase Agreement

April 9, 2025, the Company entered into an Equity Purchase Agreement (the “Hudson EPA”) with Hudson pursuant to which Hudson

committed to purchase, at the Company’s discretion and subject to certain conditions, up to $ 50 million of the Company’s

common stock over a 24-month period.

Under the terms of the Hudson EPA, the Company could, from time to time, issue put notices directing

Hudson to purchase shares of common stock at a price determined in accordance with a formula based on the market price of the Company’s

common stock, as defined in the agreement.

connection with entering into the Hudson EPA, the Company issued 152,000 commitment shares to Hudson.

The commitment shares were valued

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

For the year ended December 31, 2025,

the Company recognized $ 594,320 of stock-based compensation expense related to the commitment shares, which is included in general and

administrative expenses in the consolidated statements of operations.

the year ended December 31, 2025, the Company issued an aggregate of 3,426,254 shares of common stock pursuant to put notices under the

Hudson EPA, resulting in gross proceeds of $ 2,838,787 .

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

April 14, 2025, the Company and the sellers of Wellgistics LLC amended the Membership Interest Purchase Agreement (the “Wellgistics

Pursuant to the amendment, the portion of the closing cash consideration payable to Strategix Global LLC was reduced by

$ 1,500,000 .

In lieu of such cash payment, the Company issued 333,333 shares of its common stock to Strategix Global LLC.

The shares are

subject to a 12-month lock-up period consistent with the lock-up restrictions applicable to management and certain large stockholders

in connection with the Company’s initial public offering.

July 24, 2025, the Company entered into the Eighth Amendment to the Wellgistics MIPA with the sellers of Wellgistics LLC, including Strategix

Global LLC, Nomad Capital LLC, and Jouska Holdings LLC.

Pursuant to the Eighth Amendment, the Company agreed to satisfy a portion of

the remaining closing cash consideration through the issuance of 7,606,785 shares of its 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 on the date of issuance.

The aggregate fair value of the shares issued, approximately $ 8.5 million, was recorded as a reduction

of the purchase consideration payable related to the Wellgistics LLC acquisition.

Conversions – Integra Health and Integra Pharma

October 30, 2025, the Company entered into a Debt Conversion Agreement with Integra Health Inc., pursuant to which outstanding indebtedness

of $ 1,300,000 owed by WoodSage LLC, a wholly owned subsidiary of the Company, was converted into 1,857,143 shares of the Company’s

common stock at a stated conversion price of $ 0.70 per share.

The fair value of the Company’s common stock on the conversion date

was $ 0.786 per share, resulting in an aggregate fair value of approximately $ 1,459,714 for the shares issued.

Because the fair value

of the equity issued exceeded the carrying amount of the debt extinguished, the Company recognized a loss on debt extinguishment of approximately

$ 159,714 for the year ended December 31, 2025.

Upon issuance of the shares, the indebtedness was fully satisfied.

October 30, 2025, the Company entered into a separate Debt Conversion Agreement with Integra Pharma Solutions, LLC, pursuant to which

outstanding indebtedness of $ 4,019,859 owed by WoodSage LLC was converted into 5,742,656 shares of the Company’s common stock at

a stated conversion price of $ 0.70 per share.

The fair value of the Company’s common stock on the conversion date was $ 0.786 per

share, resulting in an aggregate fair value of approximately $ 4,513,727 for the shares issued.

As the fair value of the equity issued

exceeded the carrying amount of the debt extinguished, the Company recognized a loss on debt extinguishment of approximately $ 493,868

for the year ended December 31, 2025.

Upon issuance of the shares, the indebtedness was fully satisfied.

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

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

appreciation rights, restricted stock awards, restricted stock units, and other stock-based awards.

The number of shares available for

issuance as incentive stock options may not exceed the Initial Limit, as adjusted for any Annual Increases, subject to adjustment as

provided under the terms of the Plan.

subject to awards that expire, are canceled, or otherwise terminate without having been exercised or settled in full will again become

available for future grant under the Plan.

However, shares repurchased by the Company on the open market will not be added back to the

share reserve.

Awards that may be settled solely in cash do not count against the share reserve.

Plan also includes a limitation on annual compensation to non-employee directors.

The aggregate value of all equity awards granted to

any non-employee director under the Plan, together with any cash compensation paid for service as a non-employee director, may not exceed

(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

to service-based vesting conditions.

February 28, 2025, in connection with the appointment of Brian Norton as Chief Executive Officer of the Company, Mr.

Norton was granted

and issued 9,000,000 shares of restricted common stock under the Company’s Amended and Restated 2023 Equity Incentive Plan (the

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.

On July 24, 2025, the Compensation Committee approved

the acceleration of vesting of the restricted shares, and the Board of Directors ratified such approval on September 4, 2025.

all 9,000,000 shares became fully vested during the third quarter of 2025.

As of the issuance date of these consolidated financial statements,

the Company and its transfer agent are examining if the shares should be considered vesting and unrestricted.

accordance with ASC 718, Compensation—Stock Compensation , the Company recognized total stock-based compensation expense

of approximately $ 24.3 million related to this award for the year ended December 31, 2025, which is included in general and administrative

expenses in the consolidated statements of operations.

The fair value of the award was determined based on the closing market price of

the Company’s common stock on the grant date of February 28, 2025.

The acceleration of vesting did not result in any incremental

As of December 31, 2025, there is no remaining unrecognized compensation cost related to this 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 December 31, 2025,

10,445,987 of these shares had vested and are included in the total outstanding common stock reported in the consolidated statement of

stockholders’ equity.

As of December 31, 2025, a total of 134,000 shares were forfeited and cancelled and the remaining 982,121

shares were unvested as of December 31, 2025.

summary of information related to restricted common stocks for the year ended December 31, 2025 is as follows:

SCHEDULE OF RESTRICTED COMMON STOCKS

Weighted Average

Unvested shares as of December 31, 2024

( 19,445,987 )

Forfeited and cancelled

Unvested shares as of December 31, 2025

following table summarizes stock-based compensation expense recognized for the year ended December 31, 2025 and 2024:

OF STOCK-BASED COMPENSATION EXPENSE

Sales and marketing expenses

General and administrative expenses

Total stock-based compensation expense

of December 31, 2025, total unrecognized compensation expense related to the 982,121 unvested restricted stock awards was $ 1,691,385 ,

which is expected to be recognized over a weighted-average period of 2 years.

October 30, 2024, the Company effected a forward stock split of all issued and outstanding shares of common stock at a ratio of 1-to-1,677,000.

The Company also amended its Certificate of Incorporation to authorize 500,000,000 shares of common stock, par value $ 0.0001 per share

from 10,000 shares of Common Stock, $ 0.001 par value per share prior to the amendment.

Accordingly, all share and per share amounts for

all periods presented in the accompanying financial statements and notes thereto have been adjusted retroactively, where applicable,

to reflect the stock split.

December 5, 2024, the Company effected a reverse stock split of all issued and outstanding shares of common stock at a ratio of 1-for-3.75.

24 unchanged sentences

The lease required a security deposit by Wellgistics Health of $ 35,855 and Wellgistics, LLC of $ 31,871 .

June 9, 2023, Intergra Pharma Solutions entered into First amendment to the Vector Collective lease, which is sublease to Wellgistics Pharmacy.

includes a monthly base rent of $ 4,714.41 from and after November 16, 2023 and expires on November 15, 2026 .

Wellgistics Pharmacy recognized a right-of-use

asset and corresponding lease liability, calculated using a discount rate of 8.36 %.

June 9, 2023, Intergra Pharma Solutions entered into First amendment to the Vector Collective lease, which is sublease to Wellgistics

The lease includes a monthly base rent of $ 4,714.41 from and after November 16, 2023 and expires on November 15, 2026 .

A right-of-use

asset and corresponding lease liability recognized calculated using a discount rate of 8.36 %.

January 2022, Wellgistics LLC entered into lease agreement for warehousing facility located in Lefrois, Florida, which has a lease term

6 unchanged sentences

Right-of-use assets

Short-term lease liabilities

Lease liabilities, current portion

Long-term lease liabilities

2 unchanged sentences

Weighted Average Discount Rate

following is the summary of future minimum payments:

The following is the summary of future

minimum payments:

OF SUMMARY OF FUTURE MINIMUM PAYMENTS

December 31, 2024

Total lease payments

2 unchanged sentences

Company had transactions with Scienture Holdings, Inc.

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

group which included Integra Pharma Solutions, LLC (IPS), in which the board members of the Company are currently the management.

The common management between the entities classifies Scienture as a related party.

was previously partly owned by a private equity company, Nomad Capital, 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, which include software

expenses and marketing expenses, with affiliated companies, are recorded within general and administrative expenses.

Wellgistics, LLC.

is charged a managerial service fee by the members of Nomad, which is recorded within general and administrative expenses.

Company had transactions with Scietech, LLC.

where a 31 % investor is the spouse of one of the Directors of the Company, which qualifies

as a related party.

Company also had transactions with Green Apotoker, LLC.

which qualifies as a related party on account of a managerial personnel of the

Company having a significant influence.

following is a summary of due from and to related parties:

OF SUMMARY OF DUE FROM AND TO RELATED PARTIES

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 2025.

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

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.

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

of inventories from Tollo Health, LLC, which was a related party until June.

See Note 13 for the Guarantee Obligation.

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

As of September 30, 2025, amounts owed to

Integra Pharma totaled $ 4,019,859 and were reclassified from due to related parties to other short-term advances following the change

in related party status.

On October 30, 2025, the Company entered into a Debt Conversion Agreement with Integra Pharma Solutions, LLC

and WoodSage LLC, pursuant to which the outstanding indebtedness of $ 4,019,859 was converted into 5,742,656 shares of the Company’s

common stock at a stated conversion price of $ 0.70 per share.

The debt was fully satisfied upon issuance of the shares.

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 December 31, 2025

SCHEDULE OF SUMMARY OF DUE FROM AND TO RELATED PARTIES

Due from Scienture Holdings

Due from related parties

Due to Chief Executive Officer

Due to Scienture Holdings

Due to Wellgistics Pharmacy

Due to related parties

Accounts payable from affiliates of Company

Accounts receivable from affiliates of Company

Company had the following transactions with related parties:

OF RELATED PARTY TRANSACTION

Accounts receivable - IPS *

Accounts receivable

Accounts payable - Scietech

Accounts payable

* IPS is no longer

a related party as of December 31, 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 for the years ended December 31, 2025 and 2024:

SCHEDULE OF RELATED PARTY TRANSACTION

Sales to Integra Pharma Solutions, LLC *

4 unchanged sentences

Business development and consultation fees paid to Green Apoteker LLC

INVESTMENT IN UNCONSOLIDATED AFFILIATES

LLC has investments in affiliates that are not consolidated.

As of December 31, 2024, the Company had an investment in Gift Health totaling

COMMITMENTS AND CONTINGENCIES

* IPS is no longer a related party as of December 31, 2025 and sales made to IPS in 2025 amounted

to $ 220,820 which is included in the net revenues in the consolidated statements of operations and comprehensive loss.

SEGMENT AND GEOGRAPHIC INFORMATION

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.

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

December 31, 2025 and 2024:

SCHEDULE OF SEGMENT AND GEOGRAPHIC INFORMATION

Cost of net revenues

Gross profit (loss)

( 6,426,419 )

Operating expenses:

General and administrative

Sales and marketing

Depreciation and amortization

Goodwill and intangible assets impairment

Total operating expenses

Loss from operations

( 93,749,097 )

( 6,145,132 )

Other income/(expense):

Interest expense, net

( 4,579,556 )

Loss on debt extinguishment

( 2,987,922 )

Total other expense, net

( 7,525,433 )

Net loss before income taxes

( 101,274,530

( 6,856,226 )

Provision for income taxes

$ ( 101,274,530

$ ( 6,856,226 )

revenues were within the U.S.

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 consolidated

balance sheets were located as follows:

OF LONG LIVED TANGIBLE ASSETS AND OPERATING LEASE RIGHT OF USE ASSETS

United States

Property, plant and equipment, net

Operating lease, right-of-use assets

COMMIMENTS AND CONTINGENCIES

time to time, the Company is involved in legal proceedings arising from the normal course of business activities.

5 unchanged sentences

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

taxes are recognized for temporary differences between the basis of assets and liabilities for financial statement and income tax purposes.

The differences relate primarily to net operating loss carry forwards.

For the years ended December 31, 2024 and 2023, the Company did

not record a current or deferred income tax expense or benefit due to current and historical losses incurred by the Company.

The following

table presents the deferred tax assets and liabilities by source:

August 21, 2024, Blythe Global Advisors, LLC filed a demand for arbitration against the Company and the Chairman of the Board 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

Wellgistics, LLC is a defendant in a

legal proceeding initiated by Lifsa Drugs LLC in the United States District Court for the District of New Jersey.

The complaint alleges

that Wellgistics, LLC failed to make payment for certain pharmaceutical products supplied by the plaintiff and seeks damages of approximately

$ 420,460 , together with interest, legal fees, and other related costs.

The matter pertains to purchases of goods made by Wellgistics,

LLC in the ordinary course of business.

Accordingly, the underlying amount relating to such purchases has already been recorded as a liability

in the Company’s books and is included within Accounts payable in the accompanying consolidated balance sheet as of December 31,

At this stage of the proceedings, the outcome of the litigation cannot be reasonably predicted.

Management, in consultation with

legal counsel, is currently evaluating the claim and the potential exposure, if any, beyond the amount already recorded.

The Company will

continue to monitor developments related to this matter and will record any additional provision, if required, when the likelihood of

loss becomes probable and reasonably estimable.

Dispute with Former Management

October 10, 2025, the Company initiated litigation in the Circuit Court of the Thirteenth Judicial Circuit in and Hillsborough County,

Florida against certain former officers and/or directors of the Company (collectively, the “Former Management Parties”).

The complaint asserts claims including, among others, breach of the fiduciary duty of loyalty, breach of contract, tortious interference

with a contract, tortious interference with business relationships, and other applicable claims, arising out of the Former Management

Parties’ efforts to threaten harm the Company as leverage to force the retraction of a vote of the majority shareholders.

December 10, 2025, Defendants filed a motion to compel arbitration of all claims in the suit.

The Company does not agree that all the

claims in the suit are subject to mandatory arbitration, and filed an opposition to that motion on December 22, 2025.

A hearing is currently

scheduled on the motion to compel arbitration for April 27, 2026.

the Company believes it has meritorious claims, litigation is inherently uncertain, and there can be no assurance regarding the outcome

or timing of resolution.

January 2026, the Company has also served a notice of claims against the Former Management Parties for misrepresentations and omissions

of material fact in connection with an acquisition of certain limited liability company membership interests, which that resulted in,

among other things, supposed promises of equity and related arrangements to such individuals.

The Company intends to seek, among other

relief, rescission and cancellation of any purported commitments related to or resulting from the misrepresentations and omissions, as

well as related equitable and monetary remedies.

As of December 31, 2025, obligations associated with

these arrangements are reflected as liabilities on the Company’s consolidated balance sheet in the aggregate amount of approximately

$ 17,500,000 .

Because the potential resolution of this matter may

result in a gain contingency, no amounts have been recognized in the accompanying consolidated financial statements for any potential

recovery or reduction of the recorded liability.

If the Company prevails in the litigation, all or a portion of the recorded liability

may be reversed in a future period.

The Company will continue to evaluate this matter and will adjust the related liability, if appropriate,

based on developments in the litigation.

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 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.

Of the total guarantee payment, $ 500,000 was subsequently recovered through an offset against an existing accounts

payable balance, resulting in a net loss on guarantee of $ 140,647 , which is included in general and administrative expenses in the consolidated

statements of operations for the year ended December 31, 2025.

Vendor Demand Letter

The Company and certain of its subsidiaries have

received demand letters from various vendors requesting payment for goods and services previously provided.

The aggregate amount referenced

in these demand letters is approximately $ 2.2 million.

Of this amount, approximately $ 1.5 million relates to obligations that are already

recorded within accounts payable in the accompanying consolidated balance sheet as of the reporting date.

The remaining $ 0.7 million

relates to claims asserted by certain vendors that are not recorded as liabilities in the accompanying consolidated financial statements.

Based on management’s evaluation of the underlying matters in accordance with ASC 450, Contingencies, the Company has determined

that a loss related to these claims is not probable as of the reporting date.

Accordingly, no liability has been recognized for these

The Company is currently in the process of initiating appropriate legal responses with respect to these claims.

Company accounts for income taxes in accordance with ASC Topic 740, Income Taxes , and the enhanced disclosure requirements of

ASU 2023-09, Income Taxes (Topic 740) — Improvements to Income Tax Disclosures , adopted for the fiscal year ended December

Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the

financial statement carrying amounts of existing assets and liabilities and their respective tax bases, as well as for net operating

loss carryforwards.

Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the

years in which those temporary differences are expected to be recovered or settled.

of Income Tax Expense

Company’s operations are entirely domestic.

For the years ended December 31, 2025 and 2024, the provision for income taxes was

$ 0 as the Company incurred net losses in both periods and maintains a full valuation allowance against its net deferred tax assets.

OF PROVISION FOR INCOME TAXES

State and local

Total current

State and local

Total deferred

Total provision for income taxes

Tax Rate Reconciliation

following table presents a reconciliation of the statutory federal income tax rate to the Company’s effective tax rate in accordance

with ASU 2023-09:

OF RECONCILIATION OF INCOME TAX EXPENSE

$ ( 101,274,530 )

$ ( 6,856,226 )

Tax benefit at statutory federal rate

( 21,263,006 )

( 1,439,807 )

State and local income taxes - federal

( 5,568,882 )

Non-deductible impairment charges

Non-deductible loss on debt extinguishment

Change in valuation allowance

Effective income tax rate

Tax Assets and Liabilities

OF DEFERRED TAX ASSETS

Deferred tax assets:

Net operating loss

Net operating loss carry forwards

Accrued exp and other liabilities

Capitalized software

Total gross deferred tax assets

Deferred tax liabilities:

Total gross deferred tax liabilities

Net deferred tax asset before valuation allowance

Valuation allowance

( 27,125,130 )

Net deferred tax assets

Company recognizes deferred tax assets to the extent that it believes that these assets are more likely than not to be realized.

such a determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable

temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations.

The Company assessed

the need for a valuation allowance against its net deferred tax assets and determined a full valuation allowance is required due, cumulative

losses through December 31, 2024 and no history of generating taxable income.

Therefore, valuation allowances of $ 2,467,687 and $ 735,387

were recorded as of December 31, 2024 and 2023, respectively.

Valuation allowance increased by $ 1,732,300 and $ 730,137 during the years

ended December 31, 2024 and 2023, respectively.

Deferred tax assets were calculated using the Company’s combined effective tax

rate, which it estimated to be 25.35 %.

The effective rate is reduced to 0 % for 2024 and 2023 due to the full valuation allowance on its

net deferred tax assets.

Company’s ability to utilize net operating loss carryforwards will depend on its ability to generate adequate future taxable income.

At December 31, 2024 and 2023, the Company had net operating loss carryforwards available to offset future taxable income in the amounts

of $ 6,856,226 and $ 2,895,684 , respectively, which can be carry forward indefinitely.

Company has evaluated its income tax positions and has determined that it does not have any uncertain tax positions.

The Company will

recognize interest and penalties related to any uncertain tax positions through its income tax expense.

Company is not presently subject to any income tax audit in any taxing jurisdiction, though its 2022-2023 tax years remain subject to

examination by U.S.

federal and state jurisdictions.

Sage and Wellgistics, with the consent of its members, have elected to be taxed as partnerships under both federal and state provisions.

Under these provisions, the Company does not pay income taxes on its taxable income.

Instead, each member reports on their income tax

return their proportionate share of the Company’s taxable income and tax credits.

( 3,960,612 )

Net deferred tax asset

Operating Loss Carryforwards

of December 31, 2025, the Company had estimated federal and state net operating loss carryforwards of approximately $ 85 million.

losses were generated in tax years ending after December 31, 2017 and carry forward indefinitely pursuant to the Tax Cuts and Jobs Act

of 2017, subject to an annual utilization limitation of 80 % of taxable income.

OF NET OPERATING LOSS CARRYFORWARDS

$ 111,031,690

Company has established a full valuation allowance against its net deferred tax assets as of December 31, 2025 and 2024, as management

has determined that it is more likely than not that the net deferred tax assets will not be realized based on the Company’s history

of operating losses and current financial position.

The valuation allowance increased by $ 23,164,519 during the year ended December 31,

2025, primarily reflecting the increase in net operating loss carryforwards, impairment-related temporary differences, and accrued expenses

arising during the period.

OF NET DEFERRED TAX ASSETS

Balance, beginning of year

Current year NOL generated

Accrued expenses and other current liabilities

Capitalized software

Balance, end of year

Company has evaluated its tax positions in accordance with ASC 740-10 and has determined that there are no material unrecognized tax

benefits as of December 31, 2025 and 2024.

accordance with ASU 2023-09, the Company discloses that no income taxes were paid at the federal or state level during the years ended

December 31, 2025 and 2024.

SUBSEQUENT EVENTS

Public Offering

February 20, 2025, the Company entered into an Underwriting Agreement (the “Underwriting Agreement”) with Craft Capital Management

LLC (the “Underwriters”), relating to the Company’s initial public offering (the “Offering” or “IPO”)

of 888,889 shares of common stock, par value at a public offering price of $ 4.50 per share, generating gross proceeds of $ 4,000,000 .

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

originally filed with the U.S.

Securities and Exchange Commission (the “Commission”) on July 22, 2024, and later amended

(as amended, the “Registration Statement”).

The Registration Statement was declared effective by the Commission on February

The closing of the Offering took place on February 24, 2025.

A final prospectus describing the terms of the offering was filed

with the Commission on February 21, 2025.

Company’s common stock commenced trading on the Nasdaq Capital Market LLC on February 21, 2025, under the symbol “WGRX”.

The IPO generated net proceeds to the Company of approximately $ 3.1 million, after deducting underwriting discounts and commissions

and other estimated offering expenses.

The Company intends to use the net proceeds from the offering to increase its capitalization,

provide financial flexibility, and enhance visibility into the marketplace as well as to create a public market for the common stock

and for general corporate purposes, including establishing working capital, funding marketing initiatives, and facilitating capital expenditures.

February 25, 2025, the Company entered into a consulting agreement (the “Consulting Agreement”) with Hudson Global Ventures,

LLC, a Nevada limited liability company (“Hudson”).

Pursuant to the Consulting Agreement, Hudson agreed, for a period of

thirty (30) days, to provide the Company with business advisory services, guidance on growth strategies, and networking opportunities

for general business purposes.

As consideration with Hudson’s services, the Company agreed to (i) pay Hudson a fee of $ 250,000

and (ii) cause the issuance in restricted book

entry form of 52,000

shares of the Company’s common stock.

the Company proposes to file any registration statement covering any of its securities, the Company agreed to provide Hudson with notice

of such registration statement and to effect the registration of any portion of Hudson’s shares of common stock, as directed by

Hudson, to the extent required to permit the resale and disposition of its shares of common stock.

On March 17, 2025, the Company entered

into a consulting agreement (the “Consulting Agreement”) with Draper, Inc., a Nevada corporation (“Draper”).

Pursuant to the Consulting Agreement the Company agreed to engage Draper as an independent consultant and Draper agreed to provide the

Company with investor relations and business development services, including but not limited to the following:

(i) reviewing the Company’s

financial requirements;

(ii) analyzing and assessing alternatives for the Company’s financial requirements;

(iii) providing introductions

to professional analysts and money managers;

(iv) assisting the Company in financing arrangement to be determined and governed by separate

and distinct financing agreements;

(v) providing analysis of the Company’s industry and competitors in the form of general industry

reports provided directly to Company and (vi) assisting the Company in advising of potential merger partners and developing corporate

partnering relationships.

The Consulting Agreement has an initial term of three months and automatically renews for successive one-month

terms until terminated.

Either party may terminate the Consulting Agreement by providing written notice at least seven days prior to

the end of the then-current term.

exchange for the services to be provided by Draper pursuant to the Consulting Agreement, the Company agreed to pay Draper a total of

100,000 restricted shares of the Company’s common stock to be delivered promptly following execution of the Consulting Agreement.

The Company will owe Draper an additional 100,000 shares of restricted shares of common stock for each subsequent term under the Consulting

Executive Officer

February 28, 2025, the Board of Directors promoted Brian Norton to serve as the Company’s Chief Executive Officer effective as

of February 28, 2025 (the “Effective Date”).

Norton will succeed Timothy Canning, who served as the Company’s Chief

Executive Officer since January 18, 2024, and who is resigning from his position, effective as of the Effective Date.

decision to resign is not the result of any dispute or disagreement with the Company, the Company’s management or the Board on

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

Management has evaluated subsequent events through March 25, 2025,

the date the financial statements were available to be issued.

Note Offerings

January 5, 2026, the Company entered into a Note Purchase Agreement with certain accredited investors (the “Investors”),

pursuant to which the Company agreed to issue and sell convertible promissory notes (the “January Notes”) in an aggregate

principal amount of up to $ 3,125,000 in a private offering.

The aggregate purchase price paid by the Investors was $ 2,500,000 , reflecting

an original issue discount of 20 %.

January Notes bear interest at 0 % per annum, except upon the occurrence of an event of default, in which case a default interest rate

of 18 % per annum applies.

All outstanding principal is due and payable on the earlier of (i) the six-month anniversary of the date of

issuance, or (ii) the closing of a qualified financing resulting in gross proceeds to the Company of at least $ 2,000,000 .

If not sooner

repaid, the outstanding balance of each January Note is convertible, at the election of the holder, into shares of equity securities

issued in the qualified financing at the price per share applicable to such financing, provided that the conversion price per share of

common stock shall not be lower than $ 0.08 per share (the “Floor Price”), subject to adjustment for stock splits and similar

The obligations under the January Notes are fully guaranteed by a subsidiary of the Company pursuant to a Global Guaranty Agreement.

connection with the offering, the Company entered into a Placement Agency Agreement with Dawson James Securities, Inc.

(the “Placement

As compensation for its services, the Company paid selling commissions of 6.5 % of gross offering proceeds, totaling $ 162,500 ,

and issued common stock purchase warrants to the Placement Agent and its designees to purchase a number of shares of common stock equal

to 5 % of aggregate gross proceeds received, at an exercise price equal to the closing price of the common stock on the last trading day

prior to the closing of the offering.

January 16, 2026, the Company entered into a Note Purchase Agreement (the “Note Purchase Agreement”) with certain accredited

investors (the “Investors”), pursuant to which the Company agreed to issue and sell secured convertible promissory notes

(the “Notes”) in an aggregate principal amount of up to $ 8,125,000 in a private offering.

The aggregate purchase price paid

by the Investors for the Notes was $ 6,500,000 , reflecting an original issue discount of 20 %.

Notes bear interest at 0 % per annum, except upon the occurrence of an event of default, in which case a default interest rate of 18 %

per annum applies.

All outstanding principal and accrued interest under the Notes is due and payable on the earlier of (i) the six-month

anniversary of the date of issuance, or (ii) the closing date of the Company’s next qualified financing.

If not sooner repaid,

the outstanding balance of each Note is convertible, at the election of the holder, into shares of the Company’s common stock at

a conversion price of $ 0.4057 per share.

Notes are secured by substantially all of the assets of the Company and its wholly-owned subsidiaries pursuant to a Security Agreement

and an Intellectual Property Security Agreement entered into in connection with the offering.

The obligations under the Notes are fully

guaranteed by a subsidiary of the Company pursuant to a Global Guaranty Agreement.

While the aggregate principal amount remains outstanding,

the Company has agreed not to incur additional indebtedness or grant new liens on its assets, subject to certain limited exceptions.

Note Purchase Agreement also provides that, for the longer of one year from the date of issuance or so long as any Notes remain outstanding,

the Investors have the right to participate in any future equity or debt offerings by the Company in an amount of up to 100% of their

respective purchased Note principal.

connection with the offering, the Company entered into a Placement Agency Agreement with Dawson James Securities, Inc.

(the “Placement

As compensation for its services, the Company paid the Placement Agent selling commissions equal to 6.5 % of gross offering

proceeds and issued common stock purchase warrants to the Placement Agent and its designees to purchase a number of shares of common

stock equal to 5 % of aggregate gross proceeds received, at an exercise price equal to the closing price of the common stock on the last

trading day prior to the closing of the offering.

Notes and any shares of common stock issuable upon conversion thereof, and the placement agent warrants, were issued in reliance upon

the exemptions from registration under Section 4(a)(2) of the Securities Act of 1933, as amended, and Rule 506(b) of Regulation D thereunder.

Agreement with Silverback Capital Corporation (SCC)

January 28, 2026, the Company entered into a Settlement Agreement and Stipulation (the “Settlement Agreement”) with Silverback

Capital Corporation, a Delaware corporation (“SCC”), pursuant to which SCC agreed to acquire and settle certain bona fide

liabilities and obligations of the Company in an aggregate principal amount of $ 10,712,734 (the “Claim Amount”).

to the Settlement Agreement, the Company agreed to issue shares of its common stock to SCC in full satisfaction of the Claim Amount.

The Settlement Shares may be issued in one or more tranches, with the number of shares in each tranche determined by dividing the applicable

portion of the Claim Amount by a fixed price per share ranging from $ 0.25 to $ 2.25 per share, as set forth in the Settlement Agreement.

addition to the shares issuable in satisfaction of the Claim Amount, the Company agreed to issue 100,000 shares of common stock as a

settlement fee and 300,000 shares of common stock to cover legal fees and expenses incurred in connection with the Settlement.

February 4, 2026, the Circuit Court within the Twelfth Judicial Circuit of Florida granted approval of the Settlement Agreement following

a fairness hearing conducted in accordance with Section 3(a)(10) of the Securities Act of 1933, as amended.

The shares of common stock

to be issued pursuant to the Settlement will be issued in reliance upon the exemption from registration afforded by Section 3(a)(10)

of the Securities Act.

February 9, 2026, the Company and SCC entered into an Amendment to the Settlement Agreement, pursuant to which the fixed price per share

applicable to the first $ 2,250,000 tranche was amended and fixed at $ 0.25 per share.

All other terms of the Settlement Agreement remain

in full force and effect.

February 1, 2026, each of Steven Lee and Howard Doss advised the Company of their resignation from the Board of Directors, effective

Lee had served as a member of the Ethics Committee, and Mr.

Doss had served as Chairman of the Audit Committee.

Doss indicated that their respective decisions to resign were not the result of any disagreement with the Company

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

February 4, 2026, the Board of Directors of the Company elected Gary Herman as a member of the Board of Directors.

Herman has since

been appointed as Chairman of the Audit Committee of the Board of Directors and qualifies as an “independent” director as

defined under applicable rules of The Nasdaq Stock Market and the SEC.

to the Company’s non-employee director compensation policy, Mr.

Herman is entitled to receive an annual cash retainer of $ 120,000 ,

payable at his election in cash or shares of common stock on a quarterly basis in arrears.

Herman is also entitled to receive an

annual equity award of 60,000 shares of common stock under the Company’s Amended and Restated 2023 Equity Incentive Plan, issuable

annually in arrears.

In connection with his appointment, Mr.

Herman received an initial grant of 200,000 restricted shares of common

stock, vesting in equal annual installments over a three-year period.

Effective March 19, 2026, the Board of Directors of the Company appointed

Marlene Velez to serve as a member of the Board of Directors.

Velez has been appointed to serve on the Audit Committee and Nominating

and Compensation Committee.

Agreement with Fortitude Advisors, LLC

February 6, 2026, the Company entered into a consulting agreement with Fortitude Advisors, LLC, an entity owned and controlled by Gerald

Commissiong, pursuant to which Mr.

Commissiong was appointed to serve as Consulting Chief Business Officer of the Company.

Agreement with Cutting Edge Sports Management, LLC

November 26, 2025, the Company entered into a Sponsorship Agreement with Cutting Edge Sports Management, LLC (“CESM”), pursuant

to which the Company agreed to pay a sponsorship fee of $ 250,000 in exchange for certain sponsorship benefits at Dream Bowl XIV, held

in Arlington, Texas from January 8–11, 2026.

The sponsorship benefits included broadcasting and branding opportunities and access

to certain intellectual property of CESM.

The Sponsorship Agreement had a term from the date of execution through February 15, 2026.

Interim Commercialization and Revenue Share Agreement

On March 6, 2026, the Company, entered into an Interim Commercialization and Revenue Share Agreement (the “Revenue

Share Agreement”) with Kare PharmTech LLC, a Florida limited liability company (“PharmTech”), whereby the Company and

PharmTech agreed to collaborate on an interim basis to commercialize certain PharmTech products through the distribution and pharmacy

network of the Company.

Pursuant to the Revenue Share Agreement, PharmTech has authorized the Company to market, promote and distribute

“KARE Verify,” a product that provides benefits verification and eligibility verification services (the “Product”),

through the Company’s pharmacy, manufacturers and distribution channels;

affiliated pharmacies and providers;

and telemedicine

and digital pharmacy platforms.

All net revenue generated from sales of the Product under the Revenue Share Agreement shall be shared

fifty percent ( 50 %) to the Company and fifty percent ( 50 %) to PharmTech.

The term of the Agreement shall be thirty-six months

unless earlier terminated.

IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

of Independent Registered Public Accounting Firm

November 11, 2025, the members of the Audit Committee of the Board of Directors received formal notice that the Company’s independent

registered public accounting firm, UHY LLP (“UHY”), had resigned as the Company’s independent accountants, effective

November 11, 2025.

UHY indicated that it elected to resign in light of certain information identified in connection with the resignation

of the Company’s former Chief Executive Officer, which had not yet been investigated at the time of UHY’s resignation.

had been engaged by the Company effective July 7, 2025, and did not audit any financial statements of the Company prior to its resignation.

Accordingly, UHY did not issue any report on the Company’s financial statements, and no report was qualified or modified as to

uncertainty, audit scope, or accounting principles.

the period from UHY’s engagement through the date of its resignation, there were no disagreements with UHY on any matter of accounting

principles or practices, financial statement disclosure, or auditing scope or procedure.

During that period, there were no “reportable

events” as defined in Item 304(a)(1)(v) of Regulation S-K, except that UHY communicated to the Company’s management and Audit

Committee that it had identified material weaknesses in the Company’s internal control over financial reporting, as described in

the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2025.

The Company provided UHY with a copy of the disclosures

made in response to this Item 9 and requested that UHY furnish a letter addressed to the SEC confirming its agreement with the statements

A copy of UHY’s letter is filed as Exhibit 16.1 to this Annual Report on Form 10-K.

of New Independent Registered Public Accounting Firm

November 17, 2025, the Audit Committee of the Board of Directors approved the re-engagement of Suri & Co., Chartered Accountants

(“Suri”), as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2025.

Suri previously served as the Company’s independent registered public accounting firm, including auditing the Company’s financial

statements for the fiscal year ended December 31, 2024.

During the two most recent fiscal years and any subsequent interim period prior

to Suri’s re-engagement, the Company did not consult with Suri regarding either (i) the application of accounting principles to

a specified transaction or the type of audit opinion that might be rendered on the Company’s financial statements, or (ii) any

matter that was either the subject of a disagreement or a reportable event.

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-K

Item 8. Financial Statements and Supplementary Data