What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-08-17 compared with 2026-05-19 · 245 added, 132 removed, 343 unchanged (52% of the section changed)

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

should read the following discussion and analysis of our financial condition and results of operations together with our consolidated

should read the following discussion and analysis of our financial condition and results of operations together with our condensed consolidated

financial statements and related notes appearing elsewhere in this Quarterly Report.

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These forward-looking statements include, but are not limited to, statements regarding our or our management

team’s expectations, hopes, beliefs, intentions or strategies regarding the future.

In addition, any statements that refer to projections,

forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements.

In some cases, you can identify forward-looking statements by the following words:

“anticipate,” “believe,” “continue,”

“could,” “estimate,” “expect,” “intend,” “may,” “ongoing,” “plan,”

“potential,” “predict,” “project,” “seek,” “should,” “target,”

or the negative of these terms or other similar expressions may identify forward-looking statements, but the absence of these words does

not mean that a statement is not forward-looking.

team’s expectations, hopes, beliefs, intentions or strategies regarding the future, including our proposed transaction with EOS

Technology Holdings, Inc., Scilex Holding Company, Datavault AI Inc., and HealthBridge Advisors, LLC, and our collaboration with Kare

Rx Hub, LLC and Kare Pharmtech, LLC.

In addition, any statements that refer to projections, forecasts or other characterizations of future

events or circumstances, including any underlying assumptions, are forward-looking statements.

In some cases, you can identify forward-looking

statements by the following words:

“anticipate,” “believe,” “continue,” “could,” “estimate,”

“expect,” “intend,” “may,” “ongoing,” “plan,” “potential,” “predict,”

“project,” “seek,” “should,” “target,” or the negative of these terms or other similar

expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking.

Forward-looking

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the SEC, including Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.

in 2022, we are a holding company for operating companies centered around healthcare technology and pharmaceutical services.

to be a micro health ecosystem, with a portfolio of companies consisting of a technology platform, pharmacy, and wholesale operations

that provide novel prescription hub and clinical services.

We strive to shift the dynamic of pharmaceutical care to revolve around the

patient for a range of therapeutic conditions by offering various integrated solutions through leveraging our business segments to address

access, care coordination, dispensing, delivery, and clinical management of certain pharmaceutical products.

(formerly Wellgistics Health, Inc.) (“DataMeds,” the “Company,” “we,” “us” or

“our”) was incorporated in 2022 as a holding company for operating companies centered around healthcare technology and pharmaceutical

We seek to be a micro health ecosystem, with a portfolio of companies consisting of a technology platform, pharmacy, and wholesale

operations that provide novel prescription hub and clinical services.

We strive to shift the dynamic of pharmaceutical care to revolve

around the patient for a range of therapeutic conditions by offering various integrated solutions through leveraging our business segments

to address access, care coordination, dispensing, delivery, and clinical management of certain pharmaceutical products.

On July 22, 2026,

the Company changed its name from Wellgistics Health, Inc.

to DataMeds AI, Inc.

and its trading symbol on The Nasdaq Capital Market from

“WGRX” to “MEDS,” as described further under “Recent Developments” below.

we own one direct operating company, Wellgistics, LLC, and two indirect operating companies, Wellgistics Tech & Hub, LLC dba DelivMeds

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We expect to monetize this valuable data with manufacturers, payors and providers.

Name and Trading Symbol Change

July 20, 2026, the Company filed a Certificate of Amendment to its Amended and Restated Certificate of Incorporation to change its name

from Wellgistics Health, Inc.

to DataMeds AI, Inc., effective July 22, 2026.

In connection with the name change, the Company’s

common stock began trading on The Nasdaq Capital Market under the new ticker symbol “MEDS,” replacing its prior symbol “WGRX.”

May 20, 2026, the Company filed a Certificate of Amendment to effect a 1-for-50 reverse stock split of its common stock, which became

effective May 26, 2026.

The reverse stock split was intended to assist the Company in regaining compliance with the minimum bid price

requirement under Nasdaq Listing Rule 5550(a)(2).

Listing Compliance

Company received deficiency notices from The Nasdaq Stock Market LLC on December 10, 2025 and April 13, 2026, relating to non-compliance

with the minimum bid price and minimum stockholders’ equity requirements, respectively, under Nasdaq Listing Rules 5550(a)(2) and

See “Liquidity and Capital Resources” below and Note 2 to the condensed consolidated financial statements for

further information.

2026 Financing

May 27, 2026, the Company entered into a Note Purchase Agreement with a group of investors, pursuant to which the previously outstanding

convertible promissory notes issued in January and April 2026 were extinguished and replaced with new convertible promissory notes in

an aggregate principal amount of $20,323,732, comprised of rollover and new money proceeds.

See Note 8 to the condensed consolidated

financial statements for further information.

Collaboration

Agreement — Healthstar Technologies, LLC

April 13, 2026, the Company entered into a Collaboration Agreement with Kare Rx Hub, LLC and Kare Pharmtech, LLC, providing for the formation

of Healthstar Technologies, LLC, in which the Company would hold a 51% membership interest, in exchange for consideration of $2,000,000

payable in shares of the Company’s common stock.

As of the date of this Quarterly Report, closing under the Collaboration Agreement

had not yet occurred.

See Note 14 to the condensed consolidated financial statements for further information

Transaction with EOS, Scilex, Datavault and HealthBridge Advisors

May 20, 2026, the Company entered into a Fully Binding Term Sheet with EOS Technology Holdings, Inc., Scilex Holding Company, Datavault

AI, Inc., HealthBridge Advisors, LLC, and Fortitude Advisors, LLC, contemplating a proposed transaction involving certain intellectual

property assets, an expansion of the Company’s existing license arrangement with Datavault, and the acquisition of a controlling

interest in Tollo Health, LLC.

On July 29, 2026, the Company entered into an Amended and Restated Letter of Intent with EOS, Scilex,

Datavault, and HealthBridge Advisors, which superseded and replaced the original Term Sheet in its entirety.

The proposed transaction

remains subject to negotiation and execution of definitive agreements, stockholder and other approvals, and other customary closing conditions.

See Note 10 to the condensed consolidated financial statements for further information.

May 20, 2026, the Company’s Board of Directors appointed Gerald Commissiong as Interim Co-Chief Executive Officer of the Company,

in connection with the Term Sheet described above.

Agreement — Silverback Capital Corporation

the six months ended June 30, 2026, the Company issued shares of common stock to Silverback Capital Corporation pursuant to a Settlement

Agreement and Stipulation, approved under Section 3(a)(10) of the Securities Act of 1933, to satisfy certain outstanding creditor obligations.

The Company delivered a termination letter with respect to the Settlement Agreement on April 3, 2026, which the parties subsequently

rescinded on May 18, 2026, reinstating the Settlement Agreement in its entirety.

See Note 9 to the condensed consolidated financial statements

for further information.

Components of Results of Operations

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to our historical or future results of operations.

Health is a holding company specifically formed to hold operating companies.

We did not generate any revenue prior to the Wood Sage Acquisition,

but now expect to generate all of our revenues through Wellgistics Pharmacy, and Wellgistics LLC.

Although Wellgistics Health may add

other sources of revenue through the acquisition of other operating companies in the future, Wellgistics Health currently does not have

Company is a holding company specifically formed to hold operating companies.

We did not generate any revenue prior to the Wood Sage

Acquisition, but now expect to generate all of our revenues through Wellgistics Pharmacy, and Wellgistics LLC.

Although the Company may

add other sources of revenue through the acquisition of other operating companies in the future, the Company currently does not have

any such plans.

Health will be subject to risk of specific inflationary pressures on product prices and its impact on consumer spending.

Company will be subject to risk of specific inflationary pressures on product prices and its impact on consumer spending.

increases in prescription drug costs could impact consumers’ ability to afford initial or on-going therapy.

Wellgistics Health’s

The Company’s

focus on the relatively expensive specialty lite business segment (i.e., $500 - $3,000 therapies) could be particularly impacted by increasing

Additionally, consumer discretionary funds could be reduced, impacting the ability to pay for digital services and subscription

models that Wellgistics Health offers.

If inflation continues to increase, sourcing and procuring specialty lite products may prove to

be capital intensive.

Wellgistics Health may not be able to adjust prices sufficiently to offset the effect without negatively impacting

consumer demand or Wellgistics Health’s gross margin.

All of these inflationary risk factors could materially and adversely impact

Wellgistics Health’s business operations, financial condition and results of operations.

Pharmacy recognizes product revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers, when we transfer promised

goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for

those goods or services.

Wellgistics Pharmacy fills prescriptions for prescription and over-the-counter drugs written by a provider and

recognizes revenue at the time the patient confirms the prescription order for payment of co-pays.

models that the Company offers.

If inflation continues to increase, sourcing and procuring specialty lite products may prove to be capital

The Company may not be able to adjust prices sufficiently to offset the effect without negatively impacting consumer demand

or the Company’s gross margin.

All of these inflationary risk factors could materially and adversely impact the Company’s

business operations, financial condition and results of operations.

Pharmacy recognizes product revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers , when we transfer

promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange

for those goods or services.

Wellgistics Pharmacy fills prescriptions for prescription and over-the-counter drugs written by a provider

and recognizes revenue at the time the patient confirms the prescription order for payment of co-pays.

and Marketing Expense

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insurance costs, facility costs not otherwise included in research and development expenses.

Following Wellgistics Health’s registration

as a public company, also include public company expenses such as costs associated with compliance with the rules and regulations of

the SEC and the stock exchange.

Following the Company’s registration

as a public company, general and administrative expenses also include public company expenses such as costs associated with compliance

with the rules and regulations of the SEC and the stock exchange.

Tax (Benefit) Expense

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of Operations

the Three Months Ended March 31, 2026 and 2025

the Three and Six Months Ended June 30, 2026 and 2025

Three Months Ended

Six Months Ended

Cost of revenues

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Loss from operations

(13,360,592 )

(36,848,744 )

Total other income (expense)

(11,018,171 )

(12,745,230 )

$ (18,363,225 )

$ (6,672,464 )

$ (26,105,822 )

$ (39,103,367 )

and Cost of Revenues

Net revenues for the three months ended March 31, 2026 were $1,559,563

compared to $10,863,443 for the three months ended March 31, 2025, a decrease of $9,303,880, or approximately 85.6%.

The decrease was

primarily driven by a significant decline in distribution revenues within the Wellgistics, LLC, reflecting the impact of liquidity constraints

that limited the Company’s ability to procure and fulfill product orders during the period.

These decreases were partially offset

by growth in pharmacy retail revenues, which increased to $1,134,416 for the three months ended March 31, 2026 from $114,676 for the three

months ended March 31, 2025, reflecting continued expansion of the Company’s pharmacy operations.

of revenues for the three months ended March 31, 2026 was $1,389,342, compared to $10,170,802 for the three months ended March 31, 2025,

revenues for the three months ended June 30, 2026 were $1,779,860, compared to $7,790,865 for the three months ended June 30, 2025, a

decrease of $6,011,005, or approximately 77.2%.

For the six months ended June 30, 2026, net revenues were $3,339,423, compared to $18,654,308

for the six months ended June 30, 2025, a decrease of $15,314,885, or approximately 82.1%.

The decrease in both periods was primarily

driven by a significant decline in distribution revenues within Wellgistics, LLC, reflecting the impact of liquidity constraints that

limited the Company’s ability to procure and fulfill product orders.

These decreases were partially offset by growth in pharmacy

retail revenues, which increased to $1,590,367 for the three months ended June 30, 2026 from $77,756 for the three months ended June

30, 2025, and to $2,724,783 for the six months ended June 30, 2026 from $192,432 for the six months ended June 30, 2025, reflecting continued

expansion of the Company’s pharmacy operations.

of net revenues for the three months ended June 30, 2026 was $1,597,656, compared to $7,285,113 for the three months ended June 30, 2025,

a decrease of $5,687,457, or approximately 78.1%.

The decrease was primarily attributable to the lower volume of distribution activity

during the period, consistent with the decline in net revenues.

Gross profit for the three months ended March 31, 2026 was $170,221, compared

to gross profit of $692,641 for the three months ended March 31, 2025, a decrease of $522,420, or approximately 75.4%.

Gross margin was

10.9% for the three months ended March 31, 2026 compared to 6.4% for the three months ended March 31, 2025.

The improvement in gross margin

percentage reflects the increased contribution of pharmacy retail revenues, which carry higher margins than the distribution segment,

partially offset by the lower overall revenue base.

following is a summary of the disaggregation of revenue for the three months ended March 31, 2026 and 2025:

For the six months ended June 30, 2026, cost of net revenues was $2,986,998, compared

to $17,455,915 for the six months ended June 30, 2025, a decrease of $14,468,917, or approximately 82.9%.

The decrease in both periods

was primarily attributable to the lower volume of distribution activity, consistent with the decline in net revenues.

profit for the three months ended June 30, 2026 was $182,204, compared to $505,752 for the three months ended June 30, 2025, a decrease

of $323,548, or approximately 64.0%.

Gross margin was 10.2% for the three months ended June 30, 2026, compared to 6.5% for the three

months ended June 30, 2025.

For the six months ended June 30, 2026, gross profit was $352,425, compared to $1,198,393 for the six months

ended June 30, 2025, a decrease of $845,968, or approximately 70.6%, with gross margin of 10.6% compared to 6.4% for the prior year period.

The improvement in gross margin percentage in both periods reflects the increased contribution of pharmacy retail revenues, which carry

higher margins than the distribution segment, partially offset by the lower overall revenue base.

following is a summary of the disaggregation of revenue for the three and six months ended June 30, 2026 and 2025:

Three Months Ended

Six Months Ended

Product revenue - distribution services

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and Administrative Expense

General and administrative expenses for the three months ended March 31,

2026 were $4,868,935 compared to $31,172,920 for the three months ended March 31, 2025, a decrease of $26,303,985, or approximately 84.4%.

The decrease was primarily attributable to a significant reduction in non-cash stock-based compensation expense.

For the three months

ended March 31, 2025, the Company recognized approximately $27.2 million in stock-based compensation expense, including $27 million related

to the immediate vesting of 9,363,617 restricted shares granted on March 14, 2025.

No comparable non-recurring stock-based compensation

charges were incurred during the three months ended March 31, 2026.

Excluding non-cash stock-based compensation, general and administrative

expenses increased period over period, reflecting higher professional fees, legal costs, and administrative costs associated with the

Company’s ongoing operations as a public company.

and administrative expenses for the three months ended June 30, 2026 were $7,056,671, compared to $4,859,949 for the three months ended

June 30, 2025, an increase of $2,196,722, or approximately 45.2%.

The increase was primarily attributable to a $2,008,000 non-recurring

compensation charge recorded in connection with the Compensation Committee’s approval, on May 12, 2026, of retroactive salary increases,

a discretionary bonus, and a special bonus tied to the Company’s 2026 capital-raising activity for its Chief Executive Officer

and President, together with higher stock-based compensation expense related to restricted stock vesting.

the six months ended June 30, 2026, general and administrative expenses were $11,925,606, compared to $36,032,869 for the six months

ended June 30, 2025, a decrease of $24,107,263, or approximately 66.9%.

The decrease was primarily attributable to the non-recurring

stock-based compensation expense of approximately $27.2 million recognized during the three months ended March 31, 2025 in connection

with the immediate vesting of restricted shares granted in March 2025, partially offset by the $2,008,000 compensation charge and the

other items described above recognized during the three months ended June 30, 2026.

and Marketing Expense

and marketing expenses for the three months ended March 31, 2026 were $960,000 compared to $65,217 for the three months ended March 31,

2025, an increase of $894,783.

The increase was primarily attributable to increased investment in brand awareness, customer acquisition

initiatives, and market development activities as the Company continues to expand its commercial presence across its pharmacy and distribution

Sales and marketing expenses for the three months

ended June 30, 2026 were $113,990, compared to $343,383 for the three months ended June 30, 2025, a decrease of $229,393.

was primarily attributable to lower marketing and advertising spend during the current period, partially offset by $93,990 of expense

recognized in connection with the Company’s marketing services agreement with Outside The Box Capital Inc.

For the six months ended June 30, 2026, sales

and marketing expenses were $1,073,990, compared to $408,600 for the six months ended June 30, 2025, an increase of $665,390.

was primarily attributable to increased investment in brand awareness, customer acquisition initiatives, and market development activities

during the three months ended March 31, 2026, together with the expense recognized in connection with the Outside The Box Capital Inc.

agreement described above.

and Amortization

and amortization expense for the three months ended March 31, 2026 was $356,824 compared to $802,872 for the three months ended March

and amortization expense for the three months ended June 30, 2026 was $356,597, compared to $802,796 for the three months ended June

30, 2025, a decrease of $446,199, or approximately 55.6%.

The decrease was primarily attributable to the impairment of goodwill and intangible

assets recognized during the year ended December 31, 2025.

expense for the three months ended March 31, 2026 was $2,072,679 compared to $1,094,490 for the three months ended March 31, 2025, an

increase of $978,189, or approximately 89.4%.

The increase was primarily attributable to amortization of debt discount on the convertible

notes issued in January 2026, amortization of debt discount on the merchant cash advance, and the write-off of the remaining unamortized

debt discount upon full repayment of the Agile Capital Funding LLC arrangement during the period.

the three months ended March 31, 2026, the Company recognized a gain on extinguishment of vendor obligations of $259,880, resulting from

the settlement of certain accounts payable and notes payable balances through the issuance of shares of common stock to Silverback Capital

Corporation at a fair value below the carrying amount of the settled obligations.

fees of $13,000 were recognized during the three months ended March 31, 2026 in connection with the Silverback Capital Corporation settlement

There were no comparable amounts for the three months ended March 31, 2025.

income for the three months ended March 31, 2026 was $98,740 compared to $11,955 for the three months ended March 31, 2025, an increase

The increase was primarily attributable to settlements reached with certain counterparties in the ordinary course of business

during the three months ended March 31, 2026.

loss for the three months ended March 31, 2026 was $7,742,597 compared to $32,430,903 for the three months ended March 31, 2025, an improvement

of $24,688,306, or approximately 76.1%.

The improvement was primarily driven by the reduction in non-cash stock-based compensation expense

of approximately $27.0 million, partially offset by lower gross profit and higher interest expense during the period.

For the six months ended June 30, 2026, depreciation and amortization expense

was $713,421, compared to $1,605,668 for the six months ended June 30, 2025, a decrease of $892,247, or approximately 55.6%.

in both periods was primarily attributable to the impairment of goodwill and intangible assets recognized during the year ended December

31, 2025, which reduced the carrying value of assets subject to amortization in the current year periods.

expense, net, for the three months ended June 30, 2026 was $1,561,240, compared to $1,184,040 for the three months ended June 30, 2025,

an increase of $377,200, or approximately 31.9%.

For the six months ended June 30, 2026, interest expense, net was $3,633,919, compared

to $2,278,530 for the six months ended June 30, 2025, an increase of $1,355,389, or approximately 59.5%.

The increase in both periods

was primarily attributable to interest and amortization of debt discount on the convertible promissory notes issued during 2026, interest

on the seller promissory note, and interest on the revolving line of credit prior to its repayment, partially offset by lower interest

expense following the repayment in full of the revolving line of credit in May 2026 and the extinguishment of the Agile Capital Funding

LLC arrangement during the three months ended March 31, 2026.

During the three and six months ended June 30, 2026, the Company recognized

a loss on extinguishment of debt of $8,881,694, comprised of a loss of $503,505, in connection with the extinguishment of the Agile Capital

Funding LLC arrangement, and a loss of $8,378,189 recognized during the three months ended June 30, 2026 in connection with the refinancing

of the Company’s outstanding convertible promissory notes on May 27, 2026.

There was no comparable amount for the three or six months

ended June 30, 2025.

the three months ended June 30, 2026, the Company recognized a loss on extinguishment of vendor obligations of $320,000, in connection

with the settlement of obligations owed to Silverback Capital Corporation through the issuance of shares of common stock at a fair value

in excess of the carrying amount of the obligations settled.

For the six months ended June 30, 2026, the Company recognized a net loss

on extinguishment of vendor obligations of $60,120, reflecting the $320,000 loss recognized during the three months ended June 30, 2026,

partially offset by a gain on extinguishment of $259,880 recognized during the three months ended March 31, 2026 in connection with the

settlement of vendor payables and notes payable through the issuance of shares of common stock at a fair value below the carrying amount

of the obligations settled.

There was no comparable amount for the three or six months ended June 30, 2025.

the three and six months ended June 30, 2026, the Company recognized a loss on contract termination fee of $766,394, in connection with

shares of common stock issued to Silverback Capital Corporation following the Company’s purported termination, in April 2026, of

its previously disclosed Settlement Agreement with Silverback, which the parties subsequently rescinded in May 2026.

There was no comparable

amount for the three or six months ended June 30, 2025.

fees of $13,000 were recognized during the six months ended June 30, 2026 in connection with the Silverback Capital Corporation settlement

arrangement, all of which was recognized during the three months ended March 31, 2026.

There was no comparable amount for the three or

six months ended June 30, 2025.

income for the three months ended June 30, 2026 was $511,157, compared to $11,952 for the three months ended June 30, 2025, an increase

For the six months ended June 30, 2026, other income was $609,897, compared to $23,907 for the six months ended June

30, 2025, an increase of $585,990.

The increase in both periods was primarily attributable to settlements reached with certain counterparties

in the ordinary course of business.

Net loss for the three months ended June 30, 2026

was $18,363,225, compared to $6,672,464 for the three months ended June 30, 2025, an increase of $11,690,761.

The increase was primarily

driven by the loss on extinguishment of debt of $8,378,189 recognized in connection with the May 2026 refinancing, the loss on contract

termination fee of $766,394, the loss on extinguishment of vendor obligations, and higher general and administrative expenses, partially

offset by the vendor credit recognized within sales and marketing expenses and higher other income during the period.

For the six months ended June 30, 2026, net loss

was $26,105,822, compared to $39,103,367 for the six months ended June 30, 2025, a decrease of $12,997,545, or approximately 33.2%.

decrease was primarily driven by the non-recurring stock-based compensation expense of approximately $27.2 million recognized during the

three months ended March 31, 2025 in connection with the immediate vesting of restricted shares granted in March 2025, partially offset

by the loss on extinguishment of debt and loss on contract termination fee recognized during the three months ended June 30, 2026, and

higher interest expense during the six months ended June 30, 2026.

and Capital Resources

As of March 31, 2026, the Company had cash and cash

equivalents of $51,730 and a working capital deficit of $29,437,191.

As of June 30, 2026, the Company had cash and

cash equivalents of $2,456,373 and a working capital deficit of $33,781,185.

The Company has incurred net losses of $18,363,225 and $26,105,822

for the three months ended March 31, 2026 and 2025, respectively, and has an accumulated deficit of $118,774,287 as of March 31, 2026.

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

for the three and six months ended June 30, 2026, respectively, and has an accumulated deficit of $137,137,512 as of June 30, 2026.

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

The accompanying condensed consolidated

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might result from the outcome of this uncertainty.

The Company has funded its operations primarily through

the issuance of debt and equity securities.

Management is actively pursuing additional sources of capital, including equity financing,

debt arrangements, and strategic partnerships, to fund ongoing operations and working capital requirements.

However, there can be no assurance

that such financing will be available on acceptable terms or at all.

following table summarizes our cash flows from operating, investing, and financing activities for the three months ended March 31, 2026

Three Months Ended

See Note 2 to the condensed consolidated financial statements for further information.

Company has funded its operations primarily through the issuance of debt and equity securities.

Management is actively pursuing additional

sources of capital, including equity financing, debt arrangements, and strategic partnerships, to fund ongoing operations and working

capital requirements.

However, there can be no assurance that such financing will be available on acceptable terms or at all.

following table summarizes our cash flows from operating, investing, and financing activities for the six months ended June 30, 2026

Six Months Ended

Net cash used in operating activities

$ (6,307,328 )

$ (3,426,447 )

Net cash used in investing activities

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used in operating activities

Net cash used in operating activities for the three months ended March

31, 2026 was $3,413,129, primarily reflecting the Company’s net loss of $7,742,597, partially offset by non-cash charges totaling

$3,034,024 and net cash provided by changes in operating assets and liabilities of $1,295,444.

Non-cash charges consisted principally

of $1,485,618 in amortization of debt discount, $1,357,764 in stock-based compensation, $328,962 in amortization of intangible assets,

$93,698 in allowance for credit losses, and $27,862 in depreciation, partially offset by a gain on extinguishment of vendor obligations

Changes in operating assets and liabilities provided net cash of $1,295,444, driven primarily by an increase in accounts

payable of $1,472,242 and an increase in accrued expenses and other liabilities of $90,060, partially offset by a net decrease in amounts

due from and to related parties of $229,200.

cash used in operating activities for the three months ended March 31, 2025 was $1,347,449, primarily due to the net loss of $32,430,903,

partially offset by non-cash expenses of $28,674,553, principally consisting of stock-based compensation of $27,773,421, and net cash

provided by changes in operating assets and liabilities of $2,408,901, driven primarily by an increase in accounts payable of $1,876,683.

Net cash used in operating activities for the

six months ended June 30, 2026 was $6,307,328, primarily due to our net loss of $26,105,822, partially offset by non-cash expenses of

$15,614,148 and $4,184,678 in cash provided by changes in operating assets and liabilities.

Non-cash expenses were primarily driven by

a loss on extinguishment of debt of $8,881,693, amortization of debt discount of $2,343,252, and stock-based compensation of $2,562,514.

Cash provided by changes in operating assets and liabilities was primarily driven by an increase in accrued expenses and other liabilities

of $2,640,868, which included a $2,008,000 compensation accrual approved by our Compensation Committee on May 12, 2026, and an increase

in accounts payable of $2,432,030.

cash used in operating activities for the six months ended June 30, 2025 was $3,426,447, primarily due to our net loss of $39,103,367,

partially offset by non-cash expenses of $30,548,175 and $5,128,743 in cash provided by changes in operating assets and liabilities.

Non-cash expenses were primarily driven by stock-based compensation of $28,708,643.

Cash provided by changes in operating assets and

liabilities was primarily driven by an increase in accounts payable of $3,141,895.

used in investing activities

cash used in investing activities for the three months ended March 31, 2026 was $205,098, consisting entirely of capitalized software

development costs related to the Company’s DelivMeds platform.

cash used in investing activities for the three months ended March 31, 2025 was $273,133, consisting of payments made for capitalized

software development costs.

cash used in investing activities for the six months ended June 30, 2026 and 2025 was $447,230 and $405,059, respectively, consisting

entirely of capitalized software development costs related to the Company’s DelivMeds platform.

from financing activities

Net cash provided by financing activities for the three months ended March

31, 2026 was $3,627,386.

Cash inflows during the period consisted primarily of $6,002,500 in net proceeds from the issuance of secured

convertible promissory notes in January 2026.

These inflows were partially offset by $2,104,557 in repayments of the Agile Capital Funding

LLC term loan, $143,525 in repayments under the revolving line of credit, $90,281 in repayments under the merchant cash advance agreement,

and $36,751 in repayments of promissory notes.

cash provided by financing activities for the three months ended March 31, 2025 was $3,108,831, driven primarily by gross proceeds of

$4,000,000 from the issuance of common stock in connection with the Company’s initial public offering, $615,000 from the issuance

of promissory notes, and $471,158 in net proceeds from a merchant cash advance agreement.

Net cash provided by financing activities for

the six months ended June 30, 2026 was $9,168,360.

This was primarily driven by gross proceeds of $14,200,000 from the issuance of convertible

promissory notes, partially offset by $1,157,500 in payment of debt issuance costs, $2,104,557 in repayments under our term loan with

Agile Capital Funding LLC, $1,643,923 in repayments of our revolving line of credit, and $89,909 in repayments under our merchant cash

advance agreement.

cash provided by financing activities for the six months ended June 30, 2025 was $3,223,112.

This was primarily driven by gross proceeds

of $4,000,000 from the issuance of common stock in our IPO, $567,722 from common stock issuances under our equity purchase agreement,

$615,000 from promissory notes, and $234,157 in net proceeds from a merchant cash advance.

These inflows were partially offset by $1,208,498

in offering costs and repayments of notes payable and the revolving line of credit.

in offering costs, as well as repayments of a note payable and revolving line of credit.

Sheet Arrangements

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What changed 10-Q

Item 2. Management’s Discussion and Analysis