What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-08-19 compared with 2025-05-12 · 343 added, 190 removed, 369 unchanged (59% 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

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

This discussion and analysis contains forward-looking

statements that involve risks, uncertainties and assumptions.

See “Cautionary Statement Regarding Forward-Looking Information”

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.

This discussion and analysis

contains forward-looking statements that involve risks, uncertainties and assumptions.

See “Cautionary Note Regarding

Forward-Looking Statements” below.

We have no obligation to update any of these forward-looking statements.

Our actual results may differ materially from those anticipated

in these forward-looking statements due to many factors, including, but not limited to, those set forth under the heading “Risk

Factors” in this Quarterly Report.

Factors that could cause or contribute to such differences include, but are not limited to,

capital expenditures, economic and competitive conditions, regulatory changes and other uncertainties, as well as those factors discussed

below and elsewhere in this Quarterly Report.

Our actual results

may differ materially from those anticipated in these forward-looking statements due to many factors, including, but not limited to,

those set forth under the heading “Risk Factors” in this Quarterly Report.

Factors that could cause or contribute to

such differences include, but are not limited to, capital expenditures, economic and competitive conditions, regulatory changes and

other uncertainties, as well as those factors discussed below and elsewhere in this Quarterly Report.

Statement Regarding Forward-Looking Information

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statements in this Quarterly Report may include, for example, statements about:

shift in pharmacy mix toward lower margin plans, margin compression on branded medications, or the increased offering of specialty

products, direct and indirect remuneration fees, mail order pharmacy steering, and programs;

Health deriving a portion of its sales from prescription drug sales reimbursed by pharmacy benefit management companies;

Health being adversely affected by a decrease in the introduction of new brand name and generic prescription drugs as well as increases

in the cost to procure prescription drugs;

in economic conditions that adversely affect consumer/client buying practices and market adoption of our mobile application and the

accompanying revenues to premium access/services;

Health’s relationships with its primary wholesaler for pharmacy operations and Wellgistics Health’s manufacturer relationships

of its wholesale and hub technology platform subsidiaries;

in the healthcare industry and regulatory environments;

The effects of competition on Wellgistics Health’s

future business;

Health’s ability to execute its business plans and strategy;

risks and uncertainties described in our Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”)

on March 25, 2025, and those risks described in the section entitled “ Risk Factors ” of this Quarterly Report.

pharmacy mix toward lower margin plans, margin compression on branded medications, or the increased offering of specialty products,

direct and indirect remuneration fees, mail order pharmacy steering, and programs;

Wellgistics Health deriving

a portion of its sales from prescription drug sales reimbursed by pharmacy benefit management companies;

Wellgistics Health being

adversely affected by a decrease in the introduction of new brand name and generic prescription drugs as well as increases in the

cost to procure prescription drugs;

changes in economic conditions

that adversely affect consumer/client buying practices and market adoption of our mobile application and the accompanying revenues

to premium access/services;

Wellgistics Health’s

relationships with its primary wholesaler for pharmacy operations and Wellgistics Health’s manufacturer relationships of its

wholesale and hub technology platform subsidiaries;

changes in the healthcare

industry and regulatory environments;

the effects of competition

on Wellgistics Health’s future business;

Wellgistics Health’s

ability to execute its business plans and strategy;

other risks and

uncertainties described in the Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on March 25,

2025, and those risks described in the section entitled “ Risk Factors ” of this Quarterly Report and in other reports we file with the SEC.

one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in

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acquired Wellgistics, LLC in August 2024.

Tech & Hub, LLC

Tech & Hub, LLC dba DelivMeds (f/k/a Alliance Pharma Solutions, LLC )

in 2017 under the name Alliance Pharma Solutions, LLC and doing business as DelivMeds, Wellgistics Tech & Hub serves as the middleware

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acquired Wellgistics Tech & Hub through our acquisition of Wood Sage in June 2024.

Pharmacy, LLC

Pharmacy, LLC (f/k/a Community Specialty Pharmacy, LLC )

in 2011, Wellgistics Pharmacy serves as the backbone dispensing pharmacy of our healthcare ecosystem.

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market by providing patients access and convenience, while providing partners with ready-to-go market solutions with big data.

Data released from the Centers for Medicare &

Medicaid Services (“CMS”) illustrates that the National Health Expenditure Data for 2022 grew to $4.5 trillion dollars and

accounted for 17.3% of GDP.

A deeper dive of this report reveals that total retail prescription specialty drug market accounts for less

than 10% of total drugs in the market but is responsible for greater than 50% of the prescription drug spend per annum.

CMS anticipates

an increase in the health spending share of GDP to 19.7% by 2032.

IQVIA’S 2024 report on medicine spending trends found that overall

spending in the U.S.

market for medicines reached $435 billion in 2023.

After evaluating reasons for increased healthcare expenditure,

poor medication adherence continues to be a challenge that causes unnecessary strain on the healthcare system, including, but not limited

to, increased hospital admissions and readmissions rates from medication non-compliance and adverse events.

Our management believes that

released from the Centers for Medicare & Medicaid Services illustrates that the National Health Expenditure Data for 2022 grew to

$4.5 trillion and accounted for 17.3% of gross domestic product (“GDP”), with an expected increase in the health spending

share of GDP to 19.7% by 2032.

A deeper dive of this report reveals that total retail prescription drug spending from 2021 to 2022 increased

by 8.4% to $405.9 billion.

IQVIA’S 2024 report on medicine spending trends found that overall spending in the U.S.

market for medicines

reached $435 billion in 2023.

It is well documented in the literature that the specialty drug market accounts for less than 10% of total

drugs in the market but is responsible for greater than 50% of the prescription drug spend per annum.

After evaluating reasons for increased

healthcare expenditure, poor medication adherence continues to be a challenge that causes unnecessary strain on the healthcare system,

including, but not limited to, increased hospital admissions and readmissions rates from medication non-compliance and adverse events.

Many of these factors are preventable by empowering patient autonomy in their healthcare journey, identifying cost savings opportunities,

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

Acquisition – Merger Agreement

April 8, 2025, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) by and among Wellgistics

Health, Inc., Wellpeek Merger Sub 1, Inc.

(“Merger Sub 1”), Wellpeek Merger Sub 2, LLC (“Merger Sub 2” and together

with Merger Sub 1, the “Merger Subs”), Peek Healthcare Technologies, Inc.

(“Peek”), and the Stockholder Representative

(as defined in the Merger Agreement).

Pursuant to the Merger Agreement, at the Effective Time (as defined in the Merger Agreement), Merger

Sub 1 will merge with and into Peek (the “First Merger”), with Peek continuing as the surviving entity and a wholly owned

subsidiary of the Company.

Immediately thereafter, Peek will merge with and into Merger Sub 2 (the “Second Merger” and, together

with the First Merger, the “Mergers”), with Merger Sub 2 continuing as the surviving entity.

The Mergers, taken together,

are intended to constitute an integrated plan and be treated as a “reorganization” for U.S.

federal income tax purposes.

The board of directors and officers of Merger Sub 2 existing as of the Effective Time will serve as the board of directors and officers

of Merger Sub 2, as the ultimate surviving entity.

is a pioneering digital prescription platform that seeks to transform how patients shop for medications by providing real-time pricing

transparency to assist consumers with making more informed medication purchase decisions.

Peek’s mission is to empower individuals

with price transparency, innovative comparison tools, and seamless access to affordable prescriptions nationwide.

Lumina Marketing, LLC,

a Florida limited liability company (“Lumina Marketing”), and Lumina Therapeutics, LLC, a Delaware limited liability company

(“Lumina Therapeutics” and, together with Lumina Marketing, the “Lumina Entities”) are affiliates of Peek and

provide a range of consulting services to brand-name and specialty-lite drug manufacturers in the areas of market access, branding, and

commercialization.

a condition to and prior to the closing of the Mergers, Peek will acquire all of the assets of each of the Lumina Entities in exchange

for newly issued shares of Class A Common Stock of Peek (the “Lumina Contribution Shares”).

Following closing of the transactions

contemplated by the Merger Agreement, the legacy Peek and Lumina Entity businesses will operate under a single, wholly-owned subsidiary

of the Company.

the effective time of the First Merger (the “First Effective Time”), the Lumina Contribution Shares that are issued and outstanding

immediately prior to the First Effective Time will be converted into the right to receive Closing Merger Consideration as follows:

A cash payment

by the Company equal to $2,000,000, minus (i) the amount of Closing Indebtedness (as defined in the Merger Agreement), minus

(ii) the amount of any unpaid Transaction Expenses (as defined in the Merger Agreement), plus (iii) the amount by which the

Estimated Working Capital (as defined in the Merger Agreement) exceeds $150,000, or minus (iv) the amount by which the

$150,000 exceeds the Estimated Working Capital;

An unsecured promissory

note made by the Company (the “Note”) in the principal amount of $6,000,000 bearing interest at the rate of 4.5%, compounding

annually, and maturing on the third anniversary of the date such note is made.

at the First Effective Time, all shares of Class A Common Stock of Peek (other than the Lumina Contribution Shares) and all shares of

Class B Common Stock of Peek (collectively, the “Specified Shares”) that are issued and outstanding immediately prior to

the First Effective Time will be converted into the right to receive 1,777,778 shares of Company common stock (the “Stock Consideration”)

in Closing Merger Consideration as follows:

507,615 shares

of Company common stock (the “Guaranteed Stock Consideration”);

1,270,163 shares of Company

common stock (the “Earn-Out Shares”), which shall be subject to forfeiture based on the Surviving Company’s ability

to achieve the target aggregate revenue amount of $8,800,000 during the period commencing on the Closing Date and ending on December

order to preserve the intended U.S.

federal income tax treatment of the Mergers, it is possible that all or a portion of the final payment

under the Note may be made in the form of additional shares of Company common stock, depending on whether and the extent to which any

Earn-Out Shares issued at the First Effective Time are forfeited pursuant to the terms of the Merger Agreement.

acquisition has not yet closed as of the issuance date of these financial statements included in this Quarterly Report.

Components of Results of Operations

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

We did not generate any revenue prior to our acquisition of Wood Sage,

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

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

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

Although Wellgistics Health

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

and Development Expense

research and development expenses will consist primarily of internal and external expenses incurred in connection with our research activities

and development programs.

These expenses will include, but are not limited to, software development, integrations with pharmacy management

systems, development supplies, testing materials, personnel costs (including salaries and benefits), depreciation expense, overhead allocation,

(consisting of various support and facility costs), stock-based compensation and consulting fees.

Research and development costs will

be expensed as incurred.

and Marketing Expense

and marketing expenses will consist of personnel and personnel-related expenses, including stock-based compensation for our business

and marketing expenses consist of personnel and personnel-related expenses, including stock-based compensation for our business

development team as well as trade events participation, public relations, white paper development, social media, pharmacy trade and patient

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and third-party software expenses.

the future, general and administrative expenses will consist primarily of personnel-related costs (including salaries, bonuses, benefits,

General and administrative expenses consist primarily of personnel-related costs (including salaries, bonuses, benefits,

and stock-based compensation expense) for personnel in executive, finance, accounting, corporate development and other administrative

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of Operations

the Three Months Ended March 31, 2025 and 2024

operating expenses

from operations

the Three Months Ended June 30, 2025 and 2024

Three Months Ended

Cost of revenues

Gross profit (loss)

General and administrative

Sales and marketing

Depreciation and amortization

Total operating expenses

Loss from operations

Total other income (expense)

and Cost of Revenues

revenues were $7,790,865 for the three months ended June 30, 2025, consisting of revenue primarily derived from Wellgistics Pharmacy

operations after the closings of the Wood Sage Acquisition on June 16, 2024 and the Wellgistics Acquisition August 30, 2024.

revenues for the same period was $7,285,113.

Gross profit was $505,752, representing a gross margin of 6.5%.

the three months ended June 30, 2024, the Company earned revenue of $44,540, with cost of revenues of $47,148, resulting in a gross loss

The prior period figures reflect only partial revenue from Wood Sage operations for the period from June 16, 2024 to June 30, 2024,

and do not include any revenue from Wellgistics.

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

Three Months Ended

Product revenue - distribution services

Pharmacy retail sales

Third party logistics services

and Administrative Expense

and administrative expenses were $4,859,949 for the three months ended June 30, 2025, compared to $570,408 for the three months

ended June 30, 2024.

The increase was primarily due to the acquisition of Wellgistics LLC in August 2024 and full-scale operations

of the consolidated company in 2025.

General and administrative expenses include personnel costs, and professional fees including

audit, tax and legal.

For the three months ended June 30, 2025, general and administrative expenses also included $870,005 of

non-cash stock-based compensation related to the issuance of restricted common stock to directors, employees, and consultants in

exchange for services rendered.

and Marketing Expense

and marketing expenses were $343,383 for the three months ended June 30, 2025, compared to $0 for the same period in 2024.

increase reflects the Company’s expanded promotional activities and marketing initiatives following the acquisitions of Wood

Sage and Wellgistics LLC.

For the three months ended June 30, 2025, sales and marketing expenses also included $65,217 of non-cash

stock-based compensation

and Amortization

and amortization was $802,796 for the three months ended June 30, 2025, compared to $0 for the three months ended June 30, 2024.

included amortization of $763,065 pertaining to intangible assets identified from acquisitions of Wood Sage and Wellgistics, LLC.

expense of $39,731 relates to fixed assets acquired from the Wellgistics LLC acquisition.

expense was $1,184,040 and $1,309 for the three months ended June 30, 2025 and 2024, respectively.

Interest expense in 2025 was incurred

on Wellgistics Health’s outstanding loans, promissory notes, revolving line of credit and merchant cash advance agreements.

the Six Months Ended June 30, 2025 and 2024

Six Months Ended

Cost of revenues

General and administrative

Sales and marketing

Depreciation and amortization

Total operating expenses

Loss from operations

(36,848,744 )

other income (expense)

Total other income (expense)

(39,103,367 )

and Cost of Revenues

sales were $10,863,443 for the three months ended March 31, 2025, consisting of revenue primarily derived from Wellgistics Pharmacy operations

after the closings of our acquisitions of Wood Sage on June 16, 2024, and of Wellgistics, LLC on August 30, 2024.

Cost of revenues for

the same period was $10,170,802.

revenues were $18,654,308 for the six months ended June 30, 2025, consisting of revenue primarily derived from Wellgistics Pharmacy

operations after the closings of the Wood Sage Acquisition on June 16, 2024 and the Wellgistics Acquisition August 30, 2024.

revenues for the same period was $17,455,915.

Gross profit was $1,198,393, representing a gross margin of 6.4%.

The Company did not earn revenue for

the three months ended March 31, 2024.

following is a summary of the disaggregation of revenue for the three months ended March 31, 2025 and 2024:

revenue - distribution services

party logistics services

the six months ended June 30, 2024, the Company earned revenue of $44,540, with cost of revenues of $47,148, resulting in a gross loss

The prior period figures reflect only partial revenue from Wood Sage operations for the period from June 16, 2024 to June 30, 2024,

and do not include any revenue from Wellgistics, LLC.

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

Six Months Ended

Product revenue - distribution services

Pharmacy retail sales

Third party logistics services

and Administrative Expense

and administrative expenses were $32,041,009 for the three months ended March 31, 2025, compared to $79,764 for the three months ended

March 31, 2024.

The increase was primarily due to the acquisition of Wellgistics, LLC in August 2024 and full-scale operations of the

consolidated company in 2025.

General and administrative expenses include personnel costs, and professional fees including audit, tax

For the three months ended March 31, 2025, general and administrative expenses also included $27,773,421 of non-cash stock-based

compensation related to the issuance of common stock to directors, employees, and consultants in exchange for services rendered.

and administrative expenses were $36,032,869 for the six months ended June 30, 2025, compared to $650,172 for the six months ended June

The increase was primarily due to the acquisition of Wellgistics LLC in August 2024 and full-scale operations of the consolidated

company in 2025.

General and administrative expenses include personnel costs, and professional fees including audit, tax and legal.

the six months ended June 30, 2025, general and administrative expenses also included $28,308,643 of non-cash stock-based compensation

related to the issuance of common stock to directors, employees, and consultants in exchange for services rendered.

and Marketing Expense

and marketing expenses were $408,600 for the three months ended June 30, 2025, compared to $0 for the same period in 2024.

reflects the Company’s expanded promotional activities and marketing initiatives following the acquisitions of Wood Sage and Wellgistics.

For the six months ended June 30, 2025, sales and marketing expenses also included $400,000 of non-cash stock-based compensation.

and Amortization

and amortization was $802,872 for the three months ended March 31, 2025, compared to $0 for the three months ended March 31, 2024.

included amortization of $763,064, which relates to intangible assets identified from acquisitions of Wood Sage and Wellgistics, LLC.

Depreciation expense of $39,807 relates to fixed assets acquired from the Wellgistics, LLC acquisition.

expense was $1,094,490 and $3,358 for the three months ended March 31, 2025 and 2024, respectively.

and amortization was $1,605,668 for the six months ended June 30, 2025, compared to $0 for the six months ended June 30, 2024.

This included

amortization of $1,526,130 pertaining to intangible assets identified from acquisitions of Wood Sage and Wellgistics, LLC.

expense of $79,538 relates to fixed assets acquired from the Wellgistics acquisition.

expense was $2,278,530 and $4,667 for the six months ended June 30, 2025 and 2024, respectively.

Interest expense in 2025 was incurred

on Wellgistics Health’s outstanding notes and merchant cash advance agreements.

on Wellgistics Health’s outstanding loans, promissory notes, revolving line of credit and merchant cash advance agreements.

and Capital Resources

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of debt and the sale of equity securities.

We expect to generate positive cash flow from the operations in 2025 due to the annual revenue

generated from Wood Sage and Wellgistics, LLC.

In order to proceed with our business plan, we may need to raise additional funds through

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operational efficiency while simultaneously removing interdependencies.

Purchase Agreement

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

in net proceeds of $1,149,417.

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

under the Equity Purchase Agreement for which proceeds were received in July 2025.

In August 2025, the parties terminated the Hudson EPA.

debt consists of the following:

payable - owners of Wellgistics

payable - third party, net of debt discount of $11,304 and $0

line of credit

promissory note

portion of debt obligations

party investor

payable - Scienture Holdings

payable - owners of Wellgistics

(formerly Danam)

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

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 March 31, 2025, 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 three months ended March 31, 2025, Company made total cash repayments of $700,680, including

principal repayments of $401,511 and interest expense of $299,169.

As of March 31, 2025, $1,003,909 in principal remained outstanding,

which was included as a current liability on the consolidated balance sheet.

March 27, 2025, the Company entered into a merchant cash advance agreement with a third-party lender.

Pursuant to the agreement, the

Company will receive total funding of $1,900,000, secured by its future sales transactions, with repayments scheduled to be made on a

weekly basis in the amount of $56,800.

The funding was made against future receivables totaling $2,840,000.

The Company received net

proceeds of $781,750 on March 27, 2025.

As of March 31, 2025, the outstanding balance of $781,750 is classified as a current liability

on the consolidated balance sheet.

Merchant cash advance, net of debt discount

Note payable - sellers of Wellgistics

Note payable, net of debt discount

Note payable – Integral Health

Revolving line of credit

Seller promissory note

Current portion of debt obligations

Merchant cash advance

Third party investor

Note payable - Integral Health

Note payable - sellers of Wellgistics

Long-term debt

On 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.

As of the date of these financial statements, the note is still outstanding

and the parties mutually agreed for an extension.

On March 18, 2025, the Company entered into a merchant

cash advance agreement with a third-party lender.

Pursuant to the agreement, the Company received gross funding of $1,900,000 in exchange

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

Of the $1,900,000 in funding, $1,118,250 was directly applied by the lender to

settle existing obligations under a prior agreement with the same lender, effectively refinancing the earlier balance.

The remaining $781,750

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

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

The Company is obligated to remit

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

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

The Company recorded a liability equal to the

full Purchased Amount of $2,840,000, with a corresponding debt discount of $940,000 representing the difference between the repayment

obligation and the net proceeds received.

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

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

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

The Company received

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

The loan does not bear a stated interest rate;

instead, the debt

discount represents the implied borrowing cost.

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

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

financing arrangements and was used for general working capital purposes.

The Company is amortizing the debt discount using the effective

interest method over the 28 week term.

Amortization of debt discount recorded to interest expense was $45,542

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

As of June 30, 2025, the carrying amount of the loan, net of the remaining unamortized discount of $210,458, was $464,542.

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

for a total purchased amount of $367,200.

The Company received $255,000 in cash proceeds and recorded a debt discount of $112,200.

The agreement assigns 15% of proceeds of future sales to the buyer, with weekly repayment installments of $13,144 over 28 weeks

based on estimated average monthly sales projections.

Proceeds were used for general working capital purposes.

The Company is

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

As of June 30, 2025, the carrying amount of

the arrangement, net of the remaining unamortized discount of $112,200, was $238,824.

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.

March 6, 2025, the Company and Wellgistics, LLC further amended the Wellgistics MIPA to extend the due date of the $10 million closing

cash payment such that the closing cash payment will be due on June 14, 2025.

the three months ended March 31, 2025, the Company recorded interest expense of $318,750 pertaining to the note.

As of March 31, 2025

and December 31, 2024, accrued interest on the note totaled $743,750 and $425,000 respectively.

As of March 31, 2025, $10,000,000 was

included as a current liability on the consolidated balance sheet and the remaining $5,000,000 was classified as long-term.

August 23, 2024, the Company and the sellers of Wellgistics LLC entered into the Fourth Amendment to the Wellgistics MIPA.

to the amended agreement, Wellgistics Health agreed to pay Wellgistics LLC a promissory note in the aggregate principal amount of

$15,000,000 plus simple interest accruing annually equal to the “Prime Rate” as published by the Wall Street

Journal on January 1 of the applicable year, together payable in three equal annual installments commencing on the first

anniversary of the date that IPO registration statement becomes effective.

For 2025, the interest rate was 7.5%.

the three and six months ended June 30, 2025, the Company recorded interest expense of $318,750 and $637,500, respectively, pertaining

As of June 30, 2025 and December 31, 2024, accrued interest on the note totaled $1,062,500 and $425,000 respectively, and is included in accrued expenses and other current liabilities on

the accompanying condensed consolidated balance sheets.

of June 30, 2025, $5,000,000 was included as a current liability on the consolidated balance sheet and the remaining $10,000,000 was

classified as non-current.

Payable – Third Party

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

For the three months ended March 31, 2025, the Company recorded interest expense

of $11,304 and amortization of debt discount $22,107 related to this promissory note.

As of March 31, 2025, the outstanding principal

of $448,411 is classified under current liabilities.

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

expense of $11,210 and amortization of debt discount of $11,304 related to this note.

For the six months ended June

30, 2025, the Company recorded total interest expense of $22,021 and amortization of debt discount of $33,411.

30, 2025, accrued interest payable on this note was $22,021, 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.

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

For the three months ended March 31, 2025, the Company recorded interest

expense of $1,562 related to this promissory note.

As of March 31, 2025, the outstanding principal of $100,000 is classified under current

February 2, 2025, the Company entered into an 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.

In the event of default,

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

For the three months ended March 31, 2025, the Company recorded interest expense

of $1,562 related to this promissory note.

As of March 31, 2025, the outstanding principal of $100,000 is classified under current liabilities.

line of credit – Wellgistics

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

The new line of credit

has interest annual rate equal to the Term 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 $332,439 for the

three months ended March 31, 2025.

The outstanding balance on the line of credit as of March 31, 2025, and December 31, 2024 was $5,220,699

and $5,531,260 respectively, 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, LLC acquisition.

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

expense of $2,500 related to this note.

For the six months ended June 30, 2025, the Company recorded total interest expense

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

classified under current liabilities.

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

currently working on an extension.

On February 2, 2025, the Company entered into another unsecured promissory

note agreement in the principal amount of $100,000.

The promissory note bears interest at a rate of 10% per annum, with both principal

and accrued interest due in full on August 15, 2025.

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

the six months ended June 30, 2025, the Company recorded interest expense of $4,062 related to this promissory note.

As of June 30, 2025,

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

As of the issuance date of these financial statements,

the parties are currently working on an extension.

Note Payable – Related Party

On April 7, 2025, the Company issued an unsecured

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

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

The April 2025 Note bears interest at a rate

of 10% per annum and matures on October 7, 2025.

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

at any time without penalty.

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

in the interest rate to 12% per annum.

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

The April 2025 Note was subsequently canceled in August 2025.

line of credit

In November 2024, the Company entered into a new credit agreement for a

line of credit of $10,000,000.

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 (an aggregate rate of 16.84% per annum).

The line of credit is collateralized by accounts receivable and inventory

Interest related to the line of credit amounted to $332,439 and $614,199 for the three and six months ended June 30, 2025, respectively.

The outstanding balance on the line of credit as of June 30, 2025 and December 31, 2024 was $3,979,766 and $5,531,260, respectively, which

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

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 three months ended March 31, 2025.

As of March 31, 2025 and December 31, 2024 the amount outstanding

is $68,570 and $137,141, which is included as a current liability on the consolidated balance sheet.

The Company assumed this debt as

part of the Wellgistics, LLC acquisition.

May 2022, the Company 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 (a subsidiary of Wellgistics

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

Company assumed this debt as part of the Wellgistics Acquisition.

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

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

Interest expense related to the promissory note was immaterial for the six months ended June 30, 2025.

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

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following table summarizes our cash flows from operating, investing, and financing activities :

cash provided by (used in) operating activities

cash (used in) provided by operating activities

$ (3,426,447 )

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from operating activities

cash used in operating activities for the three months ended March 31, 2025, was $1,347,449, primarily due to our net loss of $32,341,047,

partially offset by non-cash expenses of $28,674,553, and $2,408,901 in cash provided in operating assets and liabilities.

Non-cash expenses

was driven by stock-based compensation of $27,773,421.

Cash provided by operating assets and liabilities was primarily driven by an increase

in accounts payable of $1,876,683.

cash provided by operating activities for the three months ended March 31, 2024, was primarily a result changes in operating assets and

liabilities of $114,358, partially offset by our net loss of $83,122.

Net 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 in operating assets and liabilities.

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

Cash provided

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

cash provided by operating activities for the six months ended June 30, 2024 was primarily a result changes in operating assets and liabilities

of $1,005,846, partially offset by our net loss of $657,447 and non-cash expenses of $12,794.

from investing activities

cash used in investing activities for the three months ended March 31, 2025, was $273,133 due to payments made for intangible assets

under development.

cash used in investing activities for the six months ended June 30, 2025, was $405,059 due to expenditures made for capitalized software.

from financing activities

cash provided by financing activities for the three months ended March 31, 2025, was $3,108,831.

This was primarily driven by gross proceeds

of $4,000,00 from the issuance of common stock in our IPO, $615,000 from promissory notes, and $471,158 in net proceeds from a merchant

cash advance.

These inflows were partially offset by $1,598,196 in offering costs, as well as repayments of a note payable and revolving

line of credit.

cash provided by financing activities for the three months ended March 31, 2024, consists of $250,000 in proceeds from a note payable

and $10,000 in proceeds from common stock to be issued.

Net 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, as well as

repayments of a note payable and revolving line of credit.

Net cash used in financing activities

for the six months ended June 30, 2024 consists of $10,000 in proceeds from common stock to be issued, and $288,037 in offering costs

Sheet Arrangements

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been given terms extending out to 45 days.

Wellgistics, LLC provides distribution and third party logistics services

to both pharmaceutical manufacturers and independent retail pharmacies.

Company recognizes revenue when goods are delivered to the customer.

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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.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis