UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2025

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________ to ________

Commission file number: 001-42530

Wellgistics Health, Inc.

(Exact Name of Registrant As Specified In Its Charter)

Delaware		93-3264234
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification No.)

3000 Bayport Drive, Suite 950

Tampa, Florida

33607

(Address of Principal Executive Offices)

(ZIP Code)

(844) 203-6092

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Securities to be registered under Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, par value $0.0001 per share

WGRX

The Nasdaq Stock Market LLC

(The NASDAQ Capital Market)

Indicate by check mark whether the registrant (1) has filed reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☐ No ☒

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the Company is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definition of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐	Accelerated filer ☐
Non-accelerated filer ☒	Smaller reporting company ☒
	Emerging growth company ☒

If an emerging growth company, indicate by check mark if the Company has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act ☐

Indicate by checkmark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of August 19, 2025, there were 84,064,100 shares of the Company’s common stock, par value $0.0001, issued and outstanding.

TABLE OF CONTENTS

			Page
Part I. Financial Information			3
	Item 1.	Financial Statements	3
		Condensed Consolidated Balance Sheets as of June 30, 2025 (unaudited) and December 31, 2024	3
		Condensed Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2025 and 2024 (unaudited)	4
		Condensed Consolidated Statements of Stockholders’ Equity for the Three and Six Months Ended June 30, 2025 and 2024 (unaudited)	5
		Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2025 and 2024 (unaudited)	6
		Notes to Condensed Consolidated Financial Statements	7
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	24
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	39
	Item 4.	Controls and Procedures	39

Part II. Other Information			40
	Item 1	Legal Proceedings	40
	Item 1A	Risk Factors	40
	Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	40
	Item 3	Defaults Upon Senior Securities	40
	Item 4	Mine Safety Disclosures	40
	Item 5	Other Information	40
	Item 6	Exhibits	41
Signatures			42

In this Quarterly Report on Form 10-Q (this “Quarterly Report”), all references to “Wellgistics Health, Inc.,” “Wellgistics Health,” “we,” “us,” “our” or the “Company” mean Wellgistics Health, Inc., and its wholly-owned subsidiaries, except where it is made clear that the term means only Wellgistics Health, Inc. The Company’s common stock, par value $0.0001 per share, is referred to as “common stock.”

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

WELLGISTICS HEALTH, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

	June 30,			December 31,
	2025			2024
	(unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	419,942		$	1,028,336
Accounts receivable, related party		775,027			271,298
Accounts receivable, net		1,386,423			2,453,517
Inventories, net		9,031,143			9,518,608
Prepaid expenses		65,525			524
Due from related parties		1,249,888			1,021,000
Subscription receivable		581,695			-
Deferred offering costs		-			875,385
Total current assets		13,509,643			15,168,668
Property, plant and equipment, net		308,642			388,180
Capitalized software		2,023,076			1,618,017
Operating lease, right-of-use-assets		1,280,459			1,528,128
Goodwill		16,219,929			16,219,929
Other intangible assets, net		19,219,880			20,746,009
Note receivable		139,771			139,771
Other assets		1,438,607			1,438,940
Deposits		85,008			85,008
Total assets	$	54,225,015		$	57,332,650

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	9,450,651		$	6,308,754
Accounts payable, related party		25,500			25,500
Accounts payable		25,500			25,500
Accrued expenses and other current liabilities		5,466,166			4,320,417
Due to related parties		5,234,770			4,944,770
Due to seller		8,500,000			10,000,000
Due to related parties		5,234,770			4,944,770
Current portion of debt obligations, net of debt discount		13,180,200			11,927,816
Operating lease liabilities- current portion		546,255			519,490
Total current liabilities		42,403,542			38,046,747
Notes payable		10,100,000			10,100,000
Note payable, related party		-			1,300,000
Note payable		-			1,300,000
Loan payable		-			55,085
Operating lease liabilities		816,218			1,096,372
Total liabilities	$	53,319,760		$	50,598,204

Commitments and contingencies (Note 14)		-			-

Stockholders’ equity:
Common stock, $0.0001 par value, 500,000,000 shares authorized, 72,881,535 and 51,055,508 shares issued and 63,144,817 and 51,055,508 shares outstanding as of June 30, 2025 and December 31, 2024, respectively		6,315			5,105
Additional paid-in capital		49,759,467			16,486,501
Accumulated deficit		(48,860,527	)		(9,757,160	)
Total stockholders’ equity		905,255			6,734,446
Total liabilities and stockholders’ equity	$	54,225,015		$	57,332,650

See the accompanying notes to the unaudited condensed consolidated financial statements

WELLGISTICS HEALTH, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

	2025			2024			2025			2024
	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2025			2024			2025			2024
Net revenues	$	7,790,865		$	44,540		$	18,654,308		$	44,540
Cost of revenues		7,285,113			47,148			17,455,915			47,148
Gross profit (loss)		505,752			(2,608	)		1,198,393			(2,608	)

Operating expenses:
General and administrative		4,859,949			570,408			36,032,869			650,172
Sales and marketing		343,383			-			408,600			-
Depreciation and amortization		802,796			-			1,605,668			-
Total operating expenses		6,006,128			570,408			38,047,137			650,172

Loss from operations		(5,500,376	)		(573,016	)		(36,848,744	)		(652,780	)

Other income (expense)
Interest expense, net		(1,184,040	)		(1,309	)		(2,278,530	)		(4,667	)
Other income		11,952			-			23,907			-
Total other expense, net		(1,172,088	)		(1,309	)		(2,254,623	)		(4,667	)

Net loss before income taxes		(6,672,464	)		(574,325	)		(39,103,367	)		(657,447	)
Provision for income taxes		-			-			-			-
Net loss	$	(6,672,464	)	$	(574,325	)	$	(39,103,367	)	$	(657,447	)

Net loss per common share - basic and diluted	$	(0.11	)	$	(0.01	)	$	(0.69	)	$	(0.01	)
Weighted average common shares outstanding - basic and diluted		61,771,127			45,898,175			56,863,720			46,843,308

See the accompanying notes to the unaudited condensed consolidated financial statements

WELLGISTICS HEALTH, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Unaudited)

					Additional						Total Stockholders’
	Common Stock				Paid-In			Accumulated			Equity
	Shares		Amount		Capital			Deficit			(Deficit)
Balance at December 31, 2023		44,720,000	$	4,472	$	(3,972	)	$	(2,900,934	)	$	(2,900,434	)
Net loss		-		-		-			(83,122	)		(83,122	)
Balance at March 31, 2024		44,720,000	$	4,472	$	(3,972	)	$	(2,984,056	)	$	(2,983,556	)
Founder’s initial contribution		-		-		10,000			-			10,000
Shares issued to employees		2,274,012		227		(227	)		-			-
Shares issued pursuant to business combination		173,961		17		399,983			-			400,000
Net loss		-		-		-			(574,325	)		(574,325	)
Balance at June 30, 2024		47,167,973	$	4,717	$	405,783		$	(3,558,381	)	$	(3,147,881	)

Balance at December 31, 2024		51,055,508	$	5,105	$	16,486,501		$	(9,757,160	)	$	6,734,446
Common stock issued pursuant to public offering		888,889		89		3,999,911			-			4,000,000
Common stock issued pursuant to consulting agreements		152,000		15		543,505			-			543,520
Vested restricted stock granted to consultants		986,123		99		2,875,461			-			2,875,560
Vested restricted stock granted to directors		8,362,494		836		24,277,922			-			24,278,758
Vested restricted stock granted to employees		15,000		2		75,582			-			75,583
Offering costs		-		-		(1,598,196	)		-			(1,598,196	)
Net loss		-		-		-			(32,430,903	)		(32,430,903	)
Balance at March 31, 2025		61,460,014	$	6,146	$	46,660,685		$	(42,188,063	)	$	4,478,768
Balance		61,460,014	$	6,146	$	46,660,685		$	(42,188,063	)	$	4,478,768
Common stock issued pursuant to equity purchase agreement		1,155,030		116		1,149,301			-			1,149,417
Issuance of commitment shares under equity purchase agreement		152,000		15		594,305			-			594,320
Common stock issued in partial settlement of seller’s note		333,333		33		1,499,967			-			1,500,000
Vested restricted stock granted to employees		44,440		4		354,559			-			354,563
Offering costs		-		-		(499,349	)		-			(499,349	)
Net loss		-		-		-			(6,672,464	)		(6,672,464	)
Balance at June 30, 2025		63,144,817	$	6,315	$	49,759,467		$	(48,860,527	)	$	905,255
Balance		63,144,817	$	6,315	$	49,759,467		$	(48,860,527	)	$	905,255

See the accompanying notes to the unaudited condensed consolidated financial statements

WELLGISTICS HEALTH, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	2025			2024
	Six Months Ended
	June 30,
	2025			2024
Cash flows from operating activities:
Net loss	$	(39,103,367	)	$	(657,447	)
Adjustments to reconcile net loss to net cash used in operating activities:
Allowance for credit losses		200,454			-
Amortization of debt discount		33,411			-
Stock-based compensation		28,708,643			-
Depreciation		79,538			-
Amortization		1,526,129			12,794
Changes in operating assets and liabilities:
Accounts receivable		362,911			(64	)
Inventories		487,465			16,102
Prepaid expenses		(65,001	)		-
Deposits		-			(35,855	)
Other assets		332			-
Accounts payable		3,141,897			(203,953	)
Accrued expenses and other liabilities		1,145,749			276,994
Operating lease liabilities, net		(5,720	)		22,114
Due from / to related parties, net		61,112			930,508
Net cash (used in) provided by operating activities		(3,426,447	)		361,193
Cash flows from investing activities:
Cash acquired in business combinations		-			30,255
Investments in capitalized software		(405,059	)		(47,800	)
Net cash used in investing activities		(405,059	)		(17,545	)
Cash flows from financing activities:
Proceeds from promissory note		615,000			-
Repayment of seller promissory note		(137,141	)		-
Proceeds from term loan		703,366			-
Proceeds from revolving line of credit		17,146,000			-
Repayments of revolving line of credit		(18,697,494	)		-
Proceeds from merchant cash advance		234,157			-
Proceeds from common stock issued pursuant to equity purchase agreement		567,722			-
Proceeds from common stock issued pursuant to public offering		4,000,000			-
Offering costs		(1,208,498	)		(288,037	)
Founder’s initial contribution		-			10,000
Net cash provided by (used in) financing activities		3,223,112			(278,037	)
Net change in cash and cash equivalents		(608,394	)		65,611
Cash and cash equivalents at beginning of period		1,028,336			1,364
Cash and cash equivalents at end of period	$	419,942		$	66,975

Supplemental disclosure of cash flow information:
Cash paid for income taxes	$	-		$	-
Cash paid for interest	$	1,477,713		$	-

Supplemental disclosure of non-cash investing and financing activities:
Subscription receivable	$	581,695		$	-
Issuance of commitment shares under equity purchase agreement	$	594,320		$	-
Common stock issued in partial settlement of seller’s note	$	1,500,000		$	-
Common stock issued pursuant to business combination	$	-		$	400,000
Debt assigned to related party	$	-		$	250,000

See the accompanying notes to the unaudited condensed consolidated financial statements

WELLGISTICS HEALTH, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The Company was initially organized in the name of Ayan Sponsors LLC on September 6, 2022. Subsequently the Company incorporated under the name Danam Health, Inc. (together with the subsidiaries below, the “Company”/ “us”/ “we”/ “our”) as a Delaware Corporation that was registered on November 15, 2022, The Company’s headquarters are in Tampa, Florida.

In January 2023 and May 2023, the Company entered into separate definitive agreements with the owners of Wood Sage LLC (“Wood Sage”) and Wellgistics LLC, respectively, whereby the Company would acquire all of the respective outstanding membership interests of Wood Sage (the “Wood Sage Acquisition”)and Wellgistics, LLC (the “Wellgistics Acquisition”). In June 2024, the Company and Wood Sage entered into an amended and revised definitive agreement and closed on the Wood Sage Acquisition, thereby making Wood Sage a wholly owned subsidiary. In connection with the Wood Sage Acquisition, the Company acquired two of its operating subsidiaries, Alliance Pharma Solutions LLC d/b/a DelivMeds (n/k/a Wellgistics Tech & Hub, LLC) (“DelivMeds”)—a pharmaceutical technology hub—and Community Specialty Pharmacy, LLC (n/k/a Wellgistics Pharmacy, LLC) (“Wellgistics Pharmacy”)—a retail community specialty pharmacy.

On August 30, 2024, the Company closed on the Wellgistics Acquisition, thereby making Wellgistics LLC—a company focused on wholesale operations including the distribution and fulfillment of certain pharmaceutical medications to a network of independent pharmacies meant to improve market access to and patient outcomes regarding the medications—a wholly owned subsidiary.

As such, the Company currently exists as a holding company with Wood Sage as a directly held intermediate holding company subsidiary, Wellgistics Tech & Hub, LLC and Wellgistics Pharmacy, LLC as indirect operating subsidiaries, and Wellgistics, LLC as a direct operating subsidiary.

On 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.

Initial Public Offering

On February 20, 2025, the Company entered into an Underwriting Agreement (the “Underwriting Agreement”) with Craft Capital Management LLC as representatives of the several underwriters (the “Underwriters”), relating to the Company’s initial public offering (the “Offering” or “IPO”) of 888,889 shares of common stock, par value $0.0001 per share, at a public offering price of $4.50 per share, generating gross proceeds of approximately $4 million and net proceeds of approximately $3.1 million, after deducting underwriting discounts and commissions and other estimated offering expenses.

The shares of common stock were offered and sold pursuant to the Company’s Registration Statement on Form S-1 (File No. 333-280945), 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 14, 2025. 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.

The 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.

Summary of Significant Accounting Policies

A description of the Company’s significant accounting policies and other financial information is included in the Company’s audited consolidated financial statements filed on March 25, 2025, with the SEC in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 (the “Form 10-K”). These policies have been applied consistently in these unaudited condensed consolidated interim financial statements.

Unaudited Interim Financial Information

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and disclosures required by U.S. GAAP for complete financial statements. In the opinion of management, such statements include all adjustments (consisting only of normal recurring items) which are considered necessary for a fair presentation of the condensed consolidated financial statements of the Company as of June 30, 2025 and for the three and six months then ended.

The accompanying unaudited interim financial statements should be read in conjunction with the Company’s audited financial statements and the notes thereto for the year ended December 31, 2024 included in the Form 10-K with the SEC on March 25, 2025.

Principles of Consolidation

The condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.

Use of Estimates

The preparation of the condensed consolidated financial statements and related disclosures in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses reported in those condensed consolidated financial statements. Descriptions of our significant accounting policies are discussed in the notes to the consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2024. Management evaluates the related estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment, and makes adjustments when facts and circumstances dictate. As future events and their effects cannot be determined with precision, actual results could differ significantly from those estimates and assumptions. Significant changes, if any, in those estimates and assumptions resulting from continuing changes in the economic environment will be reflected in the consolidated financial statements in future periods.

Segment Reporting

In accordance with Accounting Standards Codification (“ASC”) 280, Segment Reporting (“ASC 280”), we identify our operating segments according to how our business activities are managed and evaluated. ASC 280 establishes standards for companies to report financial statement information about operating segments, products, services, geographic areas, and major customers. Operating segments are defined as components of an enterprise for which separate financial information is available that is regularly evaluated by the Company’s chief operating decision maker (“CODM”), or group, in deciding how to allocate resources and assess performance.

The CODM has been identified as the Chief Executive Officer, who reviews the operating results for the Company as a whole to make decisions about allocating resources and assessing financial performance. Accordingly, management has determined that the Company only has one operating and reportable segment.

The key measures of segment profit or loss reviewed by our CODM are revenue and operating costs. These metrics are reviewed and monitored by the CODM to manage and forecast 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.

See Note 12 for further detail.

Concentration of Credit Risks and Major Customers

Financial instruments that potentially subject the Company to credit risk consist principally of cash and cash equivalents and receivables. The Company places its cash and cash equivalents with financial institutions. Deposits are insured to Federal Deposit Insurance Corp limits. For the six months ended June 30, 2025, one customer accounted for approximately 15% of total revenue. The Company’s reliance on this and other major customers presents a concentration risk. The loss of this customer or a significant reduction in their orders could have a material adverse effect on the Company’s financial performance. The Company continues to focus on efforts to diversify its customer base to mitigate such risks.

Fair Value of Financial Instruments

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the measurement date. A hierarchy has been established for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability and are developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions of what market participants would use in pricing the asset or liability based on the best information available in the circumstances. The financial and nonfinancial assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurement. The hierarchy is presented down into three levels based on the reliability of the inputs.

	Level 1	Quoted 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.

The carrying amounts of cash, accounts receivable, note receivable, deposits, accounts payable, accrued liabilities and short-term debt approximate their fair value because of the short-term nature of these instruments. The carrying amount of long-term debt approximates fair value because the debt is based on current rates at which the Company could borrow funds with similar maturities.

Accounts Receivable and Allowance for Credit Losses

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

The Company uses a loss rate method to estimate its allowance for credit losses. The determination of the current expected credit loss rate begins with our review of historical loss experience as a percentage of accounts receivable. To determine the current allowance for credit losses, we combine the historical and expected credit loss rates and apply them to our period end accounts receivable.

The Company provides for a 95% - 100% loss rate of the accounts receivable which are due over the period of 90 days. The Company recognized a provision for credit losses of $200,454 and $0 within general and administrative expenses for the six months ended June 30, 2025 and 2024, respectively.

As of June 30, 2025 and December 31, 2024, allowance for credit losses was $1,111,824 and $940,596, respectively.

Inventories, Net

Inventories are stated at the lower of cost and net realizable value. Cost is determined on a first in first out (“FIFO”) basis. 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. We believe that the inventory valuation provides a reasonable approximation of the current value of inventory.

Capitalized Software

The Company complies with the guidance of ASC 350-40, “Intangibles—Goodwill and Other—Internal Use Software”, in accounting for our internally developed system projects that it utilizes to provide our services to customers. These system projects generally relate to software of the Company that is not intended for sale or otherwise marketed. Internal and external costs incurred during the preliminary project stage are expensed as they are incurred. Once a project has reached the development stage, the Company capitalizes direct internal and external costs until the software is substantially complete and ready for our intended use. Costs for upgrades and enhancements are capitalized, whereas costs incurred for maintenance are expensed as incurred. These capitalized software costs are amortized on a project-by-project basis over the expected economic life of the underlying software on a straight-line basis, which is generally three to five years. Amortization commences when the software is available for our intended use.

As of June 30, 2025 and December 31, 2024, the Company capitalized $2,023,076 and $1,618,017, respectively, in software development pertaining to the Delivmeds platform via its DelivMeds subsidiary.

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

Revenue Recognition

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

To determine revenue recognition for arrangements that the Company determines are within the scope of ASC 606, the Company performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligation(s) in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligation(s) in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. The Company only applies the five-step model to contracts when it is probable that the entity will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. At contract inception, once the contract was determined to be within the scope of ASC 606, the Company assessed the goods or services promised within each contract and determined those that were performance obligations, and assessed whether each promised good or service was distinct. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied.

A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of account in ASC 606. The Company recognizes revenue at the point of sale. The majority of orders are placed via the Company’s website. Customers generally pay by credit card at the time they place their order. The Company does have larger customers to whom they have extended terms for payment. Generally, payments from these customers are due within 30 days of their order being shipped. However, a few customers have been given terms extending out to 45 days.

Distribution

Wellgistics, 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, which generally are estimated and recorded in the same period that the revenues are recognized. Such variable consideration represents chargebacks, rebates, sales allowances and sales returns. These deductions represent estimates of the related obligations and, as such, knowledge and judgment are considered when estimating the impact of these revenue deductions on gross sales for a reporting period. All revenue for the Company is recognized at the point-in-time when delivered to customer based on contractual obligations. Any amount collected from customers for goods not yet delivered is recorded as a contract liability.

Pharmacy

The Company is in the retail pharmacy business, which fills prescriptions for medication written by a doctor and recognizes revenue at the time the patient confirms delivery of the prescription. Customer returns are not material. The following are the steps taken to recognize revenue.

Step One: Identify the contract with the customer — The prescription is written by a doctor for a customer and delivered to the Company. The prescription identifies the performance obligations in the contract. The Company fills the prescription and delivers to the Customer the prescription, fulfilling the contract. The collection is probable because there is confirmation that the customer has insurance for the reimbursement to the Company prior to filling of the prescription.

Step Two: Identify the performance obligations in the contract — Each prescription is distinct to the Customer.

Step Three: Determine the transaction price — The consideration is not variable. The transaction price is determined to be the price of the prescription at the time of delivery which considers the expected reimbursements from third party payors (e.g., pharmacy benefit managers, insurance companies and government agencies).

Step Four: Allocate the transaction price — The price of the prescription invoiced represents the expected amount of reimbursement from third party payors. There is no difference between contract price and “stand-alone selling price”.

Step Five: Recognize revenue when or as the entity satisfies a performance obligation — Revenue is recognized upon the delivery of the prescription.

Disaggregation of Revenue

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

SCHEDULE OF DISAGGREGATION OF REVENUE

	2025		2024		2025		2024
	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2025		2024		2025		2024
Product revenue - distribution services	$	7,548,600	$	-	$	18,216,887	$	-
Pharmacy retail sales		77,756		44,540		192,432		44,540
Third party logistics services		164,509		-		244,989		-
Net revenues	$	7,790,865	$	44,540	$	18,654,308	$	44,540

All revenue for the six months ended June 30, 2025 and 2024 were within the United States.

Contract Assets and Liabilities

Contract assets would include costs and services incurred on contracts with open performance obligations. These amounts would be included in contract assets on the condensed consolidated balance sheets. Contract liabilities include payment received for incomplete performance obligations and are included in contract liabilities on the condensed consolidated balance sheets.

At June 30, 2025 and December 31, 2024, the Company had unearned revenue of 245,765 included in accrued expenses and other current liabilities.

Goodwill

Goodwill is an asset representing the excess cost over the fair market value of net assets acquired in business combinations. Goodwill is not amortized but is tested annually for impairment or on an interim basis 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.

The 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.

The 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.

During the three and six months ended June 30, 2025, the Company did not identify any events or changes in circumstances that would indicate potential impairment of goodwill. Accordingly, no goodwill impairment was recorded for the period.

Impairment of Long-Lived Assets

The Company continually monitors events and changes in circumstances that could indicate carrying amounts of long-lived assets may not be recoverable. 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. If the total 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.

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

Leases

The Company accounts for its leases under ASC 842, Leases. Under this guidance, arrangements meeting the definition of a lease are classified as operating or financing leases, and are recorded on the consolidated balance sheet as both a right of use asset and lease liability, calculated by discounting fixed lease payments over the lease term at the rate implicit in the lease or the Company’s incremental borrowing rate. Lease liabilities are increased by interest and reduced by payments each period, and the right of use asset is amortized over the lease term. For operating leases, interest on the lease liability and the amortization of the right of use asset result in straight-line rent expense over the lease term. For finance leases, interest on the lease liability and the amortization of the right of use asset results in front-loaded expense over the lease term. Variable lease expenses are recorded when incurred.

In calculating the right of use asset and lease liability, the Company has elected to combine lease and non-lease components. The Company excludes short-term leases having initial terms of 12 months or less from the new guidance as an accounting policy election, and recognizes rent expense on a straight-line basis over the lease term.

Offering Costs

The 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 . The deferred offering costs are charged to stockholders’ equity upon the completion of an offering or to expense if the offering is abandoned, terminated, or significantly delayed in the period of determination. Deferred offering costs includes professional fees incurred including legal, accounting, underwriting and advisory services in connection with the Company’s equity offering.

As of June 30, 2025 and December 31, 2024, the Company had capitalized $0 and $875,385, respectively, in deferred offering costs. During the six months ended June 30, 2025, a total of $875,385 in previously capitalized offering costs was charged to stockholders’ equity upon the completion of the IPO.

Stock-Based Compensation

The Company accounts for stock-based compensation in accordance with ASC 718, Compensation – Stock Compensation. The Company measures all stock-based awards granted to employees, directors and non-employee consultants based on the fair value on the date of the grant and recognizes compensation expense for those awards over the requisite service period, which is generally the vesting period of the respective award. For awards with service-based vesting conditions, the Company records the expense for using the straight-line method. For awards with performance-based vesting conditions, the Company records the expense if and when the Company concludes that it is probable that the performance condition will be achieved.

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

Net Loss per Share

Net earnings or loss per share is computed by dividing net income or loss by the weighted-average number of common shares outstanding during the period, excluding shares subject to redemption or forfeiture. The Company presents basic and diluted net earnings or loss per share. Diluted net earnings or loss per share reflect the actual weighted average of common shares issued and outstanding during the period, adjusted for potentially dilutive securities outstanding. Potentially dilutive securities are excluded from the computation of the diluted net loss per share if their inclusion would be anti-dilutive. As all potentially dilutive securities are anti-dilutive as of June 30, 2025, diluted net loss per share is the same as basic net loss per share for each period. For the three and six months ended June 30, 2025 and 2024, the following items have been excluded from the computation of diluted net loss per share because the effect of including these would have been anti-dilutive:

	2025		2024
	June 30,
	2025		2024

Unvested restricted common stock issued not outstanding		10,070,051		-
Total potentially dilutive shares		10,070,051		-

Recent Accounting Pronouncements

In December 2023, Financial Accounting Standards Board (“FASB”) issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”). ASU 2023-09 focuses on income tax disclosures around effective tax rates and cash income taxes paid and requires public business entities to disclose, on an annual basis, a rate reconciliation presented in both dollars and percentages. The guidance requires the rate reconciliation to include specific categories and provides further guidance on disaggregation of those categories based on a quantitative threshold equal to 5% or more of the amount determined by multiplying pretax income (loss) from continuing operations by the applicable statutory rate. For entities reconciling to the US statutory rate of 21%, this would generally require disclosing any reconciling items that impact the rate by 1.05% or more. ASU 2023-09 is effective for public business entities for annual periods beginning after December 15, 2024 (generally, calendar year 2025) and effective for all other business entities one year later. Entities should adopt this guidance on a prospective basis, though retrospective application is permitted. The adoption of ASU 2023-09 is expected to have a financial statement disclosure impact only and is not expected to have a material impact on the Company’s condensed consolidated financial statements.

In March 2024, the FASB issued ASU 2024-03, which provides new accounting guidance for certain crypto assets. Under the ASU, entities are required to subsequently measure qualifying crypto assets at fair value, with changes in fair value recognized in net income each reporting period. The ASU also establishes specific disclosure requirements, including information about significant crypto asset holdings, contractual sale restrictions, and changes in such holdings.

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

	●	Meet the definition of intangible assets as defined in the ASC Master Glossary.
	●	Do not provide enforceable rights to or claims on underlying goods, services, or other assets.
	●	Are created or reside on a distributed ledger based on blockchain or similar technology.
	●	Are secured through cryptography.
	●	Are fungible.
	●	Are not created or issued by the reporting entity or its related parties.

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

The Company is currently evaluating the impact of ASU 2024-03 on its condensed consolidated financial statements. While the Company does not currently hold material amounts of crypto assets, it is assessing the implications of the guidance in the event of future crypto asset acquisitions or changes in investment strategy.

Note 2. LIQUIDITY AND GOING CONCERN

The Company had a net loss of $39,103,367 for the six months ended June 30, 2025 and an accumulated deficit of $48,860,527 as of June 30, 2025. Furthermore, the Company had net cash used in operating activities of $3,426,447 for the six months ended June 30, 2025. These factors raise a substantial doubt on whether the Company can continue as a going concern from the date these unaudited interim condensed consolidated financial statements are issued.

The Company’s ability to continue as a going concern in the next twelve months following the date the condensed consolidated financial statements were available to be issued is dependent upon its ability to produce revenues and/or obtain financing sufficient to meet current and future obligations and deploy such to produce profitable operating results.

Management Plans

On April 9, 2025, the Company entered into the Hudson Equity Purchase Agreement (“EPA”). Under the agreement, the Company may, at its discretion and subject to certain conditions, issue and sell shares of its common stock to Hudson over a 24-month commitment period, providing a potential source of additional capital to support the Company’s ongoing operations and growth initiatives. As of June 30, 2025, the Company had sold 1,155,030 shares of common stock under the Hudson EPA, resulting in net proceeds of $1,149,417. The Company subsequently terminated the Hudson EPA effective August 13, 2025.

There is no assurance, however, that the Company will be able to sell shares on favorable terms or that additional capital will be available from other sources when needed. If the Company is unable to obtain sufficient amount of additional capital, it may be required to reduce the scope of its planned development, which could harm its business, financial condition, and operating results. The accompanying condensed consolidated financial statements do not include any adjustments that might result from these uncertainties.

As a result of the above, in connection with our assessment of going concern considerations in accordance with FASB ASU 2014-15, “Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern,” management has determined that our liquidity condition raises substantial doubt about our ability to continue as a going concern through twelve months from the date these unaudited interim condensed consolidated financial statements are issued. These unaudited interim condensed consolidated financial statements do not include any adjustments relating to the recovery of the recorded assets or the classification of the liabilities that might be necessary should we be unable to continue as a going concern

Note 3. ACCOUNTS RECEIVABLE, NET

Accounts receivable, net consist of the following:

SCHEDULE OF ACCOUNTS RECEIVABLE, NET

	June 30,			December 31,
	2025			2024
Third Party	$	2,498,247		$	3,394,112
Affiliates		775,027			271,298
Total Accounts Receivable		3,273,274			3,665,410
Less: Allowance for credit losses		(1,111,824	)		(940,596	)
Total accounts receivable, net	$	2,161,450		$	2,724,814

Note 4. INVENTORIES, NET

Inventory consists of the following:

SCHEDULE OF INVENTORY

	June 30,			December 31,
	2025			2024
First Defense Nasal Screen Corp (“FDNS”)	$	6,005,624		$	6,717,373
Finished goods		3,271,255			3,034,836
Total inventory, at cost		9,276,879			9,752,209
Less: reserve for obsolescence		(245,736	)		(233,601	)
Inventories, net	$	9,031,143		$	9,518,608

Note 5. PROPERTY, PLANT AND EQUIPMENT, NET

Property, plant and equipment consist of the following:

	June 30,			December 31,
	2025			2024
Leasehold improvements	$	766,467		$	766,467
Equipment		589,208			589,208
Furniture and fixtures		152,161			152,161
Property, plant and equipment, gross		1,507,836			1,507,836
Less: Accumulated depreciation		(1,199,194	)		(1,119,656	)
Property, plant and equipment, net	$	308,642		$	388,180

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

Note 6. INTANGIBLE ASSETS

Intangible assets consist of the following:

SCHEDULE OF INTANGIBLE ASSETS

	June 30,			December 31,
	2025			2024

Software development costs - Delivmeds	$	2,023,076		$	1,618,017

Customer relationships - Wood Sage acquisition		393,853			393,853
Customer relationships - Wellgistics acquisition		11,256,067			11,256,067
Trademark - Wellgistics acquisition		10,143,137			10,143,137
Intangible assets, gross		21,793,057			21,793,057
Accumulated amortization		(2,573,177	)		(1,047,048	)
Intangible assets, net	$	19,219,880		$	20,746,009

Intangible assets of $393,853 represent customer relationships identified and measured at fair value pursuant to the Wood Sage Acquisition in June 2024. The Company recorded amortization of $12,308 and $24,616 for the three and six months ended June 30, 2025, respectively, pertaining to these intangible assets.

Intangible assets of $11,256,067 and $10,143,137 represent customer relationships and trademarks, respectively, identified and measured at fair value pursuant to the Wellgistics, LLC Acquisition in August 2024. The Company recorded amortization of $496,003 and $938,006 pertaining to customer relationships, and $281,754 and $563,508 pertaining to the trademark for the three and six months ended June 30, 2025, respectively.

The following table represents the future amortization of intangibles assets:

Year Ended December 31,
2025 (remaining six months)	$	1,526,129
2026		3,052,258
2027		3,052,258
2028		3,052,258
2029		3,052,258
Thereafter		5,484,719
Intangible assets	$	19,219,880

Note 7. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

Accrued expenses and other liabilities consist of the following:

	June 30,		December 31,
	2025		2024
Accrued personnel costs	$	3,426,314	$	3,112,470
Accrued professional fees		139,557		347,829
Accrued expenses		227,973

SEC Form 10-Q filed by Wellgistics Health Inc.