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BASIS OF PRESENTATION | 6 Months Ended
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Jun. 30, 2025
BASIS OF PRESENTATION |
BASIS OF PRESENTATION | NOTE 1 – BASIS OF PRESENTATION The terms “COSM,” “we,” the “Company,” the “Group” and “us” as used in this report refer to Cosmos Health Inc. The accompanying unaudited condensed consolidated balance sheet as of June 30, 2025 and unaudited condensed consolidated statements of operations and comprehensive income (loss) for the three months ended June 30, 2025 have been prepared in accordance with generally accepted accounting principles 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 footnotes required by U.S. generally accepted accounting principles for complete financial statements. In the opinion of the management of COSM, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three months ended June 30, 2025, are not necessarily indicative of the results that may be expected for the year ending December 31, 2025, or any other period. These unaudited condensed consolidated financial statements and notes should be read in conjunction with the financial statements for the year ended December 31, 2024, included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 (“Form 10-K”). The accompanying condensed consolidated balance sheet as of December 31, 2024 has been derived from the audited financial statements filed in our Form 10-K and is included for comparison purposes on the accompanying balance sheet. Going Concern The Company’s unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”), which contemplates the continuation of the Company as a going concern. For the six‑month period ended June 30, 2025, the Company generated revenue of $28,458,230, incurred a net loss of $3,646,165, and used $1,396,236 of net cash in operating activities. As of June 30, 2025, the Company had cash and cash equivalents of $655,503, compared to $315,105 as of December 31, 2024, reflecting an increase of $340,398. The Company also had negative working capital of $604,249, an accumulated deficit of $117,668,440, and stockholders’ equity of $26,231,633. These conditions raise substantial doubt about the Company’s ability to continue as a going concern for a period of 12 months from the date of this filing. While the Company’s revenues have grown, they remain insufficient to fund operating expenses and meet debt obligations as they become due. Furthermore, the Company remains dependent on external financing sources to sustain operations and fund growth initiatives. Management has evaluated these factors and its ability to meet obligations due within the next 12 months. Its plans include expanding the portfolio of brand‑name and private‑label products, launching new distribution channels, and increasing sales from recently secured agreements, such as the exclusive distribution of Sky Premium Life products in the United Arab Emirates (“UAE”). Significant purchase orders have already been received under this agreement and are expected to contribute to operating cash inflows in the near term. Moreover, the Company is planning to expand the customer base of its subsidiary, Cosmofarm S.A., which is expected to substantially increase its wholesale revenue stream. In addition, the Company’s manufacturing subsidiary, CANA S.A., which is already demonstrating improved revenue and gross profit, is planning to strengthen its existing contract manufacturing agreements and secure new ones. From a financing perspective, during the six‑month period ended June 30, 2025, the Company raised capital through the issuance of convertible notes by the Parent Company and by entering into new debt facilities at both the Parent Company and subsidiaries level. Management intends to continue accessing capital markets to raise additional funds through equity offerings. Beginning in August 2025, the Company expects to become eligible to utilize an S‑3 registration statement (12 months after regaining compliance with Nasdaq Listing Rule 5250(c)(1)) to access equity capital more efficiently. In addition, the Company is pursuing amendments to certain debt facilities to defer principal repayments and exploring additional debt financing opportunities to enhance liquidity. Finally, on August 5, 2025, the Company entered into a Securities Purchase Agreement for the issuance of up to $300 million of senior secured convertible promissory notes, with an initial $8 million closing completed on August 6, 2025. The availability of these proceeds, primarily intended for digital asset acquisition and working capital, significantly improves the Company’s liquidity and alleviates substantial doubt regarding our ability to continue as a going concern for at least the next 12 months. Management is also considering postponing certain payments to suppliers and other creditors if required. Although these actions are intended to address the going concern uncertainty, there can be no assurance that the Company will be successful in executing its plans or obtaining the necessary funding. As a result, substantial doubt remains regarding the Company’s ability to continue as a going concern for a period of 12 months from the date of this filing. The accompanying consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty, including potential effects on the recoverability or classification of assets or the amounts and classification of liabilities. Considering the above, management is of the view that substantial doubt exists for the Company’s ability to continue as a going concern. The consolidated financial statements do not include any adjustments to reflect the possible future effect on the recoverability and classification of assets or the amounts and classifications of liabilities that may result from the outcome of this uncertainty.

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- Definition The entire disclosure for the business description and basis of presentation concepts. Business description describes the nature and type of organization including but not limited to organizational structure as may be applicable to holding companies, parent and subsidiary relationships, business divisions, business units, business segments, affiliates and information about significant ownership of the reporting entity. Basis of presentation describes the underlying basis used to prepare the financial statements (for example, US Generally Accepted Accounting Principles, Other Comprehensive Basis of Accounting, IFRS). + References Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef -Topic 235 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 4 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147483426/235-10-50-4 Reference 2: http://www.xbrl.org/2009/role/commonPracticeRef -Topic 205 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/205/tableOfContent + Details
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