mos Health (COSM) - 2024 Q3 - Quarterly Report

Acquisitions and Partnerships - The company reported a total acquisition cost of €800,000 and 46,377 shares of common stock for the acquisition of Cana Laboratories, completed on June 30, 2023[223]. - The acquisition of Bikas is expected to increase annual revenue by more than $10 million and enhance gross margins due to economies of scale[226]. - The acquisition of Cloudscreen, a cutting-edge AI platform, was completed for a total price of$637,080, enhancing the company's capabilities in drug repurposing[227]. - The company has established exclusive distribution agreements in multiple regions, including a significant partnership for the UAE market[219]. - The Company is committed to pursuing acquisitions and joint ventures to enhance its distribution network and product offerings[259]. Revenue and Financial Performance - The Company reported revenue of $12,411,048 for the three months ended September 30, 2024, a decrease of 3.22$12,823,797 in the same period of 2023, while for the nine months, revenue increased by 7.10% to $40,202,238 from$37,537,003[228]. - The net loss for the three months ended September 30, 2024, was $2,182,534, an improvement from a net loss of$3,415,077 in the same period of 2023, while the nine-month net loss increased to $6,639,935 from$4,790,597[228]. - Cost of goods sold for the three months ended September 30, 2024, was $11,204,186, a decrease of 3.49$11,609,039 in 2023, while for the nine months, it increased by 7.19% to $36,894,502 from$34,418,334[230]. - Gross profit for the three months ended September 30, 2024, was $1,206,862, a slight decrease of 0.65$1,214,758 in 2023, while for the nine months, gross profit increased by 6.06% to $3,307,736 from$3,118,669[232]. - Operating expenses for the three months ended September 30, 2024, decreased by 18.56% to $2,239,864 from$3,017,301 in 2023, primarily due to lower general and administrative costs[233]. - The Company had working capital of $11,027,653 as of September 30, 2024, down from$12,285,310 as of December 31, 2023[240]. - Net cash used in operating activities for the nine months ended September 30, 2024, was $3,883,215, a significant decrease from$16,587,726 in 2023[241]. - The Company recorded a foreign currency translation adjustment gain of $747,879 for the three months ended September 30, 2024, compared to a loss of$890,645 in the same period of 2023[239]. - Management expressed substantial doubt about the Company's ability to continue as a going concern for the next twelve months due to ongoing losses and accumulated deficit of $104,479,692[245]. Product Development and Market Expansion - The company has developed over 105 product codes in its proprietary nutraceutical line, which includes brands like "Sky Premium Life®" and "Mediterranation®"[209]. - The Company plans to expand its product portfolio to 150 SKUs by the end of 2023, including basic line formulas and advanced formulations[251]. - The Company is positioned to enter the global baby food market, valued at$102.90 billion annually, with its Bio-Bebe brand[264]. - The Company is expanding its antiseptic brand C-Sept with the launch of C-Scrub Wash, targeting the $29 billion global antiseptic market[264]. - The Company aims to enhance its distribution network through exclusive distributors, wholesalers, and e-commerce platforms in the EU, Asia, USA, and Canada[251]. - The Company is expanding its branded pharmaceuticals globally, particularly in the EU and UK, and enhancing exclusive distribution rights[252]. - The Company plans to invest in expanding production capacity and global facilities to boost sales and engage in contract manufacturing[259]. Operational Efficiency and Supply Chain - The company operates a distribution network exceeding 1,500 pharmacies in Greece and has established a high-end distribution center utilizing robotic systems[208]. - The company achieved a 0% error selection rate in its distribution processes, enhancing order fulfillment efficiency[207]. - The company has a robust supply chain with stable pharmaceutical supply from DocPharma, enhancing its expansion capabilities[206]. - The company maintains merchandise inventories valued at the lower of cost or market using the weighted-average cost method[278]. - The company records valuation reserves annually for merchandise damage, defective returns, slow-moving items, and obsolescence, estimating a reduction in value[278]. Internal Controls and Governance - The company plans to complete remediation of material weaknesses in internal controls by December 31, 2024[281]. - The company is updating its organizational chart to improve role allocation and share responsibilities among personnel[282]. - The company is developing multiple levels of review based on job responsibilities to enhance oversight in financial reporting[284]. - The audit committee is responsible for overseeing financial reporting and accounting processes, with independent directors serving on the committee[286]. - The audit committee meets at least four times a year and maintains direct communication with independent auditors[288]. - There have been no changes in internal control over financial reporting that materially affect the company[285]. - The company is assessing a new financial reporting application to improve IT General Controls[284]. - The company is not required to provide risk factor disclosures due to its status as a Smaller Reporting Company[289].