Part I. Financial Information Financial Statements For Q1 2025, Wellgistics Health reported $10.9 million in net sales but a $32.4 million net loss, primarily due to non-cash stock-based compensation, with going concern uncertainty Consolidated Balance Sheets As of March 31, 2025, total assets increased slightly to $58.1 million, liabilities rose to $53.6 million, and stockholders' equity decreased to $4.5 million due to net loss | Financial Metric | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $2,516,585 | $1,028,336 | | Total current assets | $16,551,732 | $15,168,668 | | Total assets | $58,063,100 | $57,332,650 | | Total current liabilities | $46,225,313 | $38,046,747 | | Total liabilities | $53,584,332 | $50,598,204 | | Total stockholders' equity | $4,478,768 | $6,734,446 | Consolidated Statements of Operations In Q1 2025, the company generated $10.9 million in net sales but incurred a $32.4 million net loss, largely due to $27.8 million in stock-based compensation | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net sales | $10,863,443 | $ - | | Gross profit | $692,641 | $ - | | Total operating expenses | $32,041,009 | $79,764 | | Loss from operations | ($31,348,368) | ($79,764) | | Net loss | ($32,430,903) | ($83,122) | | Net loss per share | ($0.62) | ($0.00) | - General and administrative expenses for Q1 2025 included $27,773,421 of non-cash stock-based compensation related to the issuance of common stock to directors, employees, and consultants188 Consolidated Statements of Cash Flows Q1 2025 saw $1.3 million cash used in operations, offset by $3.1 million from financing activities, resulting in a quarter-end cash balance of $2.5 million | Cash Flow Activity | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | ($1,347,449) | $31,237 | | Net cash used in investing activities | ($273,133) | $ - | | Net cash provided by financing activities | $3,108,831 | $260,000 | | Net change in cash and cash equivalents | $1,488,249 | $291,237 | | Cash and cash equivalents at end of period | $2,516,585 | $292,601 | Notes to Consolidated Financial Statements Notes detail the February 2025 IPO, a going concern uncertainty due to recurring losses, $24.1 million total debt, and subsequent events including a merger and a $50 million equity line of credit - In February 2025, the company completed its IPO, generating gross proceeds of $4.0 million and net proceeds of approximately $3.1 million2325 - The company has a net loss of $32.4 million for Q1 2025 and an accumulated deficit of $42.2 million, which raises substantial doubt about its ability to continue as a going concern85 - As of March 31, 2025, total debt was $24.1 million, with key components being a $15 million note to the former owners of Wellgistics and a $5.2 million revolving line of credit102 - Subsequent to the quarter end, the company entered into a merger agreement with Peek Healthcare Technologies and secured a $50 million equity line of credit (ELOC) with Hudson Global Ventures135142 Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) MD&A details the company's 'micro health ecosystem' business model, Q1 2025 results showing $10.9 million revenue but a $32.4 million net loss due to non-cash compensation, and ongoing liquidity concerns Business Overview The company operates as a holding company for a 'micro health ecosystem' through its 2024 acquisitions, focusing on an integrated model for the 'specialty-lite' drug market - The company's business is structured as a micro health ecosystem with three core operating companies: a technology platform, a pharmacy, and a wholesale operation157 - Wellgistics, LLC is a key subsidiary, serving as a 50-state licensed pharmaceutical wholesaler with a network of over 5,000 registered pharmacies160 - The company's strategy focuses on integrating its business segments to address access, care coordination, and clinical management, particularly in the growing 'specialty-lite' pharmaceutical market169171 Results of Operations Q1 2025 saw first significant revenues of $10.9 million, a 6.4% gross margin, but exceptionally high operating expenses of $32.0 million, leading to a $32.4 million net loss | Revenue Stream | Three Months Ended March 31, 2025 | | :--- | :--- | | Product revenue - distribution services | $10,668,287 | | Pharmacy retail sales | $114,676 | | Third party logistics services | $80,480 | | Net sales | $10,863,443 | - The significant increase in general and administrative expenses was primarily due to $27,773,421 of non-cash stock-based compensation188 - Depreciation and amortization expense was $802,872, related to intangible and fixed assets acquired in the Wood Sage and Wellgistics, LLC acquisitions189 Liquidity and Capital Resources The company faces significant liquidity concerns with a going concern doubt, $1.3 million cash used in operations, $24.1 million total debt, and reliance on external financing like its recent IPO and a $50 million equity line of credit - The company expects to fund operations through operating cash flows, debt, and equity sales, but acknowledges that it may need to raise additional funds to execute its business plan191 | Debt Component | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Current portion of debt | $17,712,035 | $11,927,816 | | Long-term debt | $6,400,000 | $11,455,085 | | Total debt | $24,112,035 | $23,382,901 | - Net cash used in operating activities was $1,347,449 for Q1 2025, primarily due to the net loss, partially offset by non-cash stock-based compensation208 - Net cash from financing activities was $3,108,831, driven by $4.0 million in gross proceeds from the IPO211 Controls and Procedures Management concluded that the company's disclosure controls and procedures were effective as of March 31, 2025, with no material changes in internal control over financial reporting during the quarter - Management concluded that the company's disclosure controls and procedures were effective as of March 31, 2025226 - There were no changes in internal controls over financial reporting during the quarter that materially affected, or are reasonably likely to materially affect, internal controls227 Part II. Other Information Risk Factors No material changes to previously disclosed risk factors were reported, except for the company's ongoing liquidity needs - No material changes in risk factors were reported, except for the company's on-going liquidity needs230 Unregistered Sales of Equity Securities and Use of Proceeds This section details the use of $3.1 million IPO proceeds for working capital and the issuance of 19.8 million restricted shares and 152,000 shares as a commitment fee - The company received net proceeds of approximately $3.1 million from its February 2025 IPO, which were used for general working capital235237 - Between March 21 and March 27, 2025, the company issued 19,764,108 shares of restricted stock to directors, employees, and consultants under its equity incentive plan232 - On April 11, 2025, the company issued 152,000 shares of common stock as a commitment fee to Hudson Global Ventures, LLC pursuant to an equity purchase agreement232 Other Information This section covers post-quarter corporate governance changes, including the appointment of Michael L. Peterson as independent director and Audit Committee Chairman, and Mark DiSiena as the new CFO - Michael L. Peterson was appointed to the Board of Directors, designated as Chairman of the Audit Committee, and deemed an audit committee financial expert242 - Mark DiSiena was appointed as Chief Financial Officer, effective April 22, 2025, succeeding Vishnu Balu who resigned without any disagreement with the company244151
Wellgistics Health Inc(WGRX) - 2025 Q1 - Quarterly Report