mos Health (COSM) - 2023 Q1 - Quarterly Report

Financial Performance - The Company reported a cost of goods sold of $11,392,700 for the three months ended March 31, 2023, compared to $11,179,868 for the same period in 2022, reflecting an increase of 1.9%[319] - Total revenue for the three months ended March 31, 2023, was $12,349,777, down from $13,071,800 in the same period of 2022, indicating a decline of approximately 5.5%[321] - The Company reported revenue of $12,349,777 for the three months ended March 31, 2023, a decrease of 5.52% compared to $13,071,800 for the same period in 2022[334] - The Company experienced a net loss of $459,863 on revenue of $12,349,777 for Q1 2023, compared to a net loss of $5,585,146 on revenue of $13,071,800 in Q1 2022[334] - Gross profit decreased by 49.41% to $957,077 for the three months ended March 31, 2023, down from $1,891,932 in the same period of 2022[358] Investments and Acquisitions - The Company entered into a definitive agreement to acquire ZipDoctor Inc. for a total sum of $150,000, with the transaction closing on April 3, 2023[301] - The Company acquired a property for its subsidiary CosmoFarm Pharmaceuticals for €966,000 (approximately $1,068,000) on May 3, 2023[302] - The Company entered into a Stock Purchase Agreement to acquire 100% of Pharmaceutical Laboratories Cana S.A. for €800,000 and 46,377 shares of Cosmos restricted common stock[332] Research and Development - The Company signed a research and development agreement for new products in the health sector, with a project cost of €820,000 ($891,504)[297] - The Company plans to enhance its pharmaceutical and OTC product lines through acquisitions and licensing agreements, focusing on sustainable growth[327] - The Company plans to expand its nutraceutical portfolio to 150 SKUs by the end of 2023, including basic line formulas and advanced formulations[362] Financial Position and Working Capital - The Company has a principal balance of €135,938 ($147,791) remaining on a loan from the Greek government as of March 31, 2023, after repaying €4,688 ($5,096) during the three months ended March 31, 2023[289] - The Company had working capital of $32,083,333 as of March 31, 2023, compared to $34,296,034 as of December 31, 2022[338] - The Company has a total undiscounted operating lease liability of $1,387,630, with a present value of $1,115,523 as of March 31, 2023[293] - The Company reported a weighted-average remaining lease term of 3.34 years with a discount rate of 6.74% for its finance leases[293] Strategic Plans and Market Expansion - The Company has established a distribution network with over 160 pharmaceutical wholesale distributors and 40,000 pharmacies across Europe, enhancing its market reach[308] - The Company intends to enhance its geographic expansion in the EU, Asia, USA, and Canada through exclusive distributors and acquisitions of nutraceutical companies[362] - The Company plans to strengthen working capital, inventories, and research and development, while also pursuing acquisitions and enhancing sales and marketing efforts[345] Internal Controls and Governance - The Company's management has concluded that the disclosure controls and procedures were partially effective as of the end of the reporting period[371] - Management is committed to remediating identified material weaknesses, including lack of segregation of duties and internal controls structure review[371] - Internal Auditors are developing further procedures to ensure the effectiveness of internal controls and the accuracy of financial reporting[371] - There has been no change in internal control over financial reporting that has materially affected it during the most recently completed fiscal year[372] - The oversight Committee has the authority to retain outside advisors at the Company's expense to assist in its duties[373] - The Committee can request attendance from any officer, employee, or external advisors to facilitate its investigations[373] Future Outlook - The Company anticipates future revenue growth to be influenced by industry trends, competition, and economic conditions, including the impact of the Ukraine conflict and COVID-19[335]