As filed with the Securities and Exchange Commission on December 6, 2024.

Registration No. 333-280945

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Amendment No. 5

to

FORM S-1

REGISTRATION STATEMENT

UNDER THE SECURITIES ACT OF 1933

Wellgistics Health, Inc.

(Exact name of registrant as specified in its charter.)

3000 Bayport Drive

Suite 950

Tampa, FL 33607

844-203-6092

(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

Timothy Canning

3000 Bayport Drive

Suite 950

Tampa, FL 33607

844-203-6092

(Name, address, including zip code and telephone number, including area code, of agent for service)

Copies to:

Kate L. Bechen

Robin K. Lehninger

Louis D. Kern

Dykema Gossett PLLC

111 E. Kilbourn Ave., Suite 1050

Milwaukee, WI 53202

(414) 488-7300

Ross David Carmel, Esq.

Thiago Spercel, Esq.

Sichenzia Ross Ference Carmel LLP

1185 Avenue of the Americas, 31^st Floor

New York, NY 10036

Tel: (212) 930-9700

Fax: (212) 930 9725

As soon as practicable after the effective date of this Registration Statement.

(Approximate date of commencement of proposed sale to the public)

If any of the securities being registered on this form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box. ☐

If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

If this form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

If this form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. ☐

The Registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the registration statement shall become effective on such date as the Commission, acting pursuant to said section 8(a), may determine.

The information in this preliminary prospectus is not complete and may be changed. The registrant named in this preliminary prospectus may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell nor does it seek an offer to buy these securities in any state where the offer or sale is not permitted.

PRELIMINARY PROSPECTUS - SUBJECT TO COMPLETION, DATED DECEMBER 6, 2024

Wellgistics Health, Inc.

900,000 Shares of Common Stock

This prospectus relates to the initial public offering (the “Offering”) of common stock, par value $.0001 per share (“Common Stock”) of Wellgistics Health, Inc. (f/k/a Danam Health, Inc.). We are offering 900,000 shares of Common Stock. Currently, no public market exists for our Common Stock. No established public trading market for our Common Stock currently exists. We have applied to list our Common Stock on the Nasdaq Capital Market LLC (“Nasdaq”) under the symbol “WGRX.” We expect our Common Stock to begin trading on or about December 31, 2024. We will not proceed with the Offering if the Common Stock is not approved for listing on Nasdaq. We estimate that the initial public offering price of our Common Stock will be between $4.50 per share and $5.50 per share. We believe that upon completion of the Offering, we will meet the standards for listing on Nasdaq.

We may amend or supplement this prospectus from time to time by filing amendments or supplements as required. You should read the entire prospectus and any amendments or supplements carefully before you make your investment decision.

We are an “emerging growth company” as defined under U.S. federal securities laws and, as such, have elected to comply with reduced public company reporting requirements. This prospectus complies with the requirements that apply to an issuer that is an emerging growth company. See “Prospectus Summary—Implications of Being an Emerging Growth Company.”

Investing in our Common Stock involves risks. Before buying any shares of Common Stock, you should review carefully the risks and uncertainties described under the heading “Risk Factors” beginning on page 10 of this prospectus and in the documents incorporated by reference into this prospectus.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.

We have retained Craft Capital Management LLC to act as the representative (the “representative”) of the underwriters (the “underwriters”) in connection with this Offering. See “Underwriting” in this prospectus for more information regarding the underwriting arrangements.

(1) We have agreed to pay the representative a discount equal to 7% of the gross proceeds of the Offering. For a description of the other compensation to be received by the representative, see “Underwriting” beginning on page 101.

(2) Excludes fees and expenses payable to the underwriters and other expenses of this Offering.

The underwriters are offering the units on a firm commitment basis and expects to deliver the Common Stock to purchasers on or about [●], 2024.

The date of this prospectus is [●], 2024

TABLE OF CONTENTS

DEALER PROSPECTIVE DELIVERY OBLIGATION

Until [●] (the 25th day after the date of this offering), all dealers that effect transactions in these securities, whether or not participating in this Offering, may be required to deliver a prospectus. This is in addition to the dealers’ obligation to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.

ABOUT THIS PROSPECTUS

You should rely only on the information contained in this prospectus or in any related free-writing prospectus. We and the underwriters have not authorized anyone to provide you with information or to make any representations other than contained in this prospectus, any post-effective amendment, or any applicable prospectus supplement prepared by or on behalf of us or to which we have referred you. We and the underwriters take no responsibility for and can provide no assurance as to the reliability of any other information that others may give you. If anyone provides you with different or inconsistent information, you should not rely on it.

You should assume that the information appearing in this prospectus, any post-effective amendment, and any applicable prospectus supplement to this prospectus is accurate only as of the date on its respective cover. Our business, financial condition, results of operations and prospects may have changed since those dates. We are not making an offer to sell our Common Stock in any jurisdiction where the offer or sale thereof is not permitted. You should not assume that the information appearing in this prospectus any post-effective amendment, and any applicable prospectus supplement to this prospectus is accurate as of any date other than their respective dates. Our business, financial condition, results of operations and prospects may have changed since those dates. You should read carefully the entirety of this prospectus before making an investment decision.

The registration statement we filed with the Securities and Exchange Commission (“SEC”), of which this prospectus forms a part, includes exhibits that provide more detail of the matters discussed in this prospectus. You should read this prospectus, any post-effective amendment, and any applicable prospectus supplement and the related exhibits filed with the SEC before making your investment decision. The registration statement and the exhibits can be obtained from the SEC, as indicated under the section entitled “Where You Can Find More Information.”

In the registration statement of which this prospectus forms a part, “Wellgistics Health,” the “Company,” “we,” “us,” “our” and similar terms refer to Wellgistics Health, Inc. (f/k/a Danam Health, Inc.), a Delaware corporation, and its consolidated subsidiaries. References to our “Common Stock” refer to the common stock, par value $0.0001 per share, of Wellgistics Health, Inc.

Certain amounts, percentages and other figures presented in this prospectus have been subject to rounding adjustments. Accordingly, figures shown as totals, dollars or percentage amounts of changes may not represent the arithmetic summation or calculation of the figures that precede them.

MARKET AND INDUSTRY DATA

We obtained the statistical data, market data and other industry data and forecasts described in this prospectus from market research, publicly available information and industry publications. Industry publications generally state that they obtain their information from sources that they believe to be reliable, but they do not guarantee the accuracy and completeness of the information. Similarly, while we believe that the statistical data, industry data and forecasts and market research are reliable, we have not independently verified the data. We have not sought the consent of the sources to refer to their reports appearing or incorporated by reference in this prospectus.

PRESENTATION OF FINANCIAL INFORMATION

Unless otherwise indicated, all financial information contained in this prospectus is prepared and presented in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP” or “GAAP”).

In January 2023 and May 2023, Wellgistics Health entered into separate definitive agreements with the owners of Wood Sage and Wellgistics, respectively, whereby Wellgistics Health would acquire all of the outstanding membership interests of Wood Sage and Wellgistics. On June 16, 2024, Wellgistics Health 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 of Wellgistics Health. In connection with the Wood Sage Acquisition, Wellgistics Health acquired Wood Sage’s two operating subsidiaries, APS—a pharmaceutical technology hub—and CSP—a retail community specialty pharmacy. On August 30, 2024, Wellgistics Health closed on the Wellgistics Acquisition, thereby making Wellgistics—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 of Wellgistics Health.

As such, Wellgistics Health currently exists as a holding company with Wood Sage as a directly held intermediate holding company subsidiary, APS and CSP as indirect operating subsidiaries, and Wellgistics LLC as a direct operating subsidiary. For more information about the Wellgistics Acquisition, Wellgistics LLC, the Wood Sage Acquisition, Wood Sage, APS, and CSP, see the sections entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operation of Wellgistics Health, Inc.” beginning on page 51 of this prospectus, “Management’s Discussion and Analysis of Financial Condition and Results of Operation of Wellgistics LLC” beginning on page 56 of this prospectus, and “Business” beginning on page 63 of this prospectus.

Despite that Wellgistics Health only recently closed the Wood Sage Acquisition and the Wellgistics Acquisition during 2024, the three companies have shared common office space, comarketed solutions to the marketplace, and leveraged financial and back-office support prior to June 2024.

FREQUENTLY USED TERMS

Unless otherwise stated or the context otherwise requires, in this proxy statement/prospectus:

“3PL” means third-party logistics.

“ACHC” means the Accreditation Commission for Health Care.

“ACOs” means Account Care Organizations.

“ADD” means Accredited Drug Distributor (formerly known as “Verified Accredited Wholesale Distributor”), which is an accreditation with the NABP.

“APD” means American Pharmaceutical Ingredients, LLC, a subsidiary of Wellgistics LLC.

“API” means advanced programming interface.

“APS” means Alliance Pharma Solutions LLC d/b/a DelivMeds, a Florida limited liability company.

“ASC” means Accounting Standards Codification.

“CMS” means the Centers for Medicare & Medicaid Services.

“CSP” means Community Specialty Pharmacy, LLC, a Florida limited liability company.

“DEA” means the Drug Enforcement Agency.

“DGCL” means the Delaware General Corporation Law, as amended.

“DHS” means designated health services.

“Equity Securities” means, with respect to any Person, (a) any share of capital or capital stock, partnership, membership, joint venture or similar interest, or other voting securities of, or other ownership interest in, any such Person, (b) any securities of such Person convertible into or exchangeable for cash or shares of capital or capital stock or other voting securities of, or other ownership interests in, such Person, (c) any warrants, calls, options, contingent value rights or other rights to acquire from such Person, or other obligations of such Person to issue, any shares of capital or capital stock or other voting securities of, or other ownership interests in, or securities convertible into or exchangeable for shares of capital or capital stock or other voting securities of, or other ownership interests in, such Person, (d) any restricted shares, stock appreciation rights, restricted units, performance units, contingent value rights, “phantom” stock, equity or equity-based rights or similar securities or rights issued by or with the approval of such Person that are derivative of, or provide economic benefits based, directly or indirectly, on the value or price of, any shares of capital or capital stock or other voting securities of, other ownership interests in, or any business, products or assets of, such Person and (e) any securities issued or issuable with respect to the securities or interests referred to in clauses (a) through (d) above in connection with a combination of shares, recapitalization, merger, consolidation or other reorganization.

“ETASU” means Elements to Assure Safe Use.

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

“FCA” means the False Claims Act, 31 U.S.C. §§ 3729–33.

“FDA” means the Food & Drug Administration.

“GDP” means Gross Domestic Product.

“GPOs” means group purchasing organizations.

“Health Reform Laws” means the Patient Protection and Affordable Care Act, as amended by the Healthcare and Education Reconciliation Act of 2010.

“HEDIS” means the Healthcare Effectiveness Data and Information Set.

“HHS” means the U.S. Department of Health and Human Services.

“HIPAA” means the Health Insurance Portability and Accountability Act of 1996.

“HMA” means Healthcare Merchant Accreditation (formerly known as “Safe Pharmacy”), which is an accreditation with the NABP.

“Integral” means Integral Health, Inc. a Delaware corporation.

“IRA” means the Inflation Reduction Act of 2022.

“IRS” means the Internal Revenue Service.

“JOBS Act” means the Jumpstart Our Business Startups Act of 2012.

“Jouska” means Jouska Holdings LLC, a Delaware limited liability company.

“LTV” means lifetime value.

“MSA” means that certain Management Services Agreement dated October 17, 2022, by and between Wood Sage and TRxADE.

“MTM” means medication therapy management.

“NABP” means the National Association of Boards of Pharmacy.

“NACDS” means the National Association of Chain Drug Stores.

“Nasdaq” means the Nasdaq Capital Market LLC.

“NCQA” means National Committee for Quality Assurance.

“NEO” means a named executive officer of Wellgistics Health.

“Nomad” means Nomad Capital LLC, a Utah limited liability company.

“NPI” means National Provider Identifier.

“NPS” means net promoter score.

“OIG” means the Office of the Inspector General.

“PBM” means pharmacy benefit plan.

“PCAOB” means U.S. Public Company Accounting Oversight Board.

“Person” means an individual, partnership, corporation, limited liability company, joint stock company, unincorporated organization or association, trust, joint venture or other similar entity, whether or not a legal entity.

“PHI” means patient health information.

“PMS” means pharmacy management software.

“Privacy Rule” means the privacy regulations issued by the Office of Civil Rights of HHS pursuant to HIPAA.

“PSAO” means Pharmacy Services Administration Organization.

“REMS” means Risk Evaluation and Mitigation Strategy.

“SEC” means the U.S. Securities and Exchange Commission.

“Securities Act” means the Securities Act of 1933, as amended.

“Security Rules” means the security regulations issued by the Office of Civil Rights of HHS pursuant to HIPAA.

“Strategix” means Strategix Global LLC, a Utah limited liability company.

“TRxADE” means TRxADE HEALTH, Inc., a Delaware corporation and publicly traded company listed on Nasdaq under the ticker MEDS.

“TRxADE Nevada” means TRxADE Group, Inc., a Nevada corporation.

“URAC” means Utilization Review Accreditation Commission.

“Wellgistics Acquisition” means the acquisition of Wellgistics by Wellgistics Health pursuant to the Wellgistics MIPA.

“Wellgistics Health” means Wellgistics Health, Inc. (f/k/a Danam Health, Inc.), a Delaware corporation.

“Wellgistics LLC” means Wellgistics, LLC, a Florida limited liability company.

“Wellgistics MIPA” means that certain Membership Interest Purchase Agreement dated May 11, 2023, as amended, by and among Wellgistics Health, Wellgistics LLC, Strategix, Nomad, Jouska, and Brian Norton, governing the Wellgistics Acquisition.

“Wood Sage” means Wood Sage LLC, a Florida limited liability company.

“Wood Sage Acquisition” means the acquisition of Wood Sage by Wellgistics Health pursuant to that certain Amended and Restated Membership Interest Purchase Agreement dated June 16, 2024, by and between Wellgistics Health and Wood Sage.

RISK FACTORS

Investing in our Common Stock involves a high degree of risk. In addition to the information, documents or reports included or incorporated by reference in this prospectus and, if applicable, any prospectus supplement or other offering materials, you should carefully consider the risks described below in addition to the other information contained in this prospectus, before making an investment decision. Our business, financial condition or results of operations could be harmed by any of these risks. As a result, you could lose some or all of your investment in our Common Stock. The risks and uncertainties described below are not the only ones we face. Additional risks not currently known to us or other factors not perceived by us to present significant risks to our business at this time also may impair our business operations.

Risks Related to Wellgistics Health’s Business

Our limited operating history as a combined company and our evolving business make it difficult to evaluate our current business and future prospects and increase the risk of your investment.

We were incorporated in 2022 for the purpose of acquiring and integrating various companies in the health care industry. Our limited operating history and rapidly evolving business make it difficult to evaluate our current business, future prospects and plan for growth. We will continue to encounter significant risks and uncertainties frequently experienced by growing companies in rapidly changing and heavily regulated industries, such as attracting new customers to our products and services; retaining customers and encouraging them to utilize new products and services that we make available; competition from other companies; hiring, integrating, training and retaining skilled personnel; developing new solutions; determining prices for our solutions; unforeseen expenses; challenges in forecasting accuracy; and new or adverse regulatory developments affecting aspects of the aerospace and defense industry. Further, because we depend, in part, on market acceptance of our newer and future products and services, it is difficult to evaluate trends that may affect our business and whether our expansion will be profitable. If we have difficulty launching new products or services, then our reputation may be harmed and our business, financial condition and results of operations may be adversely affected. If our assumptions regarding these and other similar risks and uncertainties that relate to our business, which we use to plan our business, are incorrect or change as we gain more experience operating as a combined company, or if we do not address these challenges successfully, our operating and financial results could differ materially from our expectations and our business could suffer.

Wellgistics Health may experience difficulties in integrating the operations of Wellgistics LLC and Wood Sage thereby hindering Wellgistics Health from realizing the expected benefits of these transactions.

Wellgistics Health’s success depends on Wellgistics Health’s ability to realize the anticipated benefits of combining the operations of the Wellgistics LLC and Wood Sage with Wellgistics Health in an efficient and effective manner. The integration process could take longer than anticipated and could result in the loss of key employees from either of Wood Sage or Wellgistics LLC, the disruption of each company’s ongoing businesses, tax costs or inefficiencies, or inconsistencies in standards, controls, information technology systems, procedures and policies, any of which could adversely affect Wellgistics Health’s ability to continue relationships with the Wood Sage’s or Wellgistics LLC’s’ customers, employees or other third parties, or Wellgistics Health’s ability to achieve the anticipated benefits of the Wood Sage Acquisition and Wellgistics Acquisition and could harm Wellgistics Health’s financial performance. If Wellgistics Health is unable to successfully or timely integrate the operations of the Wood Sage or Wellgistics LLC with its business, Wellgistics Health may incur unanticipated liabilities and be unable to realize the revenue growth, operating efficiencies, synergies and other anticipated benefits resulting from such transactions and Wellgistics Health’s business, results of operations, and financial condition could be materially and adversely affected.

Reductions in third-party reimbursement levels, from private or governmental agency plans, and potential changes in industry pricing benchmarks for prescription drugs could materially and adversely affect Wellgistics Health’s results of operations.

The substantial majority of the prescriptions Wellgistics Health will fill at Wellgistics Health’s CSP division will be reimbursed by third-party payers, including private and governmental agency payers. The continued efforts of health maintenance organizations, managed care organizations, PBM companies, governmental agencies, and other third-party payers to reduce prescription drug costs and pharmacy reimbursement rates, as well as litigation and other legal proceedings relating to how drugs are priced, may adversely impact Wellgistics Health’s results of operations. In the U.S., plan changes with rate adjustments often occur in January and July and Wellgistics Health’s reimbursement arrangements may provide for rate adjustments at prescribed intervals during their term. In addition, the timing and amount of periodic contractual reconciliations payments can vary significantly and may not follow a predictable path. Further, in an environment where some PBM clients utilize narrow or restricted pharmacy provider networks, some of these entities may offer pricing terms that Wellgistics Health may not be willing to accept or otherwise restrict Wellgistics Health’s participation in their networks of pharmacy providers. This may also impact the ability for Wellgistics Health’s pharmacy network partners to adjudicate certain prescription claims received via transfer from the DelivMeds hub platform technology which may impact several revenue generating channels in the form of technology-related fees. Further, Wellgistics Health’s wholesale operations may be impacted as pharmacy coverage/ margin is diminished on certain products effecting the ability to carry and move this inventory thereby affecting buying patterns.

In addition, many payers in the U.S. are increasingly considering new metrics as the basis for reimbursement rates. It is possible that the pharmaceutical industry or regulators may evaluate and/or develop an alternative pricing reference to replace wholesale acquisition price (WAC) and average wholesale price (AWP), which will be the pricing reference used for Wellgistics Health’s pharmacy and network partner pharmacies contracts. This will also have a direct impact on Wellgistics Health’s secondary wholesalers sourcing and procurement strategies. Future changes to the pricing benchmarks used to establish pharmaceutical pricing, including changes in the basis for calculating reimbursement by third-party payers, could adversely affect Wellgistics Health.

A shift in pharmacy mix toward lower margin plans, margin compression on branded medications, increased offering of specialty products, DIR fees, mail order pharmacy steering, and programs could adversely affect Wellgistics Health’s results of operations.

Wellgistics Health’s CSP division and network of independent partner pharmacies will seek to grow prescription volume while operating in a marketplace with continuous reimbursement pressure. A shift in the mix of pharmacy prescription volume towards programs offering lower reimbursement rates could adversely affect Wellgistics Health’s results of operations both from an in-house prescription fulfillment perspective and also technology and transactional fees from Wellgistics Health’s network of independent partner pharmacies. General trends Wellgistics Health may observe impacting independent pharmacies include but are not limited to: a shift in pharmacy mix towards 90-day fills which are often reimbursed at lower amounts compared to 30-day fills, DIR fees from PBMs on Medicare Part D prescriptions often leading to negative reimbursements, lower plan paid amounts for branded and specialty medications while simultaneously observing an increase in the number of patients requiring a “specialty-lite” or full specialty medication, narrow networks with unfavorable contract pricing, delivery and shipping-related restrictions impacting the pharmacies ability to gain additional market share, enhanced PBM tactics to steer patients to mail order pharmacies thereby reducing market opportunities, and little to no remuneration for in-demand consumer-driven concierge services from pharmacists. Wellgistics Health’s pharmacy division retains access to all major plans with as expected market competitive reimbursement rates for an independent pharmacy. In-network coverage for PBMs and payors at the independent network partner pharmacy level will vary from store-to-store and Wellgistics Health continue to add more network participants to provide robust coverage.

If Wellgistics Health is not able to generate prescription volume and other business from patients participating in these programs that is sufficient to offset the impact of lower reimbursement, or if the degree or terms of Wellgistics Health’s participation in such preferred networks declines in future years, Wellgistics Health’s results of operations could be materially and adversely affected. Furthermore, changes in political, economic, and regulatory influences, as well as industry-wide changes in business practices, including with respect to the imposition of DIR fees by PBMs, may significantly affect Wellgistics Health’s business. Wellgistics Health’s failure to successfully anticipate and respond to, or appropriately adapt to, evolving industry conditions or any of these changes or trends, none of which are within Wellgistics Health’s control, in a timely and effective manner could have a significant negative impact on Wellgistics Health’s competitive position and materially adversely affect Wellgistics Health’s business, financial condition and results of operations.

Wellgistics Health will derive a portion of its sales from prescription drug sales reimbursed by PBM companies and Wellgistics Health’s participation in the pharmacy provider networks of these companies may be restricted or terminated.

Wellgistics Health will derive a portion of Wellgistics Health’s sales from prescription drug sales reimbursed through prescription drug plans administered by PBM companies. PBM companies typically administer multiple prescription drug plans that expire at various times and provide for varying reimbursement rates, and often limit coverage to specific drug products on an approved list, known as a formulary, which might not include all of the approved drugs for a particular indication. Changes in pricing and other terms of Wellgistics Health’s contracts with PBM companies can significantly impact Wellgistics Health’s results of operations. There can be no assurance that Wellgistics Health will participate in any particular PBM company’s pharmacy provider network in any particular future time period or on terms reasonably acceptable to Wellgistics Health. If Wellgistics Health’s participation in the pharmacy provider network for a prescription drug plan administered by one or more of the large PBM companies is restricted or terminated, Wellgistics Health expects that Wellgistics Health’s sales would be adversely affected, at least in the short-term. If Wellgistics Health is unable to replace any such lost sales, either through an increase in other sales or through a resumption of participation in those plans, Wellgistics Health’s operating results could be materially and adversely affected. If Wellgistics Health exits a pharmacy provider network and later resumes participation, there can be no assurance that Wellgistics Health will achieve any particular level of business on any particular pace, or that all clients of the PBM company will choose to include us again in the pharmacy network for their plans, initially or at all. In addition, in such circumstances Wellgistics Health may incur increased marketing and other costs in connection with initiatives to regain former patients and attract new patients covered by such plans.

Wellgistics Health could be adversely affected by a decrease in the introduction of new brand name and generic prescription drugs as well as increases in the cost to procure prescription drugs.

The profitability of Wellgistics Health’s healthcare ecosystem business model depends upon the utilization of prescription drugs. Utilization trends are affected by, among other factors, the introduction of new and successful prescription drugs, coverage on payor/PBM formularies, as well as lower-priced generic alternatives to existing brand name drugs. Inflation in the price of drugs also can adversely affect utilization, particularly given the increased prevalence of high-deductible health insurance plans and related plan design changes. New brand name drugs with coverage on formularies can result in increased drug utilization and associated sales, while the introduction of lower priced generic alternatives typically results in relatively lower sales, but relatively higher gross profit margins.

In addition, if Wellgistics Health experiences an increase in the amounts it pays to procure pharmaceutical drugs, including generic drugs, Wellgistics Health’s gross profit margins would be adversely affected to the extent Wellgistics Health is not able to offset such cost increases. Any failure to fully offset any such increased prices and costs or to modify Wellgistics Health’s activities to mitigate the impact could have a material adverse effect on Wellgistics Health’s results of operations. Also, any future changes in drug prices could be significantly different than Wellgistics Health’s expectations.

A 2019 study performed by NACDS entitled “Cost of Dispensing Study” found that the overall cost of dispensing for all drugs was $12.40 per fill. After factoring inflation, that same cost is estimated to be $14.68 per fill. The latter does not account for other costs associated with medication dispensing noted in this “Risk Factors” section which clearly demonstrates further strain to gross profit margin on prescription-related fills.

Accordingly, a decrease in the number or magnitude of significant new brand name drugs or generics successfully introduced, delays in their introduction, a decrease in the utilization of previously introduced prescription drugs, and or rising costs associated with medication dispensing could materially and adversely affect Wellgistics Health’s business, financial condition and results of operations.

Consolidation and strategic alliances in the healthcare industry could adversely affect Wellgistics Health’s business operations, competitive positioning, financial condition and results of operations.

Many organizations in the healthcare industry, including PBM companies, have consolidated in recent years to create larger healthcare enterprises with greater bargaining power, which has resulted in greater pricing pressures. If this consolidation trend continues, it could give the resulting enterprises even greater bargaining power, which may lead to further pressure on the prices for Wellgistics Health’s products and services. If these pressures result in reductions in Wellgistics Health’s prices, Wellgistics Health’s businesses would become less profitable unless Wellgistics Health are able to achieve corresponding reductions in costs or develop profitable new revenue streams.

Changes in economic conditions could adversely affect consumer/client buying practices and market adoption of Wellgistics Health’s DelivMeds mobile application and the accompanying revenues to premium access/services.

Wellgistics Health’s performance may be adversely impacted by changes in global, national, regional or local economic conditions and consumer confidence. These conditions can also adversely affect Wellgistics Health’s key vendors and customers. External factors that affect consumer confidence and over which Wellgistics Health exercises no influence include unemployment rates, inflation, levels of personal disposable income, levels of taxes and interest and global, national, regional or local economic conditions, health epidemics or pandemics. For example, COVID-19 exposes Wellgistics Health to the risks of continued impact of global supply chain disruptions, and the uncertain economic and geopolitical environment, as well as looting, vandalism, acts of war or terrorism. Changes in economic conditions and consumer confidence could adversely affect consumer preferences, purchasing power and spending patterns, which could lead to a decrease in overall consumer spending as well as in prescription drug, services, and digital health services utilization and which could be exacerbated by the increasing prevalence of high-deductible health insurance plans and related plan design changes. From a client perspective, increasing pressures from margin compression, prescription pricing negotiations, and other known stressors as outlined in this “Risk Factors” section may negatively impact a manufacturer’s willingness to adopt and utilize various a-la-carte services Wellgistics Health will provide through Wellgistics Health’s hub platform and clinical services. Further threats from market competitors to offer additional products at promotional pricing could lead to lower pricing floors as well.

Inflationary pressures could have a material impact on Wellgistics Health’s business and operations.

Wellgistics Health will be subject to risk of specific inflationary pressures on product prices and its impact on consumer spending. For example, increases in prescription drug costs could impact consumers ability to afford initial or on-going therapy. Wellgistics Health’s focus on the relatively expensive specialty lite business segment (i.e., $500 - $3,000 therapies) could be particularly impacted by increasing costs. Additionally, consumer discretionary funds could be reduced, impacting the ability to pay for digital services and subscription models that Wellgistics Health offers. If inflation continues to increase, sourcing and procuring specialty lite products may prove to be capital intensive. Wellgistics Health may not be able to adjust prices sufficiently to offset the effect without negatively impacting consumer demand or Wellgistics Health’s gross margin. All of these inflationary risk factors could materially and adversely impact Wellgistics Health’s business operations, financial condition and results of operations.

The industries in which Wellgistics Health will operate are highly competitive and constantly evolving and changes in market dynamics could adversely impact us.

The level of competition in the pharmacy (i.e., retail, independent, specialty, and digital), healthcare and clinical concierge like services, and pharmaceutical wholesale industries is high. Changes in market dynamics or actions of competitors or manufacturers, including industry consolidation and the emergence of new competitors and strategic alliances, could materially and adversely impact us. Disruptive innovation, or the perception of potentially disruptive innovation, by existing or new competitors could alter the competitive landscape in the future and require us to accurately identify and assess such changes and if required make timely and effective changes to Wellgistics Health’s strategies and business model to compete effectively.

All of Wellgistics Health’s businesses will face intense competition from multiple existing and new businesses, some of which are aggressively expanding in markets Wellgistics Health will serve. Wellgistics Health will develop Wellgistics Health’s offerings to respond to market dynamics; however, if Wellgistics Health’s customers are not receptive to these changes, if Wellgistics Health is unable to expand successful programs in a timely manner, or Wellgistics Health otherwise does not effectively respond to changes in market dynamics, Wellgistics Health’s businesses and financial performance could be materially and adversely affected.

There are a significant number of competitors that provide one or more comprehensive services, including distribution, with respect to specialty pharmacy drugs, hub and clinical services to perform patient financial assistance; prior authorization coordination; copay tiered reductions; tele-pharmacy; and access to digital health resources, some of whom have greater resources than Wellgistics Health does, including: PBMs; retail pharmacy chains and independent retail pharmacies; digital pharmacies; national, regional and niche specialty pharmacies; home and specialty infusion therapy companies; provider practices and systems; and GPOs.

The leading payors and drug chains have completed extensive mergers and acquisitions transactions and business combinations, and, therefore, have significantly greater market share, resources and purchasing power than Wellgistics Health does and, in the aggregate, these competitors generally have access to substantially the same limited distribution drugs that will be in Wellgistics Health’s portfolio. These companies also benefit from their acquisition activity with healthcare organizations, as Wellgistics Health has seen recent acquisitions in the home healthcare and primary care services arena (i.e., One Medical, Signify Health, Village MD, Summit Health, CareCentrix, among others).

Digital pharmacies both national and regional have been increasingly entering the market over the course of the last decade with well-known players such as Roman, Lemonaid Health, ForHims, TruePill, and Amazon’s acquisition of PillPack. At the regional level, Wellgistics Health has seen the emergence of companies like Capsule, Alto, and many others outlined below looking to penetrate markets and gain access to lives by looking for additional points of differentiation. The competitive healthcare landscape along with macroeconomic pressures has also seen increased chapter 11 filings for bankruptcy and or other means of dissolution including Medley, NowRx, AmazonCare, Haven (i.e., joint venture of Amazon, Berkshire Hathaway, and JPMorgan Chase) over recent years. Many of these companies leverage access to telehealth services and backend partnerships with mail order pharmacies to provide consumers with cash-paying models for access to niche services. The evolution of centralized digital patient support networks with network pharmacies has also recently been gaining steam.

As Wellgistics Health will increase in scale and market share, or provide additional healthcare services, Wellgistics Health expects more direct competition for certain drugs, payer and patient access, and services from this myriad of companies. These factors together with the impact of the competitive marketplace or other significant differentiating factors between us and Wellgistics Health’s competitors may make it difficult to gain market access and penetration all of which could materially and adversely impact Wellgistics Health’s business operations, financial condition and results of operations.

Below is a 2021 Snapshot of Digital Pharmacy Solutions amongst key healthcare stakeholders/entities:

Source:

If Wellgistics Health does not successfully create and implement relevant omni-channel experiences for Wellgistics Health’s customers, Wellgistics Health’s businesses and results of operations could be adversely impacted.

The portion of total consumer expenditures from various business sectors completing online shopping has drastically changed over the last two decades. Wellgistics Health is seeing a complete paradigm shift, as consumer sentiment and behavior has moved towards mobile application use. The COVID-19 pandemic was the accelerant, and Wellgistics Health expects this pace of increase exponentially. Consumers are now able to have more have more and more services delivered to their homes or work and more recently Wellgistics Health is seeing this same push with healthcare services. Moreover, prescription related deliveries have become the new normal versus waiting for pharmacy pick-up which is often not as efficient or convenient for this everchanging mindset and expectation of the consumer.

In order to be successful with executing on this service delivery, Wellgistics Health’s strategy must offer enhanced value services while also being convenient to the consumer. To accomplish this, an omni-channel approach, intelligent user experience, and home health differentiated model is a necessity to keep up with the rapidly evolving pace of changing customer expectations and new developments by Wellgistics Health’s competitors. Wellgistics Health must compete by offering a consistent and convenient shopping experience for Wellgistics Health’s customers regardless of the ultimate sales channel and by investing in, providing and maintaining digital tools for Wellgistics Health’s customers. If Wellgistics Health is unable to make, improve, or develop relevant customer-facing technology in a timely manner that keeps pace with technological developments and dynamic customer expectations, Wellgistics Health’s ability to compete and Wellgistics Health’s results of operations could be materially and adversely affected. In addition, if Wellgistics Health’s online activities or Wellgistics Health’s other customer-facing technology systems do not function as designed, Wellgistics Health may experience a loss of customer confidence, data security breaches, lost sales, or be exposed to fraudulent purchases, any of which could materially and adversely affect Wellgistics Health’s business operations, reputation and results of operations.

Wellgistics Health may be unable to achieve Wellgistics Health’s environmental, social and governance goals.

Wellgistics Health recognizes the rising importance of environmental, social, and governance matters among Wellgistics Health’s team members, customers, and certain stockholders and will be committed to upholding a culture dedicated to corporate responsibility. Wellgistics Health will establish certain goals that allow us to better communicate and align to Wellgistics Health’s environmental, social, and governance strategy. However, these goals are subject to risks and uncertainties, which are outside of Wellgistics Health’s control and might prohibit us from meeting the goals.

Further, there is a risk that team members, customers, or certain stockholders might not be satisfied with Wellgistics Health’s goals or strategy and efforts to meet the goals. Some of the risks that Wellgistics Health will be subject to include, but are not limited to: Wellgistics Health’s ability to execute Wellgistics Health’s operational strategy within the timeframe or costs projected; the availability or cost of renewable energy, materials, goods, and/or services required, and evolving regulations or requirements that change or limit Wellgistics Health’s ability to set standards or gather information from Wellgistics Health’s supplier partners or third party contractors. Failure to meet Wellgistics Health’s goals could negatively impact public perception of Wellgistics Health’s company with interested stakeholders.

Environmental, social, and governance matters are also increasingly important to current and potential employees. In order to retain and attract talent Wellgistics Health knows that it is critical that Wellgistics Health clearly communicate Wellgistics Health’s environmental, social, and governance strategy, and a delay or inability to meet Wellgistics Health’s goals on time could impact Wellgistics Health’s reputation as a desirable place to work. With increased interest from certain stockholders, an inability to meet Wellgistics Health’s goals could also have a negative impact on Wellgistics Health’s stock price. These impacts could make it more difficult for us to operate efficiently and effectively and could have a negative effect on Wellgistics Health’s business, operating results and financial conditions.

Wellgistics Health’s business results will depend on Wellgistics Health’s ability to successfully manage ongoing organizational change and business transformation and achieve cost savings and operating efficiency initiatives through Wellgistics Health’s healthcare ecosystem.

The key to Wellgistics Health’s success will be executing on Wellgistics Health’s win-win strategy for all stakeholders in the healthcare delivery model. Through leveraging Wellgistics Health’s portfolio of subsidiaries, Wellgistics Health’s leadership will need to deliver on a value proposition to patients, pharmacies, providers, payors/ PBMs, and pharmaceutical manufacturers. This is obtained by making healthcare services affordable and convenient in a centralized model. Wellgistics Health’s success will hinge on the Wellgistics Health’s leadership team to improve operational efficiency, decreasing costs, market access and insights, data transparency, value-based outcomes, and innovative technology via automation.

There can be no assurance that Wellgistics Health will realize, in full or in part, the anticipated benefits of leveraging these subsidiaries and what that market adoption will be like. Wellgistics Health’s financial goals assume a level of productivity improvement and other business optimization initiatives. If Wellgistics Health is unable to implement the programs or deliver these expected productivity improvements, while continuing to invest in business growth, or if the volume and nature of change overwhelms available resources, Wellgistics Health’s business operations, financial condition and results of operations could be materially and adversely impacted.

Risks Relating to Wellgistics Health’s Operations

Disruption in Wellgistics Health’s global supply chain could negatively impact Wellgistics Health’s businesses.

The pharmaceutical products for Wellgistics Health’s wholesale division are sourced from pharmaceutical manufacturers with a wide variety of domestic and international vendors, and any future disruption in Wellgistics Health’s supply chain or inability to find qualified vendors and access products that meet requisite quality and safety standards in a timely and efficient manner could adversely impact Wellgistics Health’s businesses. The loss or disruption of such supply arrangements for any reason, including for issues such as COVID-19 or other health epidemics or pandemics, labor disputes, loss or impairment of key manufacturing sites, inability to procure sufficient raw materials, quality control issues, ethical sourcing issues, a supplier’s financial distress, natural disasters, looting, vandalism or acts of war (such as the conflict in Ukraine) or terrorism, trade sanctions or other external factors over which Wellgistics Health has no control, could interrupt product supply and, if not effectively managed and remedied, have a material adverse impact on Wellgistics Health’s business operations, financial condition and results of operations.

Wellgistics Health’s pharmacy division and to the greater extent, Wellgistics Health’s independent network of partner pharmacies, may also be impacted by disruptions in global supply chain as listed above based on primary wholesaler and direct pharmaceutical manufacturing contracts.

Wellgistics Health’s business and operations will be subject to risks related to climate change.

The long-term effects of global climate change present both physical risks (such as extreme weather conditions or rising sea levels) and transition risks (such as regulatory or technology changes), are expected to be widespread and unpredictable. These changes could over time affect, for example, the availability and cost of products, commodities and energy (including utilities), which in turn may impact Wellgistics Health’s ability to procure goods or services required for the operation of Wellgistics Health’s business at the quantities and levels Wellgistics Health require. In addition, Wellgistics Health’s facilities may be in locations that may be impacted by the physical risks of climate change, and Wellgistics Health may face the risk of losses incurred as a result of physical damage to stores, distribution or fulfillment centers, loss or spoilage of inventory and business interruption caused by such events. Wellgistics Health will also use natural gas, diesel fuel, gasoline and electricity in Wellgistics Health’s operations, all of which could face increased regulation as a result of climate change or other environmental concerns.

Whether internally or via Wellgistics Health’s third-party relationships with Wellgistics Health’s national and regional ride- sharing partners (i.e., Lyft and Roadie) for prescription delivery; and shipping carriers (i.e., USPS, UPS, FedEx), rising fuel costs will lead to an increase in tiered rates for mileage/distance which will increase Wellgistics Health’s costs associated with prescription delivery or shipping. Regulations limiting greenhouse gas emissions and energy inputs may also increase in coming years, which may increase Wellgistics Health’s costs associated with compliance and merchandise. These events and their impacts could otherwise disrupt and adversely affect Wellgistics Health’s operations and could materially adversely affect Wellgistics Health’s financial performance.

Wellgistics Health’s business is primarily focused on certain therapeutic targets, making it vulnerable to risks associated with having therapeutically concentrated operations.

Wellgistics Health’s operates within the “specialty-lite” or niche sector of the pharmaceutical industry. It is well documented in the literature that the specialty drug market accounts for less than 10% of total drugs in the market. As a result, Wellgistics Health’s business, financial condition and results of operations are susceptible to economic downturns within this sector of the industry, whether cause by state regulations, budget constraints, severe weather conditions, catastrophic events, or other disruptions. As Wellgistics Health seeks to expand its existing operations, opportunities for growth within the “specialty-lite” or niche sector of the pharmaceutical industry may become more limited.

Failure to retain and recruit, or failure to manage succession of, key personnel could have an adverse impact on Wellgistics Health’s future performance.

Wellgistics Health’s ability to attract, engage, develop and retain qualified and experienced employees at all levels, including in executive and other key strategic positions, is essential for us to meet Wellgistics Health’s objectives. Competition among potential employers might result in increased salaries, benefits or other employee-related costs, or in Wellgistics Health’s failure to recruit and retain employees which could have a materially adverse impact on Wellgistics Health’s business operations, financial condition and results of operations.

Additionally, any failure to adequately plan for and manage succession of key management roles or the failure of key employees to successfully transition into new roles could have a material adverse effect on Wellgistics Health’s business and results of operations. While Wellgistics Health has succession plans in place and employment arrangements with certain key executives, these do not guarantee the services of these executives will continue to be available to us.

We are highly dependent on the continued service of our directors and officers, whose financial interests may conflict with the interests of investors.

Our directors and officers, including Tim Canning, Chief Executive Officer, and Vishnu Balu, Vice President of Finance, have years of significant experience in the pharmaceutical industry and other sectors related to our business. Our success depends upon the continued service of these directors and officers. The loss of any of these directors and officers might significantly delay or prevent the achievement of our business objectives and could materially harm our business, financial condition and results of operations.

Failure to renew facility leases in a timely manner could have an adverse impact on Wellgistics Health’s business operations.

Wellgistics Health’s facilities will include multiple corporate offices, physical location of the pharmacy, and multiple warehouse facilities for wholesale product warehousing and distribution. These locations are subject to competition with other retailers and businesses for suitable locations for Wellgistics Health’s facilities. Local land use and zoning regulations, environmental regulations and other regulatory requirements may impact Wellgistics Health’s ability to find suitable locations and influence the cost of constructing, renovating and operating Wellgistics Health’s stores. In addition, real estate, zoning, construction and other delays may adversely affect Wellgistics Health’s business and increase Wellgistics Health’s costs. Further, changing local demographics may adversely affect revenue and profitability levels. The terms of leases at existing facility locations may adversely affect Wellgistics Health if the renewal terms of, or requested modifications to, those leases are unacceptable to Wellgistics Health, and Wellgistics Health will be forced to close or relocate operations. If Wellgistics Health is unable to maintain Wellgistics Health’s facility locations or open/move to new facility locations in desirable places and on favorable terms, Wellgistics Health’s results of operations could be materially and adversely affected.

Wellgistics Health may not be able to maintain business, scale for growth, renew pharmacy and wholesale state licenses, and retain commercial and federal contracts while preventing restrictions and termination.

The ability to maintain business channels, service existing pharmacies from a wholesale product distribution perspective, and service Wellgistics Health’s patient base at the pharmacy will all be potential areas for adverse impacts to Wellgistics Health’s financial condition and operations due to everchanging regulations and requirements to maintain contracts and licenses. Wellgistics Health’s wholesale operations will retain state licenses for whole distribution from the various state boards of pharmacy or equivalent along with the federal level as maintained by the FDA, third-party logistics and controlled substance licenses from all state boards of pharmacy, and an accreditation with the NABP and ADD.

Wellgistics Health’s pharmacy division will have the equivalent of 35 state board of pharmacy licenses along with the District of Columbia. Many of these licenses include the ability to dispense controlled substance with only a few states retaining waivers for exemption. The pharmacy will also have a Florida state Medicaid contract, several NPI numbers, and a DEA certificate. The pharmacy formerly had accreditation status with ACHC and URAC as a specialty pharmacy and plans on pursing reaccreditation along with URAC Small Business Mail Order accreditation. The pharmacy will retain all major PBM/payor direct contracts with little to no restrictions. The pharmacy will be affiliated with Elevate as its PSAO to provide the relevant minor PBM contracts.

The ability to retain all of these state board, federal, and PBM/payor contracts through the renewal process while expanding Wellgistics Health’s reach is critical to conducting business and generating revenues. Contract restrictions, termination, and or an inability to expand would be deemed as events that could disrupt and adversely affect Wellgistics Health’s operations and could materially adversely affect Wellgistics Health’s financial performance.

Wellgistics Health’s relationships with Wellgistics Health’s primary wholesaler for pharmacy operations and Wellgistics Health’s manufacturer relationships for Wellgistics Health’s wholesale and hub technology platform entities will be critical to Wellgistics Health’s success.

Wellgistics Health’s internal pharmacy division has a primary contract with AmerisourceBergen for pharmaceutical distribution agreement pursuant to which Wellgistics Health sources branded and generic pharmaceutical products from AmerisourceBergen. CSP executed this agreement in October 2022, and the agreement requires the pharmacy to purchase a certain volume per month while also maintain compliance with the GCR. Wellgistics Health has a relationship with HD Smith and TRxADE to acquire products via the secondary channel. This is seen as a potential risk for the business as the secondary channel providers often do not provide full spectrum catalogs and more specifically used to assist with cost savings opportunities through the purchase of short-dated products and or access to specialty or niche therapeutic category products. Consequently, Wellgistics Health’s business may be adversely affected by any operational, financial or regulatory difficulties that these wholesalers or pharmaceutical manufacturers experience, including those resulting from COVID-19. For example, if operations are seriously disrupted for any reason, whether due to a natural disaster, pandemic, labor disruption, regulatory action, computer or operational systems or otherwise, it could adversely affect Wellgistics Health’s business and Wellgistics Health’s results of operations.

Wellgistics Health’s distribution agreement with AmerisourceBergen is subject to early termination in certain circumstances and, upon the expiration or termination of the agreement, there can be no assurance that Wellgistics Health or AmerisourceBergen will be willing to renew the agreement or enter into a new agreement, on terms favorable to us or at all. If such expiration or termination occurred, Wellgistics Health believes that alternative sources of supply for most generic and brand- name pharmaceuticals are readily available and that Wellgistics Health could obtain and qualify alternative sources, which may include self-distribution in some cases, for substantially all of the prescription drugs Wellgistics Health will sell on an acceptable basis, such that the impact of any such expiration or termination would be temporary. However, there can be no assurance Wellgistics Health would be able to engage alternative supply sources as a primary wholesaler for generic and branded products in a timely basis or on terms favorable to us, or effectively manage these transitions, any of which could adversely affect Wellgistics Health’s business operations, financial condition and results of operations.

At the wholesale level, Wellgistics Health now has, upon closing of the Wellgistics LLC Acquisition, relationships with approximately 60 manufacturers to distribute products to retail, independent, and specialty pharmacies. At the hub technology platform division, Wellgistics Health will leverage the wholesale operation to expand pharmaceutical manufacturer relationships. Wellgistics Health’s combined portfolio will work synergistically to provide additional value to pharmaceutical manufacturers. This will in turn will help lower costs and provide additional market access. In recent years, an increasing number of pharmaceutical manufacturers have attempted to significantly limit the number of pharmacies that may dispense their drugs. Pharmacies dispensing products from direct manufacturer relationships need to ensure they can manage a drug’s rollout, obtain real-time data, and confirm the unique patient population’s receipt of the necessary services and support to remain adherent. Access to limited-distribution drugs provides us with significant competitive advantages in developing relationships with payers and physicians. If Wellgistics Health cannot obtain access to new limited-distribution pharmaceuticals or lose access to limited-distribution pharmaceuticals Wellgistics Health currently distribute this could have a material and adverse impact on Wellgistics Health’s business, profitability and results of operations.

Wellgistics Health will obtain access to limited-distribution drugs primarily from small to mid-size pharmaceutical companies, often many of these are boutique companies, many of whom are bringing their first or second drug to market. Wellgistics Health will incur significant expense, time and opportunity cost to educate and assist emerging small and mid-size manufacturers in bringing these products to the marketplace without any guarantee of a successful drug launch or future sales. The failure to monetize these relationships and supply Wellgistics Health’s independent network of pharmacies with prescriptions could adversely impact Wellgistics Health’s profitability and Wellgistics Health’s prospects.

Wellgistics Health will also provide a significant amount of direct and indirect services for the benefit of Wellgistics Health’s pharmaceutical manufacturer customers and Wellgistics Health’s patients to gain access to these products, and Wellgistics Health’s failure to provide services at optimal quality could result in losing access to existing and future drugs. In addition, Wellgistics Health will incur significant costs in providing these services and if manufacturers require significant additional services and products to obtain access to their drugs without a corresponding increase in service fees paid to Wellgistics Health, Wellgistics Health’s profitability could be adversely impacted.

Wellgistics Health’s contracts with pharmaceutical manufacturers and wholesalers will be generally for one-year terms on the hub technology platform and clinical services and three years on the wholesale side and are terminable on reasonably short notice by either party before or after the contract term. If several of these contractual relationships are terminated or materially altered by the pharmaceutical manufacturers or wholesalers or if Wellgistics Health is otherwise unable to renew these contracts or enter into similar contracts on favorable terms, Wellgistics Health could lose a major source of revenue from the pharmaceuticals Wellgistics Health will dispense or distribute, and also prescriptions Wellgistics Health is able to generate and pass through to Wellgistics Health’s network of independent pharmacy partners which would materially impact Wellgistics Health’s operations and financial condition.

Wellgistics Health will outsource certain business processes to third-party vendors that subject us to risks, including disruptions in business and increased costs.

Wellgistics Health will outsource certain business, administrative, and development functions and rely on third-party technologies such as plug-ins and APIs to perform certain services for Wellgistics Health’s hub technology platform and other divisions on Wellgistics Health’s behalf. Various examples of this will include relationships with both domestic and foreign developers for Wellgistics Health’s mobile solutions as part of Wellgistics Health’s hub technology platform, relationships with various PMS system providers, relationships with various ride-sharing platform providers and their network of drivers, carrier relationships for shipping of products, and various relationships with third party clinical service providers or technology solutions to be able to offer Wellgistics Health’s end- to-end holistic approach to patient- centered care services.

Wellgistics Health will rely on third-party vendors and their licenses to meet Wellgistics Health’s quality and performance requirements. Wellgistics Health will utilize these third-party vendors for some of the technology to be used in Wellgistics Health’s products, and intends to license technologies from third parties. Most of these licenses can be renewed only by mutual consent and may be terminated if Wellgistics Health breaches the terms of the license and fails to cure the breach within a specified period of time. Wellgistics Health may not be able to obtain these licenses on commercially reasonable terms, or at all. Wellgistics Health’s inability to obtain or renew these licenses or find suitable alternatives could delay development of new products or prevent us from selling Wellgistics Health’s existing products until suitable substitute technology can be identified, licensed, integrated, or developed by us. Wellgistics Health cannot assure you as to when Wellgistics Health would be able to do so, if at all.

Most of Wellgistics Health’s third-party licenses will be non-exclusive. Wellgistics Health’s competitors may obtain the right to use any of the technology covered by these licenses and use the technology to attempt to compete more effectively with us. In addition, Wellgistics Health’s use of third-party technologies will expose us to risks associated with the integration of components from various sources into Wellgistics Health’s products, such as unknown software errors or defects or unanticipated incompatibility with Wellgistics Health’s systems and technologies, or unintended infringement resulting from the combination of intellectual property rights. Further, Wellgistics Health will be dependent on Wellgistics Health’s vendors’ support of the technology Wellgistics Health will use. If a vendor chooses to discontinue or is unable to support a licensed technology, Wellgistics Health may not be able to modify or adapt Wellgistics Health’s products to fit other available technologies in a timely manner, which would lead us to experience operational difficulties, reputational harm, and increased costs that could materially and adversely affect Wellgistics Health’s business operations and results of operations.

Risks Relating to Wellgistics Health’s Business Strategy

Wellgistics Health may not be successful in executing elements of Wellgistics Health’s business strategy, which may have a material adverse impact on Wellgistics Health’s business and financial results.

Wellgistics Health’s ability to successfully implement Wellgistics Health’s comprehensive strategy of leveraging product warehousing/distribution while simultaneously facilitating the hub technology platform to transfer prescriptions to Wellgistics Health’s network of independent partner pharmacies will be crucial to Wellgistics Health’s operations and financial condition. Wellgistics Health’s wholesale operations will enable pharmaceutical companies to have a single entity for contracting which assists with minimizing product returns and eliminates chargebacks. Now that the Wellgistics LLC Acquisition has closed, Wellgistics Health’s warehouse’s distribution capabilities assist manufacturers with preventing inventory loss in the form of having to sell short-dated products at a lower margin and or potentially destroy expired and unusable products. Wellgistics Health’s portfolio of products along with Wellgistics Health’s sales strategy will enable Wellgistics Health to move niche specialty products that have a distinct place in the market and help maximize returns.

The ability to provide pharmaceutical manufacturer and provider groups like ACOs with a hub technology platform with an accompanying robust network of independent pharmacies is crucial to the success of Wellgistics Health’s health eco-system strategy. Wellgistics Health’s technology platform along with Wellgistics Health’s mobile solutions will enable patients to access digital health resources for added visibility in their prescription journey, which leads to cost savings opportunities, convenience, and healthier outcomes. This is especially important for pharmaceutical manufacturers and provider group clients looking to improve health outcomes for the patient populations they serve. Wellgistics Health will provide both of these clients with a reliable pharmacy network, clinical services, and transparent reporting with a primary focus on boosting medication adherence. Wellgistics Health’s platform will be able to identify high-risk patients and provide actionable and meaningful outcomes geared towards patient engagement to boost medication adherence and preserve compliance to therapy. The ability to transfer these prescriptions to integrated and non-integrated pharmacies will be key to receiving the data which can then be mined and presented to various stakeholders and clients to improve operational efficiency, customize marketing, and share in cost savings.

Additionally, Wellgistics Health will engage in strategic initiatives to, among other reasons, maximize long-term stockholder value, expand on Wellgistics Health’s consumer-centric approach, strengthen Wellgistics Health’s partnerships with local healthcare providers and improve health outcomes. These strategic initiatives do not guarantee improvements in future financial performance. Wellgistics Health cannot provide any assurance that Wellgistics Health will be able to successfully execute these strategic initiatives, or that these initiatives will not result in additional unanticipated costs. The failure to realize the benefits of any strategic initiatives or successfully structure Wellgistics Health’s business to meet market conditions could have a material adverse effect on Wellgistics Health’s business, financial condition, cash flows, or results of operations.

Wellgistics Health’s growth strategy is partially dependent upon Wellgistics Health’s ability to identify and successfully complete acquisitions, joint ventures and other strategic partnerships and alliances.

A significant element of Wellgistics Health’s growth strategy is to identify, pursue and successfully complete and integrate acquisitions, joint ventures and other strategic partnerships and alliances that either expand or complement Wellgistics Health’s existing operations. Acquisitions and other strategic transactions involve numerous risks, including difficulties in successfully integrating the operations and personnel, navigating the necessary regulatory approval requirements, distraction of management from overseeing, and disruption of, Wellgistics Health’s existing operations, difficulties in entering markets or lines of business in which Wellgistics Health has no or limited direct prior experience, the possible loss of key employees and customers, and difficulties in achieving the synergies Wellgistics Health anticipated. Any failure to select suitable opportunities at fair prices, conduct appropriate due diligence, acquire and successfully integrate the acquired company, including particularly when acquired businesses operate in new geographic markets or areas of business, could materially and adversely impact Wellgistics Health’s growth strategies, financial condition and results of operations.

Apart from acquisitions in the healthcare space and emerging technologies such as artificial intelligence and blockchain technologies, Wellgistics Health’s strategy is to engage in business-to-business relationships that can help us gain further market penetration and adoption, all of which are imperative given the highly saturated healthcare market. Partnerships with strategic clients such as pharmaceutical manufacturers and provider groups will help us source products at lower costs and drive prescriptions through Wellgistics Health’s hub technology platform. Other strategic partnerships range from PMS systems, ridesharing and shipping companies GPOs, and other clinical providers to provide robust and complementary services that are value adds for all stakeholders.

Currently, the hub technology platform has partnered with Best Rx pharmacy software system. There are approximately 1,400 independent pharmacies utilizing this software which accounts for greater than 6% of the independent pharmacy market share. These pharmacies are ideal candidates to be members of Wellgistics Health’s integrated pharmacy network based on the various integrations Wellgistics Health will develop to communicate with their systems. These locations are predominately located on the east coast. Wellgistics Health’s ability to onboard pharmacies in an effective manner and being located on the east coast is a risk associated with gaining market share and providing patients with an adequate solution for fulfillment. To combat this, Wellgistics Health will identify strategic partners within this network that are able to ship prescription medications through Wellgistics Health’s integrations which aids in providing more coverage area options. Wellgistics Health management has a relationship with PrimeRx MARKET and Wellgistics Health believes that this relationship could provide access to more than 13,200 pharmacies using a wide array of pharmacy management software systems which accounts for 66% of the independent PMS. Through Wellgistics Health’s fax modality integrations and solutions for data capture for non-integrated pharmacies, Wellgistics Health will have the means to provide patients with more robust network coverage. Wellgistics Health’s team has identified additional PMS systems to partner with such as Prime Rx, Pioneer Rx, Liberty, Transactional Data Systems, and Digital Business Solutions. These additional PMS systems will help with Wellgistics Health’s ability expand the integrated network which help drive additional value in the form of data capture elements. By integrating with the PMS system, Wellgistics Health will then in turn able to recruit the pharmacies utilizing this software to join Wellgistics Health’s network. Risks associated with this strategy include the PMS corporate team’s willingness to partner, Wellgistics Health’s ability to integrate the software into Wellgistics Health’s overall solution in a timely manner, and the pharmacies willingness to join the network.

Wellgistics Health’s software solution will be integrated with two national ride-sharing logistics providers and all of the major shipping carriers to offer both pharmacies and patients with multiple means for sending and receiving their prescriptions. From the ride-sharing prospective, Wellgistics Health’s core technology will be integrated with Lyft Healthcare, Inc., and Roadie. These integrations will help us provide nationwide coverage for same-day and next-day prescription delivery and a system with built in redundancies between both networks to ensure prompt delivery. Wellgistics Health’s strategy is to onboard pharmacies across the United States and mapping out ride-sharing coverage to ensure adequate turnaround time for prescription delivery. Risks associated with this strategy include maintaining an on-going relationship with these entities, providing a significant number of transactions to ensure profitability for all partners, and Wellgistics Health’s ability to renew contracts. Wellgistics Health’s contractual relationships will be for one-year terms with one-year autorenewal terms. Either party will be able to terminate the relationship with proper notice. Wellgistics Health’s integrations with carriers include USPS, UPS, and FedEx. Wellgistics Health will be able to transmit the respective rates to end users based on the network partner pharmacy’s availability and allow patients to price compare options due to the redundancies. Future risks associated with this include changes to rates based on factors such as inflation, fuel, and other variables that are not in control which could impact Wellgistics Health’s business operations and financial condition.

Wellgistics Health’s strategy to increase Wellgistics Health’s network of independent partner pharmacies also leverages GPOs. By partnering with these entities, Wellgistics Health will be able to onboard a larger cohort of pharmacies vs. individual sign-up, and in return, these GPOs will be able to promote Wellgistics Health’s services as a business opportunity to help network pharmacies increase their business and improve their bottom line. Risks associated with this strategy include successfully presenting the value proposition to the corporate team and obtaining a contract, ability to convert pharmacy’s part of the GPO through combined marketing initiatives, execution of Wellgistics Health’s onboarding strategies, and the pharmacies willingness to remain in the network and pay associated fees. It should be noted that each participating pharmacy within the GPO uses different PMS systems and that by successfully striking a partnership with the GPO, there is no guarantee that Wellgistics Health will be able to onboard each pharmacy to the integrated network. Wellgistics Health can however onboard them to the “soft network” which allows us to transfer the prescription via fax.

Integrating third-party clinical features and services is vital to the success of Wellgistics Health’s business strategy as being an end-to-end solution for end users and Wellgistics Health’s clients. Wellgistics Health’s partners that offer these types of value-add services include patient enrollment campaigns, prior authorization coordination, digital health resources, calendar-based refill reminder systems, and other key pieces that will help boost the LTV and NPS for market adoption. Risks associated with these partnerships include willingness to integrate, costs associated with these services, end clients need for these services to continue driving growth, Wellgistics Health’s ability to engage in cost-sharing with the pharmacies for the various service levels being provided, and the dependency on the quality of the services being performed by these third-party companies.

These acquisition transactions and potential partnerships may also cause us to significantly increase Wellgistics Health’s interest expense, leverage and debt service requirements if Wellgistics Health incurs additional debt to pay for an acquisition or investment, issue Common Stock that would dilute Wellgistics Health’s current stockholders’ percentage ownership, or incur asset write-offs and restructuring costs and other related expenses that could have a material adverse impact on Wellgistics Health’s operating results. Acquisitions, joint ventures and strategic investments also involve numerous other risks, including potential exposure to assumed litigation and unknown environmental and other liabilities, as well as undetected internal control, regulatory or other issues, or additional costs not anticipated at the time the transaction was completed. The failure to realize the benefits of any strategic initiatives and partnerships to meet market conditions could have a material adverse effect on Wellgistics Health’s business, financial condition, or results of operations.

Businesses acquired by Wellgistics Health could experience losses or liabilities that would result in a material adverse effect on Wellgistics Health’s business operations, results of operation and financial condition.

Healthcare and technology businesses acquired could experience losses or liabilities, including medical liability claims, causing us to incur significant expenses and requiring Wellgistics Health to pay significant damages if not covered by insurance. These businesses will be subject to medical liability claims in the ordinary course of business, and although Wellgistics Health will carry insurance covering medical malpractice claims, including professional liability insurance, in amounts Wellgistics Health believes is appropriate in light of the risks attendant to Wellgistics Health’s business, successful medical liability claims could result in substantial damage awards that exceed the limits of Wellgistics Health’s insurance coverage. Professional liability insurance is expensive and insurance premiums may increase significantly in the future, particularly as Wellgistics Health expands Wellgistics Health’s services. As a result, adequate professional liability insurance may not be available to Wellgistics Health in the future at acceptable costs or at all. Any claims made against Wellgistics Health or its acquired businesses that are not fully covered by insurance could be costly to defend against, result in substantial damage awards against us and divert the attention of Wellgistics Health’s management and Wellgistics Health’s providers from Wellgistics Health’s operations, which could harm Wellgistics Health’s business. In addition, any claims may significantly harm Wellgistics Health’s business or reputation.

In addition, businesses acquired expose Wellgistics Health to risks that are inherent in the provision of healthcare services. If patients, clients or partners assert liability claims against Wellgistics Health, any ensuing litigation, regardless of outcome, could result in a substantial cost to Wellgistics Health, divert management’s attention from operations, and decrease market acceptance of Wellgistics Health’s services and care delivery model. Wellgistics Health does exert control over any provider led entities now or in the future with respect to the practice of medicine and the provision of healthcare services, and the risk of liability, including through unexpected medical outcomes, is inherent to the healthcare industry.

Wellgistics Health may make investments in companies over which Wellgistics Health does not have sole control and some of these companies may operate in sectors that differ from Wellgistics Health’s operations and have different risks.

From time to time, Wellgistics Health may make debt or equity investments in companies that Wellgistics Health may not control or over which Wellgistics Health may not have sole control but would be of strategic value to bolster Wellgistics Health’s service and capabilities. Investments in these businesses, among other risks, subject Wellgistics Health to the operating and financial risks of the businesses Wellgistics Health invests in and to the risk that Wellgistics Health does not have sole control over the operations of these businesses. Wellgistics Health relies on the internal controls and financial reporting controls of these entities and their failure to maintain effectiveness or comply with applicable standards may materially and adversely affect Wellgistics Health. Investments in entities over which Wellgistics Health does not have sole control, including joint ventures and strategic partnerships and alliances, present additional risks such as having differing objectives from Wellgistics Health’s partners or the entities in which Wellgistics Health will be invested, becoming involved in disputes, or competing with those persons.

The success of Wellgistics Health’s hub technology platform and clinical services depends on the willingness of participants in the network of independent partner pharmacies to continue receiving prescriptions and enrolling in a-la-carte services for outsourced work.

Wellgistics Health’s pharmacy network will be segregated into three networks: integrated network, soft network, and general pharmacy network. The integrated network would be any pharmacy that has completed onboarding and using a PMS system which Wellgistics Health will have integrated with for the bidirectional exchange of electronic information including prescription transfer. The soft network would be any onboarded pharmacy who Wellgistics Health will not have an integration with but that can still receive prescription transfers in the form of facsimile and who Wellgistics Health will establish alternative means for data capture. Lastly, the general network is any pharmacy irrespective of whether they would be deemed as an independent pharmacy and that the patient has elected to transfer their prescription to thereby preserving patient autonomy.

Accordingly, a general downturn in the pharmacy industry, or healthcare industry more generally, could materially harm Wellgistics Health’s hub services offerings. In addition, demand for Wellgistics Health’s hub services may be affected by Wellgistics Health’s customers’ perceptions regarding outsourcing as a whole. For example, other digital pharmacies or hub services companies could engage in conduct or fail to detect malfeasance that could render Wellgistics Health’s customers less willing to do business with them or any digital pharmacy or hub services company. If any such event causing industry-wide reputational harm were to occur, even though outside Wellgistics Health’s control, confidence in the industry generally could be impaired and the willingness of Wellgistics Health’s customers to outsource services to organizations that provide digital pharmacy and hub services like Wellgistics Health’s could diminish.

Moreover, demand for Wellgistics Health’s digital pharmacy hub services will depend to a significant extent on the trust Wellgistics Health’s customers place in the combined company and Wellgistics Health’s reputation for independent, high-quality service. To maintain client satisfaction and compliance, Wellgistics Health will keep certain information and software systems, infrastructure, and employees “firewalled” on a need-to-know basis. In the event that Wellgistics Health’s protocols or procedures are not followed or contain undetected errors or defects that are subsequently discovered by Wellgistics Health, Wellgistics Health’s customers or a third-party, Wellgistics Health’s reputation with current and potential customers could be harmed. If one or more of the foregoing events were to occur, it could have a material adverse effect on Wellgistics Health’s business, financial condition and results of operations.

Risks Related to Cybersecurity, Data Privacy, and Information Security

A significant disruption in Wellgistics Health’s information technology and computer systems or those of businesses Wellgistics Health relies on could harm Wellgistics Health.

At Wellgistics Health’s internal pharmacy division, Wellgistics Health will rely extensively on Wellgistics Health’s computer/software systems to manage Wellgistics Health’s ordering, pricing, point-of-sale, pharmacy fulfillment, inventory replenishment, finance and other processes. Additionally, Wellgistics Health’s core architecture will be housed on Amazon Web Services servers, and Wellgistics Health will rely on various third-party vendors and partners who will provide various plug-ins and APIs that drive Wellgistics Health’s end-to-end solution on the hub technology platform that could significantly impact Wellgistics Health’s business operations and financial condition. To a greater extent, Wellgistics Health’s PMS system partners will be used by various network pharmacies and may impact Wellgistics Health’s ability to electronically transmit information.

Wellgistics Health’s systems will be subject to damage or interruption from power outages, facility damage, computer and telecommunications failures, computer viruses, security breaches including credit card or personally identifiable information breaches, vandalism, theft, natural disasters, catastrophic events, human error and potential cyber threats, including malicious codes, worms, phishing attacks, denial of service attacks, ransomware and other sophisticated cyber-attacks, and Wellgistics Health’s disaster recovery planning cannot account for all eventualities. If any of Wellgistics Health’s systems are damaged, fail to function properly or otherwise become unavailable, Wellgistics Health may incur substantial costs to repair or replace them, and may experience loss or corruption of critical data and interruptions or disruptions and delays in Wellgistics Health’s ability to perform critical functions, which could materially and adversely affect Wellgistics Health’s businesses and results of operations.

In addition, Wellgistics Health expects to make substantial investments in Wellgistics Health’s information technology systems and infrastructure, some of which are significant. Implementing new systems carries significant potential risks, including failure to operate as designed, potential loss or corruption of data or information, changes in security processes, cost overruns, implementation delays, disruption of operations, and the potential inability to meet business and reporting requirements. Wellgistics Health will rely on strategic partners and other service providers to help us with certain significant information technology projects and services. Information technology projects or services frequently are long-term in nature and may take longer to complete and cost more than Wellgistics Health expects and may not deliver the benefits Wellgistics Health projects once they are complete. Any system implementation and transition difficulty may result in operational challenges, reputational harm, and increased costs that could materially and adversely affect Wellgistics Health’s business operations and results of operations. Wellgistics Health also could be adversely affected by any significant disruption in the systems of third parties Wellgistics Health interact with, including strategic and business partners, key payers and vendors.

Privacy and data protection laws will increase Wellgistics Health’s compliance burden and any failure to comply could harm Wellgistics Health.

The regulatory environment surrounding data security and privacy is increasingly demanding, with the frequent imposition of new and changing requirements across businesses and geographic areas. Wellgistics Health will be required to comply with increasingly complex and changing data security and privacy regulations in the jurisdictions in which Wellgistics Health will operate that regulate the collection, use and transfer of personal data, including the transfer of personal data between or among countries. In the U.S., for example, HIPAA imposes extensive privacy and security requirements governing the transmission, use and disclosure of health information by covered entities in the healthcare industry, including healthcare providers such as pharmacies. In addition, the California Consumer Privacy Act, which went into effect on January 1, 2020, imposes stringent requirements on the use and treatment of “personal information” of California residents, and other jurisdictions have enacted, or are proposing similar laws related to the protection of personal data. Moreover, there are specific privacy requirements from Apple and Google’s respective mobile application stores that Wellgistics Health will need to be up to date with as Wellgistics Health’s mobile application is currently available on both stores.

Compliance with changes in privacy and information security laws and standards may result in significant expense due to increased investment in technology and the development of new operational processes. Failure to comply with these laws subjects us to potential regulatory enforcement activity, fines, private litigation including class actions, and other costs. Wellgistics Health will have contractual obligations that might be breached if Wellgistics Health fails to comply a significant privacy breach or failure to comply with privacy and information security laws could have a materially adverse impact on Wellgistics Health’s reputation, business operations, financial position and results of operations.

Wellgistics Health and businesses with which Wellgistics Health will interact may experience cybersecurity incidents and might experience significant computer system compromises or data breaches.

The protection of customer, employee and company data will be critical to Wellgistics Health’s businesses. Cybersecurity and other information technology security risks, such as a significant breach or theft of customer, employee, or company data, could create significant workflow disruption, attract media attention, damage Wellgistics Health’s customer relationships, reputation and brand, and result in lost sales, fines or lawsuits. Throughout Wellgistics Health’s future operations, Wellgistics Health will receive, retain and transmit certain personal information that Wellgistics Health’s customers and others provide to purchase products or services, fill prescriptions, enroll in clinical and promotional programs, register on Wellgistics Health’s website or mobile applications, or otherwise communicate and interact with us. In addition, aspects of Wellgistics Health’s operations will depend upon the secure transmission of confidential information over public networks. Wellgistics Health will also depend on and interact with the information technology networks and systems of third parties for many aspects of Wellgistics Health’s business operations, strategic partners, and cloud service providers. These third parties may have access to information Wellgistics Health will maintain about Wellgistics Health’s company, operations, customers, employees and vendors, or operating systems that are critical to or can significantly impact Wellgistics Health’s business operations. Like other healthcare technology companies, Wellgistics Health and the businesses Wellgistics Health interact with will experience threats to data and systems, including from vandalism or theft of physical systems or media and from perpetrators of random or targeted malicious cyber- attacks, computer viruses, worms, phishing attacks, bot attacks or other destructive or disruptive software and attempts to misappropriate customer information, and cause system failures and disruptions.

Compromises of Wellgistics Health’s data security systems or of those of businesses with which Wellgistics Health interacts that result in confidential information being accessed, obtained, damaged or used by unauthorized or improper persons, could in the future adversely impact Wellgistics Health. Any such compromise could harm Wellgistics Health’s reputation and expose it to regulatory actions, customer attrition, remediation expenses, and claims from customers, financial institutions, payment card associations and other persons, any of which could materially and adversely affect Wellgistics Health’s reputation, business operations, financial condition and results of operations. In addition, security incidents may require that Wellgistics Health expend substantial additional resources related to the security of information systems and disrupt Wellgistics Health’s businesses. The risks associated with data security and cybersecurity incidents have increased during COVID-19 given the increased reliance on remote work arrangements.

Wellgistics Health will be subject to electronic payment-related and other financial services risks that could increase Wellgistics Health’s operating costs, expose Wellgistics Health to fraud or theft, subject Wellgistics Health to potential liability and potentially disrupt Wellgistics Health’s business operations.

Across Wellgistics Health’s businesses, Wellgistics Health will accept payments using a variety of methods, including cash, checks, credit and debit cards, mobile payment technologies such as Apple Pay or PayPal, and Wellgistics Health may offer new payment options over time. Acceptance of these payment options will subject Wellgistics Health to rules, regulations, contractual obligations, and compliance requirements, including payment network rules and operating guidelines, data security standards and certification requirements, and rules governing electronic funds transfers. These requirements and related interpretations may change over time, which has made and could continue to make compliance more difficult or costly.

For certain payment methods, including credit and debit cards, Wellgistics Health will pay interchange and other fees, which could increase over time and raise Wellgistics Health’s operating costs. Wellgistics Health will rely on third parties such as Stripe to provide payment processing services, including the processing of credit cards, debit cards, and other forms of electronic payment. Wellgistics Health will not store credit card information on file for Wellgistics Health’s mobile technology to remain in PCI compliance, however, Wellgistics Health’s other business entities may store this information on file for clients, partners, and vendors. If these companies become unable to provide these services, or if their systems are compromised, it could disrupt Wellgistics Health’s business. The payment methods that Wellgistics Health will offer also subject Wellgistics Health to potential fraud and theft by persons who seek to obtain unauthorized access to or exploit any weaknesses that may exist in the payment systems. If Wellgistics Health fails to comply with applicable rules or requirements, or if data is compromised due to a breach or misuse of data relating to Wellgistics Health’s payment systems, Wellgistics Health may be liable for costs incurred by payment card issuing banks and other third parties or subject to fines and higher transaction fees, or Wellgistics Health’s ability to accept or facilitate certain types of payments could be impaired. In addition, Wellgistics Health’s reputation could suffer, and Wellgistics Health’s customers could lose confidence in certain payment types, which could result in higher costs and/or reduced sales and materially and adversely affect Wellgistics Health’s results of operations.

Risks Related to Financial and Accounting Matters

Wellgistics Health and its subsidiaries have, and entities that Wellgistics Health may acquire could have, significant outstanding debt. The debt and associated payment obligations of Wellgistics Health and its current and future subsidiaries could significantly increase in the future if Wellgistics Health and its current or future subsidiaries incur additional debt and do not retire existing debt.

Wellgistics Health and Wood Sage are holding companies with no business operations of their own. Their assets primarily consist of direct ownership interest in, and their business is conducted through, subsidiaries which are separate legal entities. As a result, they are dependent on funding from their investors and operating subsidiaries to pay dividends and meet their debt obligations. As of September 30, 2024, the outstanding debt and credit obligations of Wellgistics Health and its subsidiaries was $20.4 million. Wellgistics Health’s subsidiaries may continue to experience negative cash flows and be restricted in their ability to pay cash dividends or to make other distributions to Wellgistics Health, which may limit the payment of cash dividends or other distributions to the holders of Wellgistics Health’s Common Stock. Credit facilities and other debt obligations of Wellgistics Health, as well as statutory provisions, may further limit the ability of Wellgistics Health and its subsidiaries to pay dividends. Payments to Wellgistics Health by its subsidiaries are also contingent upon the subsidiaries’ earnings, if any, and business considerations. Future dividends to Wellgistics Health will be determined based on earnings, if any, capital requirements, financial condition and other factors considered relevant by its board of directors.

Wellgistics Health’s quarterly results may fluctuate significantly based on seasonality and other factors.

Wellgistics Health’s operating results have historically varied on a quarterly basis, including increased variability during COVID-19, and may continue to fluctuate significantly in the future. For instance, Wellgistics Health’s pharmacy business and its PBM and payor contracts often experience significant changes twice per year as new formularies are introduced in January and July which often restrict certain products, allow new products to be covered, or products change covered insurance tiers thereby making them more difficult access for members. This same effect can be extrapolated to Wellgistics Health’s hub technology platform division and the corresponding network pharmacies that are part of Wellgistics Health’s network in the form of reduced transaction fees from transferred prescriptions. This in turn may impact Wellgistics Health’s wholesale division as for the exact same reason which may negatively impact Wellgistics Health’s ability to move certain products and increase Wellgistics Health’s liabilities in the form of inventory.

In addition, both prescription and non-prescription drug sales are affected by the timing and severity of the cough, cold and flu season, which can vary considerably from year to year. Other factors that may affect Wellgistics Health’s quarterly operating results, some of which are beyond the control of management, include, but are not limited to the timing of the introduction of new generic and brand name prescription drugs; inflation (i.e., generic drug procurement costs); changes in payer reimbursement rates and terms; the timing and amount of periodic contractual reconciliation payments, fluctuations in inventory, energy, transportation, labor, healthcare and other costs; significant acquisitions, dispositions, joint ventures and other strategic initiatives; asset impairment charges, including the performance of and impairment charges related to Wellgistics Health’s equity method investments; market conditions; and many of the other risk factors discussed herein. Accordingly, Wellgistics Health believes that quarter- to-quarter comparisons of Wellgistics Health’s operating results are not necessarily meaningful, and investors should not place undue reliance on the results of any particular quarter as an indication of Wellgistics Health’s future performance.

Wellgistics Health has a substantial amount of goodwill and other intangible assets which could, in the future, become impaired and result in material non-cash charges to Wellgistics Health’s results of operations. Wellgistics Health may be required to take write-downs or write-offs, restructuring and impairment or other charges that could have a significant negative effect on its financial condition, results of operations, and stock price.

There can be no assurances that all material issues that may be present in Wellgistics Health’s operations, including from the Wood Sage Acquisition and Wellgistics Acquisition, or that factors outside of its control will not later arise. As a result, Wellgistics Health may be forced to write-down or write-off assets, restructure operations, or incur impairment or other charges that could result in losses. Unexpected risks may arise and previously known risks may materialize in a manner not consistent with each company’s preliminary risk analysis. Even though these charges may not have an immediate impact on Wellgistics Health’s liquidity, the fact that Wellgistics Health will report charges of this nature could contribute to negative market perceptions about Wellgistics Health or its securities and may make its future financing difficult to obtain on favorable terms or at all.

From time to time, Wellgistics Health’s intangible assets are subject to impairment testing. Under current accounting standards, Wellgistics Health’s goodwill, including acquired goodwill, is tested for impairment on an annual basis and may be subject to impairment losses as circumstances change (e.g., after an acquisition). If Wellgistics Health records an impairment loss, it could have a material adverse effect on Wellgistics Health’s results of operations for the year in which the impairment is recorded.

Acquisitions Wellgistics Health pursues in its industry and related industries could result in operating difficulties, dilution to Wellgistics Health’s stockholders and other consequences harmful to Wellgistics Health’s business.

As part of Wellgistics Health’s growth strategy, it may selectively pursue strategic acquisitions in its industry and related industries. Wellgistics Health may not be able to consummate such acquisitions, which could adversely impact Wellgistics Health’s growth. If Wellgistics Health does consummate acquisitions, integrating an acquired company, business or technology may result in unforeseen operating difficulties and expenditures, including:

Wellgistics Health’s evaluations of potential acquisitions may not accurately assess the value or prospects of acquisition candidates, and the anticipated benefits from its future acquisitions may not materialize. In addition, future acquisitions or dispositions could result in potentially dilutive issuances of Wellgistics Health’s Equity Securities, including Wellgistics Health’s Common Stock, the incurrence of debt, contingent liabilities or amortization expenses, or write-offs of goodwill, any of which could harm Wellgistics Health’s financial condition.

Wellgistics Health may incur non-cash impairment charges in the future associated with its portfolio of intangible assets, including goodwill.

As a result of the Wood Sage Acquisition and the Wellgistics Acquisition, Wellgistics Health will carry a significant goodwill and other acquired intangible assets on its pro forma combined balance sheet. Goodwill and intangible assets, net, accounted for approximately 75% of the total assets on its pro forma combined balance sheet as of September 30, 2024. Wellgistics Health tests goodwill for impairment annually as of December 31 of each year and Wellgistics Health tests goodwill and intangible assets, net, for impairment at other times if events have occurred or circumstances exist that indicate the carrying value of such assets may no longer be recoverable. It is possible Wellgistics Health may incur impairment charges in the future, particularly in the event of a prolonged economic recession or loss of a key client or clients. A significant non-cash impairment could have a material adverse effect on Wellgistics Health’s results of operations.

Wellgistics Health’s level of debt may negatively impact its liquidity, restrict its operations and ability to respond to business opportunities, and increase its vulnerability to adverse economic and industry conditions, especially given that Wellgistics Health’s bank debt contains a variable interest rate component based on its corporate credit ratings.

Wellgistics Health utilizes debt financing in its capital structure and may incur additional debt, including under its revolving credit facility subject to customary conditions in its loan agreements. Wellgistics Health’s level of debt could have significant consequences, which include, but are not limited to, the following:

Wellgistics Health’s ability to meet its debt service obligations, comply with Wellgistics Health’s debt covenants and deleverage depends on its cash flows and financial performance, which are affected by financial, business, economic and other factors. The rate at which Wellgistics Health will be able to or choose to deleverage is uncertain. Failure to meet Wellgistics Health’s debt service obligations or comply with Wellgistics Health’s debt covenants could result in an event of default under the applicable indebtedness. Wellgistics Health may be unable to cure, or obtain a waiver of, an event of default or otherwise amend Wellgistics Health’s debt agreements to prevent an event of default thereunder on terms acceptable to Wellgistics Health or at all. In that event, the debt holders could accelerate the related debt, which may result in the cross-acceleration or cross-default of other debt, leases or other obligations. If Wellgistics Health does not have sufficient funds available to repay indebtedness when due, whether at maturity or by acceleration, Wellgistics Health may be required to sell important strategic assets; refinance Wellgistics Health’s existing debt; incur additional debt or issue Common Stock or other Equity Securities, which Wellgistics Health may not be able to do on terms acceptable to it, in amounts sufficient to meet Wellgistics Health’s needs or at all. Wellgistics Health’s inability to service Wellgistics Health’s debt obligations or refinance Wellgistics Health’s debt could harm Wellgistics Health’s business. Further, if Wellgistics Health is unable to repay, refinance or restructure its secured indebtedness, the holder of such debt could proceed against the collateral securing the Indebtedness. Refinancing Wellgistics Health’s indebtedness may also require Wellgistics Health to expense previous debt issuance costs or to incur new debt issuance cost.

Wellgistics Health’s financial performance is exposed to interest rate risks as the Company funds its working capital with bank asset-based lending (“ABL”) debt that carries a variable interest rate linked to the Company’s corporate credit ratings. Consequent to higher interest rates in the economy, the Company has had to pay higher interest rates on its own ABL debt. Given the competitive nature of the drug wholesale business, the company has not been able to, and may not be able in the future, pass on the higher borrowing costs to its customers. The company continues to be exposed to interest rate movements in the market. Also, any adverse changes in its own credit ratings can lead to higher risk spread on its debt, and directly increase the borrowing costs of the Company. As Wellgistics Health expands its business in the future, its investment in working capital is expected to increase, and consequently the ABL debt drawdown will also be higher, which further increases the exposure to interest rate risks. All these factors could materially and adversely impact Wellgistics Health’s business operations, financial condition and results of operations. In addition, its ratings impact the cost and availability of future borrowings and, accordingly, its cost of capital. Wellgistics Health’s ratings reflect the opinions of the ratings agencies as to our financial strength, operating performance and ability to meet Wellgistics Health’s debt obligations. There can be no assurance that Wellgistics Health will achieve a particular rating or maintain a particular rating in the future.

Wellgistics Health’s existing credit agreement and any other credit or similar agreements into which Wellgistics Health may enter in the future may restrict its operations, particularly Wellgistics Health’s ability to respond to changes or to take certain actions regarding its business.

Wellgistics Health’s existing credit agreement contains a number of restrictive covenants that may impose operating and financial restrictions on Wellgistics Health and limit its ability to engage in acts that may be in Wellgistics Health’s long-term best interests, including restrictions on Wellgistics Health’s ability to incur indebtedness, grant liens, undergo certain fundamental changes, dispose of assets, make certain investments, enter into certain transactions with affiliates, and make certain restricted payments, in each case subject to limitations and exceptions set forth in the existing credit agreement.

The existing credit agreement also contains customary events of default that include, among other things, certain payment defaults, covenant defaults, cross-defaults to other indebtedness, change of control defaults, judgment defaults, and bankruptcy and insolvency defaults. Such events of default may allow the creditors to accelerate the related debt and may result in the acceleration of any other debt to which a cross-acceleration or cross-default provision applies, which could have a material adverse effect on our business, operations, and financial results. Furthermore, if Wellgistics Health is unable to repay the amounts due and payable under the existing credit agreement, those lenders could proceed against the collateral granted to them to secure that indebtedness, which could force Wellgistics Health into bankruptcy or liquidation. In the event that Wellgistics Health’s lenders accelerated the repayment of the borrowings, Wellgistics Health may not have sufficient assets to repay that indebtedness. Any acceleration of amounts due under the existing credit agreement would likely have a material adverse effect on Wellgistics Health. As a result of these restrictions, Wellgistics Health may be limited in how Wellgistics Health conducts business, unable to raise additional debt or equity financing to operate during general economic or business downturns, or unable to compete effectively or to take advantage of new business opportunities.

In addition, Wellgistics Health may enter into other credit agreements or other debt arrangements from time to time which contain similar or more extensive restrictive covenants and events of default, in which case Wellgistics Health may face similar or additional limitations as a result of the terms of those credit agreements or other debt arrangements.

Risks Related to Regulatory and Legal Considerations

Wellgistics Health’s business is subject to substantial government regulation.

The health care industry is heavily regulated, and Wellgistics Health must comply with extensive and complex laws and regulations at the federal, state and local government levels. A number of these laws specifically relate to the provision of Medicare and Medicaid billing.

Anti-Kickback Statutes

The federal Anti-Kickback Statute prohibits the knowing and willful offer, payment, solicitation or receipt of remuneration to induce the referral of a patient or the purchase, lease or order (or the arranging for or recommending of the purchase, lease or order) of health care items or services paid for by federal health care programs, including Medicare or Medicaid. A violation does not require proof that a person had actual knowledge of the statute or specific intent to violate the statute, and court decisions under the Anti-Kickback Statute have consistently held that the law is violated where one purpose of a payment is to induce or reward referrals. Violation of the federal anti-kickback statute could result in felony conviction, administrative penalties, civil liability (including penalties) under the False Claims Act and/or exclusion from federal health care programs.

A number of states have enacted anti-kickback laws (including so-called “fee splitting” laws) that sometimes apply not only to state-sponsored health care programs but also to items or services that are paid for by private insurance and self-pay patients. State anti-kickback laws can vary considerably in their applicability and scope and sometimes have fewer statutory and regulatory exceptions than does the federal law. Enforcement of state anti-kickback laws varies widely and is often inconsistent and erratic.

Our management carefully considers the importance of such anti-kickback laws when structuring company operations. That said, we cannot assure that the applicable regulatory authorities will not determine that some of our arrangements with hospitals, surgical facilities, physicians, or other referral sources violate the Anti-Kickback Statute or other applicable laws. An adverse determination could subject us to different liabilities, including criminal penalties, civil monetary penalties and exclusion from participation in Medicare, Medicaid or other health care programs, any of which could have a material adverse effect on our business, financial condition or results of operations.

Physician Self- Referral (“Stark”) Laws

The federal Stark Law, 42 U.S.C. § 1395nn, also known as the physician self-referral law, generally prohibits a physician from referring Medicare and Medicaid patients to an entity (including hospitals) providing “designated health services,” if the physician has a “financial relationship” with the entity, unless an exception applies. Designated health services include, among other services, inpatient hospital services, outpatient prescription drug services, clinical laboratory services, certain diagnostic imaging services, and other services that our affiliated physicians may order for their patients. The prohibition applies regardless of the reasons for the financial relationship, unless an exception applies. The exceptions to the federal Stark Law are numerous and often complex. The penalties for violating the Stark Law include civil penalties of up to $15,000 for each violation and potential civil liability (including penalties) under the False Claims Act.

Some states have enacted statutes and regulations concerning physician self-referrals (i.e., referrals by a physician to a health care entity in which the physician has an ownership interest). Such physician self- referrals laws may apply to the referral of patients regardless of payor source and/or type of health care service. These state laws may contain statutory and regulatory exceptions that are different from those of the federal law and that may vary from state to state. Enforcement of state physician self-referral laws varies widely and is often inconsistent and erratic.

Our management carefully considers the importance of physician self-referral laws when structuring company operations. That said, we cannot assure that the applicable regulatory authorities will not determine that some of our arrangements with physicians violate the Federal Stark Law or other applicable laws. An adverse determination could subject us to different liabilities, including criminal penalties, civil monetary penalties and exclusion from participation in Medicare, Medicaid or other health care programs, any of which could have a material adverse effect on our business, financial condition or results of operations.

False Claims Act

The federal False Claims Act, 31 U.S.C. § 3729, imposes civil penalties for knowingly submitting or causing the submission of a false or fraudulent claim for payment to a government-sponsored program, such as Medicare and Medicaid. Violations of the False Claims Act present civil liability of treble damages plus a penalty of at least $11,803 per false claim. The False Claims Act has “whistleblower” or “qui tam” provisions that allow individuals to commence a civil action in the name of the government, and the whistleblower is entitled to share in any subsequent recovery (plus attorney’s fees). Many states also have enacted civil statutes that largely mirror the federal False Claims Act, but allow states to impose penalties in a state court.

The False Claims Act has been used by the federal government and qui tam plaintiffs to bring enforcement actions under so-called “fraud and abuse” laws like the federal Anti-Kickback Statute and the Stark Law. Such actions are not based on a contention that claims for payment were factually false or inaccurate. Instead, such actions are based on the theory that accurate claims are deemed to be false/ fraudulent if there has been noncompliance with some other material law or regulation. The existence of the False Claims Act, under which so-called qui tam plaintiffs can allege liability for a wide range of regulatory noncompliance, increases the potential for such actions to be brought and has increased the potential financial exposure for such actions. These actions are costly and time-consuming to defend.

Our management carefully considers the importance of compliance with all applicable laws and when structuring company operations. Our management is aware of and actively works to minimize risk related to potential qui tam plaintiffs. That said, we cannot assure that the applicable enforcement authorities or qui tam plaintiffs will not allege violations of the False Claims Act or analogous state false claims laws. A finding of liability under the False Claims Act could have a material adverse effect on our business, financial condition or results of operations.

State Licensure and Accreditation

States have a wide variety of health care laws and regulations that potentially affect our operations and the operations of our partners. For example: (1) many states have implemented laws and regulations related to so-called “tele-health,” but whether those laws apply to our operations, and the obligations they impose, vary significantly; (2) some states have so-called corporate practice of medicine prohibitions, and such prohibitions are used to indirectly regulate ownership of heath care companies and/or management companies; and (3) some states have “surprise billing” or out-of-network billing laws that impose a variety of obligations on health care providers and health plans. The failure to comply with all state regulatory obligations could be used by health plans to deny payment or to recoup funds, and any noncompliance could subject us to penalties or limitations that could have a material adverse effect on our business, financial condition or results of operations.

In addition, our partners’ health care facilities and professionals are subject to professional and private licensing, certification and accreditation requirements. These include, but are not limited to, requirements imposed by Medicare, Medicaid, state licensing authorities, voluntary accrediting organizations and third-party private payors. Receipt and renewal of such licenses, certifications and accreditations are often based on inspections, surveys, audits, investigations or other reviews, some of which may require affirmative compliance actions by us that could be burdensome and expensive. The applicable standards may change in the future. There can be no assurance that we will be able to maintain all necessary licenses or certifications in good standing or that they will not be required to incur substantial costs in doing so. The failure to maintain all necessary licenses, certifications and accreditations in good standing, or the expenditure of substantial funds to maintain them, could have an adverse effect on our business.

Health Information Privacy and Security Standards

The privacy and data security regulations under HIPPA, as amended, contain detailed requirements concerning (1) the use and disclosure of individually identifiable PHI; (2) computer and data security standards regarding the protection of electronic PHI including storage, utilization, access to and transmission; and (3) notification to individuals and the federal government in the event of a breach of unsecured PHI. HIPAA covered entities and business associates must implement certain administrative, physical, and technical security standards to protect the integrity, confidentiality and availability of certain electronic health information received, maintained, or transmitted. Violations of the HIPAA privacy and Security Rules may result in civil and criminal penalties. In the event of a breach, a HIPAA covered entity must promptly notify affected individuals of a breach. All breaches must also be reported to the federal government. Where a breach affects more than 500 individuals, additional reporting obligations apply. In addition to federal enforcement, State attorneys general may bring civil actions on behalf of state residents for violations of the HIPAA privacy and Security Rules, obtain damages on behalf of state residents, and enjoin further violations. Many states also have laws that protect the privacy and security of confidential, personal information, which may be similar to or even more stringent than HIPAA. Some of these state laws may impose fines and penalties on violators and may afford private rights of action to individuals who believe their personal information has been misused. We expect increased federal and state privacy and security enforcement efforts.

Our management carefully considers the importance of compliance with patient privacy and data security regulations when structuring company operations. Our management is aware of and actively works to minimize risk related to patient privacy and data security. That said, we cannot assure that a breach will not occur or that the applicable enforcement authorities will not allege violations of HIPAA’s patient privacy and data security regulations. A breach or an allegation of noncompliance with HIPAA’s patient privacy and data security regulations could have a material adverse effect on our business, financial condition or results of operations.

Changes in the healthcare industry and regulatory environments may adversely affect Wellgistics Health’s businesses.

Political, economic and regulatory influences are subjecting the healthcare industry to significant changes that could adversely affect Wellgistics Health’s results of operations. In recent years, the healthcare industry has undergone significant changes in an effort to reduce costs and government spending. These changes include an increased reliance on managed care; cuts in certain Medicare and Medicaid funding in the U.S. and the funding of governmental payers in foreign jurisdictions; consolidation of competitors, suppliers and other market participants; and the development of large, sophisticated purchasing groups. In addition, the IRA took effect in 2023. The IRA includes, among other things, policies that are designed to have a direct impact on drug prices and reduce drug spending by the federal government. For example, the IRA requires drug manufacturers to pay rebates to Medicare if they increase prices faster than inflation for drugs used by Medicare beneficiaries. The mechanics of the rebate calculation would mimic those of the Medicaid rebate, but the expansion of inflation-based rebates may further complicate pricing strategies, particularly as to the launch of Wellgistics Health’s new products. The IRA could have the effect of reducing the prices Wellgistics Health can charge and reimbursement Wellgistics Health receives for Wellgistics Health’s products, thereby reducing Wellgistics Health’s profitability.

Wellgistics Health expects the healthcare industry continue to change significantly in the future. Some of these potential changes, such as a reduction in governmental funding for certain healthcare services or adverse changes in legislation or regulations governing prescription drug pricing, healthcare services or mandated benefits, may cause customers to reduce the amount of Wellgistics Health’s products and services they purchase or the price they are willing to pay for Wellgistics Health’s products and services. Wellgistics Health expects continued governmental and private payer pressure to reduce pharmaceutical pricing, and these pressures could be further exacerbated if payer deficits or shortfalls increase due to COVID-19 or otherwise. Changes in pharmaceutical manufacturers’ pricing or distribution policies and practices as well as applicable government regulations, including, for example, in connection with the federal 340B drug pricing program, could also significantly reduce Wellgistics Health’s profitability.

Wellgistics Health will be exposed to risks related to litigation and other legal proceedings.

Wellgistics Health operates in a highly regulated and litigious environment. Wellgistics Health may become involved in the following types of legal proceedings but not limited to litigation, investigations, inspections, audits, claims, inquiries and similar actions by pharmacy, healthcare, tax, and other governmental authorities. Like other companies in the retail pharmacy, healthcare services and pharmaceutical wholesale industries, Wellgistics Health is subject to extensive regulation by federal, state and local government agencies in the U.S. and other countries in which it operates. There continues to be a heightened level of review and/or audit by regulatory authorities of, and increased litigation regarding business, compliance and reporting practices of Wellgistics Health and other industry participants. If Wellgistics Health were to be exposed to litigation or other legal proceedings, it could have a material adverse effect on Wellgistics Health’s business, financial condition, cash flows, or results of operations.

A significant change in, or noncompliance with, governmental regulations and other legal requirements could have a material adverse effect on Wellgistics Health’s reputation and profitability.

Wellgistics Health will operate in complex, highly regulated environments around the world and could be materially and adversely affected by changes to applicable legal requirements including the related interpretations and enforcement practices, new legal requirements and/or any failure to comply with applicable regulations. Wellgistics Health’s businesses will be subject to numerous country, state and local regulations including licensing, billing practices, utilization and other requirements for pharmacies and reimbursement arrangements. The regulations to which Wellgistics Health will be subject include, but are not limited to: country and state registration and regulation of pharmacies and drug discount card programs; dispensing and sale of controlled substances and products containing pseudoephedrine; applicable governmental payer regulations including Medicare and Medicaid; data privacy and security laws and regulations including HIPAA; the ACA or any successor thereto; laws and regulations relating to the protection of the environment and health and safety matters, each of which continues to evolve, including those governing exposure to, and the management and disposal of, hazardous substances; regulations regarding food and drug safety including those of the FDA and the DEA, trade regulations including those of the U.S. Federal Trade Commission, and consumer protection and safety regulations including those of the Consumer Product Safety Commission, as well as state regulatory authorities, governing the availability, sale, advertisement and promotion of products Wellgistics Health will sell as well as Wellgistics Health’s loyalty and drug discount card programs; anti-kickback laws; false claims laws; laws against the corporate practice of medicine; and national and state laws governing healthcare fraud and abuse and the practice of the profession of pharmacy. For example, in the U.S., the DEA, FDA and various other regulatory authorities regulate the distribution and dispensing of pharmaceuticals and controlled substances. Wellgistics Health is required to hold valid DEA and state-level licenses, meet various security and operating standards and comply with the federal and various state-controlled substance acts and related regulations governing the sale, dispensing, disposal, holding and distribution of controlled substances. The DEA, FDA and state regulatory authorities have broad enforcement powers, including the ability to seize or recall products and impose significant criminal, civil and administrative sanctions for violations of these laws and regulations. As noted above, the IRA includes policies that are designed to have a direct impact on drug prices and reduce drug spending by the federal government. Wellgistics Health is also governed by national and state laws of general applicability, including laws regulating matters of working conditions, health and safety and equal employment opportunity and other labor and employment matters as well as employee benefit, competition and antitrust matters. In addition, Wellgistics Health could have significant exposure if Wellgistics Health is found to have infringed another party’s intellectual property rights.

Changes in laws, regulations and policies and the related interpretations and enforcement practices may alter the landscape in which Wellgistics Health will do business and may significantly affect Wellgistics Health’s cost of doing business. The impact of new laws, regulations and policies and the related interpretations and enforcement practices generally cannot be predicted, and changes in applicable laws, regulations and policies and the related interpretations and enforcement practices may require extensive system and operational changes, be difficult to implement, increase Wellgistics Health’s operating costs and require significant capital expenditures. Untimely compliance or noncompliance with applicable laws and regulations could result in the imposition of civil and criminal penalties that could adversely affect the continued operation of Wellgistics Health’s businesses, including: suspension of payments from government programs; loss of required government certifications; loss of authorizations to participate in or exclusion from government programs, including the Medicare and Medicaid programs; loss of licenses; and significant fines or monetary penalties. Any failure to comply with applicable regulatory requirements in which Wellgistics Health will operate could result in significant legal and financial exposure, damage to Wellgistics Health’s reputation and brand, and have a material adverse effect on Wellgistics Health’s business operations, financial condition and results of operations.

Wellgistics Health could be adversely affected by product liability, product recall, personal injury or other health and safety issues.

Wellgistics Health could be adversely impacted by the supply of defective or expired products, including the infiltration of counterfeit products into the supply chain, errors in re-labeling of products, product tampering, product recall and contamination or product mishandling issues. Through Wellgistics Health’s pharmacy, wholesale distribution centers, and Wellgistics Health’s wholesale and manufacturer relationships acquired by Wellgistics Health as a result of the Wellgistics Acquisition, Wellgistics Health will also be exposed to risks relating to the products and services Wellgistics Health will offer. Errors in the dispensing and packaging of pharmaceuticals, including related counseling, and in the provision of other healthcare services could lead to serious injury or death. Product liability or personal injury claims may be asserted against Wellgistics Health and mandatory or voluntary product recalls may apply to Wellgistics Health with respect to any of the retail products or pharmaceuticals Wellgistics Health will sell or services Wellgistics Health will provide. For example, from time to time, the FDA issues statements alerting patients that products in Wellgistics Health’s supply chain may contain impurities or harmful substances, and claims relating to the sale or distribution of such products may be asserted against Wellgistics Health or arise from these statements. Wellgistics Health could suffer significant reputational damage and financial liability if Wellgistics Health, or any affiliated entities or third-party healthcare providers that Wellgistics Health will do business with, experience any of the foregoing health and safety issues or incidents, which could have a material adverse effect on Wellgistics Health’s business operations, financial condition and results of operations.

Wellgistics Health could be subject to adverse changes in tax laws, regulations and interpretations or challenges to Wellgistics Health’s tax positions.

As a corporation operating within the U.S., from time to time, changes in tax laws or regulations may be proposed or enacted that could adversely affect Wellgistics Health’s overall tax liability. There can be no assurance that changes in tax laws or regulations will not materially and adversely affect Wellgistics Health’s effective tax rate, tax payments, financial condition and results of operations. Similarly, changes in tax laws and regulations that impact Wellgistics Health’s customers and counterparties, or the economy generally may also impact Wellgistics Health’s financial condition and results of operations.

Tax laws and regulations are complex and subject to varying interpretations, and Wellgistics Health is subject to regular review and audit by tax authorities. Any adverse outcome of such a review or audit could have a negative impact on Wellgistics Health’s effective tax rate, tax payments, financial condition and results of operations. In addition, the determination of Wellgistics Health’s income tax provision and other tax liabilities requires significant judgment, and there are many transactions and calculations where the ultimate tax determination is uncertain. The ultimate tax determination may differ from the amounts recorded in Wellgistics Health’s financial statements and may materially affect Wellgistics Health’s results of operations in the period or periods for which such determination is made. Any significant failure to comply with applicable tax laws and regulations in all relevant jurisdictions could give rise to substantial penalties and liabilities. Any changes in enacted tax laws, rules or regulatory or judicial interpretations; or any change in the pronouncements relating to accounting for income taxes could materially and adversely impact Wellgistics Health’s effective tax rate, tax payments, financial condition and results of operations.

Risks Related to Wellgistics Health’s Intellectual Property

Despite the actions Wellgistics Health will take to defend and protect its intellectual property, Wellgistics Health may not be able to adequately protect or enforce its intellectual property rights or prevent unauthorized parties from copying or reverse engineering its solutions. Wellgistics Health’s efforts to protect and enforce its intellectual property rights and prevent third parties from violating its rights may be costly.

The success of Wellgistics Health’s products and its business depend in part on Wellgistics Health’s ability to obtain patents and other intellectual property rights and maintain adequate legal protection for its products in the United States and other international jurisdictions. Wellgistics Health will rely on a combination of patent, service mark, trademark and trade secret laws, as well as confidentiality procedures and contractual restrictions, to establish and protect its proprietary rights, all of which provide only limited protection.

Wellgistics Health cannot assure that any patents will be issued with respect to its currently pending patent applications or that any trademarks will be registered with respect to its currently pending applications in a manner that gives Wellgistics Health adequate defensive protection or competitive advantages, if at all, or that any patents issued to Wellgistics Health or any trademarks registered by it will not be challenged, invalidated or circumvented. Wellgistics Health has filed for patents and trademarks in the United States and in certain international jurisdictions, but such protections may not be available in all countries in which it operates or in which Wellgistics Health seeks to enforce its intellectual property rights, or may be difficult to enforce in practice. Wellgistics Health’s currently-issued patents and trademarks and any patents and trademarks that may be issued or registered, as applicable, in the future with respect to pending or future applications may not provide sufficiently broad protection or may not prove to be enforceable in actions against alleged infringers. Wellgistics Health’s foreign intellectual property portfolio will not as comprehensive as its U.S. intellectual property portfolio and may not protect its intellectual property in some countries where its products are sold or may be sold in the future. Wellgistics Health cannot be certain that the steps it has taken will prevent unauthorized use of its technology or the reverse engineering of its technology. Moreover, others may independently develop technologies that are competitive to Wellgistics Health or infringe Wellgistics Health’s intellectual property.

Protecting against the unauthorized use of Wellgistics Health’s intellectual property, products and other proprietary rights is expensive and difficult, particularly internationally. Wellgistics Health believes that its patents are foundational in the area of healthcare products and intends to enforce Wellgistics Health’s intellectual property portfolio. Unauthorized parties may attempt to copy or reverse engineer Wellgistics Health’s healthcare technology or certain aspects of Wellgistics Health’s solutions that it considers proprietary. Litigation may be necessary in the future to enforce or defend Wellgistics Health’s intellectual property rights, to prevent unauthorized parties from copying or reverse engineering its solutions, to determine the validity and scope of the proprietary rights of others or to block the importation of infringing products into the United States.

Any such litigation, whether initiated by Wellgistics Health or a third party, could result in substantial costs and diversion of management resources, either of which could adversely affect Wellgistics Health’s business, operating results and financial condition. Even if it obtains favorable outcomes in litigation, Wellgistics Health may not be able to obtain adequate remedies, especially in the context of unauthorized parties copying or reverse engineering its solutions.

Further, many of Wellgistics Health’s competitors have the ability to dedicate substantially greater resources to defending intellectual property infringement claims and to enforcing their intellectual property rights than Wellgistics Health has. Attempts to enforce its rights against third parties could also provoke these third parties to assert their own intellectual property or other rights against Wellgistics Health or result in a holding that invalidates or narrows the scope of Wellgistics Health’s rights, in whole or in part. Effective patent, trademark, service mark, copyright and trade secret protection may not be available in every country in which Wellgistics Health’s products will be available and competitors based in other countries may sell infringing products in one or more markets. Failure to adequately protect Wellgistics Health’s intellectual property rights could result in Wellgistics Health’s competitors offering similar products, potentially resulting in the loss of some of Wellgistics Health’s competitive advantage and a decrease in its revenue, which would adversely affect Wellgistics Health’s business, operating results, financial condition and prospects.

Third-party claims that Wellgistics Health is infringing intellectual property, whether successful or not, could subject it to costly and time-consuming litigation or expensive licenses, and its business could be adversely affected.

Although Wellgistics Health may hold key patents related to its products, a number of companies, both within and outside of the healthcare industry, hold other patents covering aspects of healthcare products. In addition to these patents, participants in this industry typically also protect their technology, especially embedded software, through copyrights and trade secrets.

As a result, there is frequent litigation based on allegations of infringement, misappropriation or other violations of intellectual property rights. Wellgistics Health in the future may receive inquiries from other intellectual property holders and may become subject to claims that it infringes their intellectual property rights, particularly as Wellgistics Health expands its presence in the market, expands to new use cases and faces increasing competition. In addition, parties may claim that the names and branding of Wellgistics Health’s products infringe their trademark rights in certain countries or territories. If such a claim were to prevail, Wellgistics Health may have to change the names and branding of its products in the affected territories and it could incur other costs.

Wellgistics Health will have a number of agreements in effect, pursuant to which it has agreed to defend, indemnify and hold harmless its customers, suppliers, and channel partners and other partners from damages and costs which may arise from the infringement by Wellgistics Health’s products of third-party patents or other intellectual property rights. The scope of these indemnity obligations varies, but may, in some instances, include indemnification for damages and expenses, including attorneys’ fees. Wellgistics Health’s insurance may not cover all intellectual property infringement claims. A claim that its products infringe a third party’s intellectual property rights, even if untrue, could adversely affect Wellgistics Health’s relationships with its customers, may deter future customers from purchasing its products and could expose Wellgistics Health to costly litigation and settlement expenses. Even if Wellgistics Health is not a party to any litigation between a customer and a third party relating to infringement by its products, an adverse outcome in any such litigation could make it more difficult for Wellgistics Health to defend its products against intellectual property infringement claims in any subsequent litigation in which it is a named party. Any of these results could adversely affect Wellgistics Health’s brand and operating results.

Wellgistics Health may in the future need to initiate infringement claims or litigation in order to try to protect its intellectual property rights. In addition to litigation where Wellgistics Health is a plaintiff, Wellgistics Health’s defense of intellectual property rights claims brought against it or its customers, suppliers and channel partners, with or without merit, could be time-consuming, expensive to litigate or settle, divert management resources and attention and force Wellgistics Health to acquire intellectual property rights and licenses, which may involve substantial royalty or other payments and may not be available on acceptable terms or at all. Further, a party making such a claim, if successful, could secure a judgment that requires Wellgistics Health to pay substantial damages or obtain an injunction, and Wellgistics Health may also lose the opportunity to license its technology to others or to collect royalty payments. An adverse determination also could invalidate or narrow Wellgistics Health’s intellectual property rights and adversely affect its ability to offer its products to its customers and may require that Wellgistics Health procure or develop substitute products that do not infringe, which could require significant effort and expense. Any of these events could adversely affect Wellgistics Health’s business, reputation, operating results, financial condition and prospects.

Wellgistics Health’s intellectual property applications for registration may not issue or be registered, which may have a material adverse effect on Wellgistics Health’s ability to prevent others from commercially exploiting products similar to Wellgistics Health’s.

Wellgistics Health cannot be certain that it is the first inventor of the subject matter to which it has filed a particular patent application, or if it is the first party to file such a patent application. If another party has filed a patent application to the same subject matter as Wellgistics Health has, Wellgistics Health may not be entitled to the protection sought by the patent application. Wellgistics Health also cannot be certain whether the claims included in a patent application will ultimately be allowed in the applicable issued patent or the timing of any approval or grant of a patent application. Further, the scope of protection of issued patent claims is often difficult to determine. As a result, Wellgistics Health cannot be certain that the patent applications that it intends to file will issue, or that its issued patents will afford, protection against competitors with similar technology. In addition, Wellgistics Health’s competitors may design around Wellgistics Health’s issued patents, which may adversely affect Wellgistics Health’s business, prospects, financial condition and operating results.

In addition to patented technology, Wellgistics Health will rely on its unpatented proprietary technology, trade secrets, designs, experiences, work flows, data, processes, software and know-how.

Wellgistics Health will rely on proprietary information (such as trade secrets, designs, experiences, work flows, data, know-how and confidential information) to protect intellectual property that may not be patentable or subject to copyright, trademark, trade dress or service mark protection, or that Wellgistics Health believes is best protected by means that do not require public disclosure. Wellgistics Health generally will seek to protect this proprietary information by entering into confidentiality agreements, or consulting, services or employment agreements that contain non-disclosure and non-use provisions with its employees, consultants, contractors and third parties. However, Wellgistics Health may fail to enter into the necessary agreements, and even once entered into, these agreements may be breached or may otherwise fail to prevent disclosure, third-party infringement or misappropriation of its proprietary information, may be limited as to their term and may not provide an adequate remedy in the event of unauthorized disclosure or use of proprietary information. Wellgistics Health will have limited control over the protection of trade secrets used by its current or future manufacturing partners and suppliers and could lose future trade secret protection if any unauthorized disclosure of such information occurs. In addition, Wellgistics Health’s proprietary information may otherwise become known or be independently developed by its competitors or other third parties. To the extent that its employees, consultants, contractors, advisors and other third parties use intellectual property owned by others in their work for Wellgistics Health, disputes may arise as to the rights in related or resulting know-how and inventions. Costly and time- consuming litigation could be necessary to enforce and determine the scope of Wellgistics Health’s proprietary rights, and failure to obtain or maintain protection for its proprietary information could adversely affect its competitive business position. Furthermore, laws regarding trade secret rights in certain markets where Wellgistics Health operates may afford little or no protection to its trade secrets.

Wellgistics Health also will rely on physical and electronic security measures to protect its proprietary information, but it cannot provide assurance that these security measures will not be breached or provide adequate protection for its property. There is a risk that third parties may obtain and improperly utilize Wellgistics Health’s proprietary information to its competitive disadvantage. Wellgistics Health may not be able to detect or prevent the unauthorized use of such information or take appropriate and timely steps to enforce its intellectual property rights.

Wellgistics Health may be subject to damages resulting from claims that it or its current or former employees have wrongfully used or disclosed alleged trade secrets of its employees’ former employers. Wellgistics Health may be subject to damages if its current or former employees wrongfully use or disclose Wellgistics Health’s trade secrets.

Wellgistics Health may be subject to claims that it or its current or former employees have inadvertently or otherwise used or disclosed trade secrets or other proprietary information of a current or former employee’s former employer. Litigation may be necessary to defend against these claims. If Wellgistics Health fails in defending such claims, in addition to paying monetary damages, it may lose valuable intellectual property rights or personnel. A loss of key personnel or their work product could hamper or prevent Wellgistics Health’s ability to commercialize its products, which could severely harm its business. Even if Wellgistics Health is successful in defending against these claims, litigation could result in substantial costs and demand on management resources.

Risks Related to Being a Public Company

Wellgistics Health will incur increased costs as a result of operating as a public company, and its management will devote substantial time to compliance with its public company responsibilities and corporate governance practices.

If Wellgistics Health becomes a public company, it will incur significant legal, accounting and other expenses that it did not incur as a private company. As a public company, Wellgistics Health will be subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act, and the Dodd-Frank Act, as well as rules adopted, and to be adopted, by the SEC and Nasdaq, and other applicable securities rules and regulations, which impose various requirements on public companies, including the establishment and maintenance of effective disclosure and financial controls and changes in corporate governance practices.

Wellgistics Health’s management and other personnel will need to devote a substantial amount of time to these public company requirements. Moreover, Wellgistics Health expects these rules and regulations to substantially increase its legal and financial compliance costs and to make some activities more time-consuming and costly. Wellgistics Health may need to hire additional legal, accounting and financial staff with appropriate public company experience and technical accounting knowledge and maintain an internal audit function.

In addition, changing laws, regulations, and standards relating to corporate governance and public disclosure are creating uncertainty for public companies, increasing legal and financial compliance costs, and making some activities more time consuming. These laws, regulations, and standards are subject to varying interpretations and may evolve over time as new guidance is provided by regulatory and governing bodies. This could result in continuing uncertainty regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices. Wellgistics Health intends to invest resources to comply with evolving laws, regulations, and standards, and this investment may result in increased general and administrative expenses and a diversion of management’s time and attention from revenue-generating activities to compliance activities. If Wellgistics Health’s efforts to comply with new laws, regulations, and standards differ from the activities intended by regulatory or governing bodies due to ambiguities related to their application and practice, regulatory authorities may initiate legal proceedings against Wellgistics Health and its business may be adversely affected.

The rules and regulations applicable to public companies will make it more expensive for Wellgistics Health to obtain and maintain director and officer liability insurance. These factors could also make it more difficult for Wellgistics Health to attract and retain qualified members of its board of directors, particularly to serve on Wellgistics Health’s audit committee and compensation committee, and qualified executive officers.

Wellgistics Health’s management team has limited experience managing a public company.

Most of the members of Wellgistics Health’s management team have limited to no experience managing a publicly traded company, interacting with public company investors and complying with the increasingly complex laws pertaining to public companies. Wellgistics Health’s management team has not worked together at prior companies that were publicly traded and the team may not successfully or efficiently manage their new roles and responsibilities.

Wellgistics Health’s ability to be successful will depend upon the efforts of Wellgistics Health’s board of directors and key personnel and the loss of such persons could negatively impact the operations and profitability of Wellgistics Health’s business.

Wellgistics Health’s ability to be successful will be dependent upon the efforts of Wellgistics Health’s board of directors and key personnel. Wellgistics Health’s cannot guarantee that its board of directors and key personnel will be effective or successful or remain with Wellgistics Health. In addition to the other challenges they will face, such individuals may be unfamiliar with the requirements of operating a public company, which could cause Wellgistics Health’s management to have to expend time and resources helping them become familiar with such requirements.

Risks Related to Ownership of Wellgistics Health’s Common Stock

Delaware State Law includes anti-takeover provisions.

Delaware law contains provisions that could have the effect of rendering more difficult, delaying or preventing an acquisition deemed undesirable by our board of directors, such as:

These provisions, alone or together, could delay or prevent hostile takeovers and changes in control or changes in our management to the extent permitted, whether by our certificate of incorporation, bylaws, or merely as a function of Delaware law. Any provision of our certificate of incorporation, bylaws, or Delaware law that has the effect of delaying, preventing or deterring a change in control could limit the opportunity for our stockholders to receive a premium for their shares of our Common Stock and could also affect the price that some investors are willing to pay for our Common Stock.

Claims for indemnification by Wellgistics Health’s directors and officers may reduce Wellgistics Health’s available funds to satisfy successful third-party claims against Wellgistics Health and may reduce the amount of money available to Wellgistics Health.

The DGCL empowers us to indemnify our directors and officers against expenses relating to certain actions, suits or proceedings as provided for therein. In order for such indemnification to be available, the applicable director or officer must not have acted in a manner that constituted a breach of his or her fiduciary duties and involved intentional misconduct, fraud or a knowing violation of law, or must have acted in good faith and reasonably believed that his or her conduct was in, or not opposed to, our best interests. In the event of a criminal action, the applicable director or officer must not have had reasonable cause to believe his or her conduct was unlawful.

We may indemnify each of our present and future directors, officers, employees or agents who becomes a party or is threatened to be made a party to any suit or proceeding, whether pending, completed or merely threatened, and whether said suit or proceeding is civil, criminal, administrative, investigative, or otherwise, except an action by or in the right of Wellgistics Health, by reason of the fact that he is or was a director, officer, employee, or agent of Wellgistics Health, or is or was serving at the request of Wellgistics Health as a director, officer, employee, or agent of another corporation, partnership, joint venture, trust, or other enterprise, against expenses, including, but not limited to, attorneys’ fees, judgments, fines, and amounts paid in settlement actually and reasonably incurred by him in connection with the action, suit, proceeding or settlement, provided such person acted in good faith and in a manner which he reasonably believed to be in or not opposed to the best interest of Wellgistics Health, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful.

The expenses of directors, officers, employees or agents of Wellgistics Health incurred in defending a civil or criminal action, suit, or proceeding may be paid by Wellgistics Health as they are incurred and in advance of the final disposition of the action, suit, or proceeding, if and only if the director, officer, employee or agent undertakes to repay said expenses to Wellgistics Health if it is ultimately determined by a court of competent jurisdiction, after exhaustion of all appeals therefrom, that he is not entitled to be indemnified by the corporation.

No indemnification shall be applied, and any advancement of expenses to or on behalf of any director, officer, employee or agent must be returned to Wellgistics Health, if a final adjudication establishes that the person’s acts or omissions involved a breach of any fiduciary duties, where applicable, intentional misconduct, fraud or a knowing violation of the law which was material to the cause of action.

The DGCL further provides that a corporation may purchase and maintain insurance or make other financial arrangements on behalf of any person who is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise for any liability asserted against him and liability and expenses incurred by him in his capacity as a director, officer, employee or agent, or arising out of his status as such, whether or not the corporation has the authority to indemnify him against such liability and expenses. We have secured a directors’ and officers’ liability insurance policy. We expect that we will continue to maintain such a policy.

If securities or industry analysts do not publish or cease publishing research or reports about Wellgistics Health, its business, or its market, or if they change their recommendations regarding Wellgistics Health’s securities adversely, the price and trading volume of Wellgistics Health’s securities could decline.

The trading market for Wellgistics Health’s securities will be influenced by the research and reports that industry or securities analysts may publish about Wellgistics Health, its business, market or competitors. Securities and industry analysts do not currently, and may never, publish research on Wellgistics Health. If no securities or industry analysts commence coverage of Wellgistics Health, Wellgistics Health’s share price and trading volume would likely be negatively impacted. If any of the analysts who may cover Wellgistics Health change their recommendation regarding Wellgistics Health Common Stock adversely, or provide more favorable relative recommendations about Wellgistics Health’s competitors, the price of shares of Wellgistics Health Common Stock would likely decline. If any analyst who may cover Wellgistics Health were to cease coverage of Wellgistics Health or fail to regularly publish reports on it, Wellgistics Health could lose visibility in the financial markets, which in turn could cause its share price or trading volume to decline.

There can be no assurance that Wellgistics Health common stock will be approved for listing on Nasdaq or, if approved, will continue to be so listed, or that Wellgistics Health will be able to comply with the continued listing standards of Nasdaq.

In connection with the registration statement of which this prospectus forms a part, Wellgistics Health’s Common Stock will be listed on Nasdaq under the symbol “WGRX.” If Nasdaq delists Wellgistics Health’s shares from trading on its exchange for failure to meet the listing standards, Wellgistics Health and its stockholders could face significant material adverse consequences including, but not limited to:

The National Securities Markets Improvement Act of 1996, which is a federal statute, prevents or preempts the states from regulating the sale of certain securities, which are referred to as “covered securities.” Because Wellgistics Health Common Stock will be listed on Nasdaq, it is a covered security. Although the states are preempted from regulating the sale of Wellgistics Health securities, the federal statute does allow the states to investigate companies if there is a suspicion of fraud, and, if there is a finding of fraudulent activity, then the states can regulate or bar the sale of covered securities in a particular case. While Wellgistics Health is not aware of a state, other than the State of Idaho, having used these powers to prohibit or restrict the sale of securities issued by blank check companies, certain state securities regulators view blank check companies unfavorably and might use these powers, or threaten to use these powers, to hinder the sale of securities of blank check companies in their states. Further, if Wellgistics Health was no longer listed on Nasdaq, Wellgistics Health’s securities would not be covered securities and Wellgistics Health would be subject to regulation in each state in which Wellgistics Health offers its securities.

If and when our Common Stock is publicly traded, it may be subject to the penny stock rules which may make it more difficult to sell our Common Stock.

The SEC has adopted regulations which generally define a “penny stock” to be any equity security that has a market price, as defined, less than $5.00 per share or an exercise price of less than $5.00 per share, subject to certain exceptions. If and when our Common Stock is publicly traded, it may be covered by the penny stock rules, which impose additional sales practice requirements on broker-dealers who sell to persons other than established customers and accredited investors, such as institutions with assets in excess of $5,000,000 or an individual with net worth in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 jointly with his or her spouse. For transactions covered by this rule, the broker-dealers must make a special suitability determination for the purchase and receive the purchaser’s written agreement of the transaction prior to the sale. Consequently, the rule may affect the ability of broker/dealers to sell our securities and also affect the ability of our stockholders to sell their shares in the secondary market.

An active market for Wellgistics Health’s securities may not develop, which would adversely affect the liquidity and price of Wellgistics Health’s securities.

The price of Wellgistics Health’s securities may vary significantly due to factors specific to Wellgistics Health as well as to general market or economic conditions. Furthermore, an active trading market for Wellgistics Health’s securities may never develop or, if developed, it may not be sustained. Holders of Wellgistics Health’s securities may be unable to sell their securities unless a market can be established and sustained.

The market price of Wellgistics Health Common Stock may decline as a result of various market factors.

Fluctuations in the price of Wellgistics Health’s securities could contribute to the loss of all or part of your investment. Prior to the effectiveness of the registration statement of which this prospectus forms a part, there has not been a public market for Wellgistics Health Common Stock. Accordingly, the valuation ascribed to Wellgistics Health may not be indicative of the price that will prevail in the trading market. If an active market for Wellgistics Health’s securities develops and continues, the trading price of Wellgistics Health’s securities could be volatile and subject to wide fluctuations in response to various factors, some of which will be beyond Wellgistics Health’s control. Any of the factors listed below could have a material adverse effect on your investment in Wellgistics Health’s securities and Wellgistics Health’s securities may trade at prices significantly below the price you paid for them. In such circumstances, the trading price of Wellgistics Health’s securities may not recover and may experience a further decline.

The market price of Wellgistics Health Common Stock may decline for a number of reasons including if:

Furthermore, broad market and industry factors may materially harm the market price of our securities irrespective of our operating performance. Certain companies have at times experienced extreme price run-ups followed by rapid price declines and high volatility unrelated or disproportionate to the operating performance of the particular companies affected. Recently, this has especially been seen with companies conducting an initial public offering, particularly among companies with smaller public floats. The trading prices and valuations of these stocks, and of our securities, may not be predictable and may make it difficult for prospective investors to assess the rapidly changing value of our securities. A loss of investor confidence in the market for retail stocks or the stocks of other companies which investors perceive to be similar to Wellgistics Health could depress our stock price regardless of our business, prospects, financial conditions or results of operations. A decline in the market price of our securities also could adversely affect its ability to issue additional securities and its ability to obtain additional financing in the future.

Future sales, or the perception of future sales, by Wellgistics Health or its stockholders in the public market could cause the market price for Wellgistics Health Common Stock to decline.

The sale of shares of Wellgistics Health Common Stock in the public market, or the perception that such sales could occur, could harm the prevailing market price of shares of Wellgistics Health Common Stock. These sales, or the possibility that these sales may occur, also might make it more difficult for Wellgistics Health to sell Equity Securities in the future at a time and at a price that it deems appropriate.

In the future, Wellgistics Health may also issue its securities in connection with investments or acquisitions. The amount of shares of Wellgistics Health Common Stock issued in connection with an investment or acquisition could constitute a material portion of the then-outstanding shares of Wellgistics Health Common Stock. Any issuance of additional securities in connection with investments or acquisitions may result in additional dilution to Wellgistics Health stockholders.

Wellgistics Health will qualify as an “emerging growth company” as well as a smaller reporting company within the meaning of the Securities Act, and if Wellgistics Health takes advantage of certain exemptions from disclosure requirements available to emerging growth companies or smaller reporting companies, this could make Wellgistics Health’s securities less attractive to investors and may make it more difficult to compare Wellgistics Health’s performance with other public companies.

Wellgistics Health will qualify as an “emerging growth company” within the meaning of the Section 2(a)(19) of the Securities Act, as modified by the JOBS Act. As such, Wellgistics Health may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies for as long as Wellgistics Health continues to be an emerging growth company, including, but not limited to: (i) not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, (ii) reduced disclosure obligations regarding executive compensation in Wellgistics Health’s periodic reports and proxy statements and (iii) exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. As a result, Wellgistics Health’s stockholders may not have access to certain information they may deem important. Wellgistics Health will remain an emerging growth company until the earliest of (i) the last day of the fiscal year in which the market value of Wellgistics Health Common Stock that is held by non-affiliates exceeds $700 million as of the end of that year’s second fiscal quarter, (ii) the last day of the fiscal year in which Wellgistics Health has total annual gross revenue of $1.235 billion or more during such fiscal year (as indexed for inflation), (ii) the date on which Wellgistics Health has issued more than $1 billion in non-convertible debt in the prior three-year period or (iv) the last day of the fiscal year following the fifth anniversary of the date of the first sale of common stock in the initial public offering. Wellgistics Health cannot predict whether investors will find Wellgistics Health’s securities less attractive because it will rely on these exemptions. If some investors find Wellgistics Health’s securities less attractive as a result of its reliance on these exemptions, the trading prices of Wellgistics Health’s securities may be lower than they otherwise would be, there may be a less active trading market for its securities and the trading prices of its securities may be more volatile.

Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such an election to opt out is irrevocable. Wellgistics Health has elected not to opt out of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, Wellgistics Health, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of Wellgistics Health’s financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.

Additionally, Wellgistics Health will qualify as a “smaller reporting company” as defined in Item 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial statements. Wellgistics Health will remain a smaller reporting company until the last day of the fiscal year in which (i) the market value of Wellgistics Health common stock held by non-affiliates exceeds $250 million as of the end of that year’s second fiscal quarter, or (ii) its annual revenues exceeded $100 million during such completed fiscal year and the market value of Wellgistics Health common stock held by non-affiliates exceeds $700 million as of the end of that year’s second fiscal quarter. To the extent Wellgistics Health takes advantage of such reduced disclosure obligations, it may also make comparison of its financial statements with other public companies difficult or impossible.

Our management team will have immediate and broad discretion over the use of the net proceeds from this Offering and we may use the net proceeds in ways with which you disagree.

The net proceeds from this Offering will be immediately available to our management to use at their discretion. We currently intend to use the net proceeds from this Offering for working capital and general corporate purposes See “Use of Proceeds.” We have not allocated specific amounts of the net proceeds from this Offering for any of the foregoing purposes. Accordingly, our management will have significant discretion and flexibility in applying the net proceeds of this Offering. You will be relying on the judgment of our management with regard to the use of these net proceeds, and you will not have the opportunity, as part of your investment decision, to assess whether the proceeds are being used appropriately. It is possible that the net proceeds will be invested in a way that does not yield a favorable, or any, return for us or our stockholders. The failure of our management to use such funds effectively could have a material adverse effect on our business, prospects, financial condition, and results of operation.

Based on our current business plan, we believe our cash and cash equivalents, together with our financing activities and the net proceeds generated from this Offering, will be sufficient to meet our current and anticipated needs for general corporate purposes for at least the next six months. If our available cash balances are insufficient to satisfy our liquidity requirements, in particular, for the development and commercialization of our products, we may seek to obtain further funding through public or private equity offerings, debt financings or other sources.

The unaudited pro forma financial information included herein may not be indicative of what Wellgistics Health’s actual financial position or results of operations would have been.

The unaudited pro forma financial information included herein is presented for illustrative purposes only and is not necessarily indicative of what Wellgistics Health’s actual financial position or results of operations would have been on the dates indicated.

Certain existing stockholders acquired our securities at a price below the current trading price of such securities and may experience a positive rate of return based on the current trading price.

Given the relatively lower purchase prices that some of our stockholders—including certain of our officers and directors—paid to acquire some of their securities compared to the current trading price of our shares of common stock, these stockholders in some instances may earn a positive rate of return on their investment, which may be a significant positive rate of return, depending on the market price of our shares of Common Stock at the time that such stockholders choose to sell their shares of Common Stock. Although our officers and directors have agreed not to sell any shares of Common Stock for a period of 180 days after the date of this prospectus, sales of significant amounts of shares held by our officers and directors, or the prospect of these sales, in the future, could adversely affect the market price of our Common Stock. Public stockholders may not be able to experience the same positive rates of return, especially in the case that our management’s stock ownership discourages a potential acquirer from making a tender offer or otherwise attempting to obtain control of us.

Investors in this Offering will experience immediate and substantial dilution in net tangible book value.

The public offering price will be substantially higher than the net tangible book value per share of our outstanding shares of Common Stock. As a result, investors in this Offering will incur immediate dilution of $5.47 per share based on the assumed public offering price of $5.00 per share, the midpoint of the estimated public offering price between $4.50 and $5.50 per share. Investors in this Offering will pay a price per share that substantially exceeds the book value of our assets after subtracting our liabilities. See “Dilution” for a more complete description of how the value of your investment will be diluted upon the completion of this Offering.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This prospectus contains certain “forward-looking statements” that are based on our management’s beliefs and assumptions and on information currently available to us. These forward-looking statements discuss matters that are not historical facts. The forward-looking statements are contained principally in, but not limited to, the sections entitled “Prospectus Summary,” “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operation of Wellgistics Health,” “Management’s Discussion and Analysis of Financial Condition and Results of Operation of Wellgistics LLC,” and “Business.” Any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. Because the following discuss future events or conditions, forward-looking statements may include words such as “anticipate,” “believe,” “estimate,” “intend,” “could,” “should,” “would,” “may,” “seek,” “plan,” “might,” “will,” “expect,” “anticipate,” “approximately,” “outlook,” “predict,” “project,” “forecast,” “potential,” and “continue” or the negative of these words or other similar expressions.

Forward-looking statements speak only as of the date they are made, are based on various underlying assumptions and current expectations about the future and are not guarantees of future performance. Such statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, level of activity, performance, or achievement to be materially different from the results of operations or plans expressed or implied by such forward-looking statements. You are cautioned to not place undue reliance on these forward-looking statements, which speak only as of the dates of such statements.

We cannot predict all the risks and uncertainties that may impact our business, financial condition, or results of operations. Accordingly, the forward-looking statements in this prospectus should not be regarded as representations that the results or conditions described in such statements will occur or that our objectives and plans will be achieved. These forward-looking statements are found at various places throughout this prospectus and include information concerning possible or projected future results of our operations, including statements about potential acquisition or merger targets, strategies or plans; business strategies; prospects; future cash flows; financing plans; plans and objectives of management; any other statements regarding future cash needs, future operations, business plans and future financial results; and any other statements that are not historical facts. We qualify all of the forward-looking statements in this prospectus by this cautionary note.

These forward-looking statements represent our intentions, plans, expectations, assumptions and beliefs about future events and are subject to a variety of factors and risks, including, but not limited to, the following:

Many of those risk factors are outside of our control and could cause actual results to differ materially from the results expressed or implied by those forward-looking statements. Considering these risks, uncertainties and assumptions, the events described in the forward-looking statements might not occur or might occur to a different extent or at a different time than we have described. All subsequent written and oral forward-looking statements concerning other matters addressed in this prospectus and attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this prospectus. You should read this prospectus with the understanding that our actual future results may be materially different from what we expect.

Except to the extent required by law, we undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, a change in events, conditions, circumstances or assumptions underlying such statements, or otherwise.

USE OF PROCEEDS

We estimate that the net proceeds we will receive from the sale of 900,000 shares of our Common Stock in this Offering, after deducting underwriter discounts and commissions and estimated offering expenses payable by us will be approximately $3,735,000. The principal purposes of this Offering are to increase our capitalization and financial flexibility, increase our visibility in the marketplace, and create a public market for our Common Stock. As of the date of this prospectus, we cannot specify with certainty all of the particular uses for the net proceeds to us of this Offering. However, we currently intend to use the net proceeds to us from this Offering primarily for general corporate purposes, including working capital, marketing initiatives, and capital expenditures. 

While we have not allocated a specific amount of net proceeds from this Offering to any particular purpose, we may use net proceeds for the acquisition of additional businesses. We do not have any understandings or agreements for any acquisitions as of the date of this prospectus.

The net proceeds we actually expend for the acquisition of additional businesses may vary significantly depending on a number of factors, including our ability to locate such companies and enter into a binding acquisition agreement on favorable terms and the negotiated purchase price. In addition, the net proceeds we actually expend for general corporate purposes may vary significantly depending on a number of factors, including future revenue growth and our cash flows. As such, we retain broad discretion over the allocation of the remaining net proceeds from this Offering. Pending use of the net proceeds from this Offering, we intend to invest the net proceeds in short-term, investment-grade securities. 

DIVIDEND POLICY

We have never declared any cash dividends on our Common Stock and do not anticipate paying any cash dividends on our Common Stock in the foreseeable future. We intend to retain future earnings to fund ongoing operations and future capital requirements of our business. Any future determination to pay cash dividends will be at the discretion of our board of directors and will be dependent upon our financial condition, results of operations, capital requirements and such other factors as our board of directors deems relevant. Our ability to pay cash dividends is subject to limitations imposed by state law.

CAPITALIZATION

The following unaudited table sets forth our capitalization as of September 30, 2024:

The pro forma as-adjusted information below is illustrative only and our capitalization following the completion of this Offering is subject to adjustment based on the initial public offering price of our common shares and other terms of this Offering determined at pricing.

You should read this table together with our financial statements and the related notes included elsewhere in this prospectus and the information under “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Wellgistics Health” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Wellgistics LLC.”

DILUTION

If you invest in our Common Stock, your interest will be diluted to the extent of the difference between the public offering price per share of our Common Stock and the pro forma net tangible book value per share of our Common Stock after this Offering.

The net tangible book value of our Common Stock as of September 30, 2024, was $(28.1) million or $(0.55) per share of Common Stock. Net tangible book value per share represents the amount of our total tangible assets less total liabilities, divided by the number of shares of Common Stock outstanding. Dilution in net tangible book value per share represents the difference between the amount per share paid by purchasers of shares of our Common Stock in this Offering and the net tangible book value per share of our Common Stock immediately afterwards. After giving effect to our sale of shares of Common Stock offered by this prospectus at an assumed public offering price of $5.00 per share (the midpoint of the estimated public offering price between $4.50 and $5.50 per share), and after deducting the underwriting discounts, commissions and estimated offering and acquisition expenses payable by us, our pro forma net tangible book value would have been $(24.4) million, or approximately $(0.47) per share. This represents an immediate increase in pro forma net tangible book value of $0.08 per share to existing stockholders and an immediate dilution in pro forma net tangible book value of $5.47 per share to new investors. The following table illustrates the per share dilution:

(1) Represents the midpoint of the estimated public offering price between $4.50 and $5.50 per share.

The following table sets forth, on a pro forma basis, the differences between the number of shares of Common Stock purchased from us, the total price and average price per share paid by existing stockholders and by the new investors, before deducting estimated offering and acquisition expenses payable by us, using the assumed public offering price of $5.00 per share (the midpoint of the estimated public offering price between $4.50 and $5.50 per share).

SELECTED FINANCIAL DATA

The selected historical financial information for the years ended December 31, 2023 and 2022 and nine months ended September 30, 2024 and 2023 provided below represents the historical financial information of Wellgistics Health. The statements of operations data for the years ended December 31, 2023 and 2022 provided below have been derived from the audited financial statements of Wellgistics Health included elsewhere in this prospectus. These historical results are not necessarily indicative of the results that should be expected in any future periods.

The unaudited pro forma combined statements of operations for the nine months ended September 30, 2024, provided below combine the historical results and operations of Wellgistics Health, Wood Sage, and Wellgistics LLC giving effect to the transactions as if they occurred on January 1, 2024. The unaudited pro forma combined statements of operations for the year ended December 31, 2023, provided below combine the historical results and operations of Wellgistics Health, Wood Sage, and Wellgistics LLC giving effect to the transactions as if they occurred on January 1, 2023. The unaudited pro forma combined statements of operations for the nine months ended September 30, 2023, provided below combine the historical results and operations of Wellgistics Health, Wood Sage and Wellgistics LLC giving effect to the transactions as if they occurred on January 1, 2023.

The pro forma adjustments are based on currently available information and certain estimates and assumptions, and, therefore, the actual effects of this Offering and the acquisition as reflected in the pro forma data may differ from the effects reflected below. However, management believes that the assumptions provide a reasonable basis for presenting the significant effects of this Offering and acquisitions as contemplated and that the pro forma adjustments give appropriate effect to those assumptions. During the periods presented, Wellgistics Health, Wood Sage and Wellgistics LLC were not under common control or management and, therefore, the data presented may not be comparable to, or indicative of, post- acquisition results. You should review the information below together with “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Wellgistics Health,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Wellgistics LLC,” the Unaudited Pro Forma Combined Financial Information and the related notes beginning on page 56 of this prospectus, and the audited and unaudited interim financial statements of Wellgistics Health and Wellgistics LLC, and the related notes all included elsewhere in this prospectus.

UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION

The following unaudited pro forma combined financial information presents the unaudited pro forma combined balance sheet and statement of operations based upon the combined historical financial statements of Wellgistics Health, Wood Sage and Wellgistics LLC after giving effect to the Wood Sage Acquisition and Wellgistics Acquisition and adjustments described in the accompanying notes.

The unaudited pro forma combined statements of operations for the nine months ended September 30, 2024, combine the historical results and operations of Wellgistics Health, Wood Sage and Wellgistics LLC giving effect to the transactions as if they occurred on January 1, 2024. The unaudited pro forma combined statements of operations for the year ended December 31, 2023, combine the historical results and operations of Wellgistics Health, Wood Sage and Wellgistics LLC giving effect to the transactions as if they occurred on January 1, 2023. The unaudited pro forma combined statements of operations for the nine months ended September 30, 2024, also separately include the results of operations of Wood Sage, which was acquired by Wellgistics Health on June 16, 2024, and Wellgistics LLC, which was acquired by Wellgistics Health on August 30, 2024. The unaudited pro forma combined statements of operations for the year ended December 31, 2023, also separately include the results of operations of APS and CSP, which were acquired by Wood Sage in August 2023.

The unaudited pro forma combined balance sheet of Wellgistics Health as of September 30, 2024, which gives effect to the Wellgistics Acquisition and the Wood Sage Acquisition, is included within the unaudited historical financial statements set forth at the end of this IPO Prospectus.

The unaudited pro forma combined financial information should be read in conjunction with the audited and unaudited historical financial statements of each of the Wellgistics Health, Wood Sage and Wellgistics LLC and the notes thereto. Additional information about the basis of presentation of this information is provided in Note 2 below.

The unaudited pro forma combined financial information was prepared in accordance with Article 11 of Regulation S-X. The unaudited pro forma adjustments reflecting the transaction have been prepared in accordance with business combination accounting guidance as provided in Accounting Standards Codification Topic 805, Business Combinations and reflect the preliminary allocation of the purchase price to the acquired assets and liabilities based upon the preliminary estimate of fair values, using the assumptions set forth in the notes to the unaudited pro forma combined financial information.

The unaudited pro forma combined financial information is provided for informational purposes only and is not necessarily indicative of the operating results or financial position that would have occurred if the transaction had been completed as of the dates set forth above, nor is it indicative of the future results or financial position of the combined company. In connection with the pro forma financial information, Wellgistics Health allocated the purchase price using its best estimates of fair value. Accordingly, the pro forma acquisition price adjustments are preliminary and subject to further adjustments as additional information becomes available and as additional analyses are performed. The unaudited pro forma combined financial information also does not give effect to the potential impact of current financial conditions, any anticipated synergies, operating efficiencies or cost savings that may result from the transaction or any integration costs. Furthermore, the unaudited pro forma combined statements of operations do not include certain nonrecurring charges and the related tax effects which result directly from the transaction as described in the notes to the unaudited pro forma combined financial information.

Unaudited Proforma Combined Statement of Operations for the Nine Months Ended September 30, 2024

(a) To reverse historical management services fees paid to Nomad.

(b) To record amortization on the intangible assets recorded as a result of the acquisitions.

(c) To record interest expense related to the promissory notes issued in connection with the Wellgistics Acquisition.

Unaudited Proforma Combined Statement of Operations for the Year Ended December 31, 2023

(a) To reverse historical management services fees paid to Nomad

(b) To record amortization on the intangible assets recorded as a result of the acquisitions.

(c) To record interest expense related to the promissory notes issued in connection with the Wellgistics Acquisition.

Description of Transactions

Wood Sage Membership Interest Purchase Agreement

In January 2023, Wellgistics Health entered into a Membership Interest Purchase Agreement (the “Wood Sage MIPA”) with Nikul Panchal, an individual resident of the State of Florida (“Seller”) in connection with the Wood Sage Acquisition. Wellgistics Health and Mr. Panchal amended and restated this agreement in June 2024, whereby the parties revised the closing payment to be made by Wellgistics Health to Mr. Panchal to be 0.389 shares of Wellgistics Health Common Stock. The shares issued by Wellgistics Health to Mr. Panchal were meant to approximate total cash compensation of $400,000 with a 20% discount. Mr. Panchal currently is Wellgistics Health’s President of Healthcare Operations in addition to being a Wellgistics Health stockholder.

Wellgistics LLC Membership Interest Purchase Agreement

During May 2023, Wellgistics Health entered into the Wellgistics MIPA regarding the Wellgistics Acquisition whereby Wellgistics Health agreed to acquire all of the outstanding membership interests of Wellgistics LLC.

On August 4, 2023, Wellgistics Health and Wellgistics LLC amended the Wellgistics MIPA to extend the termination date of the Wellgistics MIPA to no later than December 26, 2023, and designate Brian Norton as a representative who may act on behalf of all named sellers in the Wellgistics MIPA. On December 26, 2023, Wellgistics Health and Wellgistics LLC further amended the Wellgistics MIPA to extend the termination date to March 29, 2024. On March 22, 2024, Wellgistics Health and Wellgistics LLC further amended the Wellgistics MIPA to extend the termination date to August 31, 2024, and to provide for Wellgistics Health to extend such date for a maximum of ninety days, among other things.

On August 23, 2024, Wellgistics Health and Wellgistics LLC entered into the Fourth Amendment to the Wellgistics MIPA, which amended the purchase price to be paid by Wellgistics Health for acquiring Wellgistics LLC, the closing date of the transaction, and certain other terms and conditions. The purchase price that Wellgistics Health agreed to pay Wellgistics LLC under the revised agreement consists of:

On August 30, 2024, Wellgistics Health closed on the Wellgistics Acquisition, thereby making Wellgistics LLC a wholly owned subsidiary of Wellgistics Health.

On November 4, 2024, Wellgistics Health and Wellgistics LLC further amended the Wellgistics MIPA to convert the $10 million and $5 million respective bonus payments into an immediate share issuance of 3,999,335 shares of restricted Wellgistics Health common stock. 2,666,223 shares of Common Stock vest in equal annual installments over a period of three years. These shares of Common Stock are not subject to repurchase by Wellgistics Health. 1,333,112 shares have been fully issued, but vest only upon the achievement of certain financial metrics. In the event the stated metrics for the applicable year are not achieved, Wellgistics Health can repurchase the applicable portion of the 1,333,112 unvested shares for nominal consideration of $0.0001 per share.

Basis of Presentation

The historical financial information has been adjusted to give pro forma effect to events that are (i) directly attributable to the transaction, (ii) factually supportable, and (iii) with respect to the unaudited proforma combined balance sheets and unaudited pro forma combined statements of operations, expected to have a continuing impact on the combined results.

The transactions were accounted for as a business acquisition wherein Wood Sage and Wellgistics LLC are the accounting acquirees and Wellgistics Health is the accounting acquirer.

Consideration Transferred

Wood Sage (closed in June 2024)

The Company has made a preliminary allocation of the purchase price in regard to the acquisition related to the assets acquired and the liabilities assumed as of the purchase date. The following table summarizes the purchase price allocation:

Wellgistics LLC (closed in August 2024)

The total fair value of the initial purchase price consideration associated with the Wellgistics Acquisition was determined as follows:

The Company has made a preliminary allocation of the purchase price in regard to the acquisition related to the assets acquired and the liabilities assumed as of the purchase date. The following table summarizes the purchase price allocation:

The Company expects to identify intangible assets such as developed technology and customer relationships upon the business combination.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS OF WELLGISTICS HEALTH

You should read the following discussion and analysis of our financial condition and results of operations together with our financial statements and related notes appearing elsewhere in this prospectus. This discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. See “Cautionary Note Regarding Forward-Looking Statements.” We have no obligation to update any of these forward-looking statements. Our actual results may differ materially from those anticipated in these forward-looking statements due to many factors, including, but not limited to, those set forth under the heading “Risk Factors” in this prospectus. Factors that could cause or contribute to such differences include, but are not limited to, capital expenditures, economic and competitive conditions, regulatory changes and other uncertainties, as well as those factors discussed below and elsewhere in this prospectus. Percentage amounts included in this prospectus have not in all cases been calculated on the basis of rounded figures, but on the basis of such amounts prior to rounding. For this reason, percentage amounts in this prospectus may vary from those obtained by performing the same calculations using the figures in the consolidated financial statements included elsewhere in this prospectus. Certain other amounts that appear in this prospectus may not sum due to rounding. Unless the context otherwise requires, references in this section to “we,” “us,” “our,” “Wellgistics Health” refer to Wellgistics Health, Inc. after giving effect to the Wood Sage Acquisition.

Overview

Incorporated in 2022, Wellgistics Health is a holding company for operating companies centered around pharmaceuticals and healthcare services. Currently, we own two indirect operating companies, APS and CSP, through an intermediary—Wood Sage—and one direct operating company, Wellgistics LLC. Because Wellgistics Health only recently closed the Wellgistics Acquisition during the third quarter of 2024, the respective businesses and financial conditions of Wellgistics Health and Wellgistics LLC are presented separately. For more information about Wellgistics LLC, see the sections entitled “Business” beginning on page 63 of this prospectus and “Management’s Discussion and Analysis of Financial Condition and Results of Operation of Wellgistics LLC” beginning on page 56 of this prospectus.

Wellgistics LLC

Wellgistics LLC was founded in 2013. In 2017, Strategix Global, LLC acquired a majority interest in Wellgistics LLC. Wellgistics LLC is a 50-state FDA licensed and NABP-accredited pharmaceutical wholesaler distributor, bridging the gap between small- to mid-size pharmaceutical manufacturers and independent retail pharmacies. Serving over 4,000 registered pharmacies nationwide, we provide significant value by offering competitive pricing, unique products, and exceptional service, while also promoting manufacturers’ products to a diverse range of pharmacies. Our primary focus is on supporting independent retail pharmacies in search of better products, prices, and services, thereby ensuring their growth and sustainability in the competitive pharmaceutical sector. As Wellgistics Health acquired Wellgistics LLC upon the closing of the Wellgistics Acquisition, Wellgistics LLC now serves as the wholesale arm of Wellgistics Health’s healthcare ecosystem.

Wellgistics LLC provides distribution and 3PL services to both pharmaceutical manufacturers and independent retail pharmacies. With approximately 60 manufacturing relationships, we identify niche therapeutic products and work with our manufacturing clients to increase market access and visibility of our client relationships with product awareness and support campaigns. Specifically, we help promote product distribution through our network of pharmacy buyers by providing sales and marketing support. These services include providing product education, identifying opportunities for therapeutic substitution when clinically relevant, and cost savings opportunities for pharmacies and their patients. Wellgistics LLC’s portfolio of products is comprised of 65% topical generics with a primary focus on the dermatology market, 20% oral generic formulations primarily in the non-narcotic pain category, 10% oral and topical brand formulations, and 5% in the over-the-counter market space. Our investments in cold chain infrastructure will position this division to compete in the specialty-lite therapy category while also expanding our ability to house additional branded products. The services provided to our manufacturing clients, pharmacy buyers, and other constituents described below are paramount to the revenue generated from this division.

Alliance Pharma Solutions, LLC

APS was founded in 2017 as a holding company for technology solutions wholly owned by Integral Health Inc. (“Integral”). In 2020, APS recommissioned its DelivMeds project so that it would serve as a pharmaceutical hub, facilitating prescription transfer and clinical concierge services to a network of independent pharmacies. After conducting an extensive market research survey focusing on competition, APS established several key differentiators for the DelivMeds hub. These differentiators included various integrations of the hub with pharmacy management software systems and pharmacy point of sale systems, among others such that DelivMeds would serve as an end-to-end patient-centric solution automating the prescription journey. Powered by CSP as the backend pharmacy, DelivMeds is the frontend technology serving as the middleware between all key stakeholders referenced in what we refer to as the 5P-Model: Patients, Providers, Pharmacies, Payors or PBMs, and Pharmaceutical Manufacturing Companies.

DelivMeds aims to preserve patient autonomy, improve price transparency, and aide in making a meaningful impact on patient outcomes by eliminating barriers to therapy while simultaneously boosting adherence. We work with channel partners such as pharmaceutical manufacturers, provider groups and accountable care organizations, telehealth companies, and employer groups to offer full suite of patient-centered pharmacy services. DelivMeds’ business-to-business strategy approach enables prescriptions to be sent directly to CSP and subsequently transferred to an eligible in-network independent pharmacy. Each channel partner is equipped with de-identified data to improve its respective business operation and or improve its renumeration from the value-based services the clinical concierge arm provides. As previously mentioned, Wood Sage acquired APS in August 2023. As discussed below and elsewhere in this prospectus, Wellgistics Health acquired Wood Sage in June 2024. APS now serves as the middleware technology arm to Wellgistics Health’s integrated healthcare ecosystem.

Community Specialty Pharmacy, LLC

CSP, was founded in 2011 as a retail community specialty pharmacy. Specializing in HIV/AIDS, the pharmacy obtained URAC and ACHC accreditations for Specialty Pharmacy and also performed general pharmacy services in its community. In 2018, Integral acquired CSP and relocated CSP to Tampa, Florida. Subsequently, CSP expanded its business operations to perform 340B services by partnering with local clinics and provider groups. During this time period, the pharmacy initiated its pursuit of additional pharmacy state licenses to convert CSP’s business to a mail order pharmacy. Currently, CSP is licensed in 35 states and the District of Columbia, with superb license coverage along the east coast. As a result of this strategic business shift CSP’s leadership team chose to voluntarily forfeit CSP’s specialty accreditations. However, CSP maintains specialty internal standard operating procedures and performs all of the functions of a specialty pharmacy.

CSP provides general and specialty pharmacy services dedicated to servicing the needs of patients, as well as clinical expertise, technology-driven innovation tools, and administrative efficiencies that support physicians, payers, and pharmaceutical manufacturers. CSP purchases pharmaceuticals including specialty medications from manufacturers and wholesale distributors, fills prescriptions, labels, packages and delivers these pharmaceuticals to patients’ homes or physicians’ offices through contract couriers or carriers. CSP maintains a call center and customer support within its pharmacy located in Tampa, Florida. CSP has several 340B relationships, acting as the dispensing pharmacy for these healthcare facilities. These relationships help drive revenue and prescription volume. Our relationship with Wellgistics LLC along with our deep-rooted ties to other wholesalers enables CSP to offer a competitive cash-based formulary for the uninsured and underinsured patient populations. CSP continues to see an uptick in utilization, as more patients elect to pay out of pocket due to our low-cost model, which CSP believes is an opportunity to gain market share with small- to medium-size employer groups in a partnership model with other consumer driven healthcare companies. The services that CSP provides to its patients and other constituents are vital to the revenue and prescription volume generated from this division. CSP now serves as the backbone of Wellgistics Health’s healthcare ecosystem.

As a micro health ecosystem, our portfolio of companies consists of a pharmacy, wholesale operations, and a technology division with a novel platform for hub and clinical services. We are focused on improving the lives of patients while delivering unique solutions for pharmacies, providers, pharmaceutical manufacturers, and payors. Our patient-centric approach combined with innovative healthcare applications positions us to shift the dynamic of care to revolve around the patient for a wide range of therapeutic conditions. We offer a full spectrum of integrated solutions by leveraging the synergies of our business segments to address access, care coordination, dispensing, delivery, and clinical management of pharmaceutical products ranging from “specialty-lite” to general maintenance conditions.

Prior to closing the Wood Sage Acquisition, Wellgistics Health did not generate revenues. Upon closing of the Wood Sage Acquisition and the Wellgistics Acquisition, our revenues are derived from (i) pharmaceutical dispensing of products, (ii) care management services we deliver to patients and offer to pharmaceutical manufacturing clients, and (iii) SaaS fees for use of our platform technology services, and (iv) product procurement and distribution to independent pharmacies. We closed the Wood Sage Acquisition in June 2024 and closed the Wellgistics Acquisition in August 2024. However, while Wellgistics Health, Wood Sage, and Wellgistics LLC previously were separate entities, each of the three companies have shared common office space, comarketed solutions to the marketplace, and leveraged financial and back-office support prior to June 2024.

Our ability to source and distribute pharmaceutical products to our pharmacy and network of independent pharmacy partners throughout the U.S. will adequately position us to negotiate greater discounts based on market share. Our digital pharmacy, including its hub and clinical services technology platform, will be poised to add significant value in this key specialty-lite market by providing patients access and convenience, while providing partners with ready-to-go market solutions with big data.

The latest data released from the Centers for Medicare & Medicaid Services illustrates that the National Health Expenditure Data for 2022 grew to $4.5 trillion and accounted for 17.3% of gross domestic product (“GDP”), with an expected increase in the health spending share of GDP to 19.7% by 2032. A deeper dive of this report reveals that total retail prescription drug spending from 2021 to 2022 increased by 8.4% to $405.9 billion. IQVIA’S 2024 report on medicine spending trends found that overall spending in the U.S. market for medicines reached $435 billion in 2023. It is well documented in the literature that the specialty drug market accounts for less than 10% of total drugs in the market but is responsible for greater than 50% of the prescription drug spend per annum. After evaluating reasons for increased healthcare expenditure, poor medication adherence continues to be a challenge that causes unnecessary strain on the healthcare system, including, but not limited to, increased hospital admissions and readmissions rates from medication non-compliance and adverse events. Many of these factors are preventable by empowering patient autonomy in their healthcare journey, identifying cost savings opportunities, and providing access to clinical resources and support.

Our business model primely positions us to address the prescription spend in the “specialty lite” therapy area while improving patient health outcomes by equipping patients with our innovative digital health tools. Our pharmacy business will expand its service coverage area while strengthening its clinical expertise in several key therapeutic categories, including services such as care coordination and patient financial assistance. Furthermore, our partner relationships will enable us to offer a competitive cash formulary as an alternative option when high insurance deductibles make it economically feasible. Our wholesale operations will expand as we continue to partner and establish new manufacturer relationships. With many of these new relationships, we will provide sales and clinical education support to the pharmacies purchasing these products. We have also strategically identified opportunities to wholesale products that are normally not carried by the three largest wholesalers in the United States. We will carve out exclusivity or semi- exclusive relationships based on a time period to ensure we are maximizing our revenues. New partnerships with group purchasing organizations are expected to be effective, as we increase the business divisions’ visibility with all or many of the member pharmacies. Our technology division, which comprises a novel platform performing pharmacy hub and clinical services, will be connected to our pharmacy network enabling us to operate as a digital pharmacy and hub. Wellgistics Health’s pharmacy network leverages the bricks and mortar of independent, locally-owned pharmacies, that are rooted in their communities, to create a powerful network capable of delivering Rx’s in hours. This channel represents over 19,000 pharmacies across the United States, servicing 1.3 billion prescriptions annually representing a $47 billion market at wholesale cost.

Our mobile application for patients will provide an end-to-end solution for digitizing the prescription journey. The solution helps to preserve patient autonomy, improve prescription price transparency, and provide additional concierge services in an effort to boost medication adherence and improve patient outcomes. We will aggregate the data collected from our solution to provide comprehensive reports that are tied to medication adherence and outcomes to make a meaningful impact for all stakeholders involved. We will monetize this valuable data with manufacturers, payors and providers.

Key Components of Results of Operations

We are an early-stage company, and our historical results may not be indicative of our future results for reasons that may be difficult to anticipate. Accordingly, the drivers of our future financial results, as well as the components of such results, may not be comparable to our historical or future results of operations.

Revenues

Wellgistics Health is a holding company specifically formed to hold operating companies. We did not generate any revenue prior to the Wood Sage Acquisition, but now expect to generate all of our revenues through APS, CSP, and Wellgistics LLC. Although Wellgistics Health may add other sources of revenue through the acquisition of other operating companies in the future, Wellgistics Health currently does not have any such plans.

Wellgistics Health will be subject to risk of specific inflationary pressures on product prices and its impact on consumer spending. For example, increases in prescription drug costs could impact consumers ability to afford initial or on-going therapy. Wellgistics Health’s focus on the relatively expensive specialty lite business segment (i.e., $500 - $3,000 therapies) could be particularly impacted by increasing costs. Additionally, consumer discretionary funds could be reduced, impacting the ability to pay for digital services and subscription models that Wellgistics Health offers. If inflation continues to increase, sourcing and procuring specialty lite products may prove to be capital intensive. Wellgistics Health may not be able to adjust prices sufficiently to offset the effect without negatively impacting consumer demand or Wellgistics Health’s gross margin. All of these inflationary risk factors could materially and adversely impact Wellgistics Health’s business operations, financial condition and results of operations.

CSP recognizes product revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers, when we transfer promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. CSP fills prescriptions for prescription and over-the-counter drugs written by a provider and recognizes revenue at the time the patient confirms the prescription order for payment of co-pays.

Expenses

Research and Development Expense

Our research and development expenses will consist primarily of internal and external expenses incurred in connection with our research activities and development programs. These expenses will include, but are not limited to, software development, integrations with pharmacy management systems, development supplies, testing materials, personnel costs (including salaries and benefits), depreciation expense, overhead allocation, (consisting of various support and facility costs), stock-based compensation and consulting fees. Research and development costs will be expensed as incurred.

Sales and Marketing Expense

Sales and marketing expenses will consist of personnel and personnel-related expenses, including stock-based compensation for our business development team as well as trade events participation, public relations, white paper development, social media, pharmacy trade and patient materials, advertising, sales collateral, syndicated data fees, and other marketing expenses. We expect to increase our sales and marketing activities to grow our customer base and increase market share. We also expect that our sales and marketing expenses will increase over time as we continue to hire additional personnel to scale the business.

General and Administrative Expense

General and administrative expenses currently consist of business development, consulting, and information technology development and support and third-party software expenses. On October 17, 2022, Wood Sage entered into the MSA, to cover the costs of ongoing software development and all other operational-related costs to ensure that the development and operations would continue seamlessly without interruption or delays.

In the future, general and administrative expenses will consist primarily of personnel-related costs (including salaries, bonuses, benefits, and stock-based compensation expense) for personnel in executive, finance, accounting, corporate development and other administrative functions. General and administrative expenses will also include legal fees, professional fees paid for accounting, auditing, consulting, tax, and investor relations services, insurance costs, facility costs not otherwise included in research and development expenses. Following Wellgistics Health’s registration as a public company, will include public company expenses such as costs associated with compliance with the rules and regulations of the SEC and the stock exchange.

Income Tax (Benefit) Expense

Our income tax provision will consist of an estimate for U.S. federal and state income taxes based on enacted rates, as adjusted for allowable credits, deductions, uncertain tax positions, changes in deferred tax assets and liabilities, and changes in the tax law. We will maintain a valuation allowance against the full value of our U.S. and state net deferred tax assets because we believe the recoverability of the tax assets is more likely than not.

Results of Operations

For Nine Months Ended September 30, 2024, Compared to September 30, 2023

Revenues and Cost of Revenues

Revenue was $5,718,408 for the nine months ended September 30, 2024, consisting of revenues derived from CSP operations after the closings of the Wood Sage Acquisition on June 16, 2024, and the Wellgistics LLC Acquisition on August 30, 2024. Cost of revenue for the same period was $5,199,772. The Company did not earn revenue for the nine months ended September 30, 2023.

General and Administrative Expense

General and administrative expenses were $2,448,813 for the nine months ended September 30, 2024, compared to $1,819,532 for the nine months ended September 30, 2023. The increase was primarily due to the acquisition of Wellgistics LLC in 2024. General and administrative expenses include personnel costs, and professional fees including audit, tax and legal.

Interest Expense

Interest expense was $142,281 and $0 for the nine months ended September 30, 2024 and 2023, respectively. Interest expense in 2024 was incurred on Wellgistics Health’s outstanding notes.

For Year Ended December 31, 2023, Compared to Year Ended December 31, 2022

General and Administrative Expense

General and administrative expenses were $2,880,603 for the year ended December 31, 2023, compared to $5,250 for the year ended December 31, 2022. General and administrative expenses include personnel costs, and professional fees including audit, tax and legal.

Interest Expense

Interest expense was $15,081 and $0 for the years ended December 31, 2023 and 2022, respectively. Interest expense in 2023 was incurred on Wellgistics Health’s outstanding notes.

Liquidity and Capital Resources

Liquidity

Our future cash needs are expected to include cash for operating activities, working capital, purchases of property and equipment, strategic investments, development, and expansion of facilities. We will fund our operations primarily through operating cash flows, the issuance of debt and the sale of Equity Securities. We expect to generate positive cash flow from the operations in 2025 due to the annual revenue generated from Wood Sage and Wellgistics LLC. In order to proceed with our business plan, we may need to raise additional funds through the issuance of debt, equity or other commercial arrangements that may not be available to us when needed or on terms that we deem favorable. To the extent we raise additional capital through the sale of equity or convertible securities, our stockholders’ ownership interests will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our common stockholders. Debt financing and preferred equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making acquisitions or capital expenditures or declaring dividends. If we are unable to obtain sufficient financial resources, our business, financial condition and results of operations may be materially and adversely affected. We may be required to delay, limit, reduce or terminate parts of its strategic business plan or future commercialization efforts. There can be no assurance that we will be able to obtain financing on acceptable terms.

Our short-term liquidity requirements include initiatives related to the (i) expansion of existing facilities and upgrade of equipment in order to increase operational capacity, (ii) recruitment of additional employees to increase operational and business needs, upgrade of information technology, and (iii) continued buildout of corporate functions and public company compliance requirements, inclusive of accounting and legal fees. Our long-term liquidity requirements include initiatives related to (a) strategic acquisitions mean to further the development of our health ecosystem such as electronic health record systems, (b) expansion of micro-distribution centers for wholesale and other wholly owned pharmacies in strategic demographic regions, (c) investments into artificial intelligence, machine learning, and data warehousing capabilities, and (d) additional integrations with third-party partners such as PMS systems, ride-sharing logistics providers, enterprise health systems, and others to bolster the value proposition of our health ecosystem with a focus on improving operational efficiency while simultaneously removing interdependencies.

For more information about the estimated financial impacts of our recent acquisitions of Wood Sage and Wellgistics LLC, see “Unaudited Pro Forma Condensed Combined Financial Information.”

Debt

In September 2023, the Company entered into two short-term note agreements for aggregate proceeds of $350,000. One note for $100,000 bears interest at 8% per annum and the Company will issue 35,000 shares of common stock upon a SPAC or merger. The other note for $250,000 is non-interest bearing and the Company will issue 5,000 shares of common stock upon a SPAC or merger. In May 2024, TrXade Health, a related party, repaid the $250,000 note on behalf of the Company, and the note is no longer outstanding.

In January 2024, the Company entered into a short-term note agreement for proceeds of $250,000. The note bears interest at 2% per annum and matures on May 18, 2024. As of the date of these consolidated financial statements, the note was fully repaid and is no longer outstanding. In connection with the note, the investor contributed an additional $10,000 for which the Company will issue three shares of common stock. The shares have not been issued, and the $10,000 was included in additional paid-in capital in the balance sheet.

On August 22, 2023, Wood Sage entered into a non-interest bearing promissory note (the “Note”) with Integral Health pursuant to which Integral made a certain loan to Wood Sage in the amount of $1,300,000 to satisfy the purchase price under the CSP MIPA and APS MIPA. No later than 30 days after a change in control to Wood Sage, the aggregate unpaid principal balance of the Note will be due and payable by Wood Sage. As of the date of these accompanying financial statements, the Note is still outstanding.

On August 23, 2024, Wellgistics Health and Wellgistics LLC entered into the Fourth Amendment to the Wellgistics MIPA. Pursuant to the amended agreement, Wellgistics Health agreed to pay Wellgistics LLC a promissory note in the aggregate principal amount of $15,000,000 plus simple interest accruing annually equal to the “Prime Rate” as published by the Wall Street Journal on January 1 of the applicable year, together payable in three equal annual installments commencing on the first anniversary of the date that registration statement becomes effective. As of September 30, 2024, the calculated interest rate was $100,000. Interest expense was $100,000 for the period ended September 30, 2024. As of September 30, 2024, $5,000,000 was included as a current liability on the consolidated balance sheet and the remaining $10,000,000 was classified as long-term.

In May 2022, Wellgistics LLC entered into a credit agreement for a new line of credit $5,000,000 replacing the former line of credit. The new line of credit has a variable interest rate of three months US treasury rate plus 2.75% adjusted for minimum and maximum ceiling rates. As of September 30, 2024, the interest rate was 8.36%. The line of credit is collateralized by accounts receivable and inventory balances. The line of credit is subject to certain specified covenants. The most stringent covenant includes compliance to certain specified financial ratios. Interest related to the line of credit amounted to $37,160 for the period ended September 30, 2024. The outstanding balance on the line of credit as of September 30, 2024 was $3,774,780, which is included as a current liability on the consolidated balance sheet. The Company assumed this debt as part of the Wellgistics Acquisition.

Also in May 2022, Wellgistics LLC entered into a promissory note agreement with the seller of APD in the amount of $1.2 million. The promissory note was part of the consideration to the Seller in connection with the APD acquisition. The promissory note bears interest at a rate of 2% per annum and will mature on April 1, 2025. Interest expenses related to the promissory note was immaterial for the period ended September 30, 2024. As of September 30, 2024 the amount outstanding is $239,400, , which is included as a current liability on the consolidated balance sheet. The Company assumed this debt as part of the Wellgistics acquisition.

Dividends

We intend to retain future earnings, if any, for future operations, expansion and debt repayment (if any) and we have no current plans to pay any cash dividends for the foreseeable future. In addition, our ability to pay dividends is likely to be limited by covenants of any future indebtedness. There are no, and we do not intend in the future for there to be any, restrictions in the covenants of any existing and outstanding indebtedness on our wholly-owned subsidiaries from distributing earnings in the form of dividends, loans or advances and through repayment of loans or advances to us.

Cash Flow

The following table sets forth the major components of our Statements of Cash Flows for the periods presented:

Net cash provided by operating activities for the nine months ended September 30, 2024, was primarily a result of changes in operating assets and liabilities of $3,465,024, partially offset by of our net loss of $2,524,474. Operating activities for the nine months ended September 30, 2023, was primarily due to changes in operating assets and liabilities of $1,932,452, partially offset by our net loss of $1,819,532.

Net cash used in operating activities in 2023 was primarily a result of our net loss of $2,895,684 partially offset by changes in operating assets and liabilities of $2,546,548.

Net cash used in investing activities for the nine months ended September 30, 2024, was due to $1,000,000 paid pursuant to the Wellgistics Acquisition, $264,850 in payments made for intangible assets under development and $35,855 for a lease security deposit, partially offset by $931,368 in cash acquired in the Wood Sage Acquisition and the Wellgistics Acquisition.

Net cash used in financing activities for the nine months ended September 30, 2024, was due to repayments of term loan and note payable of $283,518, partially offset by $10,000 proceeds received from common share to be issued. Net cash provided by financing activities in 2023 consists of $350,000 in proceeds from a note payable and $500 in proceeds from founder common stock.

Off-Balance Sheet Arrangements

As of September 30, 2024, Wellgistics Health has not engaged in any off-balance sheet arrangements, as defined in Item 303(a)(4)(ii) of SEC Regulation S-K.

Critical Accounting Policies and Estimates

Our financial statements have been prepared in accordance with U.S. generally accepted accounting principles, or U.S. GAAP. Preparation of the financial statements requires our management to make a number of judgments, estimates and assumptions relating to the reported amount of expenses, assets and liabilities and the disclosure of contingent assets and liabilities. We consider an accounting judgment, estimate or assumption to be critical when (i) the estimate or assumption is complex in nature or requires a high degree of judgment and (ii) the use of different judgments, estimates and assumptions could have a material impact on our consolidated financial statements. Our significant accounting policies are described in Note 1 to our financial statements included elsewhere in this proxy statement/prospectus.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS OF WELLGISTICS LLC

You should read the following discussion and analysis of our financial condition and results of operations together with our financial statements and related notes appearing elsewhere in this prospectus. This discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. See “Cautionary Note Regarding Forward-Looking Statements.” We have no obligation to update any of these forward-looking statements. Our actual results may differ materially from those anticipated in these forward-looking statements due to many factors, including, but not limited to, those set forth under the heading “Risk Factors” in this prospectus. Factors that could cause or contribute to such differences include, but are not limited to, capital expenditures, economic and competitive conditions, regulatory changes and other uncertainties, as well as those factors discussed below and elsewhere in this prospectus. Percentage amounts included in this prospectus have not in all cases been calculated on the basis of rounded figures, but on the basis of such amounts prior to rounding. For this reason, percentage amounts in this prospectus may vary from those obtained by performing the same calculations using the figures in the consolidated financial statements included elsewhere in this prospectus. Certain other amounts that appear in this prospectus may not sum due to rounding. Unless the context otherwise requires, references in this section to the “the Company” “Wellgistics LLC,” “us,” “our” or “we” refer to Wellgistics LLC prior to the Wellgistics Acquisition.

Overview

Wellgistics LLC was founded in 2013. In 2017, Strategix Global, LLC acquired a majority interest in Wellgistics LLC. Wellgistics LLC is a 50-state FDA licensed and NABP-accredited pharmaceutical wholesaler distributor, bridging the gap between small- to mid-size pharmaceutical manufacturers and independent retail pharmacies. Serving over 4,000 registered pharmacies nationwide, we provide significant value by offering competitive pricing, unique products, and exceptional service, while also promoting manufacturers’ products to a diverse range of pharmacies. Our primary focus is on supporting independent retail pharmacies in search of better products, prices, and services, thereby ensuring their growth and sustainability in the competitive pharmaceutical sector. As Wellgistics Health acquired Wellgistics LLC upon the closing of the Wellgistics Acquisition, Wellgistics LLC now serves as the wholesale arm of Wellgistics Health’s healthcare ecosystem.

Wellgistics LLC provides distribution and 3PL services to both pharmaceutical manufacturers and independent retail pharmacies. With approximately 60 manufacturing relationships, we identify niche therapeutic products and work with our manufacturing clients to increase market access and visibility of our client relationships with product awareness and support campaigns. Specifically, we help promote product distribution through our network of pharmacy buyers by providing sales and marketing support. These services include providing product education, identifying opportunities for therapeutic substitution when clinically relevant, and cost savings opportunities for pharmacies and their patients. Wellgistics LLC’s portfolio of products is comprised of 65% topical generics with a primary focus on the dermatology market, 20% oral generic formulations primarily in the non-narcotic pain category, 10% oral and topical brand formulations, and 5% in the over-the-counter market space. Our investments in cold chain infrastructure will position this division to compete in the specialty-lite therapy category while also expanding our ability to house additional branded products. The services provided to our manufacturing clients, pharmacy buyers, and other constituents described below are paramount to the revenue generated from this division.

Acquisition by Wellgistics Health

On May 11, 2023, we entered into the Wellgistics MIPA, whereby Wellgistics Health agreed to acquire all of the issued outstanding membership interests of Wellgistics LLC.

On August 4, 2023, Wellgistics Health and Wellgistics LLC amended the Wellgistics MIPA to extend the termination date of the Wellgistics MIPA to no later than December 26, 2023, and designate Brian Norton as a representative who may act on behalf of all named sellers in the Wellgistics MIPA. On December 26, 2023, Wellgistics Health and Wellgistics LLC further amended the Wellgistics MIPA to extend the termination date to March 29, 2024. On March 22, 2024, Wellgistics Health and Wellgistics LLC further amended the Wellgistics MIPA to extend the termination date to August 31, 2024, and to provide for Wellgistics Health to extend such date for a maximum of ninety days, among other things.

On August 23, 2024, Wellgistics Health and Wellgistics LLC entered into the Fourth Amendment to the Wellgistics MIPA, which amended the purchase price to be paid by Wellgistics Health for acquiring Wellgistics LLC, the closing date of the transaction, and certain other terms and conditions. The purchase price that Wellgistics Health agreed to pay Wellgistics LLC under the revised agreement consists of:

On August 30, 2024, Wellgistics Health 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 of Wellgistics Health.

On November 4, 2024, Wellgistics Health and Wellgistics LLC further amended the Wellgistics MIPA to convert the $10 million and $5 million respective bonus payments into an immediate share issuance of 3,999,335 shares of restricted Wellgistics Health common stock. 2,666,223 shares of Common Stock vest in equal annual installments over a period of three years. These shares of Common Stock are not subject to repurchase by Wellgistics Health. 1,333,112 shares have been fully issued, but vest only upon the achievement of certain financial metrics. In the event the stated metrics for the applicable year are not achieved, Wellgistics Health can repurchase the applicable portion of the 1,333,112 unvested shares for nominal consideration of $0.0001 per share.

Key Components of Results of Operations

This “Key Components of Results of Operations” section describes how we define the significant components of revenues and expenses. The fluctuations of these segments are further discussed in the “Results of Operations” section below. The drivers of our future financial results, as well as the components of such results, may not be comparable to our historical or future results of operations.

Revenues

We recognize product revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers, when we transfer promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.

Our product revenue is derived from product sales to our independent pharmacies purchasing exclusive drugs and diagnostic equipment sourced from the various manufacturers we represent.

Expenses

Selling and Marketing Expense

Selling and marketing expenses consist of personnel and personnel-related expenses, including stock-based compensation for our business development team as well as advertising and marketing expenses.

General and Administrative Expense

General and Administrative expenses consist primarily of personnel-related costs (including salaries, bonuses, benefits, and stock-based compensation expense) for personnel in executive, finance, accounting, corporate development and other administrative functions. General and administrative expenses also include legal fees, professional fees paid for accounting, auditing, consulting, tax, and investor relations services, insurance costs, and facility costs.

Depreciation and amortization Expense

Our depreciation and amortization expense represents depreciation of property and equipment and amortization of intangible assets and capitalized software costs.

Other (expense) income, net

Other income and expenses consist of non-operating items that include gain on settlement of a lawsuit, gain from loan forgiveness from paycheck protection program, gain on disposal of assets and loss from fair value of assets.

Interest income (expense), net

Interest expense (income), net includes income generated from cash held in interest-bearing overnight sweep accounts or commercial money market accounts and interest accrued on money borrowed from our credit facility.

Income Tax (Benefit) Expense

Our income tax provision will consist of an estimate for U.S. federal and state income taxes based on enacted rates, as adjusted for allowable credits, deductions, uncertain tax positions, changes in deferred tax assets and liabilities, and changes in the tax law.

Results of Operations

For Six Months Ended June 30, 2024 Compared to June 30, 2023

The following table presents our condensed results of operations for three months ended June 30, 2024, and 2023:

Revenue

We recognized revenue of $18.0 million for the six months ended June 30, 2024, as compared to $15.7 million for the six months ended June 30, 2023, an increase of $2.3 million. This increase is primarily attributable to our focus on growth of platform sales.

Cost of revenue

We recognized cost of revenue of $15.8 million for the six months ended June 30, 2024, as compared to $12.6 million for the six months ended June 30, 2023, an increase of $3.2 million. While cost of revenue increased corresponding to higher sales, we had lower margins due to the increased platform sales.

General and Administrative Expense

General and administrative expenses were $2.8 million for the six months ended June 30, 2024, as compared to $3.3 million for the six months ended June 30, 2023. The decrease of $0.5 million was primarily due to less headcount in 2024.

Depreciation expense

Depreciation expense was $81,521 for the six months ended June 30, 2024, as compared to $139,309 for the six months ended June 30, 2023. The decrease was due to fully depreciated assets at the end of 2023.

Income expense, net

Interest expense, net was $175,123 for the six months ended June 30, 2024, compared to $173,895 for the six months ended June 30, 2023.

Other Income, net

Other income of $0.4 million in 2024 primarily consisted of inventory credits from a vendor, and other income of $0.2 million in 2023 primarily consisted of employee retention tax credits.

Net Income (loss)

Net loss was $413,557 in the six months ended June 30, 2024, as compared to a net loss of $358,846 in the six months ended June 30,2023. The change was primarily due to the lower gross profit in 2024, partially offset by lower operating expenses.

For Year Ended December 31, 2023 Compared to December 31, 2022

The following table presents our condensed results of operations for the years ended December 31, 2023, and 2022:

Year Ended December 31,

Revenue

We recognized revenue of $33.2 million for the year ended December 31, 2023, as compared to $31.9 million for the year ended December 31, 2022, an increase of $1.3 million. The increase was due to an increase in sales volume due to the restructuring of the sales team to drive product platform sales as well as a heavy focus on new product procurement activities.

Cost of revenue

We recognized cost of revenue of $30.5 million for the year ended December 31, 2023, as compared to

$26.1 million for the year ended December 31, 2022, an increase of $4.4 million. The increase was primarily attributable to the revenue recognized for 2023.

General and Administrative Expense

General and administrative expenses were $6.6 million for the year ended December 31, 2023, as compared to $6.5 million for the year ended December 31, 2022. Depreciation expense decreased by $0.1 million in 2023.

Income expense, net

Interest expense, net was $363,526 for the year ended December 31, 2023, compared to $287,183 for the year ended December 31, 2022. The increase was primarily due to the increase in debt that resulted from the acquisition of APD.

Other Income, net

Other income, net included $1.8 million in 2022 due to the settlement of a lawsuit.

Net Income (loss)

Net loss was $4.5 million in the year ended December 31, 2023, as compared to a net income of $0.3 million in 2022. The change was primarily due to the lower gross profit in 2023 due to higher cost of sales, and the other income recognized in 2022.

Liquidity and Capital Resources

Liquidity

Our principal source of liquidity is cash generated from the operations of our core business and the potential to borrow under existing or future revolving lines of credit. We maintain our cash and restricted cash in domestic bank accounts which may at times exceed federally insured limits. We believe that our existing cash balance, together with cash generated from our core business operations and amounts available under existing or future revolving lines of credit will be sufficient to meet our anticipated cash needs for at least the next twelve months. Our future capital requirements may vary materially from those currently planned and will depend on many factors, including our growth rate, the timing and extent of spending to support development efforts, the expansion of selling and marketing activities, as well as the overall economic conditions. Any debt financing we secure could involve restrictive covenants relating to our capital raising activities and other financial and operational matters, which may make it more difficult for us to obtain additional capital and to pursue business opportunities, including potential acquisitions. In the event that additional financing is required from outside sources, we may not be able to raise such financing on terms acceptable to us or at all. If we are unable to raise additional capital when desired, our business, operating results and financial condition would be adversely affected.

Our principal uses of cash have been for operating expenses and the acquisition of APD. We anticipate these uses will continue to be our principal uses of cash in the future in addition to any necessary business acquisitions. We currently do not have any material unused sources of liquid assets. Our primary objectives for 2024 are to continue negotiating opportunities to represent good products with good manufacturing relationships and continuing to innovate opportunities in the secondary space and work to increase our client base and operational revenue.

We have historically funded our operations primarily through revenue and cashflow, we plan to continue this strategy throughout 2024 and continue to build our institutional lending relationships for any additional product opportunities which may arise. We believe that we have adequate cash to implement our plan to operate a business-to-business web-based marketplace focused on the United States pharmaceutical industry. Our core service is designed to bring the nation’s independent pharmacies and accredited national suppliers of pharmaceuticals together to provide efficient and transparent buying and selling opportunities.

Accounts receivable, net consist of the following: