Executive Summary

Revenue grew 6.7% year over year to $12.824M, but gross margin compressed to 9.5% vs 14.9% last year; operating loss widened on higher SG&A and R&D integration costs .
Adjusted EBITDA fell to $(1.132)M from $0.494M in Q3 2022; net interest expense declined sharply (down ~95% YoY) after debt repayments .
Balance sheet showed total assets at a record $71.5M and stockholders’ equity of $44.2M (>60% of assets), while cash fell to $2.36M amid heavy operating cash outflows; management disclosed “going concern” risk .
Management reiterated long-term 2026 guidance of >$180M revenue and >$20M EBITDA, began a $3M buyback, and signaled an R&D spin-off to unlock value; subsequent event: AI platform acquisition for drug repurposing .

What Went Well and What Went Wrong

What Went Well

Revenue increased ~7% YoY to $12.8M, driven by logistics distribution expansion following the Bikas GP network acquisition .
Net interest expense fell to $0.04M from $0.75M YoY following significant debt repayments in late 2022 and early 2023 .
Assets and equity strengthened: property & equipment rose 467% YoY to $10.2M and equity reached $44.2M with an equity-to-assets ratio >60% .

Management quote: “Revenues increased by approximately 7% YoY to $12.8 million… total assets reaching a record $71.5 million… net interest expense… decreased by 95% YoY… we reiterate our 2026 guidance of gross annual revenue over $180 million and annual EBITDA exceeding $20 million” .

What Went Wrong

Gross margin contracted to 9.5% (from 14.9% YoY) due to sales mix shift toward lower-margin logistics distribution and discounted nutraceutical sales to reduce receivables, compressing profitability .
Operating expenses surged: SG&A rose to $4.0M (vs $2.0M YoY) from elevated R&D costs, acquisition integration, staffing, stock comp, and tax/bad debt provisions; operating loss widened to $(3.017)M .
Liquidity pressure and risk disclosures intensified: cash declined to $2.36M; net cash used in operations was $(16.59)M YTD; management raised substantial doubt about going concern .

Financial Results

Headline P&L metrics (USD)

Metric	Q3 2022	Q2 2023	Q3 2023
Revenue ($)	$12,016,098	$12,363,429	$12,823,797
Gross Profit ($)	$1,783,897	$946,834	$1,214,758
Gross Margin (%)	14.9%	—	9.5%
Total Operating Expenses ($)	$2,128,009	—	$4,232,059
Net Income (Loss) ($)	$(1,972,775)	$(981,530)	$(3,349,204)
Basic/Diluted EPS ($)	$(1.93)	—	$(0.27)
Adjusted EBITDA ($)	$494,148	$232,044	$(1,131,886)
Adjusted Net Income (Loss) ($)	$(365,863)	$156,007	$(1,106,691)

Notes:

Non-GAAP adjustments are detailed in reconciliations, including stock comp, non-recurring items, FX, and prior years’ bad debt allowances .

Segment revenue and profit (Q3 2023)

Segment	Q3 2023 Revenue ($)	Q3 2023 Segment Profit (Loss) ($)
Wholesale (Distribution & export)	$11,936,166	$(728,986)
Pharma Manufacturing	$91,055	$(604,790)
Nutraceuticals & Pharmaceuticals (owned brands)	$796,576	$(1,838,942)
Other	—	$(1,082,184)
Total	$12,823,797	$(4,254,902)

Revenue by geography (Q3 2023)

Country	Q3 2023 Revenue ($)
Greece	$12,544,643
Cyprus	$72,754
UK	$190,614
USA	$210
Ireland	$1,417
Croatia	$14,159
Total	$12,823,797

Balance sheet and liquidity KPIs

Metric	Dec 31, 2022	Jun 30, 2023	Sep 30, 2023
Total Assets ($)	$68,038,621	$68,592,184	$71,525,379
Stockholders’ Equity ($)	$39,656,709	$44,041,472	$44,568,154
Cash & Cash Equivalents ($)	$20,749,683	$2,232,697	$2,360,604
Inventory ($)	$3,451,868	$4,799,492	$5,960,342
Lines of Credit ($)	$5,758,737	$4,725,936	$5,354,752
Notes Payable ($)	$5,028,899	$3,417,520	$4,230,750

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Gross Annual Revenue	FY 2026	>$180M (initial/inaugural)	>$180M	Maintained/Reiterated
EBITDA	FY 2026	>$20M (initial/inaugural)	>$20M	Maintained/Reiterated

Notes:

No near-term quarterly or FY2023 guidance was provided; management reiterated the long-term 2026 targets .

Earnings Call Themes & Trends

Note: No Q3 2023 earnings call transcript was available in the document catalog; themes derived from Q3 press release and 10-Q, with prior-quarter context from Q2 press release [List: 0 transcripts found; documents used: [1], [2], [10]].

Topic	Previous Mentions (Q-2 and Q-1)	Current Period (Q3 2023)	Trend
Acquisitions & Integration (Cana, Bikas)	Acquired Cana and Bikas; bargain purchase gain; Bikas network expected to add >$10M revenue; integration underway	“Substantial progress” integrating Cana and Bikas; expenses elevated during integration	Integration progressing; revenue support, but mix pressuring margins
R&D execution (obesity/CCX0722; spin-off plan)	Completed second phase of CCX0722; trials slated for Q4 2023	Ramping R&D; announced intention to spin off R&D division into a standalone public company	Increased investment; moving toward spin-out
Supply chain/margins	—	Gross margin down to 9.5% vs 14.9% YoY; heavier logistics mix and discounted nutraceuticals to reduce receivables	Margin pressure from mix and working capital actions
Capital structure & liquidity	Lines of credit down; equity-to-assets >60% in Q2; positive adjusted net income in H1	Net interest expense down ~95% YoY; capital raise $5.25M; buyback commenced; cash low; going concern disclosed	Lower interest burden but tightened liquidity; risk disclosures elevated
Regulatory/legal & controls	—	€15,000 fine; material weakness in controls (unauthorized building purchase approval); disclosure controls ineffective	Added compliance and control risks
AI/technology initiatives	—	Subsequent event: purchasing an AI platform for drug repositioning/repurposing	New initiative; potential future capability

Management Commentary

Strategy: Vertical integration and brand expansion, leveraging Cana manufacturing and Bikas distribution; commitment to transparency (KPMG appointed), and shareholder value initiatives (buyback, spin-off) .
Outlook: “We reiterate our 2026 guidance of gross annual revenue over $180 million and annual EBITDA exceeding $20 million” .
Valuation message: “Book value per share of $3.4… more than 3 times the current share price,” highlighting perceived dislocation and initiating buybacks .

Selected quotes (CEO Greg Siokas):

“Revenues increased by approximately 7% YoY to $12.8 million… total assets reaching a record $71.5 million… net interest expense having decreased by 95% YoY…” .
“We… reiterate our 2026 guidance… and… our commitment to spin off our R&D division into a separate standalone public company…” .
“We commenced the implementation of our stock buyback program and are currently exploring additional ways to support and protect our shareholders” .

Q&A Highlights

No Q3 2023 earnings call transcript was available in the document catalog; therefore, no Q&A highlights or on-call guidance clarifications can be provided from primary sources.

Estimates Context

Wall Street consensus (S&P Global/Capital IQ) estimates for Q3 2023 revenue/EPS and coverage were not retrievable at the time of analysis due to data access limitations; as a result, estimate comparisons are unavailable.

Key Takeaways for Investors

Revenue growth with margin compression: Q3 revenue rose to $12.824M (+6.7% YoY), but gross margin fell to 9.5% on mix shift and discounted nutraceutical sales, pressuring profitability .
Costs elevated during integration and R&D ramp: SG&A rose to $4.0M (vs $2.0M YoY), widening operating loss to $(3.017)M; Adjusted EBITDA swung to $(1.132)M .
Balance sheet quality vs liquidity strain: Equity-to-assets >60% and assets hit $71.5M, yet cash was $2.36M and operating cash outflows were $(16.59)M YTD; going concern risk disclosed—monitor funding plans and cost discipline .
Capital actions and long-term guide: $5.25M capital raise closed; buyback program began; management reiterated 2026 targets (> $180M revenue, > $20M EBITDA)—potential sentiment support if execution improves .
Segment reality: Distribution drives revenue but low margins; nutraceuticals and manufacturing posted losses in Q3—near-term earnings leverage requires margin mix improvement and brand monetization .
Operational catalysts: Progress integrating Cana and Bikas; subsequent AI platform acquisition could augment pipeline/repurposing capabilities; R&D spin-off may unlock value if capitalized appropriately .
Compliance and controls: Fine at SkyPharm, material weakness in controls, and ineffective disclosure controls—execution and governance improvements are key to de-risk the equity story .

Cosmos Health Inc. (COSM)·Q3 2023 Earnings Summary