Wellgistics Health, Inc. Debt Disclosure
NOTE 8. DEBT
Outstanding debt consists of the following:
| December 31, | ||||||||
| 2025 | 2024 | |||||||
| Merchant cash advance | $ | 1,744,134 | $ | 1,259,415 | ||||
| Loan payable | 1,601,052 | |||||||
| Note payable - owners of Wellgistics | 5,000,000 | 5,000,000 | ||||||
| Note payable - third party, net of debt discount | 898,411 | |||||||
| Revolving line of credit | 1,643,923 | 5,531,260 | ||||||
| Seller promissory note | 137,141 | |||||||
| Current portion of debt obligations | 10,887,520 | 11,927,816 | ||||||
| Merchant cash advance | $ | $ | 55,085 | |||||
| Third party investor | 100,000 | 100,000 | ||||||
| Note payable - Integral Health | 1,300,000 | |||||||
| Note payable - owners of Wellgistics | 12,500,000 | 10,000,000 | ||||||
| Long-term debt | 12,600,000 | 11,455,085 | ||||||
| Total debt | $ | 23,487,520 | $ | 23,382,901 | ||||
As of December 31, 2025 and 2024, total unamortized debt discount was $1,568,776 and $519,430, respectively.
Integral Health Inc. (“Integral Health”)
On August 22, 2023, Wood Sage entered into a non-interest bearing promissory note (“Note”) with Integral Health, a then related party with common ownership and board members, 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 agreements by which Wood Sage acquired Wellgistics Pharmacy and DelivMeds. No later than 30 days after a change in control to Wood Sage, the aggregate unpaid principal balance of the Note became due and payable by Wood Sage, which occurred upon the consummation of the Company’s acquisition of Wood Sage.
On October 30, 2025, the Company entered into a Debt Conversion Agreement (the “Integra Health DCA”) with Integra Health Inc., Blue Cap Acquisitions LLC, and WoodSage. Pursuant to the agreement, the outstanding indebtedness of $1,300,000 under the Note was converted into shares of the Company’s common stock at a stated conversion price of $0.70 per share. The fair value of the shares issued on the conversion date was $ per share. As a result, the total fair value of the equity issued exceeded the carrying amount of the debt extinguished by approximately $159,714. Accordingly, the Company recognized a loss on debt extinguishment of $159,714 for the year ended December 31, 2025, which is included in other expense in the consolidated statements of operations. Upon conversion, the Note was fully satisfied and extinguished.
Merchant Cash Advances
On March 18, 2025, the Company entered into a merchant cash advance (“March 2025 MCA”) agreement with Cedar Advance LLC pursuant to which it received gross funding of $1,900,000 in exchange for the sale of future receivables totaling $2,840,000. Of the $1,900,000 gross funding, $1,118,250 was applied directly to satisfy the amount outstanding under a prior MCA arrangement, and the remaining $781,750 was remitted to the Company for working capital purposes. The Company accounts for the arrangement as a debt obligation. The difference between the repayment amount and the net proceeds received was recorded as a debt discount and is amortized to interest expense over the estimated term of the agreement using the effective interest method.
On October 20, 2025, the Company refinanced the March 2025 MCA pursuant to a new agreement with Cedar Advance LLC. Under the October agreement, the stated purchase price was $2,898,000. Of this amount, $1,198,800 was applied directly to satisfy outstanding amounts under the prior MCA, and $701,200 was remitted to the Company. The total repayment obligation under the new arrangement resulted in a principal balance of $1,900,000, with fixed weekly payments of $56,800 over an estimated 51-week term.
The Company evaluated the March 2025 and October 2025 refinancing in accordance with ASC 470 and concluded that the transaction represented a debt extinguishment. Accordingly, the remaining unamortized debt discount associated with the refinancing written off, and the Company recognized a loss on debt extinguishment of $402,153 for the year ended December 31, 2025.
For the years ended December 31, 2025 and 2024, the Company recognized amortization of debt discount of $1,252,211 and $217,017 related to its merchant cash advance arrangements, which is recorded as interest expense in the consolidated statements of operations.
As of December 31, 2025, the gross contractual repayment obligation under the merchant cash advance was $2,547,200. The related unamortized debt discount was $803,066, resulting in a net carrying amount of $1,744,134, which is classified as a current liability in the consolidated balance sheets. As of December 31, 2024, the gross contractual repayment obligation under the merchant cash advance was $1,833,930. The related unamortized debt discount was $519,430, resulting in a net carrying amount of $1,314,500, of which $1,259,415 was classified as a current liability and $55,085 was classified as a long-term liability in the consolidated balance sheets.
Loan Payable
During the year ended December 31, 2025, the Company entered into multiple financing arrangements with Agile Capital Funding LLC (“Agile”) and the Company accounts for these arrangements as debt obligations.
On May 14, 2025, the Company entered into an agreement with Agile pursuant to which it received net proceeds of $500,000 in exchange for total contractual repayments of $756,000. The agreement required fixed weekly payments over an estimated 24-week term. The Company recorded the obligation at the net proceeds received, with the excess of the total contractual repayment amount over the net proceeds recorded as a debt discount. The debt discount was amortized to interest expense over the estimated term of the agreement using the effective interest method.
On June 25, 2025, the Company entered into a separate agreement with Agile pursuant to which it received net proceeds of $250,000 in exchange for total contractual repayments of $367,200. The arrangement required fixed weekly payments over an estimated 28-week term. The Company recorded the obligation at the net proceeds received and recognized a corresponding debt discount, which was amortized to interest expense using the effective interest method.
On August 26, 2025, the Company entered into a refinancing arrangement with Agile pursuant to which it received net proceeds of approximately $500,074. Total contractual repayments under the August agreement were approximately $1,872,000, with fixed weekly payments over an estimated 33-week term. The August 2025 agreement was used to satisfy the outstanding balances of both the May 14, 2025 and June 25, 2025 arrangements. The Company evaluated the transaction under ASC 470-50 and concluded that the refinancing represented an extinguishment of the prior debt obligations. Accordingly, the Company derecognized the carrying amounts of the extinguished debt and recorded a loss on debt extinguishment related to the write-off of the remaining unamortized debt discount.
On October 29, 2025, the Company refinanced the August 2025 arrangement pursuant to a new agreement with Agile. Under the October agreement, the Company received net proceeds of $533,889, of which $50,000 represented issuance costs to be amortized over the term of the debt. Total contractual repayments under the October agreement are $2,880,000, with fixed weekly payments of $75,789 over an estimated 38-week term. A portion of the proceeds was applied directly to satisfy the outstanding balance of the August 2025 obligation. The Company accounted for the October transaction as a debt extinguishment in accordance with ASC 470-50 and recognized a loss related to the write-off of the remaining unamortized debt discount associated with the extinguished debt.
For the year ended December 31, 2025, the Company recognized total losses on debt extinguishment of $578,524 related to Agile refinancing. For the year ended December 31, 2025, the Company recognized $765,681 of debt discount amortization, which is included in interest expense in the consolidated statements of operations.
As of December 31, 2025, the gross contractual repayment obligation under the Agile agreement was $2,366,766. The related unamortized debt discount was $765,710, resulting in a net carrying amount of $1,601,056, which is classified as a current liability in the consolidated balance sheets.
Note payable – owners of Wellgistics, LLC
On August 23, 2024, Wellgistics Health and the owners of Wellgistics LLC entered into the Fourth Amendment to the Membership Interest Purchase Agreement (“MIPA”). Pursuant to the amended agreement, the Company issued a promissory note in the aggregate principal amount of $15,000,000, which bears simple interest at a rate equal to the Prime Rate as published by The Wall Street Journal on January 1 of the applicable year. The principal and accrued interest were originally payable in three equal annual installments commencing on the first anniversary of the effective date of the related registration statement.
On July 24, 2025, the parties executed the Eighth Amendment to the MIPA, which increased the principal amount of the promissory note from $15.0 million to $17.5 million and modified the repayment schedule whereby $5,000,000 of principal shall be payable on the first and second anniversaries and $7,500,000 of principal shall be payable on the third anniversary, of the effective date of Promissory Note,
The Company evaluated the amendment in accordance with ASC 470-50, Debt—Modifications and Extinguishments, and concluded that the changes constituted a debt extinguishment. As a result, the original note and related accrued interest of $1,146,337 were derecognized. The Company recognized a non-cash loss on debt extinguishment of $1,353,663 during the year ended December 31, 2025.
For the years ended December 31, 2025 and 2024, the Company recognized interest expenses of $1,373,390 and $425,000, respectively, related to the seller promissory note. As of December 31, 2025 and 2024, accrued interest on the note totaled $652,055 and $425,000, respectively, and is included in accrued expenses and other current liabilities on the accompanying consolidated balance sheet.
As of December 31, 2025, $5,000,000 of the amended promissory note was classified as a current liability and the remaining $12,500,000 was classified as non-current in the consolidated balance sheets. As of December 31, 2024, $5,000,000 was classified as current and the remaining $10,000,000 was classified as long-term.
Note Payable – Third party
On January 2, 2025, the Company entered into an unsecured promissory note agreement for a principal amount of $448,411. The promissory note bears interest at a rate of 10% per annum, with both principal and accrued interest due in full on May 15, 2025. In the event of default, interest accrues at a default rate of 12% per annum. In connection with this note, the Company received net proceeds of $415,000, with the remaining $33,411 recognized as a debt discount. For the year ended December 31, 2025, the Company recorded interest expense of $44,442. For the same year, the Company recognized amortization of debt discount of $33,411 related to this promissory note. As of December 31, 2025, accrued interest payable on this note was $44,442 and the outstanding principal of $448,411 is classified under current liabilities. As of the issuance date of these financial statements, the parties are currently working on an extension.
On February 2, 2025, the Company entered into an unsecured promissory note agreement for a principal amount of $100,000. The promissory note bears interest at a rate of 10% per annum, with both principal and accrued interest due in full on August 15, 2025. In the event of default, interest accrues at a default rate of 12% per annum. Under the terms of the promissory note, an event of default occurs only if the maker fails to pay any amount due within five (5) days after receipt of written notice from the payee. As of December 31, 2025, the Company had not received any such written notice and, accordingly, no event of default had occurred. For the year ended December 31, 2025, the Company recorded interest expense of $9,062 related to this note. As of December 31, 2025, accrued interest payable on this note was $9,062, and the outstanding principal of $100,000 is classified under current liabilities.
On April 8, 2025, the Company issued a Promissory Note to Strategic EP, LLC in the principal amount of $250,000. The note bears interest at a rate of 10% per annum. Under the terms of the agreement, the outstanding principal and accrued interest are payable on the earlier of (i) April 8, 2026, or (ii) within five business days following the Company’s receipt of aggregate gross proceeds of at least $10 million from one or more equity or debt financings. On February 27, 2026, the Company received a demand letter from Strategic EP, LLC indicating that the Company was in default under the terms of the promissory note. As of December 31, 2025, the Company had accrued interest on the note in accordance with the contractual default interest rate of 18% amounting to $22,122 which is classified in the accrued expenses and other liabilities and the outstanding principal of $250,000 is classified under current liabilities. The Company is currently engaged in discussions with the lender to repay or otherwise settle the outstanding balance, including accrued interest. Management is working toward resolving the obligation and addressing the default under the terms of the agreement.
On February 2, 2025, the Company entered into another unsecured promissory note agreement a principal amount of $100,000. The promissory note bears interest at a rate of 10% per annum, with both principal and accrued interest due in full on August 15, 2025. In the event of default, interest accrues at a default rate of 12% per annum. Under the terms of the promissory note, an event of default occurs only if the maker fails to pay any amount due within five (5) days after receipt of written notice from the payee. As of December 31, 2025, the Company had not received any such written notice and, accordingly, no event of default had occurred. For the year ended December 31, 2025, the Company recorded interest expense of $9,062 related to this note. As of December 31, 2025, accrued interest payable on this note was $9,062, and the outstanding principal of $100,000 is classified under current liabilities.
As of December 31, 2025, the $100,000 short-term note entered into in September 2023 with third party investor remains outstanding. The note bears interest at 8% per annum and provides that the lender will be issued shares of common stock upon the consummation of a SPAC transaction or merger. For the years ended December 31, 2025 and 2024, the Company recorded interest expense of $8,000 for both the years related to this note. As of December 31, 2025 and 2024, accrued interest payable on this note was $19,666 and $11,666, respectively, and the outstanding principal of $100,000 is classified under non-current liabilities.
Revolving line of credit – Wellgistics
In November 2024, Wellgistics, LLC entered into a new credit agreement with for a line of credit of $10,000,000. The new line of credit has interest annual rate equal to the Term Secured Overnight Financing Rate (“SOFR”) plus 11.5%, calculated and prorated daily on the daily balance (an aggregate rate of 16.84% per annum). The line of credit is collateralized by accounts receivable and inventory balances. Interest expense related to the line of credit amounted to $1,100,292 and $159,740 for the years ended December 31, 2025 and 2024, respectively. The outstanding balance on the line of credit as of December 31, 2025 and December 31, 2024 was $1,643,923 and $5,531,260 respectively, which is included as a current liability on the condensed balance sheets.
Seller Promissory Note - Wellgistics
In May 2022, Wellgistics, LLC entered into a promissory note agreement in the amount of $1.2 million. The promissory note was part of the consideration to the seller in connection with its acquisition of American Pharmaceutical Ingredients, LLC. The promissory note bore interest at a rate of 2% per annum and was scheduled to mature on April 1, 2025.
The Company assumed this debt as part of the acquisition of Wellgistics. As of December 31, 2025, the promissory note had been fully repaid, and the outstanding balance was $0, compared to $137,141 as of December 31, 2024. Interest expense related to the promissory note was immaterial for the years ended December 31, 2025 and 2024.
The following table is a summary of annual principal payments of the Company’s outstanding debt:
| Year Ended December 31, | ||||
| 2026 | $ | 10,887,520 | ||
| 2027 | 5,100,000 | |||
| 2028 | 7,500,000 | |||
| $ | 23,487,520 | |||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 20, 2026 | Showing above |
| 2024 | Mar 25, 2025 | |
About Debt Disclosures
Debt disclosures detail a company's borrowing structure — the types of instruments, interest rates, maturity schedule, and covenant restrictions that define its financial obligations and flexibility. This section is essential for assessing refinancing risk, interest rate exposure, and the margin of safety against financial distress.
Key signals: the maturity schedule reveals concentration risk — large maturities within 1-2 years during tight credit markets can force dilutive refinancing or asset sales. Compare the fair value of debt against carrying amount to gauge whether the market views the company's credit risk differently than the balance sheet suggests. Watch covenant compliance disclosures for tightening cushions, especially leverage and interest coverage ratios. Variable-rate debt exposure quantifies sensitivity to interest rate changes. Secured versus unsecured mix affects recovery rates and future borrowing capacity. Compare net debt-to-EBITDA against industry peers and covenant limits to assess financial health.