DataMeds AI Posts $10,535,560 in Third-Quarter Net Income, Boosted by Debt Extinguishment Gain
Key Facts
DataMeds AI reported net income of $10,535,560 for the three months ended September 30, 2026, compared with a net loss of $34,318,204 in the same period a year earlier, according to its quarterly filing with the U.S. Securities and Exchange Commission. The company said a non-cash gain from debt extinguishment was the primary driver of the result, making the accounting shift to a profit distinct from an improvement in operating performance. Diluted net income per share was $2.72, compared with a loss of $23.07 per share a year earlier. The current result was based on a weighted average of 3.96 million shares, compared with an average of 1.49 million shares in the corresponding period. Meanwhile, quarterly revenue declined as the company continued to face liquidity constraints and significant debt maturities.
Revenue was $2,668,980 in the third quarter, down 11.4% from $3,012,904 a year earlier, the filing showed. The company attributed part of the decline to lower distribution revenue at Wellgistics, which fell to $37,690 from $2,637,790 in the third quarter of 2025 amid liquidity constraints. Retail pharmacy sales, by contrast, rose to $2,393,191 from $172,100, while the KareHub platform recorded $144,755 in technology and platform revenue. The company said the increased contribution from pharmacy sales, which carry higher margins than distribution, helped improve gross margin. Gross profit rose to $431,880 from $231,012, and the margin climbed to 16.2% from 7.7%. The figures show an improved revenue mix and margin alongside a decline in total sales.
Net income did not come solely from operating earnings; the company said a non-cash gain of $19,064,881 from debt extinguishment was the primary driver of the result, partly offset by a $3,605,978 loss from extinguishment of vendor liabilities. General and administrative expenses fell to $3,343,627 from $30,172,800 in the corresponding period. The company attributed most of the decline to $25,370,523 in non-cash stock-based compensation recorded in the third quarter of 2025. That included $24,300,000 related to accelerated vesting of shares held by the former chief executive. The current result therefore compares with a period that included a large one-time expense, alongside the impact of the debt-extinguishment gain in the current quarter. For the nine months ended September 30, 2026, revenue was $6,008,403, compared with $21,667,212 a year earlier, and the company recorded a net loss of $15,570,262.
The quarterly result comes alongside a liquidity position that the company said raises substantial doubt about its ability to continue as a going concern. Cash and cash equivalents totaled $476,598 on September 30, while the working capital deficit reached $31,329,749. Total principal debt was $25,186,014, of which the company said $23,722,342 is due within 12 months. That amount includes $20,323,731 in new notes due May 27, 2027. The company said these factors raise substantial doubt about its ability to continue as a going concern for one year from the issuance of the financial statements. The scale of near-term obligations and available liquidity will test the company's ability to continue its shift toward pharmacy and technology sales.
As part of its business transformation, DataMeds AI acquired Helomics on September 11, 2026. Helomics is a research organization that provides drug response testing for tumors, three-dimensional tumor models and laboratory services. Helomics operates a CLIA-certified laboratory in Pittsburgh, according to the quarterly filing. The company said Nasdaq notified it on October 19 that it had regained compliance with the minimum stockholders' equity requirement, with compliance monitoring continuing. In trading, MEDS closed at $0.7439 on November 13, 2026, according to EL7 data. The available source did not include a documented intraday trading range.