PMGC Holdings Inc 10-K for FY2025
PMGC Holdings Inc. (ELAB)
About this 10-K
PMGC Holdings Inc filed this 10-K on March 30, 2026, covering the fiscal year ended December 31, 2025 (FY2025).
Headline figures
Fiscal year ended December 31, 2025, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $590.08K
- Net loss
- $7.75M
- compared with a net loss of $6.25M a year earlier
UNITED STATES
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Washington, D.C. 20549
FORM
For the fiscal year ended
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As of March 30, 2026, there were
PMGC HOLDINGS INC.
ANNUAL REPORT ON FORM 10-K
FOR THE FISCAL YEAR ENDED
DECEMBER 31, 2025
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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Annual Report on Form 10-K (this “Annual Report”) contains forward-looking statements regarding our business, financial condition, results of operations, and prospects. Words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates,” and similar expressions or variations of such words are intended to identify forward-looking statements but are not deemed to represent an all-inclusive means of identifying forward-looking statements as denoted in this Annual Report. Additionally, statements concerning future matters are forward-looking statements.
Although forward-looking statements in this Annual Report reflect the good faith judgment of our management, such statements can only be based on facts and factors currently known by us. Consequently, forward-looking statements are inherently subject to risks and uncertainties, and actual results and outcomes may differ materially from the results and outcomes discussed in or anticipated by the forward-looking statements. Factors that could cause or contribute to such differences in results and outcomes include, without limitation, those specifically addressed under the headings “Risks Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” You are urged not to place undue reliance on these forward-looking statements, which speak only as of the date of this Annual Report. We file reports with the SEC. The SEC maintains a website (www.sec.gov) that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC, including us.
We undertake no obligation to revise or update any forward-looking statements in order to reflect any event or circumstance that may arise after the date of this Annual Report, except as required by law. Readers are urged to carefully review and consider the various disclosures made throughout the entirety of this Annual Report, which are designed to advise interested parties of the risks and factors that may affect our business, financial condition, results of operations and prospects.
DEFINITIONS OF FREQUENTLY USED TERMS
Except where the context otherwise requires and for purposes of this Annual Report only, references to:
| ● | “Board” or “Board of Directors” refers to the Board of Directors of the Company. |
| ● | “cGMP” are to current good manufacturing practices. |
| ● | “Common Stock” are to our Common Stock with a par value of $0.0001 per share. |
| ● | “Exchange Act” are to the United States Securities Exchange Act of 1934, as amended; |
| ● | “FDA” are the U.S. Food and Drug Administration. |
| ● | “SEC” or “Securities and Exchange Commission” are to United States Securities and Exchange Commission; |
| ● | “Securities Act” are to the U.S. Securities Act of 1933, as amended; and |
| ● | “PMGC”, “our business”, “our Company”, “Company”, “we”, “us”, “our” and “Group” are to PMGC Holdings Inc., a Nevada corporation, and, unless the context requires otherwise, its subsidiaries. |
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SUMMARY OF MATERIAL RISKS RELATED TO OUR COMPANY
Risks Related to our Financial Condition and Capital Structure
| ● | Our financial statements have been prepared on a going-concern basis and our continued operations are in doubt. |
| ● | We have a history of net losses, and we may not be able to achieve or maintain profitability in the future. |
| ● | Our operating cash consumption significantly exceeds our revenue, and we may not be able to fund our operations without continued access to the capital markets. |
| ● | We will need additional capital to conduct our operations and develop our products and businesses, and our ability to obtain the necessary funding is uncertain. |
| ● | We have conducted multiple reverse stock splits in a short period of time, which may adversely affect the market price of our Common Stock and investor confidence. |
Risks Related to our Holding Company Structure and Acquisition Strategy
| ● | We may not achieve expected operational, strategic, or financial benefits from managing multiple subsidiaries under a single corporate structure. Our subsidiaries may operate independently with limited synergies, and the costs associated with maintaining a diversified platform—including corporate overhead, compliance costs, management attention and reporting requirements—may outweigh the benefits. If the anticipated advantages of our holding company structure do not materialize, our financial condition and results of operations could be adversely affected. |
| ● | Our growth strategy depends on acquisitions, which involve significant risks and uncertainties. |
| ● | Potential business combinations could require significant management attention, prove difficult to integrate, and adversely affect our operating results. |
| ● | The purchase price allocations for our acquisitions may be preliminary and subject to adjustment, which could materially affect our reported financial results. |
Risks Related to our Operating Subsidiaries
| ● | Our biotechnology subsidiary, Northstrive Biosciences, is at an early stage of product development, and we may not develop products that can be successfully commercialized. |
| ● | Pacific Sun Packaging’s revenue depends on the IT hardware industry, which is subject to cyclical and secular changes. |
| ● | AGA Precision Systems operates in industries subject to stringent regulatory requirements, including International Traffic in Arms Regulations. |
| ● | AGA Precision Systems has historically operated without a formal sales and marketing function, which may limit its growth. |
Risks Related to our Investment Activities (PMGC Capital)
| ● | PMGC Capital LLC may be deemed an “investment company” under the Investment Company Act of 1940, which could impose significant regulatory burdens. |
| ● | PMGC Capital’s investment activities subject us to market risk, and we may incur losses on our investment portfolio. |
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Risks Related to Regulatory, Legal and Intellectual Property Matters
| ● | We may become subject to litigation, regulatory proceedings, or governmental investigations that could be costly and time-consuming. |
| ● | Changes in U.S. trade policy, tariffs, and international relations could adversely affect our supply chain and cost structure. |
| ● | If we fail to protect or enforce our intellectual property, others could compete against us more directly and we may not be able to compete effectively in our market. |
| ● | Certain of our technology may not be subject to protection through patents, which leaves us vulnerable to theft of our technology. |
Risks Related to our Management and Governance
| ● | Our corporate governance documents and Nevada law may have anti-takeover effects that could discourage, delay, or prevent a change in control. |
| ● | If we lose key personnel or are unable to attract and retain qualified personnel, we may be unable to execute our business plan. |
| ● | Graydon Bensler serves as both our Chief Executive Officer and Chief Financial Officer, which presents governance risks and limitations. |
| ● | Significant related-party transactions with entities controlled by our executive officers and directors may present conflicts of interest. |
| ● | We have previously identified a material weakness in our internal control over financial reporting, and there can be no assurance that additional material weaknesses will not be identified in the future. |
Risks Related to the Ownership of our Securities
| ● | Our Common Stock may be affected by limited trading volume and price fluctuations, which could adversely impact the value of our Common Stock. |
| ● | We have a significant number of shares of Series B Preferred Stock outstanding with voting rights that may dilute the voting power of Common Stock holders. |
| ● | We may not be able to continue to satisfy listing requirements of Nasdaq to maintain a listing of our Common Stock. |
| ● | We currently do not intend to declare dividends on our Common Stock in the foreseeable future and, as a result, your returns on your investment may depend solely on the appreciation of our common stock. |
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PART I
Item 1. Business
Overview
As of December 31, 2025, we manage and operate a diverse portfolio of four (4) wholly owned subsidiaries across the medical aesthetics and biopharmaceutical sectors:
| ● | Northstrive Biosciences Inc. (“Northstrive Biosciences”) is a biopharmaceutical company focusing on the development and acquisition of cutting-edge aesthetic medicines and therapeutic products. Our lead asset, EL-22, is leveraging a first-in-class engineered probiotic approach to address obesity’s pressing issue of preserving muscle while on weight loss treatments, including GLP-1 receptor agonists. |
| ● | PMGC Capital LLC (“PMGC Capital”) is a multi-strategy investment firm focused on direct investments, strategic lending, and acquiring undervalued companies and assets across diverse markets. Our mission is to identify and seize high-potential opportunities, delivering sustainable growth and maximizing returns on capital. |
| ● | Pacific Sun Packaging, Inc. (“Pacific Sun Packaging” or “Pacific Sun”) is a specialty packaging provider focused on high-precision, component-level packaging solutions for the electronics and information technology (“IT”) hardware industries. The company designs and supplies custom-engineered protective packaging for delicate components such as central processing units (“CPUs”), memory modules (Dual In-line Memory Modules (“DIMMs”) and Small Outline Dual Inline Memory Modules (“SO-DIMMs”), solid state drives (“SSDs”), hard disk drives (“HDDs”), and fiber-optic transceivers, serving customers across the semiconductor, data center, and networking equipment supply chains. |
| ● | AGA Precision Systems LLC (“AGA Precision Systems” or “AGA”) is a specialized computer numerical control (“CNC”) machine shop focused on high-tolerance milling, turning, mold manufacturing, and machining of complex metals including titanium and Inconel. The company serves customers across the aerospace, defense, and industrial sectors, delivering precision components to demanding technical specifications. |
We are dedicated to enhancing our portfolio through the acquisition of operating companies and innovative biotechnology assets that align with our growth mission, while actively pursuing the acquisition of operating companies.
On January 16, 2025, we completed the divestiture of the assets relating to our prior Elevai Skincare Inc. business. Elevai Skincare Inc., previously specializing in developing and commercializing physician-dispensed skincare products, is no longer part of our operations. The Skincare asset divestiture enabled us to dedicate more resources and time to advancing our initiatives and assets in larger markets with unmet needs, creating greater growth opportunities for the Company and its shareholders. Our efforts are now focused on the clinical development of biotechnology assets through NorthStrive Biosciences. Moreover, this strategic shift has positioned us to actively explore and execute potential business acquisitions and high-value biotechnology assets, further strengthening our portfolio and driving long-term growth.
Business Strategy
PMGC Holdings Inc. is a diversified holding company focused on acquiring and growing valuable assets and operating businesses across various industries. Our strategy is to identify and invest in compelling opportunities—regardless of sector—with strong fundamentals, growth potential, and scalable operations. We actively seek acquisitions that complement our existing portfolio and align with our long-term value creation objectives.
Northstrive Biosciences Inc.
Northstrive Biosciences Inc., a wholly owned subsidiary of PMGC Holdings Inc., is a biopharmaceutical company focusing on the development and acquisition of cutting-edge aesthetic medicines and therapeutic products. Currently, more than 40% of adults in the United States live with obesity - a figure predicted to rise to approximately 50% by 2030. Obesity is a leading risk factor for the development of serious health conditions, including Type 2 diabetes and heart failure. Goldman Sachs predicts that this epidemic will create a $100 billion market for anti-obesity players.
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Our lead asset, EL-22, is leveraging a first-in-class engineered probiotic approach to address obesity’s pressing issue of preserving muscle while on weight loss treatments, including GLP-1 receptor agonists. EL-22 has completed a Phase 1 clinical trial in South Korea, demonstrating it was generally well tolerated and safe in healthy volunteers. No subjects dropped out due to adverse events and no statistically significant difference was found between the intervention groups in the incidence of treatment emergent adverse events. The Company intends to evaluate EL-22 for efficacy and safety in combination with popular weight-loss therapeutics currently on the market, with the goal of decreasing fat mass while preventing the muscle wasting that commonly occurs with weight-loss drugs. We are working towards either submitting an Investigational New Drug application (“IND”) with the FDA to test EL-22 in human subjects, assuming we have sufficient working capital, or collaborating with another company in order to facilitate completing and submitting an IND more quickly. Our second asset, EL-32, is a preclinical engineered probiotic expressing dual myostatin & activin-A and also being positioned for the muscle preservation space as a combination to weight loss treatments, including GLP-1 receptor agonists. In a preclinical healthy mouse model, EL-32 demonstrated a statistically significant increase in Activin-A and myostatin antibodies, confirming the efficacy using the ELISA test.
Northstrive Biosciences Products
Northstrive Biosciences leverages a first-in-class engineered probiotic approach to address obesity’s pressing issue of preserving muscle while on weight loss treatments, including GLP-1 receptor agonists. Our lead asset, EL-22, has completed a Phase 1 clinical trial in South Korea, demonstrating it was generally well tolerated and safe in healthy volunteers. No subjects dropped out due to adverse events and no statistically significant difference was found between the intervention groups in the incidence of treatment emergent adverse events.
Preclinical results of EL-22 from a 2022 study demonstrated physiological (serum creatine kinase level), physical (body weight change), and functional (rotarod test) improvements in the dystrophic features of mdx mice, a mouse model of Duchenne muscular dystrophy (“DMD”)1. Elevai believes that EL-22 has the potential to treat obesity in combination with popular weight loss therapeutics, including GLP-1 receptor agonists, by preserving muscle mass while decreasing fat mass. We hope to either submit or partner with another biopharmaceutical company in 2026 to submit an IND application in 2025 that utilizes the licensed asset EL-22 for efficacy and safety in combination with popular weight-loss therapeutics currently on the market, with the goal of decreasing fat mass while preventing the muscle wasting that commonly occurs with weight-loss drugs. Regulatory bodies might require us to conduct preclinical bridge studies in order to pivot EL-22 from DMD to obesity indications.
Our second asset, EL-32, is a preclinical engineered probiotic expressing dual myostatin & activin-A and also positioned for the muscle preservation space as a combination to weight loss treatments, including GLP-1 receptor agonists.
Several key companies are actively developing GLP-1 drugs for obesity and complementary treatments to address associated conditions such as muscle wasting. These companies include:
| 1. | Novo Nordisk: Known for its GLP-1 drugs, Ozempic and Wegovy, Novo Nordisk remains a dominant player in the obesity drug market. They have shown significant efficacy in weight loss and improving cardiovascular health. |
| 2. | Eli Lilly: Another major player with its GLP-1 drug, Mounjaro (tirzepatide), which has shown promising results in weight loss. Eli Lilly also acquired Versanis Bio, which is developing bimagrumab, a drug that helps increase lean muscle mass while reducing fat. |
| 3. | Pfizer: Developing danuglipron, an oral GLP-1 analog, aimed at carving out a niche in the obesity market with a more convenient dosing regimen. |
| 4. | Biohaven: Biohaven’t taldefgrobep is an investigational fusion protein targeting myostatin to impact skeletal muscle growth relevant to individuals living with overweight and obesity. |
| 5. | Scholar Rock: Scholar Rock’s apitegromab is an inhibitor of the activation of latent myostatin, with the aim of improving patients’ motor function. Scholar Rock is assessing apitegromab’s ability to preserve lean muscle mass in individuals on GLP-1 receptor agonist therapy for obesity. |
| 6. | Veru: Veru’s enobosarm is an androgen receptor modulator, also known as a SARM, to address the loss of muscle in patients undergoing weight loss therapy with GLP-1 drugs. |
| 1. | Reference: Sung DK, Kim H, Park SE, Lee J, Kim JA, Park YC, Jeon HB, Chang JW, Lee J. A New Method of Myostatin Inhibition in Mice via Oral Administration of Lactobacillus casei Expressing Modified Myostatin Protein, BLS-M22, Int. J. Mol. Sci. 2022, 23, 9059. https://doi.org/10.3390/ijms23169059 |
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These companies are at the forefront of developing both GLP-1 drugs and complementary treatments to address the growing need for effective obesity management and the prevention of muscle wasting associated with weight loss.
PMGC Capital LLC
PMGC Capital LLC, a wholly owned subsidiary of PMGC Holdings Inc., is a multi-strategy investment vehicle engaged in investing, lending and pursuing diversified investment opportunities. PMGC Capital LLC actively supports the growth and expansion of PMGC Holdings Inc.’s portfolio companies. The subsidiary’s dynamic investment approach is designed to capitalize on high yield returns on capital and investing into and acquiring assets and companies that are undervalued.
Pacific Sun Packaging, Inc.
Pacific Sun Packaging is a specialty provider of high-precision, component-level packaging solutions serving the electronics and IT hardware industries. Headquartered in San Clemente, California, Pacific Sun Packaging designs and supplies custom-engineered protective packaging for sensitive IT hardware components, including CPUs, memory modules (DIMMs and SO-DIMMs), SSDs, HDDs, and fiber-optic transceivers.
Pacific Sun Packaging’s packaging solutions are engineered to meet demanding standards of durability, electrostatic discharge (ESD) protection, and dimensional precision. Pacific Sun Packaging serves customers across the semiconductor, data center, and networking equipment supply chains, ensuring the secure transport, handling, and storage of delicate, high-value electronic components.
Products
Pacific Sun Packaging offers a portfolio of custom and standard packaging solutions designed for component-level IT hardware applications. Its product offerings include:
| ● | CPU Packaging – precision trays and protective carriers designed to protect processors during handling and shipment. |
| ● | Memory Module Packaging – custom trays for DIMMs and SO-DIMMs used in servers, workstations, and PCs. |
| ● | Storage Device Packaging – protective packaging for solid state drives (SSDs) and hard disk drives (HDDs). |
| ● | Optical and Networking Packaging – solutions for fiber-optic transceivers and related networking hardware components. |
| ● | Custom Packaging Solutions – tailored designs engineered to meet specific customer and component requirements. |
Each solution is engineered to deliver protection against electrostatic discharge vibration, and mechanical damage, while enabling ease of handling, automated processing, and efficient integration into customer supply chains.
Customers
Pacific Sun Packaging serves a diverse base of over 300 commercial customers across North America. Its customers include:
| ● | Original equipment manufacturers (OEMs); |
| ● | Contract manufacturers; |
| ● | Global technology distributors; |
| ● | Data center operators; and |
| ● | IT asset disposition (“ITAD”) and lifecycle management firms. |
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These customers rely on Pacific Sun Packaging’s specialized solutions to protect valuable IT hardware during manufacturing, distribution, and resale.
Sales and Marketing
Pacific Sun Packaging markets its products primarily through a direct sales force. Pacific Sun Packaging maintains long-standing relationships with customers by focusing on reliability, speed of delivery, and the ability to provide tailored solutions.
Sales efforts emphasize:
| ● | Technical collaboration with customers during design and production stages; |
| ● | Responsiveness and speed to market for new product requirements; and |
| ● | Consistent product quality that reduces returns and integration issues. |
Pacific Sun Packaging also participates in trade shows and industry events to strengthen brand visibility.
Competition
The packaging industry is highly competitive and includes large multinational packaging companies as well as smaller specialized providers. Pacific Sun Packaging differentiates itself through its:
| ● | Focus on component-level IT hardware packaging; |
| ● | Custom engineering capabilities tailored to customer needs; |
| ● | Technical expertise in ESD protection and precision molding; and |
| ● | Established reputation for reliability among IT hardware supply chain participants. |
Competitive Strengths
Pacific Sun Packaging’s competitive position is supported by the following key strengths:
| 1. | Specialization in High-Value IT Hardware Packaging – Unlike general packaging providers, Pacific Sun Packaging focuses exclusively on component-level electronics, enabling deep technical expertise and customer trust. |
| 2. | Custom Engineering Capabilities – Pacific Sun Packaging’s ability to collaborate directly with OEMs and IT service providers on tailored solutions creates high switching costs and long-term customer relationships. |
| 3. | U.S.-Based Operations – Domestic manufacturing and fulfillment provide shorter lead times, reduced logistics risk, and alignment with industry trends favoring onshoring of critical supply chains. |
| 4. | Established Customer Base – With over 300 commercial customers, Pacific Sun Packaging benefits from a diversified client network across OEMs, distributors, and ITAD firms. |
| 5. | Lean and Scalable Operations – Pacific Sun Packaging’s disciplined cost structure and quality-focused processes provide a foundation for profitable growth and operational scalability. |
4
Growth Strategy
Pacific Sun Packaging intends to expand its market position by:
| 1. | Broadening its Customer Base – targeting new OEMs, distributors, and ITAD firms in growing sectors such as cloud computing and AI infrastructure. |
| 2. | Expanding Product Offerings – developing additional packaging solutions for next-generation IT hardware components. |
| 3. | Leveraging Industry Trends – capitalizing on increased demand for IT lifecycle management, resale, and refurbishment, where packaging plays a critical role in maintaining product value. |
| 4. | Operational Scaling – investing in expanded production capacity and efficiency improvements to meet growing demand. |
AGA Precision Systems LLC
AGA Precision Systems is a specialized computer numerical code CNC machine shop focused on high-tolerance milling, turning, mold manufacturing, and machining of complex metals including titanium and Inconel. Headquartered in California, AGA Precision Systems serves customers across the aerospace, defense, and industrial sectors, delivering precision components to demanding technical specifications.
AGA Precision Systems has built its business over more than a decade, growing primarily via referrals and repeat orders without a formal sales or marketing function. Its operations emphasize quality, precision, and reliability.
Precision Machining Industry Overview
The precision machining industry is a critical part of the advanced manufacturing supply chain, supporting sectors such as aerospace, defense, medical devices, energy, and industrial equipment. The market is characterized by:
| ● | Increasing Demand for High-Precision Components – Aerospace and defense programs, particularly those involving next-generation aircraft, spacecraft, and defense systems, require components manufactured to extremely tight tolerances. |
| ● | Specialized Metals Usage – Growth in the use of exotic materials such as titanium, Inconel, and other high-performance alloys reflects the need for strength, heat resistance, and lightweight performance in mission-critical applications. |
| ● | Reshoring and Supply Chain Security – U.S. government initiatives and defense priorities emphasize domestic production of critical parts to reduce reliance on foreign suppliers, creating opportunity for U.S.-based CNC machine shops. |
| ● | Industrial and Commercial Applications – Beyond aerospace and defense, precision machining is essential for industries such as energy infrastructure, automotive performance, and heavy machinery, all of which rely on exacting quality and reliability. |
Within this context, AGA Precision Systems is positioned as a niche provider specializing in high-tolerance machining of complex metals, enabling it to serve programs and customers with stringent technical requirements.
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Products & Services
AGA Precision Systems offers a suite of high-precision manufacturing services, including:
| ● | High-Tolerance Milling & Turning – machining of complex parts to tight tolerances from hard or exotic metals. |
| ● | Mold Manufacturing – design and fabrication of molds used in industrial and aerospace processes. |
| ● | Specialty Metals Machining – handling of difficult materials (e.g., titanium, Inconel) that require specialized tooling, processes, and quality oversight. |
Components produced by AGA Precision Systems are often used in mission-critical applications where dimensional accuracy, material properties, and surface finish are essential.
Customers
AGA Precision Systems serves a diversified group of clients primarily in:
| ● | Aerospace manufacturers and suppliers; |
| ● | Defense contractors and programs; and |
| ● | Industrial equipment producers. |
These customers require precision machining of components with high standards for performance, durability, and regulatory compliance. Long-standing relationships and repeat business are characteristic of AGA Precision Systems’ customer base.
Sales & Marketing
AGA Precision Systems has historically grown via referrals and repeat orders. The company has not maintained a formalized sales or marketing department but relies on:
| ● | Reputation for precision, quality, and reliability; |
| ● | Word-of-mouth, referrals, and customer networks; and |
| ● | Technical credibility and capability to meet or exceed customer specifications. |
Going forward, we believe there is opportunity to augment growth via more proactive business development, targeted outreach in aerospace/defense programs, and participation in trade or industry events.
Manufacturing & Operations
AGA Precision Systems operates from its manufacturing facility in California. Key operational and technical features include:
| ● | Capabilities to machine exotic and high-performance metals such as titanium and Inconel, which require specialized processes and tooling; |
| ● | High-precision tolerances, strict quality assurance, and inspection processes; |
| ● | Mold manufacturing capabilities that complement standard CNC machining; and |
| ● | Experienced management and technical staff with machine shop expertise. |
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Competition
The precision machining and specialty metals CNC market is competitive and includes both small niche shops and larger, vertically integrated manufacturers. AGA Precision Systems differentiates itself via:
| ● | Specialized machining of hard and exotic metals to high tolerances; |
| ● | Reputation and proven reliability in aerospace, defense, and industrial segments; |
| ● | Existing customer relationships and repeat business without reliance on large marketing expenditures; |
| ● | Flexibility in managing small to medium-sized, highly technical orders. |
Competitive Strengths
AGA Precision Systems’ competitive advantages include:
| 1. | Technical Specialization in Exotic Metals & Tight Tolerances – its expertise in machining titanium, Inconel, and other challenging metals required for aerospace and defense applications. |
| 2. | Recognized Industry Certifications & Compliance – AGA is International Traffic in Arms Regulations (“ITAR”) registered and maintains AS9100 certification, reinforcing its credibility as a qualified manufacturing partner for aerospace and defense customers with strict quality and regulatory requirements. |
| 3. | Mold Manufacturing Capability – its ability to design and fabricate molds provides value beyond standard machining services. |
| 4. | Long-Standing Customer Relationships – its repeat business and referrals from established aerospace, defense, and industrial customers reflect trust and reliability. |
| 5. | U.S.-Based Operations – domestic manufacturing reduces logistics risks, ensures regulatory compliance, and aligns with defense and aerospace reshoring priorities. |
Growth Strategy
AGA Precision Systems intends to expand its market presence by:
| 1. | Business Development & Marketing Enhancements – formalizing efforts to reach new customers in aerospace, defense, and industrial sectors. |
| 2. | Expanding Capacity & Efficiency – investing in machinery, tooling, process improvements, and quality systems to improve throughput and reduce cost. |
| 3. | Leveraging Strategic Support – using financial and operational resources provided under its parent company to scale operations and compete for larger contracts. |
| 4. | Diversification of Customer & Program Exposure – pursuing opportunities in government defense programs, industrial supply chains, and emerging sectors beyond its core niches. |
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Operational and Competitive Strengths
We face competition from both commercialized obesity medications, as well as clinical candidates that are still in the development stage. We believe the primary competitive factors in our favor for EL-22 & EL-32 are the following:
| ● | Our First-in-Class Approach and Early Results |
Northstrive Biosciences is developing EL-22, an engineered probiotic with myostatin antigens, to elicit an immune response that could help people achieve substantial fat loss while preserving muscle mass. Based on the generated preclinical data and the mechanism of the myostatin-activin signaling pathway effect on muscle wasting, we believe that EL-22 has the potential to treat obesity in combination with GLP-1 receptor agonists by preserving muscle mass while decreasing fat mass. In the preclinical studies1:
| ● | EL-22 showed a statistically significant increase in anti-myostatin IgG antibody concentration, where myostatin is a key negative regulator of muscle growth. |
| ● | EL-22 showed a statistically significant decrease in creatine kinase levels, which indicates a decrease of muscle destruction. |
| ● | EL-22 administered to mdx mice, a mouse model of Duchenne muscular dystrophy, had improved physical activity and gross motor function, as demonstrated by a longer duration during rotarod tests. |
Based on the generated preclinical data and the mechanism of the myostatin-activin signaling pathway effect on muscle wasting, we believe that EL-22 has the potential to treat obesity in combination with GLP-1 by preserving muscle mass while decreasing fat mass. The Company aspires to either complete an IND submission in 2026, assuming it has sufficient working capital, or to enter into a collaboration with another company to do so. Our ability to proceed with human trials in the U.S. to evaluate the myostatin approach in combination with one or more GLP-1 receptor agonists in obesity is contingent upon the FDA clearing the IND submission.
| ● | Our Candidates’ Ease of Use and Convenient Oral Administration |
We believe our product candidates EL-22 and EL-32 would be the only oral myostatin formulations to date, making Northstrive Bioscience an early mover in the emerging GLP-1 combination space for muscle preservation. Existing approaches targeting obesity with combinations to preserve muscle mass while on weight loss therapies are administered through injectable forms; either subcutaneously or intravenously. Although effective, many patients in general prefer orally administered medications over injections due to factors like convenience, ease of administration, and fear of needles. Our product candidates have been designed to be oral capsules to provide benefits without any needling.
Strategy
Northstrive Biosciences’ strategy focuses primarily on the clinical development and commercialization of novel medicines for the treatment of metabolic diseases, including obesity. We will need substantial capital to support our drug development and any related commercialization efforts for our drug candidates. The key elements of our strategy are:
| ● | Develop EL-22 & EL-32 for obesity. |
Reference:
| 1 | Sung DK, Kim H, Park SE, Lee J, Kim JA, Park YC, Jeon HB, Chang JW, Lee J. A New Method of Myostatin Inhibition in Mice via Oral Administration of Lactobacillus casei Expressing Modified Myostatin Protein, BLS-M22, Int. J. Mol. Sci. 2022, 23, 9059. https://doi.org/10.3390/ijms23169059 |
Our metabolic drug pipeline is focused on the clinical development of EL-22, a first-in-class engineered probiotic approach to address obesity’s pressing issue of preserving muscle while on weight loss treatments, including GLP-1 receptor agonists. Currently, more than 40% of adults in the United States live with obesity - a figure predicted to rise to approximately 50% by 2030.1 Obesity is a leading risk factor for the development of serious health conditions, including Type 2 diabetes and heart failure. Goldman Sachs predicts that this epidemic will create a $100 billion market for anti-obesity players.2
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Approved GLP-1 drugs used in weight loss, such as Novo Nordisk’s Ozempic® (semaglutide) & Wegovy®(semaglutide) and Eli Lilly’s Zepbound (tirzepatide), and Mounjaro® (tirzepatide) have transformed the obesity treatment landscape. However, past studies of these highly effective drugs show that up to 20-50% of the weight loss is due to loss of lean muscle.3
Muscle is necessary for metabolism, strength, and physical function. As a result, we believe that one of the key unmet needs in the current obesity landscape is the avoidance of muscle loss while on weight loss treatments. Northstrive Biosciences is developing EL-22, an engineered probiotic with myostatin antigens, to elicit an immune response that could help people achieve substantial fat loss while preserving muscle mass.
Our second asset, EL-32, is a preclinical engineered probiotic expressing dual myostatin & activin-A and also positioned for the muscle preservation space as a combination to weight loss treatments, including GLP-1 receptor agonists.
We believe this urgent unmet medical need could be addressed by both EL-22 and EL-32, that may effectively prevent the loss of muscle mass and increase the fat loss experienced by older patients receiving GLP-1 drugs for the treatment of obesity.
References:
| 1 | Ward ZJ, BleichSN, Cradock AL, Barrett JL, Giles CM, Flax CN, Long MW, GortmakerSL. Projected U.S. State-Level Prevalence of Adult Obesity and Severe Obesity. N Engl J Med 2019;381:2440-2450. https://www.nejm.org/doi/full/10.1056/NEJMsa1909301. |
| 2 | Why the anti-obesity drug market could grow to $100 billion by 2030. https://www.goldmansachs.com/insights/articles/anti-obesity-drug-market.html. |
| 3 | Sargeant JA, Henson J, King JA, Yates T, Khunti K, Davies MJ. A Review of the Effects of Glucagon-Like Peptide-1 Receptor Agonists and Sodium-Glucose Cotransporter 2 Inhibitors on Lean Body Mass in Humans. Endocrinol Metab (Seoul). 2019 Sep;34(3):247-262. doi: 10.3803/EnM.2019.34.3.247. PMID: 31565876; PMCID: PMC6769337. |
Corporate History and Structure
As of December 31, 2025, PMGC Holdings Inc. has four (4) wholly owned subsidiaries, Northstrive Biosciences Inc., PMGC Capital LLC, Pacific Sun Packaging, Inc., and AGA Precision Systems LLC.
Our predecessor company, Elevai Labs, Inc., was incorporated in Delaware in June 2020, and completed its initial public offering of Common Stock on November 24, 2023. On December 20, 2024, the Company re-domesticated to Nevada and changed its name to “PMGC Holdings Inc.” In January 2025, the Company completed its divestiture of the Elevai Skincare business and another operating subsidiary, Elevai Biosciences, Inc., changed its name to Northstrive Biosciences.
In July 2025, the Company acquired both AGA Precision Systems and Pacific Sun Packaging, respectively.
Market, Industry and Other Research-Based Data
Our Market and Industry
We have transitioned to a diversified holding company focused on acquiring and growing valuable assets and operating businesses across various industries. Our strategy is to identify and invest in compelling opportunities—regardless of sector—with strong fundamentals, growth potential, and scalable operations. We actively seek acquisitions that complement our existing portfolio and align with our long-term value creation objectives. Our business model consists of four (4) primary components:
| 1. | PMGC Capital LLC, our multi-strategy investment vehicle, which seeks to generate revenue through capital deployment in undervalued assets, structured financings, and public and private market investments. |
| 2. | NorthStrive Biosciences Inc., our biotechnology subsidiary focused on advancing clinical-stage assets toward regulatory approval and commercialization. |
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| 3. | Pacific Sun Packaging, Inc., our specialty packaging subsidiary focused on high-precision, component-level packaging solutions for the electronics and IT hardware industries, including custom-engineered protective packaging for central processing units, memory modules, solid-state drives, hard disk drives, and fiber-optic transceivers across semiconductor, data center, and networking supply chains. | |
| 4. | AGA Precision Systems LLC, our precision manufacturing subsidiary focused on high-tolerance CNC milling and turning, mold manufacturing, and machining of complex metals such as titanium and Inconel, serving aerospace, defense, and industrial customers, and operating with ITAR registration and AS9100 certification to meet stringent regulatory and quality requirements. |
As part of this strategic shift, we no longer operate in the physician-dispensed cosmetics or medical aesthetics markets. The Company has transitioned to a diversified holding company structure, operating through wholly owned subsidiaries across the biotechnology, advanced manufacturing, specialty packaging, and investment sectors. We believe this diversified structure provides the Company with the ability to pursue growth opportunities across multiple industries and reduces the risks associated with concentration in a single market or product line.
Industry Data
The following industry data is derived from third-party sources that we believe to be reliable but that we have not independently verified. Investors should not place undue reliance on these estimates, and there can be no assurance that our business will grow at rates comparable to the industry projections described below. See “Risk Factors — Certain market opportunity data and forecasts in this Annual Report were obtained from third-party sources and were not independently verified by us.”
Biotechnology and Anti-Obesity Therapeutics
The global biotechnology market continues to grow, driven by advancements in gene therapies, regenerative medicine, and biologics. According to Grand View Research, the global biotechnology industry was valued at approximately $1.37 trillion in 2022 and is expected to grow at a compound annual growth rate (“CAGR”) of 12.8% from 2023 to 2030.¹ This expansion is fueled by rising research and development investments, regulatory approvals, and the increasing adoption of biotechnology-based therapies.
The weight-loss drug market has emerged as a high-growth sector, with GLP-1 receptor agonists such as Novo Nordisk’s Ozempic® and Eli Lilly’s Mounjaro® driving significant demand. Goldman Sachs projects the anti-obesity drug market could reach $100 billion by 2030.² Currently, more than 40% of adults in the United States live with obesity, a figure predicted to rise to approximately 50% by 2030.³ Obesity is a leading risk factor for the development of serious health conditions, including Type 2 diabetes and heart failure.
However, research indicates that up to 40% of weight loss from GLP-1 drugs comes from loss of lean muscle mass, creating an unmet need for therapies that preserve muscle mass during treatment.⁴ We believe this represents a significant market opportunity for our lead asset, EL-22.
Precision Manufacturing and Aerospace & Defense
The precision machining industry is a critical component of the advanced manufacturing supply chain, supporting sectors such as aerospace, defense, medical devices, energy, and industrial equipment. According to Grand View Research, the global precision machining market was valued at approximately $123 billion in 2025 and is expected to grow at a CAGR of approximately 8.1% from 2026 to 2033, driven by rising demand for high-precision components across advanced industries and accelerated adoption of CNC automation and smart manufacturing.⁵
The aerospace and defense sector in particular requires components manufactured to extremely tight tolerances from specialized materials such as titanium, Inconel, and other high-performance alloys. U.S. government initiatives and defense priorities continue to emphasize domestic production of critical parts to reduce reliance on foreign suppliers, creating opportunity for U.S.-based precision manufacturers.⁶ The global aerospace parts manufacturing market was valued at approximately $913 billion in 2023 and is expected to grow at a CAGR of approximately 4.2% from 2024 to 2030.⁷
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Specialty IT Hardware Packaging
The global electronic packaging market serves the semiconductor, data center, and networking equipment supply chains and is driven by increasing demand for IT infrastructure, cloud computing, and artificial intelligence applications. According to Grand View Research, the market was valued at approximately $62.5 billion in 2024 and is expected to reach $89.7 billion by 2030, growing at a CAGR of about 6.2%, supported by expanding data center construction, growth in semiconductor production, and increasing demand for IT asset lifecycle management, resale, and refurbishment, where packaging plays a critical role in maintaining product value.⁸
The trend toward onshoring critical supply chains in the United States, combined with increasing data center capital expenditure, creates favorable demand dynamics for domestic specialty packaging providers focused on component-level IT hardware protection.
Northstrive Biosciences Products
Northstrive Biosciences leverages a first-in-class engineered probiotic approach to address the pressing issue of preserving muscle mass while on weight loss treatments, including GLP-1 receptor agonists.
EL-22
Our lead asset, EL-22, is an engineered probiotic expressing myostatin antigens, designed to elicit an immune response that helps preserve muscle mass while promoting fat loss. EL-22 has completed a Phase 1 clinical trial in South Korea, demonstrating it was generally well tolerated and safe in healthy volunteers. No subjects dropped out due to adverse events and no statistically significant difference was found between the intervention groups in the incidence of treatment-emergent adverse events.
Preclinical results of EL-22 from a 2022 study demonstrated physiological (serum creatine kinase level), physical (body weight change), and functional (rotarod test) improvements in the dystrophic features of mdx mice, a mouse model of Duchenne muscular dystrophy
(“DMD”).⁹
Based on the generated preclinical data and the mechanism of the myostatin-activin signaling pathway effect on muscle wasting, we believe that EL-22 has the potential to treat obesity in combination with GLP-1 receptor agonists by preserving muscle mass while decreasing fat mass.
In the preclinical studies:
| ● | EL-22 showed a statistically significant increase in anti-myostatin IgG antibody concentration, where myostatin is a key negative regulator of muscle growth. |
| ● | EL-22 showed a statistically significant decrease in creatine kinase levels, which indicates a decrease of muscle destruction. |
| ● | EL-22 administered to mdx mice had improved physical activity and gross motor function, as demonstrated by a longer duration during rotarod tests. |
The Company intends to complete an IND submission in 2025 and to initiate clinical trials in the U.S. to evaluate the myostatin approach in combination with one or more GLP-1 receptor agonists in obesity. Our ability to proceed with human trials is contingent upon the FDA clearing the IND submission.
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Regulatory bodies might require us to conduct preclinical bridge studies in order to pivot EL-22 from DMD to obesity indications.
EL-32
Our second asset, EL-32, is a preclinical engineered probiotic expressing dual myostatin & activin-A antigens and is also positioned for the muscle preservation space as a combination to weight loss treatments, including GLP-1 receptor agonists. In a preclinical healthy mouse model, EL-32 demonstrated a statistically significant increase in activin-A and myostatin antibodies, confirming the efficacy using the ELISA test.
Pacific Sun Packaging Products and Services
Pacific Sun Packaging offers a portfolio of custom and standard packaging solutions designed for component-level IT hardware applications, including CPU packaging, memory module packaging (DIMMs and SO-DIMMs), storage device packaging (SSDs and HDDs), optical and networking packaging (fiber-optic transceivers and related networking hardware), and custom packaging solutions tailored to specific customer and component requirements. Each solution is engineered to deliver protection against electrostatic discharge (“ESD”), vibration, and mechanical damage, while enabling ease of handling, automated processing, and efficient integration into customer supply chains.
AGA Precision Systems Products and Services
AGA Precision Systems offers a suite of high-precision manufacturing services, including high-tolerance milling and turning of complex parts from hard or exotic metals, mold manufacturing for industrial and aerospace applications, and specialty metals machining of difficult materials such as titanium and Inconel that require specialized tooling, processes, and quality oversight. Components produced by AGA Precision Systems are often used in mission-critical applications where dimensional accuracy, material properties, and surface finish are essential.
Competition
We face competition across each of our operating segments.
Northstrive Biosciences — Biotechnology
The obesity and muscle preservation therapeutic market is highly competitive. Several key companies are actively developing GLP-1 drugs for obesity and complementary treatments to address associated conditions such as muscle wasting. These companies include:
| 1. | Novo Nordisk — a leader in the GLP-1 drug market with its products Ozempic® (semaglutide) and Wegovy® (semaglutide), which have shown substantial efficacy in weight loss and improving cardiovascular health. |
| 2. | Eli Lilly — developer of Mounjaro® (tirzepatide) and Zepbound® (tirzepatide) for obesity treatment. Eli Lilly also acquired Versanis Bio, which is developing bimagrumab, a drug designed to increase lean muscle mass while reducing fat. |
| 3. | Pfizer — developing danuglipron, an oral GLP-1 analog aimed at offering a more convenient dosing regimen for obesity treatment. |
| 4. | Biohaven — developing taldefgrobep, an investigational fusion protein targeting myostatin to impact skeletal muscle growth in individuals living with overweight and obesity. |
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| 5. | Scholar Rock — developing apitegromab, an inhibitor of latent myostatin activation, and assessing its ability to preserve lean muscle mass in individuals on GLP-1 receptor agonist therapy for obesity. |
| 6. | Veru — developing enobosarm, an androgen receptor modulator to address the loss of muscle in patients undergoing weight loss therapy with GLP-1 drugs. |
| 7. | Altimmune — developing pemvidutide, a GLP-1 drug that has shown potential in weight loss and reduction of dyslipidemia. |
| 8. | AstraZeneca, Bristol Myers Squibb, Novartis, and Amgen — in the early stages of developing obesity treatments, including various GLP-1 receptor agonists and other pharmacological approaches. |
These companies have significantly greater financial, technical, manufacturing, marketing, and human resources than we do. There can be no assurance that we will be able to compete effectively against these or other competitors.
Pacific Sun Packaging — Specialty Packaging
The packaging industry is highly competitive and includes large multinational packaging companies as well as smaller specialized providers. Pacific Sun Packaging differentiates itself through its focus on component-level IT hardware packaging, custom engineering capabilities tailored to customer specifications, technical expertise in ESD protection and precision molding, and established reputation for reliability among IT hardware supply chain participants. We compete with both domestic and international packaging providers, some of which have substantially greater resources than we do.
AGA Precision Systems — Precision Manufacturing
The precision machining and specialty metals CNC market is competitive and includes both small niche machine shops and larger, vertically integrated manufacturers. AGA Precision Systems differentiates itself through specialized machining of hard and exotic metals to high tolerances, reputation and proven reliability in aerospace, defense, and industrial segments, existing customer relationships and repeat business, ITAR registration and AS9100 certification, mold manufacturing capabilities, and flexibility in managing small to medium-sized highly technical orders. We compete with other domestic CNC machine shops and larger manufacturers, some of which have substantially greater resources, broader capabilities, and more established customer relationships.
Operational and Competitive Strengths
We believe our competitive position is supported by the following key strengths across our operating segments:
| ● | Diversified Holdings Across Multiple Industries. We operate wholly owned subsidiaries across the biotechnology, advanced manufacturing, specialty packaging, and investment sectors. This diversified structure provides the Company with exposure to multiple end markets and reduces the risks associated with concentration in a single industry. |
| ● | Strategic Capital Deployment. Through PMGC Capital LLC, we seek to deploy capital into undervalued assets and investment opportunities, with the objective of generating returns on capital while expanding our portfolio of operating businesses and investments. |
| ● | Advancement of High-Potential Biotechnology Assets. Our subsidiary, Northstrive Biosciences Inc., is advancing EL-22 and EL-32, product candidates targeting muscle preservation in combination with weight loss treatments, addressing what we believe to be a significant unmet medical need in the obesity treatment landscape. |
| ● | First-in-Class Oral Myostatin Approach. We believe our product candidates EL-22 and EL-32 would represent the only oral myostatin formulations currently in development, providing a potential competitive advantage over existing injectable approaches to muscle preservation. Existing approaches targeting muscle preservation in combination with weight loss therapies are administered through injectable forms, whereas our product candidates have been designed as oral capsules. |
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| ● | Specialized Precision Manufacturing Capabilities. AGA Precision Systems provides high-tolerance machining of complex and exotic metals, including titanium and Inconel, for aerospace, defense, and industrial customers. AGA’s ITAR registration and AS9100 certification position it to serve customers with stringent regulatory and quality requirements, and its U.S.-based operations align with industry trends favoring domestic production of critical components. |
| ● | Niche IT Hardware Packaging Expertise. Pacific Sun Packaging focuses exclusively on component-level electronics packaging, providing deep technical expertise, custom engineering capabilities, and high switching costs that support long-term customer relationships. Pacific Sun serves a diversified base of commercial customers across OEMs, distributors, and ITAD firms. |
| ● | U.S.-Based Operations. Both Pacific Sun Packaging and AGA Precision Systems operate from facilities in California, providing shorter lead times, reduced logistics risk, and alignment with industry trends favoring onshoring of critical supply chains and domestic manufacturing. |
| ● | Flexible M&A and Licensing Model. Our holding company structure allows for strategic acquisitions, licensing arrangements, and potential spin-offs of wholly owned subsidiaries or specific assets, providing flexibility to pursue value creation opportunities across multiple sectors. |
References
| 1. | Biotechnology Market Size Report, 2023-2030. (Grand View Research). |
| 2. | Why the Anti-Obesity Drug Market Could Grow to $100 Billion by 2030. (Goldman Sachs). |
| 3. | Ward ZJ, Bleich SN, Cradock AL, Barrett JL, Giles CM, Flax CN, Long MW, Gortmaker SL. Projected U.S. State-Level Prevalence of Adult Obesity and Severe Obesity. N Engl J Med 2019;381:2440-2450. |
| 4. | Sargeant JA, Henson J, King JA, Yates T, Khunti K, Davies MJ. A Review of the Effects of Glucagon-Like Peptide-1 Receptor Agonists and Sodium-Glucose Cotransporter 2 Inhibitors on Lean Body Mass in Humans. Endocrinol Metab (Seoul). 2019 Sep;34(3):247-262. |
| 5. | Precision Machining Market (2026 - 2033) (Grand View Research). |
| 6. | U.S. Department of Defense, Securing Defense-Critical Supply Chains (Feb. 2022) |
| 7. | Aerospace Parts Manufacturing Market Report (Grand View Research) |
| 8. | Electronic Packaging Market (2025 - 2030) (Grand View Research) |
| 9. | Sung DK, Kim H, Park SE, Lee J, Kim JA, Park YC, Jeon HB, Chang JW, Lee J. A New Method of Myostatin Inhibition in Mice via Oral Administration of Lactobacillus casei Expressing Modified Myostatin Protein, BLS-M22. Int. J. Mol. Sci. 2022, 23, 9059. https://doi.org/10.3390/ijms23169059. |
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Intellectual Property
We have developed a comprehensive portfolio of intellectual property, consisting of patents, patent applications, domain names, know-how and trade secrets. As of the date of this Annual Report, we have two registered domain names, six non-provisional patent applications filed, and four provisional patent applications filed.
We believe our intellectual property adequately protects our products and technology and may prevent others from commercializing products or methods substantially similar to ours.
PMGC Holdings Inc.
Patents
Below is a table, with footnotes, that includes our United States patent applications with the referenced property number(s) that are material to our business, as well as our two anticipated patent applications:
| Property No. | Patent Title | Application Number and Filing Date |
Application Type | Jurisdiction | |||||
| 1. | Fusion Protein of Myo-2 for Use in Treating Muscle Loss in Obese Patients | 63/639,722, 04/29/2024 |
Provisional | USA | |||||
| 2. | Combination Therapy of a Fusion Protein of Myo-2 with a GLP-1 Receptor Agonist for Use in Treating Muscle Loss in Obese Patients | 63/639,723, 04/29/2024 |
Provisional | USA | |||||
| 3. | Pharmaceutical Composition for Treatment of Muscle Loss Due to Obesity | 63/639,727, 04/29/2024 |
Provisional | USA | |||||
| 4. | Combination Therapy for Treatment of Muscle Loss Due to Obesity | 63/639,728, 04/29/2024 |
Provisional | USA |
Below is a table that includes our United States patent applications as of December 31, 2025:
| Patent Title | Filing Date |
Application Type |
Jurisdiction | |||
| Fusion Protein of Myo-2 for Use in Treating Muscle Loss in Obese Patients (1) | 9/25/2024 | Non-provisional | USA | |||
| Combination Therapy of a Fusion Protein of Myo-2 with a GLP-1 Receptor Agonist for Use in Treating Muscle Loss in Obese Patients (2) | 9/25/2024 | Non-Provisional | USA | |||
| Pharmaceutical Composition for Treatment of Muscle Loss Due to Obesity (3) | 4/28/2025 | Non-provisional | USA | |||
| Combination Therapy for Treatment of Muscle Loss Due to Obesity (4) | 4/28/2025 | Non-provisional | USA | |||
| Fusion Protein of Myo-2 for Use in Encouraging Muscle Growth in Animals (5) | 4/28/2025 | Non-provisional | USA | |||
| Animal Feed Additive to Encourage Muscle Growth (6) | 4/28/2025 | Non-provisional | USA |
| (1) | Non-provisional patent application based on Property. |
| (2) | Non-provisional patent application based on Property. |
| (3) | Non-provisional patent application based on Property. |
| (4) | Non-provisional patent application based on Property. |
| (5) | Non-provisional patent application based on Property. |
| (6) | Non-provisional patent application based on Property. |
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Domain Names
We have the right to use the following domain registration issued in the United States, as noted below:
| Number | Issue Date | Expiration Date |
Registration Agency |
Domain Name | Owner | |||||
| 1. | July 31, 2024 | July 31, 2027 | GoDaddy | www.pmgcholdings.com | PMGC Holdings Inc. | |||||
| 2. | April 10, 2024 | April 10, 2025 | GoDaddy | www.northstrivebio.com | PMGC Holdings Inc. |
NorthStrive Biosciences Inc.
Patents
| Property No. | Licensed Product/ Nation |
Registration Number |
Registration Date | Title | ||||
| 1. | EL-22 Korea | 10-0857861-0000 | 2008.09.03 | Surface Expression Vector for Fusion Protein of Myo-2 Peptide Multimer and Myostatin, and Microorganism Transformed by Therof | ||||
| 2. | EL-22 Korea | 10-0872042-0000 | 2008.11.28 | Cell Surface Expression Vector of Myostatin and Microorganisms Transformed Thereby | ||||
| 3. | EL-22 USA | 8470551 | 2013.06.25 | Surface Expression Vector for Fusion Protein of Myo-2 Peptide Multimer and Myostatin, and Microorganism Transformed by Therof | ||||
| 4. | EL-22 Japan | 05634867 | 2014.10.24 | Surface Expression Vector for Fusion Protein of Myo-2 Peptide Multimer and Myostatin, and Microorganism Transformed by Therof | ||||
| 5. | EL-22 China | ZL200780101116.2 | 2013.06.19 | Surface Expression Vector for Fusion Protein of Myo-2 Peptide Multimer and Myostatin, and Microorganism Transformed by Therof |
Patent Applications
| Property No. | Licensed Product/ Nation |
Patent Application Serial No |
Filing Date | Title | ||||
| 1. | EL-32 USA | 18/627,462 | 2024.04.05 | Pharmaceutical composition for alleviation, treatment, and prevention of sarcopenia containing microorganism transformed with cell surface display vector operably linked with gene encoding myostatin and activin A proteins as active ingredient | ||||
| 2. | EL-32 Korea | 10-2022-0136606 | 2022.10.21 | A pharmaceutical composition for alleviation, treatment and prevention of sarcopenia containing a microorganism transformed with a vector expressing myostatin and activin A on the cell surface as an active ingredient | ||||
| 3. | EL-22 USA | 19/541,209 | 2026.02.16 | Fusion Protein of Myo-2 for Use in Encouraging Muscle Growth in Animals | ||||
| 4. | EL-32 USA | 19/540,888 | 2026.02.16 | Animal Feed Additive to Encourage Muscle Growth | ||||
| 5. | EL-22 USA | 19/540,893 | 2026.02.16 | Fusion Protein of Myo-2 for Use in Reducing Animal Gas Emissions | ||||
| 6. | EL-32 USA | 19/540,895 | 2026.02.16 | Animal Supplement for Use in Reducing Animal Gas Emissions | ||||
| 7. | EL-22 USA | 19/540,898 | 2026.02.16 | Fusion Protein of Myo-2 for Use in Encouraging Muscle Growth in Aquatic Animals | ||||
| 8. | EL-32 USA | 19/540,900 | 2026.02.16 | Aquatic Animal Supplement for Use in Encouraging Muscle Growth | ||||
| 9. | EL-22 USA | 19/540,905 | 2026.02.16 | Fusion Protein of Myo-2 for Use in Reducing Emissions in Aquatic Animals | ||||
| 10. | EL-32 USA | 19/540,908 | 2026.02.16 | Aquatic Animal Supplement for Use in Reducing Emissions | ||||
| 11. | EL-22 USA | 19/540,913 | 2026.02.16 | Fusion Protein of Myo-2 for Use in Encouraging Muscle Growth in Poultry | ||||
| 12. | EL-32 USA | 19/540,918 | 2026.02.16 | Poultry Supplement for Use in Encouraging Muscle Growth |
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Operational and Competitive Strengths
We operate in a highly competitive biotechnology and investment landscape, facing competition from pharmaceutical companies, biotechnology firms, and investment funds. Our key competitive advantages include:
| ● | Strategic Capital Deployment: Through PMGC Capital LLC, we seek to acquire undervalued assets, optimizing capital returns while expanding our portfolio. |
| ● | Diversified Holdings: We establish and acquire wholly owned subsidiaries across biotechnology, advanced manufacturing, and specialty industrial sectors, including clinical-stage and preclinical therapeutic assets, precision engineering businesses, and high-value component and packaging solutions. |
| ● | Advancement of High-Potential Biotechnology Assets: Our subsidiary, NorthStrive Biosciences Inc., is progressing EL-22, a lead asset targeting muscle preservation in obesity treatment. |
| ● | Flexible M&A and Licensing Model: Our structure allows for strategic acquisitions, licensing deals, and potential spin-offs, creating value for shareholders. |
Sales and Marketing
As a diversified holding company, our sales and marketing activities are conducted both at the parent level and through our wholly owned subsidiaries, with strategies tailored to the specific industries in which each subsidiary operates. Our approach is designed to drive revenue growth, enhance asset value, and support strategic partnerships, licensing arrangements, and capital deployment initiatives across our biotechnology, advanced manufacturing, specialty packaging, and investment operations.
At the parent level, we focus on communicating our overall platform strategy, capital allocation approach, and subsidiary performance to investors, strategic partners, and other stakeholders.
| ● | We engage with institutional investors, strategic acquirers, and industry participants to enhance awareness of our diversified business model and growth strategy. |
| ● | We support our subsidiaries’ business development efforts through targeted marketing, industry engagement, and strategic introductions. |
| ● | We participate in industry conferences, trade events, and investor presentations across our operating sectors to facilitate relationship development, generate opportunities, and support long-term value creation. |
This diversified platform allows us to allocate capital across multiple sectors, pursue complementary growth opportunities, and enhance long-term shareholder value.
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Strategy
We aim to position PMGC Holdings Inc. as a leading diversified investment and holding company, leveraging strategic acquisitions, capital deployment, and asset optimization to drive long-term growth.
Our strategy is built on three key pillars:
| 1. | Capital Deployment for Stronger Returns Through PMGC Capital, we focus on achieving high returns on capital by investing in undervalued assets, deploying treasury funds into public and private investments, and leveraging structured financings to maximize value. |
| 2. | Acquiring and Scaling Biotechnology and High-Growth Operating
Companies We actively seek acquisitions in the biotechnology sector and other high-growth industries, financing their expansion through equity, debt, and available grants. By integrating synergistic businesses under our portfolio, we enhance operational efficiencies, accelerate commercialization, and unlock market opportunities. |
| 3. | Spin-Offs and Strategic Portfolio Optimization We continuously evaluate spin-off opportunities for wholly owned subsidiaries or specific assets, allowing us to unlock shareholder value and create independent, specialized companies. This approach enables us to capitalize on advanced scientific research and address significant unmet medical needs while maintaining a diversified and scalable business model. |
Commercialization and Growth Strategy
Our commercialization and growth strategy varies by business segment:
| ● | NorthStrive Biosciences Inc. – focused on advancing our preclinical and clinical-stage assets and seek to create value through strategic partnerships, licensing agreements, and collaborative arrangements with biotechnology, pharmaceutical, and healthcare companies to support continued development and progression of our programs. | |
| ● | PMGC Capital LLC – focused on identifying and executing investment opportunities across public and private markets, including structured financings and investments in undervalued assets, with an emphasis on capital deployment and value creation. | |
| ● | Pacific Sun Packaging, Inc. – generates revenue through direct customer relationships, providing custom packaging solutions to customers in the semiconductor, data center, and information technology hardware industries, with a focus on customer retention and long-term supply relationships. | |
| ● | AGA Precision Systems LLC – generates revenue through contract manufacturing and precision machining services for customers in the aerospace, defense, and industrial sectors. Competitive positioning in this company is supported by technical capabilities, high-tolerance manufacturing expertise, and compliance with industry standards, including ITAR registration and AS9100 certification. |
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Our Facilities
Our principal executive office is located at 120 Newport Center Drive, Newport Beach, CA 92660. The office has 1,650 square feet, and the lease is on a month-to-month basis. The monthly rent is $9,273.50.
The following table sets forth the leases term and monthly rent:
| Lease Term | Address | Space (square feet) |
Average Monthly Rent |
|||||||
| Month to Month | 120 Newport Center Drive, Newport Beach, CA 92660 | 1,650 | $ | 9,273.50 | ||||||
Some members of our management work outside of these premises in office space that we do not rent.
Employees
As of the date of this Annual Report, we have 32 full-time employees and 2 part-time employee. We provide employee benefits for each employee which include medical, unemployment, and work injury compensation. Our employees have not formed any employee union or association. We have developed various methods to train our employees adequately for the functions they perform and are aware of the laws and regulations affecting our industry. Our success depends on our ability to attract, retain and motivate qualified employees. We endeavor to offer employees competitive compensation packages and a positive, dynamic and creative work environment. We believe that we maintain a good working relationship with our employees and have not experienced any difficulty in recruiting staff for our operations.
Regulations
Government Regulation and Biologic Drug Approval
Government authorities in the United States, at the federal, state and local level, and other countries, extensively regulate, among other things, the research, development, testing, manufacture, quality control, approval, labeling, packaging, storage, recordkeeping, promotion, advertising, distribution, marketing and export and import of products such as those we are selling and developing. Because we are developing product candidates that are unique biological entities, the regulatory requirements that we will be subject to are not entirely clear and may change. Regulatory requirements governing our product candidates have changed frequently and will likely continue to change in the future. We believe that the FDA will regulate part of our product candidates as a biologic drug (i.e., a biologic) through the Biologics License Application (“BLA”) process under the jurisdiction of the Office of Therapeutic Products within the Center for Biologics Evaluation and Research (“CBER”). We will work with FDA to confirm that a BLA is the most appropriate pathway and that CBER will be the FDA center responsible for review and licensure (i.e., approval). For future product candidates, we will also confirm the appropriate approval pathway (i.e., BLA or new drug application (“NDA”)) and the appropriate FDA center with regulatory oversight (i.e., CBER or the Center for Drug Evaluation and Research (“CDER”)).
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U.S. Biologic Drug Development Process
In the United States, biologic drugs (“biologics”) are regulated under two statutes: The Public Health Service Act PHS Act and the Federal Food, Drug, and Cosmetic Act and their implementing regulations. However, submission and approval of only one application—typically either a BLA or an NDA—is required prior to marketing. The FDA has also issued numerous “Guidance Documents” and other materials that address specific aspects of biologic development for particular types of product candidates (e.g., cells, tissues, etc.). Substantial time and financial resources are required to obtain regulatory approvals and subsequently comply with appropriate federal, state, and local statutes and regulations. Failure to comply with the applicable U.S. requirements at any time during the biologic development, approval, or post-approval processes may subject an applicant to administrative or judicial sanctions. These sanctions could include the FDA’s refusal to approve pending applications, withdrawal of an approval, imposition of a clinical hold on ongoing clinical trials, issuance of warning or untitled letters, product recalls, product seizures, total or partial suspension of production or distribution, injunctions, fines, refusals of government contracts, restitution, disgorgement or civil or criminal penalties. Any agency or judicial enforcement action could have a material adverse effect on us.
The process required by the FDA before a biologic may be marketed in the United States generally involves the following steps:
| ● | completion of preclinical laboratory tests, animal studies and formulation studies in accordance with FDA’s current good laboratory practice requirements and other applicable regulations; |
| ● | submission to the FDA of an IND, which must become effective before human clinical trials may begin; |
| ● | approval by an independent institutional review board (“IRB”) at each clinical site (or by one “commercial IRB”) before each trial may be initiated; |
| ● | performance of adequate and well-controlled human clinical trials in accordance with current Good Clinical Practices (“cGCPs”) requirements to establish the safety, purity, and potency (i.e., efficacy) of the proposed biologic for its intended use; |
| ● | submission to the FDA of a BLA after completion of all clinical trials; |
| ● | satisfactory outcome of an FDA advisory committee review, if applicable; |
| ● | satisfactory completion of an FDA inspection of the manufacturing facility or facilities at which the biologic is produced to assess compliance with cGMP requirements to assure that the facilities, methods and controls are adequate to preserve the biologic’s identity, strength, quality and purity, and FDA inspection of selected clinical investigation sites to assess compliance with cGCPs; and |
| ● | FDA review and approval of the BLA to permit commercial marketing of the product for particular indications for use in the United States. |
The specific preclinical studies and clinical testing that is required for a BLA varies widely depending upon the specific type of product candidate under development. Prior to beginning a human clinical trial with either a biologic or drug product candidate in the United States, we must submit an IND to the FDA and that IND must become effective. The focus of an IND submission is the general investigational plan and protocol for the proposed clinical study. The IND also includes results of animal and in vitro studies assessing the toxicology, pharmacokinetics, pharmacology, and pharmacodynamic characteristics of the product; Chemistry Manufacturing and Controls (“CMC”) information; and any available human data or literature to support the use of the investigational product. An IND must become effective before human clinical trials may begin. The IND automatically becomes effective 30 days after receipt by the FDA, unless the FDA, within the 30-day time period, raises safety concerns or questions about the proposed clinical trial. In such a case, the IND may be placed on clinical hold, and the IND sponsor and the FDA must resolve any outstanding concerns or questions before the clinical hold is lifted and the clinical trial can begin. Submission of an IND therefore may or may not result in FDA authorization to begin a clinical trial.
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Clinical trials involve the administration of the investigational product to human subjects under the supervision of qualified investigators in accordance with cGCPs, which include the requirement that all research subjects provide their informed consent for their participation in any clinical trial. Clinical trials are conducted under protocols detailing, among other things, the objectives of the study, the parameters for monitoring safety and the effectiveness criteria to be evaluated. A separate submission to the existing IND must be made for each successive clinical trial conducted during product development. Other submissions to an IND include protocol amendments, information amendments, IND safety reports and annual reports. Furthermore, an independent IRB for each clinical trial site (or a commercial IRB that acts as the IRB at one or more of the clinical trial sites) must review and approve the protocol and informed consent form before the clinical trial may begin. The IRB also monitors the clinical trial until completed.
Regulatory authorities, the IRB or the sponsor may suspend a clinical trial at any time on various grounds, including a finding that the subjects are being exposed to an unacceptable health risk or that the trial is unlikely to meet its stated objectives. Some clinical trials also include oversight by an independent group of qualified experts organized by the clinical trial sponsor, known as a data safety monitoring board (“DSMB”). A DSMB authorizes whether or not a study may move forward at designated check points based on access to certain data from the trial. The DSMB may halt the clinical trial if it determines there is an unacceptable safety risk for subjects or on other grounds, such as no demonstration of efficacy. Related reporting requirements for the sponsor, clinical investigator, and/or IRB also include IND safety reports and updating clinical trial results in public registries (e.g., ClinicalTrials.gov).
Human clinical trials are typically conducted in three sequential phases that may overlap or be combined:
| ● | Phase 1: The product candidate is initially introduced into healthy human subjects. These clinical trials are designed to test the safety, dosage tolerance, absorption, metabolism, distribution, excretion, side effects, and, if possible, early evidence of effectiveness. In the case of some products for severe or life-threatening diseases when the product may be too inherently toxic to ethically administer it to healthy volunteers, the initial human testing is often conducted in individuals who have the targeted disease or condition instead of healthy subjects; |
| ● | Phase 2: The product candidate is administered to a limited population of individuals who have the specified disease or condition to continue to evaluate safety, as well as preliminary efficacy, optimal dosages and dosing schedule, possible adverse side effects and safety risks. Multiple Phase 2 clinical trials may be conducted to obtain information prior to beginning larger and more expensive Phase 3 (i.e., pivotal) clinical trials; and |
| ● | Phase 3: Generally, the largest in size, Phase 3 clinical trials are generally conducted at multiple geographically dispersed clinical trial sites. The product candidate is administered to an expanded population of individuals who have the specified disease or condition to further evaluate dosage, provide statistically significant evidence of clinical efficacy and gain additional safety data. These clinical trials are intended to establish the overall risk/benefit ratio of the investigational product and to provide an adequate basis for product approval. |
Concurrent with clinical trials, sponsors usually complete additional animal studies. Sponsors must also develop information about the chemical and physical characteristics of the biologic and finalize a process for manufacturing the product in commercial quantities in accordance with cGMP requirements. The manufacturing process must be capable of consistently producing quality batches of the product candidate, and, among other things, the manufacturer must develop methods for testing the identity, strength, quality, and purity of the final biologic. In addition, the sponsor must develop and test appropriate packaging, and must conduct stability studies to demonstrate that the product candidate does not undergo unacceptable deterioration over its shelf life. Before approval of a BLA, FDA evaluates the establishment by an on-site inspection to ensure the facilities and controls used for the manufacture, processing, packaging, and testing of the drug are adequate to ensure and preserve its identity, strength, quality, and purity.
During the development of a new biologic, sponsors are given opportunities to meet with the FDA. These meetings typically occur before the submission of an IND (i.e., pre-IND meeting), at the end of Phase 2 (i.e., EOP2 meeting), and before a BLA is submitted (i.e., pre-BLA meeting). Meetings at other times may be requested. These meetings provide an opportunity for the sponsor to share information about the data gathered to date, for the FDA to provide advice, and for the sponsor and the FDA to reach agreement on the next phase of development. Sponsors typically use EOP2 meetings to discuss Phase 2 clinical results and present plans for the pivotal Phase 3 clinical trials that they believe will support approval of the new biologic.
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U.S. Review and Approval Process for Biologic Drugs
Assuming successful completion of all required testing in accordance with the applicable statutory and regulatory requirements, the sponsor submits a BLA to the FDA. A BLA contains the results of product development, preclinical and other non-clinical studies and clinical trials, descriptions of the manufacturing process, analytical testing, proposed labeling and other relevant information. The submission of a BLA is subject to the payment of a substantial application fee under the Prescription Drug User Fee Amendments (“PDUFA”). PDUFA fees apply to both drugs and biologics. Sponsors may seek a waiver of these fees in certain limited circumstances, including a waiver of the application fee for the first BLA or NDA submitted by a small business. Product candidates with an Orphan Drug Designation (“ODD”) are not subject to the BLA application fee unless the product application also includes a non-orphan indication.
The FDA reviews a BLA to determine, among other things, whether a biologic is safe, pure, and potent (i.e., effective) for its intended use and whether its manufacturing is GMP-compliant to assure the product’s identity, strength, quality and purity. Under PDUFA, the FDA has a goal date of ten months from the date of “filing” to review and act on the submission. However, the time between submission and filing can add an additional two months as FDA conducts a preliminary review to ensure that the BLA is sufficiently complete to permit substantive review. Formal FDA review of the BLA does not begin until FDA has accepted it for filing. The FDA may refer an application in some cases to an advisory committee for its independent review. An advisory committee is a panel of independent experts, including clinicians and other scientific experts, that reviews, evaluates and provides a recommendation to FDA as to whether the application should be approved and under what conditions. The FDA is not bound by the recommendations of an advisory committee, but it considers such recommendations carefully when making decisions.
Before approving a BLA, the FDA will typically inspect the locations where the product is manufactured. The FDA will not approve an application unless it determines that the manufacturing processes and facilities are in compliance with cGMPs, and are adequate to assure consistent production of the product within required specifications. An important part of a BLA is a lot release protocol that the sponsor will use to test each lot of product made after BLA approval, as well as the FDA’s own test plan that will be used for confirmatory testing of each post-approval product lot that is made before it is released to the public. If the FDA determines that the data and information in the application, including about the manufacturing process or manufacturing facilities, are not acceptable, then the FDA will outline the deficiencies and often will request additional testing or information. Notwithstanding the submission of any requested additional information, the FDA ultimately may decide that the application does not satisfy the regulatory criteria for approval.
After the FDA evaluates a BLA, it will either issue an approval letter or a Complete Response Letter (“CRL”). The approval letter authorizes commercial marketing of the biologic with approved prescribing information for specific approved indications. On the other hand, a CRL indicates that the review cycle of the application is complete but the BLA cannot be approved in its present form. A CRL usually describes the specific deficiencies identified by the FDA and describes the actions the sponsor must take to correct those deficiencies. A sponsor that receives a CRL must resubmit the BLA after addressing the deficiencies or withdraw the application. Even if such additional data and information are submitted to address the deficiencies, the FDA may decide that the data and information in the resubmitted BLA do not satisfy the approval criteria.
Following marketing approval, a sponsor may need to fulfill certain post-marketing requirements (“PMRs”) or post-marketing commitments (“PMCs”). For example, post-approval trials, sometimes referred to as Phase 4 studies, may be conducted after initial marketing approval. These trials are used to gain additional experience from the treatment of patients for the intended therapeutic indication. The trials may be agreed upon prior to approval, or the FDA may require them if new safety issues emerge. Following approval, a sponsor may also need to conduct a pediatric study that was temporarily deferred during the initial product development process. Under the Pediatric Research Equity Act (“PREA”), a sponsor must conduct pediatric clinical trials for most new drugs or biologics, for a new active ingredient, new indication, new dosage form, new dosing regimen or new route of administration. The required assessment must evaluate the safety and effectiveness of the product for the claimed indications in all relevant pediatric subpopulations and support dosing and administration for each pediatric subpopulation for which the product is safe and effective. PREA studies must be included in the application unless the sponsor has received a deferral or waiver.
A risk evaluation and mitigation strategy (“REMS”) may also be an important component of a BLA approval that requires sponsor post-marketing regulatory efforts. A REMS is a safety strategy to manage a known or potential serious risk associated with a drug or biologic and to enable patients to have continued access to such medicines by managing their safe use. A REMS may include medication guides, physician communication plans, or elements to assure safe use (ETASU) such as restricted distribution methods, patient registries, and other risk minimization tools.
Once approved, the FDA may withdraw the product approval if compliance with PMRs, PMCs, or a REMS program is not maintained or if problems occur after the product reaches the marketplace. The FDA may also request that a product be recalled for an identified safety issue. In addition, new government requirements, including those resulting from new legislation, may be established, or the FDA’s policies may change, which could impact the timeline for regulatory approval or otherwise impact ongoing development programs.
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Regulations Applicable to Our Precision Manufacturing Operations
Our precision manufacturing operations serve customers in the aerospace, defense, and industrial sectors and are subject to a range of federal and state regulatory requirements.
International Traffic in Arms Regulations (ITAR)
Certain of our precision manufacturing operations are registered with the U.S. Department of State’s Directorate of Defense Trade Controls under the ITAR, 22 C.F.R. Parts 120–130. ITAR controls the export, temporary import, and brokering of defense articles, defense services, and related technical data listed on the United States Munitions List (“USML”). As an ITAR-registered entity, our applicable subsidiaries are authorized to manufacture defense articles and provide defense services, and are required to comply with all applicable ITAR requirements, including restrictions on the transfer of controlled technical data and defense articles to foreign persons, whether inside or outside the United States. ITAR registration must be renewed annually, and we are required to maintain records, implement security protocols, and ensure that all employees with access to ITAR-controlled information are U.S. persons as defined under the regulations. Failure to comply with ITAR requirements could result in civil penalties, criminal penalties, debarment from government contracting, loss of export privileges, and reputational harm.
Export Administration Regulations
In addition to ITAR, certain of the products and technical data produced by our precision manufacturing operations may be subject to the Export Administration Regulations (“EAR”), administered by the Bureau of Industry and Security within the U.S. Department of Commerce. The EAR controls the export, reexport, and transfer of dual-use items — goods, software, and technology that have both commercial and military or proliferation applications — that are listed on the Commerce Control List or that are subject to EAR jurisdiction. We are required to determine the applicable export classification of our products and technical data and to comply with all applicable licensing requirements, end-use restrictions, and screening obligations under the EAR. Violations of the EAR may result in civil and criminal penalties, denial of export privileges, and other sanctions.
AS9100 Quality Management System Certification
Certain of our precision manufacturing operations maintain certification under AS9100, the internationally recognized quality management system standard for the aerospace, defense, and space industries, published by the Society of Automotive Engineers International. AS9100 incorporates the requirements of ISO 9001 and adds additional requirements specific to the aerospace and defense industries, including requirements related to configuration management, risk management, product safety, counterfeit parts prevention, and first article inspection. AS9100 certification is required or strongly preferred by many aerospace and defense prime contractors and government agencies as a condition to qualifying as an approved supplier. Our certified facilities are subject to periodic surveillance audits and recertification audits conducted by accredited third-party certification bodies, and must maintain ongoing compliance with the standard’s requirements to retain certification. Loss of AS9100 certification could result in the loss of existing customer qualifications, disqualification from bidding on new contracts, and reputational harm.
Occupational Safety and Health Regulations
Our precision manufacturing operations are subject to federal and state occupational safety and health laws and regulations, including those administered by the Occupational Safety and Health Administration (“OSHA”) under the Occupational Safety and Health Act of 1970. These regulations establish requirements for workplace safety, including standards related to machine guarding, hazard communication, personal protective equipment, lockout/tagout procedures, noise exposure, and other hazards associated with CNC machining and metalworking operations. Our operations in California are also subject to California Occupational Safety and Health Administration regulations, which in certain respects impose requirements that are more stringent than federal OSHA standards. Failure to comply with applicable occupational safety and health requirements could result in citations, fines, work stoppages, employee injury claims, and increased workers’ compensation costs.
Environmental Regulations
Our precision manufacturing operations involve the use, storage, handling, and disposal of materials that may be subject to federal, state, and local environmental laws and regulations, including the Resource Conservation and Recovery Act (“RCRA”), the Clean Air Act, the Clean Water Act, the Toxic Substances Control Act, and their state-law equivalents. The machining of metals, including specialty and exotic alloys, involves the use of cutting fluids, coolants, lubricants, and other substances that may constitute hazardous materials or generate hazardous waste. We are required to comply with applicable requirements for the storage, handling, labeling, transportation, and disposal of such materials. Failure to comply with applicable environmental laws and regulations could result in fines, penalties, remediation costs, and restrictions on operations.
Government Contracting Regulations
To the extent our precision manufacturing operations provide products or services directly or indirectly to the U.S. government, such operations may be subject to federal government contracting regulations, including the Federal Acquisition Regulation and the Defense Federal Acquisition Regulation Supplement. These regulations impose requirements relating to cost accounting, pricing, procurement integrity, subcontracting, and compliance with socioeconomic policies. Non-compliance with government contracting regulations could result in contract termination, suspension or debarment from future government contracts, civil and criminal penalties, and reputational harm.
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Regulations Applicable to Our Specialty Packaging Operations
Our specialty packaging operations provide custom-engineered protective packaging solutions for electronic and IT hardware components and are subject to a range of federal, state, and local regulatory requirements.
Electrostatic Discharge (ESD) Protection Standards
Our packaging solutions are engineered to comply with industry standards for electrostatic discharge protection, including standards published by the ESD Association, such as ANSI/ESD S20.20 and ANSI/ESD S541. These standards establish requirements for the handling, packaging, and transportation of ESD-sensitive electronic components. While compliance with ESD standards is generally voluntary, many of our customers in the semiconductor, data center, and networking equipment supply chains require their suppliers to demonstrate compliance with applicable ESD standards as a condition of doing business. Failure to meet customer-required ESD standards could result in product returns, customer claims, loss of business, and reputational harm.
Occupational Safety and Health Regulations
Our specialty packaging operations are subject to federal and state occupational safety and health laws and regulations, including those administered by OSHA and, for operations located in California, Cal/OSHA. These regulations establish requirements for workplace safety applicable to our manufacturing and warehouse operations, including standards related to material handling, hazard communication, personal protective equipment, and ergonomic safety. Failure to comply with applicable occupational safety and health requirements could result in citations, fines, work stoppages, and employee injury claims.
Environmental Regulations
Our specialty packaging manufacturing operations may involve the use of materials and processes that are subject to federal, state, and local environmental laws and regulations, including requirements related to air emissions, waste disposal, and the handling and storage of chemicals used in the packaging manufacturing process. We are required to comply with applicable environmental regulations, including those administered under the Clean Air Act, the Clean Water Act, RCRA, and their state-law equivalents. Failure to comply with applicable environmental laws and regulations could result in fines, penalties, and remediation costs.
California Proposition 65
Our operations and products may be subject to the requirements of California’s Safe Drinking Water and Toxic Enforcement Act of 1986, commonly known as Proposition 65. Proposition 65 requires businesses operating in California to provide warnings to consumers when their products contain chemicals known to the State of California to cause cancer, birth defects, or other reproductive harm. The list of chemicals subject to Proposition 65 is maintained and periodically updated by the California Office of Environmental Health Hazard Assessment (“OEHHA”). Non-compliance with Proposition 65 can result in significant civil penalties and private enforcement actions.
Packaging and Labeling Regulations
Our packaging products may be subject to federal and state packaging and labeling requirements, including requirements imposed by the Federal Trade Commission and state consumer protection agencies. To the extent we make environmental claims about our packaging products (e.g., recyclability, sustainability), such claims are subject to the Federal Trade Commission (“FTC”)’s Guides for the Use of Environmental Marketing Claims and analogous state regulations. We are also required to comply with any applicable product marking, labeling, or material disclosure requirements imposed by our customers or required by industry standards.
Trade and Customs Regulations
To the extent our specialty packaging operations source materials or components from international suppliers or ship products internationally, such operations may be subject to U.S. customs laws and regulations administered by U.S. Customs and Border Protection, including requirements related to import classification, valuation, country of origin marking, and applicable tariffs and duties. Changes in U.S. trade policy, including the imposition or escalation of tariffs on imported materials, could increase our cost of goods and adversely affect our margins and competitive position.
General Regulatory Matters Applicable to All Subsidiaries
In addition to the industry-specific regulations described above, all of the Company’s subsidiaries are subject to a broad range of federal, state, and local laws and regulations of general applicability, including laws and regulations relating to employment and labor (including wage and hour, anti-discrimination, and workplace accommodation requirements), employee benefits, data privacy and security, tax, anti-corruption, anti-money laundering, and securities laws. Our operations in California subject us to California-specific regulatory requirements that may, in certain respects, be more stringent than federal requirements, including those related to employment, environmental protection, and consumer protection. As we grow and expand our operations, including through acquisitions, we may become subject to additional regulatory requirements in new jurisdictions. Compliance with existing and evolving regulatory requirements may increase our costs, require changes to our business practices, and divert management resources.
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Item 1A. Risk Factors.
An investment in our securities involves a high degree of risk. You should carefully consider the risks and uncertainties described below, together with all of the other information contained in this Annual Report, including our consolidated financial statements and the related notes thereto, before deciding to invest in our securities. The risks and uncertainties described below are not the only ones we face. Additional risks and uncertainties that we are unaware of, or that we currently believe are not material, may also become important factors that adversely affect our business. If any of the following risks actually occur, our business, financial condition, results of operations and prospects could be materially and adversely affected. In that event, the market price of our Common Stock could decline, and you could lose part or all of your investment.
RISKS RELATED TO OUR FINANCIAL CONDITION AND CAPITAL STRUCTURE
Our financial statements have been prepared on a going-concern basis and our continued operations are in doubt.
The uncertainty about our ability to continue in operation is based on our continuing losses from operation, limited revenue and limited working capital, among other things which existed as of year-end December 31, 2025 and December 31, 2025. As of December 31, 2025 and December 31, 2024, the Company had net working capital of $2,928,959 and $4,251,867, respectively, and has an accumulated deficit of $21,017,440 and $13,269,627, respectively. Included in the accumulated deficit are net losses of $7,747,813 for the year ended December 31, 2025 and $6,245,737 for the year ended December 31, 2024. Given all of these facts, we are dependent on obtaining funding from operations and the sale of debt or equity to continue as a going concern. The financial statements do not include any adjustments relating to the recoverability of assets and classification of liabilities that might be necessary should we be unable to continue as a going concern.
Our ability to continue as a going concern depends on the success of any future offering and receipt of additional funds through debt or equity financing and our operations. In the event we are unable to obtain such funding, we may have to delay, reduce or eliminate certain of our planned operations, including some of our research and development and/or clinical validation studies to demonstrate aesthetic improvement, reduce overall overhead expense, or divest assets. This in turn may have an adverse effect on our ability to realize the value of our assets. If we are unable to continue as a going concern, you may lose all or part of your investment.
We have a history of net losses, and we may not be able to achieve or maintain profitability in the future.
We have incurred net losses each year since our inception, and we may not be able to achieve or maintain profitability in the future. We incurred net losses of $7,747,813 and $6,245,737 for the years ended December 31, 2025 and 2024, respectively. Our expenses will likely increase in the future and may be more costly than we expect and may not result in increased revenue or growth in our business. These offerings may require significant capital investments and recurring costs, maintenance, depreciation, asset life and asset replacement costs, and if we are not able to maintain sufficient levels of utilization of such assets or such offerings are otherwise not successful, our investments may not generate sufficient returns and our financial condition may be adversely affected. Any failure to increase our revenue sufficiently to keep pace with our investments and other expenses could prevent us from achieving or maintaining profitability or positive cash flow on a consistent basis. If we are unable to successfully address these risks and challenges as we encounter them, our business, financial condition, results of operations and prospects could be adversely affected. If we are unable to generate adequate revenue growth and manage our expenses, we may continue to incur significant losses in the future and may not be able to achieve or maintain profitability.
Our operating cash consumption significantly exceeds our revenue, and we may not be able to fund our operations without continued access to the capital markets.
Our current level of operating cash consumption materially exceeds our revenue and is not sustainable without continued infusions of external capital. If we are unable to substantially increase revenue from our operating subsidiaries, achieve returns on capital through PMGC Capital, or continue to access debt and equity financing, we may be unable to fund our operations. There can be no assurance that we will be able to reduce our operating cash burn to a level that can be sustained by our operating revenue within any particular timeframe, if at all.
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We will need additional capital to conduct our operations and develop our products and businesses, and our ability to obtain the necessary funding is uncertain.
We have used, and expect to continue to use, a significant amount of cash to finance our operations, and we need to obtain significant additional capital resources in order to develop our businesses and products going forward. We may not be successful in maintaining our normal operating cash flow and the timing of our capital expenditures may not result in cash flows sufficient to sustain our operations through the next twelve months. If financing is not sufficient and additional financing is not available or available only on terms that are detrimental to our long-term survival, it could have a major adverse effect on our ability to pursue our business strategy, clinical research and product development programs, and could ultimately affect our ability to continue to function. The timing and degree of any future capital requirements and our ability to meet such capital requirements in a timely manner, on favorable terms or at all will depend on many factors, including:
| ● | the accuracy of the assumptions underlying our estimates for capital needs; | |
| ● | the success and growth of our acquired operating subsidiaries; | |
| ● | scientific progress in our research and development programs at Northstrive Biosciences; | |
| ● | the magnitude and scope of our acquisition strategy and our ability to identify, negotiate, finance and integrate target companies; | |
| ● | the costs involved in preparing, filing, prosecuting, maintaining, defending and enforcing patent claims; | |
| ● | the performance of PMGC Capital’s investment portfolio; | |
| ● | the number and type of pipeline products that we pursue; and | |
| ● | the development of major widespread events, including the possibility of a recession in the U.S. and globally, market volatility, geopolitical conflict, tariffs, trade restrictions and other events which could impact us and third parties on which we depend. |
Additional financing through strategic collaborations, public or private equity or debt financings or other financing sources may not be available on acceptable terms, or at all. Additional equity financing could result in significant dilution to our stockholders, and any debt financings will likely involve covenants restricting our business activities. Further, if we obtain additional funds through arrangements with collaborative partners, these arrangements may require us to relinquish rights to some of our technologies, products or pipeline assets that we might otherwise seek to develop and commercialize on our own. If sufficient capital is not available, we may be required to delay, reduce the scope of or eliminate one or more of our business initiatives, research or product development programs, or planned acquisitions, any of which could have a material adverse effect on our financial condition or business prospects.
Our existing equity purchase facility may result in substantial dilution to our existing stockholders and may place downward pressure on the price of our Common Stock.
We have entered into an equity purchase facility with Streeterville Capital, LLC (“Streeterville”), as disclosed in previous SEC filings, pursuant to which we may consummate one or more secured pre-paid purchases of our Common Stock, and we have consummated multiple pre-paid purchases thereunder. Under these arrangements, the outstanding principal and accrued interest is convertible at the option of the investor at a price that reflects a discount to the volume-weighted average price of our Common Stock during a specified look-back period, subject to a floor price. We have issued, and expect to continue to issue, significant numbers of shares of Common Stock in settlement of amounts outstanding under these arrangements.
The conversion mechanics for the pre-paid purchases under the equity purchase facility, which allow conversion at a discount to market price, may create significant downward pressure on the trading price of our Common Stock. As the stock price declines, additional shares may be required to settle the same dollar amount of debt, potentially creating a cycle of increasing dilution and declining stock price. These dynamics could materially and adversely affect the market price of our Common Stock, the ability of existing stockholders to sell their shares at favorable prices, and our ability to raise additional capital on acceptable terms. The settlement and potential conversion of outstanding and future instruments under the equity line of credit into shares of Common Stock will result in further dilution to our existing stockholders, and the magnitude of such dilution will depend on market conditions at the time of conversion.
Our equity interests in our key subsidiaries and the assets of those subsidiaries are pledged as collateral under our equity purchase facility with Streeterville, and a default on our obligations pursuant to such facility could result in the loss of our operating businesses.
In connection with our equity purchase facility with Streeterville, we entered into a Security Agreement and a Pledge Agreement, pursuant to which we pledged, as collateral, (i) 100% of the equity interests (membership interests and stock, respectively) in our wholly-owned subsidiaries, AGA Precision Systems and Pacific Sun Packaging, and (ii) substantially all of the assets of these subsidiaries. Streeterville holds a first-position security interest in this collateral (subordinate only to certain permitted liens). If we default on our obligations under such agreements, Streeterville is entitled to seize the pledged equity interests or the assets of the subsidiaries. This may result in the loss of one or more of our primary operating businesses, which would have a material adverse effect on our financial condition and ability to continue operations.
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We have conducted multiple reverse stock splits in a short period of time, which may adversely affect the market price of our Common Stock and investor confidence.
Since November 2024, we have completed multiple reverse stock splits of our Common Stock. Reverse stock splits may be viewed negatively by investors and analysts as an indication of financial difficulty or poor stock performance. There can be no assurance that the market price of our Common Stock following any reverse stock split will remain at a level proportional to the prices prior to the reverse stock split. The repeated use of reverse stock splits may diminish investor confidence, reduce trading liquidity, and adversely affect our ability to attract and retain investors. If we are unable to maintain compliance with the Nasdaq listing requirements, including the minimum bid price rule, we may be required to undertake further reverse stock splits in the future, which could result in additional negative market perception and further dilution on a per-share basis for investors who acquired shares prior to such splits.
If we fail to generate sufficient cash flow from our operations, we will be unable to continue to develop and commercialize our products and grow our businesses.
We expect capital outlays and operating expenditures to increase over the next several years as we expand our operations, pursue acquisitions, and conduct research and development and manufacturing activities. However, our present and future funding requirements will depend on many factors, including, among other things:
| ● | the level of research and development investment required to maintain and improve our competitive position; | |
| ● | the success of product sales and service revenue at our operating subsidiaries and related collections; | |
| ● | the returns on capital deployed by PMGC Capital; | |
| ● | our need or decision to acquire or license complementary businesses, products or technologies; | |
| ● | costs relating to the expansion of our workforce, management and operational support across multiple subsidiaries; | |
| ● | competing technological and market developments; and | |
| ● | costs relating to changes in regulatory policies or laws that affect our operations. |
As a result of these factors, we may need to raise additional funds, and we cannot be certain that such funds will be available to us on acceptable terms when needed, if at all. If we cannot raise funds on acceptable terms, we may not be able to expand our operations, develop new products, take advantage of future opportunities or respond to competitive pressures or unanticipated business requirements.
We may need, but be unable, to obtain additional funding on satisfactory terms, which could dilute our stockholders or impose burdensome financial restrictions on our business.
We have relied upon cash from financing activities. In the future, we hope to rely on revenues generated from operations to fund the cash requirements of our activities. However, there can be no assurance that we will be able to generate any significant cash from our operating activities in the future. Future financing may not be available on a timely basis, in sufficient amounts or on terms acceptable to us, if at all. Any debt financing or other financing of securities senior to the Common Stock will likely include financial and other covenants that will restrict our flexibility. Any failure to comply with these covenants would have a material adverse effect on our business, prospects, financial condition and results of operations because we could lose our existing sources of funding and impair our ability to secure new sources of funding.
We may be unable to realize the expected value from the divestiture of our Elevai Skincare business, including earn-out payments.
In connection with the divestiture of our Elevai Skincare business, the purchase consideration included potential earn-out payments contingent upon the buyer achieving certain revenue milestones over specified periods following the closing. There can be no assurance that the buyer will achieve these milestones or that we will receive any earn-out payments. If the buyer’s business underperforms, experiences operational difficulties, or ceases operations, we may receive little or no additional consideration beyond the amounts received at closing. Additionally, shares of the buyer’s common stock received as consideration may have limited liquidity and their value may decline.
Changes in tax laws or regulations could adversely affect our business and financial results.
We are subject to U.S. federal, state and local tax laws, which are complex and subject to change. Changes in tax laws, regulations, or interpretations thereof, including changes resulting from new legislation, could increase our tax obligations, reduce the value of our deferred tax assets, or otherwise adversely affect our financial condition and results of operations. In addition, tax authorities may disagree with our tax positions or the manner in which we allocate income and deductions among our subsidiaries, which could result in additional tax liabilities, interest and penalties.
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RISKS RELATED TO OUR HOLDING COMPANY STRUCTURE AND ACQUISITION STRATEGY
Our diversified holding company structure may make our business more complex and difficult to manage.
We operate as a diversified holding company with subsidiaries across multiple industries, including biotechnology, precision manufacturing, specialty packaging, and investment activities. This structure increases the complexity of our operations, financial reporting, internal controls, and management oversight. Each of our subsidiaries operates in distinct markets with unique regulatory requirements, competitive dynamics, and capital needs.
Managing multiple disparate businesses requires broad management expertise, robust financial and operational reporting systems, and the ability to allocate capital and personnel effectively across unrelated industries. Our management team is small, and the breadth of our operations may strain our resources. If we are unable to effectively manage this complexity, our business, financial condition, and results of operations could be adversely affected.
Our results depend on our ability to allocate capital effectively across our subsidiaries and investments.
Our business model relies on deploying capital across multiple subsidiaries and investment opportunities. Our ability to generate returns depends on management’s judgment in allocating capital among competing opportunities, including acquisitions, internal investments, strategic initiatives, and investments through PMGC Capital.
There can be no assurance that our capital allocation decisions will achieve desired returns. Capital deployed into underperforming subsidiaries or unsuccessful investments represents an opportunity cost and may result in impairment charges. Misallocation of capital could materially adversely affect our financial condition and long-term shareholder value.
We may not realize anticipated benefits from operating as a platform of multiple businesses.
We may not achieve expected operational, strategic, or financial benefits from managing multiple subsidiaries under a single corporate structure. Our subsidiaries may operate independently with limited synergies, and the costs associated with maintaining a diversified platform—including corporate overhead, compliance costs, management attention and reporting requirements—may outweigh the benefits. If the anticipated advantages of our holding company structure do not materialize, our financial condition and results of operations could be adversely affected.
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Our growth strategy depends on acquisitions, which involve significant risks and uncertainties.
A core element of our business strategy is to grow through the acquisition of operating companies and assets. We have completed multiple acquisitions and intend to continue pursuing additional acquisitions. These transactions involve numerous risks, including:
| ● | difficulties in identifying suitable targets at reasonable valuations; | |
| ● | failure to accurately assess the value, prospects, strengths and weaknesses of acquisition candidates; | |
| ● | inability to negotiate favorable terms or obtain financing for acquisitions; | |
| ● | failure to complete transactions after expending significant time and resources on due diligence; | |
| ● | difficulties in integrating acquired businesses, operations, technologies, systems and personnel; | |
| ● | assumption of unknown or undisclosed liabilities, including potential legal, regulatory, tax, environmental or contractual obligations; | |
| ● | disruption to our existing business and diversion of management attention; | |
| ● | loss of key employees, customers or suppliers of acquired businesses; | |
| ● | potential impairment of acquired goodwill and intangible assets; | |
| ● | dilution to existing stockholders from equity issued as acquisition consideration or to finance acquisitions; and | |
| ● | increased debt and associated covenants and restrictions. |
Acquired businesses may not perform as expected and may require significantly more capital than anticipated. Failure to successfully identify, execute, finance or integrate acquisitions could materially adversely affect our business, financial condition, and results of operations.
Potential business combinations could require significant management attention, prove difficult to integrate, and adversely affect our operating results.
Business combinations generally involve a number of additional difficulties and risks to our business, including failure to integrate management information systems, personnel, research and development and marketing, operations, sales and support; disruption of our ongoing business and diversion of management’s attention from other business matters; potential loss of the acquired company’s customers; failure to further develop or integrate the acquired company’s products or technology successfully; unanticipated costs and liabilities; and other accounting consequences.
In addition, we may not realize benefits from any business combination we may undertake in the future. If we fail to successfully integrate such businesses, or the products and technologies associated with such business combinations into our Company, the revenue and operating results of the combined company could be adversely affected. Any integration process would require significant time and resources, and we may not be able to manage the process successfully. We may not successfully evaluate, integrate or utilize the acquired technology and product lines or accurately forecast the financial impact of a combination.
The purchase price allocations for our acquisitions may be preliminary and subject to adjustment, which could materially affect our reported financial results.
In connection with our acquisitions, the initial purchase price allocations may be preliminary and subject to adjustment as we finalize our valuations of identifiable assets acquired and liabilities assumed. Adjustments to preliminary purchase price allocations during the measurement period could result in changes to the carrying values of acquired assets and liabilities, including goodwill, intangible assets, property and equipment, and deferred tax liabilities. Such adjustments could materially affect our consolidated balance sheet, results of operations and financial condition in future periods.
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We have recorded goodwill on our consolidated balance sheet that may be subject to impairment, which could adversely affect our financial results.
We have recorded goodwill arising from our acquisitions. Goodwill is not amortized but is subject to annual impairment testing, or more frequently if events or changes in circumstances indicate that the carrying value may not be recoverable. Factors that could trigger an impairment review include, among others, a significant decline in expected future cash flows of an acquired business, deterioration of market conditions, loss of key customers, underperformance relative to projected financial results, and a sustained decline in the market price of our Common Stock. If any of our reporting units fail to achieve projected results or if market conditions deteriorate, we may be required to record a non-cash goodwill impairment charge, which could have a material adverse effect on our reported financial results and the market price of our Common Stock.
Earn-out and contingent consideration arrangements may result in disputes or financial obligations that adversely affect our results.
Certain of our acquisition agreements include earn-out or contingent consideration provisions that are payable based on the achievement of specified financial milestones by the acquired businesses. If acquired businesses achieve the applicable performance thresholds, we will be required to make additional payments that will increase the overall cost of the acquisitions and reduce our available cash. Conversely, disagreements with sellers regarding the measurement or achievement of earn-out targets could result in disputes, litigation or strained relationships with key personnel who remain involved in the acquired businesses. Changes in fair value of contingent consideration are recognized in earnings and may cause volatility in our reported results of operations.
We depend on the founders and key employees of our acquired businesses, and their departure could adversely affect the performance of those businesses.
Our recently acquired subsidiaries have historically been operated by their founders and small teams with deep customer relationships, specialized technical knowledge and institutional know-how. The success of these businesses following acquisition depends in significant part on our ability to retain and motivate these individuals during the transition period and beyond. If the former owners or other key employees of our acquired businesses depart or become disengaged, we may experience disruptions to operations, loss of customer relationships, loss of critical technical expertise, and a decline in the performance of these businesses, any of which could materially adversely affect our revenue and results of operations.
RISKS RELATED TO OUR OPERATING SUBSIDIARIES
Risks Related to Northstrive Biosciences Inc. (Biotechnology)
Our biotechnology subsidiary, Northstrive Biosciences, is at an early stage of product development, and we may not develop products that can be successfully commercialized.
Northstrive Biosciences is at an early stage of product development. As of the date of this Annual Report, we have not commercialized any therapeutic products. Our lead asset, EL-22, has completed a Phase 1 clinical trial in South Korea but has not yet been tested in human subjects in the United States. Our second asset, EL-32, is in the preclinical stage. A key element of our growth strategy depends on our ability to develop and advance these product candidates through clinical trials, obtain regulatory approvals, and ultimately commercialize products, which may take many years and may never occur. We may not be able to successfully commercialize or synthesize any of our product candidates at a scale that is profitable. Our product candidates may prove to have undesirable and unintended side effects or other characteristics adversely affecting their safety, efficacy or cost effectiveness that could prevent or limit their use.
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Because our future commercial success with respect to our Licensed Products (as defined below) depends on gaining regulatory approval, we cannot generate therapeutic revenue without obtaining such approvals.
Our long-term success and generation of revenue with respect to the Licensed Products will depend upon the successful development of these product candidates from our research and development activities. Product development is very expensive and involves a high degree of risk. Only a small number of research and development programs result in the commercialization of a product. The process for obtaining regulatory approval to market product candidates is expensive, usually takes many years, and can vary substantially based on the type, complexity, and novelty of the product candidates involved. Our ability to generate revenue from the Licensed Products would be adversely affected if we are delayed or unable to successfully develop our products.
We cannot guarantee that any marketing application for our product candidates will be approved. If we do not obtain regulatory approval of our products or we are significantly delayed or limited in doing so, we cannot generate therapeutic revenue, and we may need to significantly curtail operations related to Northstrive Biosciences.
(“Field” means (a) all prophylactic and therapeutic uses in humans, including but not limited to the prevention and treatment of muscular (including, but not limited to, Duchenne muscular dystrophy and sarcopenia), obesity, metabolic, renal, cardiovascular, psychological, psychiatric, neurologic, and endocrine conditions in humans; and (b) all uses in animal health, including all applications as a feed additive.
“Licensed Products” means any therapeutic product or course of treatment, in the Field comprising one or more Compound(s) including any Improvement(s) thereto. Capitalized terms in this definition not defined herein have the meanings set forth in the License Agreement between the Company and MOA Life Plus Co., Ltd (“MOA”) dated April 30, 2024, as amended, and as assigned to Northstrive Biosciences on February 28, 2025).
The development and acquisition of therapeutic product candidates could expose us to significant legal and regulatory risks.
Our acquisition and development of innovative therapeutic product candidates, specifically with our lead asset, EL-22, could expose us to significant legal and regulatory risks. The development and commercialization of therapeutic product candidates, including EL-22, are subject to extensive regulation by the FDA and other regulatory authorities. The regulations govern all aspects of product development, including pre-clinical studies, clinical trials, manufacturing and marketing. Any failure to comply with the regulations might result in significant delays in product development, approval and commercialization or suspension or termination of clinical trials. Any non-compliance could lead to enforcement actions, including warning letters, fines, injunctions and withdrawal of marketing approvals.
The ability to proceed with human clinical trials for our product candidates is contingent upon receiving FDA clearance of our eventual IND submission. If the FDA requires us to provide extensive additional data to demonstrate safety and efficacy, including without limitation generating additional preclinical data, conducting further toxicology or pharmacology studies or addressing unforeseen issues, we may face significant delays or be unable to proceed as planned. In addition, as one of the first companies pursuing an oral myostatin formulation combined with GLP-1 receptor agonists, we may encounter heightened regulatory scrutiny. Regulators may impose unexpected conditions, mandate more extensive trials or request additional safety and efficacy data, all of which could increase our costs and delay timelines.
If we are unable to successfully complete preclinical testing and clinical trials of the Licensed Products or experience significant delays in doing so, our business will be materially harmed.
We expect to invest material efforts and financial resources in the development of the Licensed Products. Our ability to generate product revenues from our therapeutic candidates, which we do not expect will occur for many years, if ever, will depend heavily on the successful development and eventual commercialization of the Licensed Products.
The commercial success of the Licensed Products will depend on several factors, including successful completion of preclinical studies and clinical trials; receipt of marketing and pricing approvals from regulatory authorities; obtaining and maintaining patent and trade secret protection for the Licensed Products; establishing and maintaining manufacturing relationships with third parties or establishing our own manufacturing capability; and commercializing our products, if and when approved, whether alone or in collaboration with others.
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If we do not achieve one or more of these factors in a timely manner or at all, we could experience significant delays or an inability to successfully complete development of, or to successfully commercialize, the Licensed Products, which would materially harm our business. Most pharmaceutical products that do overcome the long odds of drug development and achieve commercialization still do not recoup their cost of capital.
The Licensed Products may cause adverse effects or have other properties that could delay or prevent their regulatory approval or limit the scope of any approved label or market acceptance.
Adverse events or serious adverse events that may be observed during clinical trials of the Licensed Products could cause us, other reviewing entities, clinical trial sites or regulatory authorities to interrupt, delay or halt such trials and could cause denial of regulatory approval. Serious or unexpected side effects caused by an approved product could result in significant negative consequences, including regulatory withdrawal of approval, mandatory labelling changes, additional clinical trials, removal from the marketplace, patient litigation, and reputational damage. These events could prevent us or our partners from achieving or maintaining market acceptance of the affected product and could substantially increase the costs of commercializing the Licensed Products.
We license from a third party the rights to our therapeutic product candidates and are therefore subject to the risk that we lose this license after investing substantial resources.
Under the License Agreement with MOA, MOA granted Northstrive Biosciences an exclusive license to commercialize under certain of MOA’s patent rights concerning two Licensed Products: (i) a clinical stage engineered probiotic expressing myostatin (EL-22) and (ii) a preclinical engineered probiotic expressing dual myostatin & activin-A antigens (EL-32). If MOA terminates the License Agreement under the terms thereunder, including, amongst other things, if we breach our obligations under the License Agreement, or the license expires before we can successfully commercialize a product candidate, our investment in research, development, and commercialization efforts for such product candidate(s) would be lost. Additionally, if we or MOA fail to adequately protect the related intellectual property rights relating to the Licensed Products, we may not realize the perceived or potential benefits of the License Agreement.
Our products under development could be rendered obsolete by technological or other medical advances.
Our products under development may be rendered obsolete or uneconomical by our competitors’ products or technological advances or those advances within other markets that may better or more inexpensively address the conditions that our products are designed to address. Biotechnology is rapidly developing and could undergo significant change in the future. Several key companies are actively developing GLP-1 drugs for obesity and complementary treatments to address associated conditions such as muscle wasting, and research and discoveries by other bioengineering, pharmaceutical or other companies may render our technologies or potential products uneconomical or result in products superior to those we develop.
Since we rely on third parties to conduct, supervise and monitor pre-clinical and clinical trials, their failure to perform satisfactorily may materially harm our business.
We rely on contract research organizations (“CROs”) and other third parties to ensure the proper and timely conduct of our pre-clinical and clinical trials for the Licensed Products. While we have agreements governing the activities of such CROs and other third parties, we cannot guarantee the actual performance of these CROs and third parties. Nevertheless, we will be responsible for ensuring that each of our clinical trials is conducted in accordance with its protocol, and that all legal, regulatory and scientific standards are met. Our reliance on CROs and other third parties does not relieve us of our regulatory responsibilities.
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If we or our CROs fail to comply with cGCPs, which are the ethical, scientific, and quality standards established by the FDA and the International Council for Harmonisation of Technical Requirements for Pharmaceuticals for Human Use for the design, conduct, performance, monitoring, auditing, recording, analysis, and reporting of clinical trials, the clinical data generated in our clinical trials may be deemed unreliable and the FDA or other regulators may require us to perform additional clinical trials before approving any marketing applications. If our CROs do not successfully carry out their contractual duties or obligations, fail to meet expected deadlines, or if the quality or accuracy of the clinical data they obtain is compromised, our clinical trials may be extended, delayed or terminated, and we may not obtain regulatory approval for our product candidates.
Because third parties may be developing competitive products without our knowledge, we may later learn that competitive products are superior to the Licensed Products.
We face potential competition from companies that may be developing competitive products that are superior to one or more of the Licensed Products. If in the future we learn of the existence of one or more competitive products, we may be required to cease our development efforts for a product candidate, cause a partner to terminate its support of a product candidate, or cause a potential partner to terminate discussions about a potential license. Any of these events may occur after we have expended substantial amounts in connection with the clinical research of one or more product candidates.
Our therapeutic products may be expensive to manufacture, and they may not be profitable if we are unable to control the costs to manufacture them.
Our therapeutic products may be significantly more expensive to manufacture than other products currently on the market. We hope to substantially reduce manufacturing costs through process improvements, development of new methods, increases in manufacturing scale and outsourcing to experienced manufacturers. If we are not able to make these improvements, our profit margins may be significantly less than those of competitive products. In addition, we may not be able to charge a high enough price for any product we develop, even if they are safe and effective, to make a profit. If we are unable to realize significant profits from our pipeline products, our business will be materially and adversely impacted.
Risks Related to Pacific Sun Packaging, Inc. (Specialty Packaging)
Pacific Sun Packaging operates in a competitive industry and may face pricing pressure from larger competitors.
The packaging industry is highly competitive and includes large multinational packaging companies as well as smaller specialized providers.
Pacific Sun Packaging competes primarily on the basis of specialization in component-level IT hardware packaging, custom engineering capabilities, and reputation for reliability. Larger competitors may have significantly greater financial, manufacturing, marketing and distribution resources. If competitors offer comparable products at lower prices or invest in technologies that render our packaging solutions less competitive, Pacific Sun’s revenue and margins could be adversely affected.
Pacific Sun Packaging’s revenue depends on the IT hardware industry, which is subject to cyclical and secular changes.
Pacific Sun Packaging designs and supplies custom-engineered protective packaging for IT hardware components, including CPUs, memory modules, SSDs, HDDs, and fiber-optic transceivers. Demand for Pacific Sun’s products is driven by activity levels in the semiconductor, data center, and networking equipment supply chains. These industries are subject to cyclical downturns, shifts in technology, and changes in end-market demand. A decline in IT hardware production, changes in component form factors that reduce the need for specialized packaging, or a shift to packaging solutions that do not require Pacific Sun’s products could materially and adversely affect Pacific Sun’s revenue and results of operations.
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Pacific Sun Packaging is dependent on a limited number of suppliers for raw materials and components.
A significant portion of Pacific Sun’s inventory purchases are concentrated among a limited number of key suppliers. Although we believe that alternative suppliers are available, a disruption in supply from one or more of these key suppliers, or a significant increase in the cost of raw materials, could adversely affect Pacific Sun’s ability to fulfill customer orders on a timely basis and at acceptable margins.
Risks Related to AGA Precision Systems LLC (Precision Manufacturing)
AGA Precision Systems operates in industries subject to stringent regulatory requirements, including International Traffic in Arms Regulations.
AGA Precision Systems operates in industries subject to export control laws and regulations, including the ITAR. AGA is ITAR-registered and maintains AS9100 certification, reflecting the stringent quality and regulatory requirements of its aerospace and defense customers. Compliance with these regulations is complex and costly. Any failure to comply could result in significant penalties, loss of export privileges, reputational harm, restrictions on our ability to conduct business with certain customers, including U.S. government and defense contractors, and potential debarment from government contracting. Changes in export control regulations, trade restrictions, tariffs, or international sanctions could also adversely affect AGA’s ability to conduct business and serve its customers.
Maintaining and renewing industry certifications, including AS9100, is critical to AGA’s ability to serve its customers.
AGA Precision Systems holds AS9100 certification, which is required or strongly preferred by many aerospace and defense customers. Loss of or failure to renew this certification, or failure to meet evolving certification standards, could result in the loss of existing customers, inability to bid on new contracts, and reputational damage. The certification process requires ongoing compliance with quality management standards, investment in systems and personnel, and periodic audits. There can be no assurance that AGA will maintain its certifications at all times, and any lapse could have a material adverse effect on AGA’s revenue and competitive position.
AGA Precision Systems has incurred, and may continue to incur, significant repair and maintenance costs, and the condition of its equipment may require ongoing capital investment.
Following the acquisitions of AGA Precision Systems and certain assets of Indarg Engineering, Inc., we incurred significant costs related to building maintenance, machine repair and recalibration of equipment. These costs were necessary to optimize operations and maintain the useful lives of acquired equipment. There can be no assurance that additional significant repair, maintenance or capital expenditure costs will not be required in the future. If the acquired equipment requires replacement or further significant investment, our results of operations and cash flows could be adversely affected.
AGA Precision Systems has historically operated without a formal sales and marketing function, which may limit its growth.
AGA Precision Systems has historically grown via referrals and repeat orders without a formalized sales or marketing department. While we believe there is opportunity to augment growth via more proactive business development, we cannot assure you that investments in sales and marketing efforts will result in meaningful revenue growth. If we are unable to expand AGA’s customer base beyond its existing network of relationships, AGA’s growth may be limited and its financial performance may be adversely impacted.
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Risks Related to All Operating Subsidiaries
Our operations across multiple industries expose us to diverse and potentially conflicting market risks.
We operate in multiple industries, including biotechnology, aerospace and defense manufacturing, specialty packaging, and financial investments. These industries are subject to different economic cycles, regulatory frameworks, and competitive pressures. Adverse developments in any one sector may not be offset by performance in other segments, and the diversification of our operations may not mitigate overall risk as expected. A downturn affecting one or more of our operating sectors could have a disproportionate impact on our consolidated results.
We may be subject to liability for workplace safety and employment-related claims across our operating subsidiaries.
Our manufacturing subsidiaries operate facilities that involve the use of heavy machinery, hazardous materials, and industrial processes that present inherent risks of workplace accidents and injuries. We are subject to federal, state and local occupational safety and health laws and regulations, including those administered by the Occupational Safety and Health Administration (“OSHA”). Failure to comply with these requirements could result in fines, penalties, work stoppages, or litigation. In addition, employment-related claims, including claims related to wages, benefits, discrimination, harassment, wrongful termination, or misclassification of employees or independent contractors, could result in significant legal costs and liabilities. We rely in part on employees seconded from entities controlled by our Chief Executive Officer and Chairman pursuant to the Company’s secondment agreements with each, and the classification and treatment of these individuals could be subject to challenge by regulatory authorities.
Our insurance coverage may be inadequate to protect us against all potential losses and liabilities.
We maintain insurance coverage that we believe is customary for businesses of our size and type; however, there can be no assurance that our insurance will be sufficient to cover all potential claims, liabilities or losses, including product liability, property damage, business interruption, cybersecurity incidents, environmental liabilities, and professional liability. Certain types of losses may be uninsurable or may only be insurable at prohibitive cost. If we incur losses or liabilities that exceed or are not covered by our insurance, our financial condition and results of operations could be materially adversely affected.
A portion of our revenue may be derived from a limited number of customers.
Certain of our subsidiaries may depend on a limited number of key customers or contracts. The loss of one or more significant customers, a reduction in orders, or unfavorable changes in the terms of business with these customers could materially adversely affect our revenue and operating results. Our recently acquired subsidiaries, Pacific Sun Packaging and AGA, are in the early stages of operating under PMGC’s ownership, and customer relationships established by prior owners may not transfer smoothly or be maintained over time.
Disruptions in supply chains or manufacturing operations could adversely affect our business.
Our manufacturing and packaging operations depend on the availability of raw materials, components, and third-party services. Disruptions in supply chains, including those caused by geopolitical events, inflation, tariffs, trade restrictions, natural disasters, pandemics, labor disputes, supplier insolvency or supplier concentration, could increase costs, delay production and impair our ability to fulfill customer orders. If we are unable to maintain adequate supply chain resilience across our operating subsidiaries, our revenue, margins and customer relationships could be adversely affected.
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A disruption in our operations could have an adverse effect on our business.
Our operations, including those of our subsidiaries, third-party suppliers and distribution partners, are subject to the risks inherent in manufacturing and distribution activities, including industrial accidents, environmental events, strikes and other labor disputes, disruptions in information systems, product quality control, safety and licensing requirements and other regulatory issues, as well as natural disasters, pandemics or other public health emergencies, acts of terrorism and other external factors beyond our control. The loss of, or damage to, any of our operating facilities or those of our key suppliers may have an adverse effect on our business, financial condition, results of operations and prospects.
To sustain our growth, we will need to increase the size of our organization, and we may encounter difficulties managing growth across multiple subsidiaries.
If we are able to successfully grow our operating subsidiaries and execute additional acquisitions, we may experience significant growth in the number of our employees and the scope of our operations across disparate industries. The resulting growth will place significant demands on our financial, managerial and operational resources. We may not be able to accurately forecast the number of employees required, the timing of their hire or the associated costs of expansion. Our success will depend on the ability of our executive officers and senior management to implement and improve operational, information management and financial control systems across multiple businesses and to expand, train and manage our employee base. Our inability to manage growth effectively may cause our operating costs to grow faster than anticipated and adversely affect our results of operations.
RISKS RELATED TO OUR INVESTMENT ACTIVITIES (PMGC CAPITAL)
PMGC Capital LLC may be deemed an “investment company” under the Investment Company Act of 1940, which could impose significant regulatory burdens.
PMGC Capital LLC is a multi-strategy investment firm engaged in investing, lending and pursuing diversified investment opportunities. If we are deemed to be an investment company under the Investment Company Act of 1940, as amended (the “1940 Act”), we would become subject to extensive regulation, which could impose significant compliance costs and operational restrictions. Under the 1940 Act, a company may be deemed to be an investment company if more than 40% of its total assets (exclusive of cash and U.S. government securities) consist of “investment securities.” We must ensure that we do not exceed this threshold. If we fail to maintain our exclusion from the 1940 Act, we could be required to register as an investment company, which would impose significant limitations on our capital structure, affiliate transactions and other aspects of our business, or we could be required to restructure our operations or divest certain assets. Any such outcome could materially adversely affect our business, financial condition, and operations.
PMGC Capital’s investment activities subject us to market risk, and we may incur losses on our investment portfolio.
Through PMGC Capital, we hold investments in publicly traded equity securities, private company stock, and convertible debentures. These investments are subject to market risk, including fluctuations in the market prices of publicly traded securities, credit risk associated with debt instruments, and liquidity risk associated with private company investments. We have in the past recognized, and may in the future recognize, realized and unrealized losses on our investment portfolio. There can be no assurance that our investments will appreciate in value or that we will not incur additional losses. Poor investment performance may adversely affect our financial results and our ability to fund operations.
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RISKS RELATED TO REGULATORY, LEGAL AND INTELLECTUAL PROPERTY MATTERS
We may become subject to litigation, regulatory proceedings, or governmental investigations that could be costly and time-consuming.
From time to time, we may be subject to legal proceedings, claims, disputes, regulatory inquiries, or governmental investigations arising in the ordinary course of business or otherwise. Such matters may include contract disputes, employment claims, intellectual property disputes, product liability claims, stockholder litigation, regulatory enforcement actions, or claims arising from our acquisitions or divestitures. Litigation and regulatory proceedings are inherently uncertain, and adverse outcomes could result in significant monetary damages, injunctive relief, penalties, or restrictions on our business activities. Even if we prevail, the costs of defending against such claims may be substantial and could divert management’s attention from our business operations.
We are subject to anti-corruption, anti-bribery, and similar laws, and non-compliance could expose us to significant penalties.
We are subject to the U.S. Foreign Corrupt Practices Act, and other anti-corruption and anti-bribery laws and regulations. As we expand our operations, pursue international business relationships, and engage third-party consultants, distributors and partners, our exposure to these laws increases. Any violation or alleged violation could result in significant criminal and civil penalties, sanctions, and reputational harm. Our policies and procedures designed to promote compliance with these laws may not be effective in preventing all violations by our employees, consultants, agents, or business partners.
Changes in U.S. trade policy, tariffs, and international relations could adversely affect our supply chain and cost structure.
Our manufacturing and packaging operations depend on materials and components that may be sourced domestically or internationally. Changes in U.S. trade policy, including the imposition or escalation of tariffs, export controls, sanctions, or trade restrictions, could increase our costs, disrupt our supply chains, or limit our ability to serve certain customers. AGA Precision Systems operates in the aerospace and defense sector, which is particularly sensitive to changes in government policy, defense spending priorities, and international relations. Adverse changes in any of these areas could materially affect our revenue and profitability.
If we fail to protect or enforce our intellectual property, others could compete against us more directly and we may not be able to compete effectively in our market.
Our success depends in part on our ability to protect our intellectual property rights. We rely on a combination of trademarks, trade secrets, confidential proprietary information, domains, patent rights and other intellectual property rights to protect our intellectual property. We also rely on patent applications licensed by us for the Licensed Products which we are contractually obligated to file, prosecute and maintain under our License Agreement with MOA. Patent protection is limited in time, and we may be unsuccessful in developing and commercializing a product before a patent expires and the underlying technology becomes available for commercialization by competitors, in which case our investment of substantial time and resources towards the applicable product or product candidate could be lost without the realization of the benefits we anticipated.
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Certain of our technology may not be subject to protection through patents, which leaves us vulnerable to theft of our technology.
Certain parts of our know-how and technology are not patentable or are trade secrets. To protect our proprietary position in such know-how and technology, we have entered and intend to require all employees, consultants, advisors and collaborators to enter into confidentiality and invention ownership agreements with us. These agreements may not provide meaningful protection for our trade secrets, know-how or other proprietary information in the event of any unauthorized use or disclosure. In the absence of patent protection, competitors who independently develop substantially equivalent technology may harm our business. If we cannot adequately protect or enforce our intellectual property rights, we may not be able to adequately compete, and our business and prospects could be adversely affected.
We may not be able to protect our proprietary technology, which may harm our ability to operate profitably.
The molecular biology and bioprocessing industries place considerable importance on obtaining patent and trade secret protection for new technologies, products and processes. Our success will depend, to a substantial degree, on our ability to obtain and enforce patent protection for our products, preserve any trade secrets and operate without infringing the proprietary rights of others. We cannot assure you that we will succeed in obtaining any patents or obtain them in a timely manner; that the use of our technology will not infringe on the proprietary rights of others; that patent applications relating to our product candidates will result in the issuance of any patents; that we will be successful in monitoring, enforcing or otherwise protecting our patents or other intellectual property rights; or that patents will not be issued to other parties which may be infringed by our potential products or technologies.
Patents held by other persons may result in infringement claims against us that are costly to defend and which may limit our ability to use disputed technologies.
A number of biotechnology and other companies, universities and research institutions have filed patent applications or have been issued patents relating to technologies potentially relevant to or required by our expected products. If third party patents or patent applications contain claims infringed by either our licensed technology or other technology required to make and use our potential products and such claims are ultimately determined to be valid, we might not be able to obtain licenses to these patents at a reasonable cost, if at all, or be able to develop or obtain alternative technology. Patent litigation is very expensive and could consume substantial resources and create significant uncertainties.
If our trademarks and trade names are not adequately protected, we may not be able to build name recognition in our target markets.
Our registered or unregistered trademarks or trade names may be challenged, infringed, circumvented, declared generic or determined to be infringing on other marks. We may not be able to protect our rights in these trademarks and trade names, which we need in order to build name recognition with potential partners or customers in our target markets. If we are unable to establish name recognition based on our trademarks and trade names, our business may be adversely affected.
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If we infringe or are alleged to infringe intellectual property rights of third parties, our business could be harmed.
Our research, development and commercialization activities may infringe or otherwise violate or be alleged to infringe or otherwise violate patents owned or controlled by other parties. These third parties could bring claims against us that would cause us to incur substantial expenses and, if successful, could cause us to pay substantial damages or be forced to stop or delay research, development, manufacturing or sales of the applicable product or product candidate.
We may need to license additional intellectual property from third parties in the future, and such licenses may not be available on commercially reasonable terms.
A third party may hold intellectual property, including patent rights, that are important or necessary to the development of our future products. It may be necessary for us to use the patented or proprietary technology of third parties to commercialize our prospective products, in which case we would be required to obtain a license from these third parties. Failure to obtain such licenses on commercially reasonable terms may limit or eliminate our ability to develop or commercialize our future product candidates, which may have a negative impact on our business and results of operations.
A recall or suspension of sale of our products, or the discovery of serious safety issues, could have a significant negative impact on us.
The FDA and comparable agencies of other countries regulate certain of our products. The FDA and equivalent foreign regulatory authorities have the authority to require the recall or suspension, either temporarily or permanently, of commercialized products in the event that a product has a reasonable probability of causing a serious adverse health risk due to adulteration or misbranding. Recalls, suspensions or other notices relating to any products that we distribute would divert managerial and financial resources and have an adverse effect on our reputation, financial condition and operating results.
Regulations governing our products could harm our business.
Certain of our products are or will be subject to extensive government regulation by numerous federal, state and local government agencies and authorities. Many of these laws and regulations involve a high level of subjectivity, are subject to interpretation, and vary significantly from market to market. These laws and regulations can have several impacts on our business, including delays or prohibitions in introducing or selling a product in one or more markets; limitations on the claims we can make regarding our products; and delays, expenses and potential product reformulations associated with compliance.
Government regulations relating to marketing and advertising may restrict, inhibit or delay our ability to sell our products.
If our products are marketed outside of their intended use, regulatory agencies such as the FDA or the FTC may investigate our marketing practices. Government authorities may regulate advertising and product claims regarding the benefits of our products, and enforcement actions could require us to revise our marketing materials, amend our claims or stop selling certain products, which could harm our business.
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We may incur product liability claims that could harm our business, and past product liability claims relating to our previously divested Elevai Skincare products could still adversely affect our business.
We may be subject to various product liability claims related to the products we sell or develop. Product liability claims could increase our costs, cause negative publicity, and adversely affect our business and financial results. Although we maintain general liability insurance, this insurance may not fully cover potential liabilities.
In addition, even though we completed the divestiture of our Elevai Skincare business in January 2025, we may still be subject to liability for past product claims related to those products. Prior to the divestiture, we marketed and sold skincare products, and claims related to those products—including adverse reactions, product contamination, or labeling inaccuracies—could result in legal action against us. We cannot assure you that the indemnification provisions in the asset sale agreement will fully protect us from such liabilities. In connection with the divestiture, we also provided certain representations, warranties and indemnification obligations. Claims under these provisions could arise if post-sale issues emerge, such as regulatory non-compliance, product defects, or third-party intellectual property claims. If such claims are asserted and indemnification is required, we could incur substantial financial obligations.
We may not have sufficient product liability insurance, which may leave us vulnerable to future claims we will be unable to satisfy.
The development, testing, manufacturing, marketing and sale of our products entail an inherent risk of product liability claims. We currently have a limited amount of product liability insurance, which may not be adequate to meet potential product liability claims. Adequate insurance coverage may not be available in the future on acceptable terms, if at all. Whether or not a product liability insurance policy is obtained or maintained in the future, any product liability claim could harm our business or financial condition.
Our employees, independent contractors, consultants, distributors, vendors and strategic partners may engage in misconduct or improper activities.
We are exposed to the risk that our employees, independent contractors, consultants, distributors, vendors, strategic partners and other individuals or entities with whom we have arrangements may engage in unethical, fraudulent or illegal activity. It is not always possible to identify and deter misconduct by these parties, and the precautions we take to detect and prevent these activities may not be effective. If such actions are instituted against us, those actions could result in government investigations, legal proceedings, the imposition of significant fines or other sanctions, which could adversely affect our ability to operate our business and our results of operations.
If we, or our third-party manufacturers fail to comply with environmental laws and regulations, we could become subject to fines or penalties.
Our research and development activities and our third-party manufacturers’ and suppliers’ activities involve the controlled storage, use and disposal of hazardous materials and other hazardous compounds. We and our manufacturers and suppliers are subject to laws and regulations governing the use, manufacture, storage, handling and disposal of these hazardous materials. We cannot eliminate the risk of contamination, which could cause an interruption of our business operations and environmental damage resulting in costly clean-up and liabilities.
If our third-party suppliers, logistics providers, and manufacturers do not comply with ethical business practices or applicable laws, our reputation and business could be harmed.
Our reputation and our customers’ willingness to purchase our products and services depend in part on our suppliers’, manufacturers’, and service providers’ compliance with ethical employment practices and all legal and regulatory requirements relating to the conduct of their businesses. We do not exercise control over our third-party service providers and cannot guarantee their compliance with ethical and lawful business practices.
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The divestiture of our Elevai Skincare business could negatively impact our operations and strategic positioning.
In January 2025, we completed the divestiture of our Elevai Skincare business as part of our strategic realignment. While this divestiture allows us to focus on our core businesses, it may result in operational and strategic challenges, including adverse market perception, loss of diversification, and potential unforeseen expenses or liabilities related to the transition. If we fail to manage this transition effectively, our financial condition, results of operations and future growth prospects could be adversely affected.
RISKS RELATED TO OUR MANAGEMENT AND GOVERNANCE
Our corporate governance documents and Nevada law may have anti-takeover effects that could discourage, delay, or prevent a change in control.
Provisions of our articles of incorporation, bylaws, and Nevada law may have the effect of discouraging, delaying, or preventing a merger, acquisition, tender offer, or other change in control of the Company that stockholders might consider favorable, including transactions in which stockholders might receive a premium over the then-current market price of our Common Stock. These provisions include the authority of the Board to issue preferred stock with rights, preferences, and privileges determined by the Board without stockholder approval, advance notice requirements for stockholder proposals and director nominations, and other provisions of Nevada corporate law that may limit the ability of stockholders to effect a change in control. These provisions may frustrate or prevent any attempt by stockholders to replace or remove our current management.
If we lose key personnel or are unable to attract and retain qualified personnel, we may be unable to execute our business plan.
We have a limited number of employees. Our Chief Executive Officer serves in a non-employee capacity pursuant to his consulting agreement with the Company. Our success depends on our continued ability to attract, retain and motivate highly qualified management, business development, and operational personnel. Our success depends in large part on the efforts and abilities of our Chief Executive Officer and Chief Financial Officer, Graydon Bensler, as well as other members of our senior management. Finding replacements for key individuals could be difficult, may take an extended period of time and could significantly impede the achievement of our business objectives.
Graydon Bensler serves as both our Chief Executive Officer and Chief Financial Officer, which presents governance risks and limitations.
Our Chief Executive Officer, Graydon Bensler, currently also serves as our Chief Financial Officer. While this dual role reduces costs, it concentrates significant authority and responsibility in a single individual and may limit the segregation of duties and independent oversight over financial reporting that would be provided by separate individuals in these roles. This concentration may increase the risk of errors or irregularities in financial reporting going undetected and may be viewed negatively by investors, analysts and regulatory bodies. Such perception may adversely impact our financial performance and/or business.
Significant related-party transactions with entities controlled by our executive officers and directors may present conflicts of interest.
The Company has entered into consulting agreements and secondment agreements with entities controlled by our Non-Employee Chief Executive Officer and our Non-Employee, Non-Executive Chairman, pursuant to which the Company pays significant consulting fees, contracted performance bonuses, management fees, and reimbursements to such entities. Compensation to such entities under the terms of such agreements include milestone-based bonuses, acquisition-based bonuses, and market capitalization-based bonuses. These compensation arrangements create potential conflicts of interest between the personal financial interests of our executive officers and directors and the interests of the Company and its stockholders. The milestone-based and acquisition-based bonus arrangements may incentivize management to pursue transactions that trigger bonus payments, even if such transactions are not in the best long-term interests of stockholders. Although our Audit Committee reviews and approves related-party transactions, there can be no assurance that these transactions are or will be on terms as favorable to the Company as those that could be obtained from unaffiliated third parties.
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We may be unable to accurately forecast revenue and appropriately plan our expenses.
Forecasts may be particularly challenging given our recently acquired subsidiaries, early-stage biotechnology programs, and ongoing acquisition strategy. We base our expense levels and investment plans on our estimates of revenue and gross margin. However, we cannot be sure that historical growth rates or trends of our acquired businesses are meaningful predictors of future performance, particularly under PMGC ownership. If our assumptions prove to be wrong, we may spend more than anticipated or may generate lower revenue than expected, either of which could have an adverse effect on our business, financial condition, results of operations and prospects.
We have a limited operating history at our current scale and with our current business model, which may make it difficult to evaluate our business and future prospects.
We began commercial operations in 2020 as a skincare development company, divested our skincare business in January 2025, and completed our first operating acquisitions in mid-2025. As a result, we have an extremely limited history of operating as a diversified holding company and an even more limited history of generating revenue from our current operating subsidiaries. Any evaluation of our business and prospects must be considered in light of this limited operating history, which may not be indicative of future performance. Because of our limited operating history in our current form, we face increased risks, uncertainties, expenses, and difficulties.
We have previously identified a material weakness in our internal control over financial reporting, and there can be no assurance that additional material weaknesses will not be identified in the future.
As disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, our management previously identified a material weakness in our internal control over financial reporting. During the fiscal year ended December 31, 2025, we implemented remediation measures, including the hiring of additional accounting and finance personnel and the implementation of standardized reconciliation procedures and enhanced review processes. Based on management’s evaluation as of December 31, 2025, the Company has concluded that the previously reported material weakness has been remediated. However, there can be no assurance that our remediation efforts will remain effective or that additional material weaknesses or significant deficiencies will not be identified in the future, particularly as we integrate newly acquired subsidiaries into our financial reporting processes. If we identify additional material weaknesses or significant deficiencies, we could be subject to sanctions or investigations by Nasdaq, the SEC or other regulatory authorities, investor perceptions of our Company may suffer and cause a decline in the market price of our Common Stock. Any failure of our internal control over financial reporting may have a material adverse effect on our stated results of operations and harm our reputation.
The requirements of being a public company may strain our resources, divert management’s attention and affect our results of operations.
As a public company in the United States, we face increased legal, accounting, administrative and other costs and expenses. We are subject to the reporting requirements of the Exchange Act and the Sarbanes-Oxley Act of 2002. Section 404 of the Sarbanes-Oxley Act requires that our management report on the effectiveness of our internal controls structure and procedures for financial reporting. Compliance with these requirements diverts internal resources and management attention. If we fail to maintain compliance, we could be subject to sanctions or investigations. We may need to hire additional employees with public accounting and disclosure experience, which will increase costs. These increased costs will require us to divert money that we could otherwise use to develop our business.
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If we cannot maintain our Company culture or focus on our mission as we grow, our success and competitive position may be harmed.
We believe our culture and mission have been key contributors to our success to date. Any failure to preserve our culture or focus on our mission could negatively affect our ability to retain and recruit personnel, which is critical to our growth. As we grow across multiple industries through acquisitions and develop the infrastructure of a public company, we may find it difficult to maintain a cohesive corporate culture.
RISKS RELATED TO OUR DEPENDENCE ON THIRD PARTIES
We depend on our collaborators to help us develop and test our proposed products, and our ability to develop and commercialize products may be impaired or delayed if collaborations are unsuccessful.
Our strategy for the development, testing and commercialization of our proposed products may require entering into collaborations with corporate partners, licensors, licensees and others. We may then be dependent upon the subsequent success of these other parties in performing their respective responsibilities and the continued cooperation of our partners. Our potential collaborators may not cooperate with us or perform their obligations under our agreements with them. We cannot control the amount and timing of our collaborators’ resources that will be devoted to our research and development activities. Should collaborators fail to conduct activities in a timely manner, or at all, expected product pipeline timelines may be delayed. If we do not achieve milestones set forth in the agreements, or if our collaborators breach or terminate their collaborative agreements with us, our business may be materially harmed.
Our reliance on non-employee consultants, third-party vendors, and operational contractors may lead to delays in development of our proposed products and operation of our businesses.
We rely extensively on third parties for critical operational and strategic functions, including through secondment agreements with entities controlled by our Chief Executive Officer and Chairman. These individuals and entities are not our employees and may have commitments to other entities that limit their availability to us. We have limited control over the activities of these service providers and can expect only limited amounts of their time to be dedicated to our business objectives. If key consultants or contractors become unavailable or fail to perform satisfactorily, our operations and development activities could be materially delayed.
Certain market opportunity data and forecasts in this Annual Report were obtained from third-party sources and were not independently verified by us.
This Annual Report contains certain data and information that we obtained from various government and private entity publications and reports. While we believe the data and information is reliable, we have not independently verified them. There is no guarantee that any particular number or percentage of market participants covered by our market opportunity estimates will purchase our products or generate any particular level of revenue for us. Even if the markets in which we compete meet the size estimates and growth forecasts included in this Annual Report, our business may fail to grow at all or at the rate we anticipate.
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We or our third-party vendors may experience network or system failures, cybersecurity attacks, or other technology risks.
Our ability to operate uninterrupted depends upon the performance of our internal network, systems and related infrastructure, and those of our third-party vendors. Our systems and those of our third-party vendors may be vulnerable to computer viruses and other malware, physical or electronic security breaches, natural disasters, and similar disruptions. Although we have not experienced any material security breaches, we cannot be certain that our defensive measures will be sufficient to defend against all current and future methods of attack.
Any actual or perceived security breach may lead to loss of customer confidence, regulatory scrutiny, compromise of intellectual property, costly litigation, fines and penalties, and reputational damage. A security breach could occur and persist for an extended period without detection, increasing the costs and consequences of such a breach.
Our business may be negatively impacted by cybersecurity threats and other security threats and disruptions.
Because our business relies on proprietary technology and computer systems, we face security threats, including threats to our information technology infrastructure, attempts to gain access to our proprietary or confidential information, and physical security threats. Cybersecurity threats are persistent, evolve quickly and include computer viruses, attempts to access information, denial of service and other electronic security breaches. A security breach or other significant disruption could disrupt operations, result in unauthorized access to or release of proprietary information, delay clinical studies, subject us to claims and regulatory actions, and damage our reputation.
RISKS RELATED TO THE OWNERSHIP OF OUR SECURITIES
Our Common Stock may be affected by limited trading volume and price fluctuations, which could adversely impact the value of our Common Stock.
Our Common Stock has experienced and is likely to experience in the future significant price and volume fluctuations, which could adversely affect the market prices of our common stock without regard to our operating performance. In addition, factors such as quarterly fluctuations in our financial results, changes in the overall economy or the condition of the financial markets, announcements of acquisitions, and changes in investor sentiment could cause the market prices of our common stock to fluctuate substantially. These fluctuations may also cause short sellers to periodically enter the market. We cannot predict the actions of market participants and, therefore, can offer no assurances that the market for our common stock will be stable or appreciate over time.
We have a significant number of shares of Series B Preferred Stock outstanding with voting rights that may dilute the voting power of Common Stock holders.
As of the date of this Annual Report, we have shares of Series B Preferred Stock outstanding that carry voting rights. The voting power of our Series B Preferred Stock and Common Stock is concentrated in a small group of holders, mainly in entities controlled by our Chief Executive Officer and Chairman. This concentration of voting power may discourage potential acquirers and reduce the market price of our Common Stock. It also limits the ability of other stockholders to influence corporate matters, including but not limited to the election of directors, changes to the Company’s governance documents, the expansion of employee equity or option pool, any merger, consolidation, sale of all or substantially all of our assets, and other major actions requiring stockholder approval.
Our Common Stock may be subject to significant volatility due to limited public float and market conditions.
Our Common Stock may experience significant price volatility due to limited trading volume, concentrated ownership, and market conditions affecting small-cap or microcap companies. This volatility may be unrelated to our operating performance and could result in substantial losses for investors.
We may not be able to continue to satisfy listing requirements of Nasdaq to maintain a listing of our Common Stock.
Our Common Stock is currently listed on Nasdaq and we must meet certain financial and liquidity criteria to maintain such listing. Our Common Stock may be delisted if we fail to meet Nasdaq’s continued listing requirements. We have previously received notices from Nasdaq regarding non-compliance with listing requirements and have utilized reverse stock splits to regain compliance. There can be no assurance that we will maintain compliance with the Nasdaq continued listing requirements in the future.
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If our Common Stock is delisted, it may be more difficult to buy or sell them or to obtain accurate quotations, and the price of the shares of Common Stock may suffer a material decline. Delisting may also impair our ability to raise capital. In addition, our Board may determine that the cost of maintaining our listing on a national securities exchange outweighs the benefits of such listing.
Changes to Nasdaq listing requirements, including potential minimum market capitalization requirements, could adversely affect our continued listing.
Nasdaq periodically reviews and may revise its continued listing standards, including requirements relating to minimum bid price, stockholders’ equity, market value of listed securities, and market capitalization. Any changes to these requirements, including potential increases in minimum market capitalization thresholds, may make it more difficult for us to maintain compliance. If we are unable to meet applicable listing standards, our Common Stock may be subject to delisting, which may adversely affect liquidity, market price, and our ability to raise capital.
We currently do not intend to declare dividends on our Common Stock in the foreseeable future and, as a result, your returns on your investment may depend solely on the appreciation of our common stock.
We currently do not expect to declare any dividends on our Common Stock in the foreseeable future. Instead, we anticipate that all of our earnings in the foreseeable future will be used to provide working capital, support our operations and finance the growth and development of our business. Any determination to declare or pay dividends in the future will be at the discretion of our Board, subject to applicable laws and dependent upon a number of factors, including our earnings, capital requirements and overall financial conditions. In addition, terms of any future debt or preferred securities may further restrict our ability to pay dividends on our Common Stock. Accordingly, your only opportunity to achieve a return on your investment in our Common Stock may be if the market price of our Common Stock appreciates and you sell your shares at a profit. The market price for our Common Stock may never exceed, and may fall below, the price that you pay for such Common Stock.
An investment in our securities is speculative and there can be no assurance of any return on any such investment.
An investment in our securities is speculative and there can be no assurance that investors will obtain any return on their investment. Investors may be subject to substantial risks involved in an investment in the Company, including the risk of losing their entire investment.
If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, our stock price and trading volume could decline.
The trading market for our Common Stock will depend in part on the research and reports that securities or industry analysts publish about us or our business. If one or more analysts downgrade our stock or publish inaccurate or unfavorable research about our business, our stock price would likely decline. If analysts cease coverage of our Company or fail to publish reports on us regularly, demand for our stock could decrease, which might cause our stock price and trading volume to decline.
If there is no active public market for our Common Stock, you may be unable to sell your shares at or above your purchase price.
Although our Common Stock is listed on Nasdaq, an active trading market for our shares may not be sustained. You may be unable to sell your shares quickly or at the market price if trading in shares of our common stock is not active. An inactive market may also impair our ability to raise capital by selling shares and may impair our ability to enter into strategic partnerships or acquire companies using our shares as consideration.
We may be subject to securities litigation, which is expensive and could divert our management’s attention.
The market price of our securities may be volatile, and in the past companies that have experienced volatility in the market price of their securities have been subject to securities class action litigation. We may be the target of this type of litigation in the future. Securities litigation against us may result in substantial costs and divert our management’s attention from other business concerns.
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Future issuances of our Common Stock or securities convertible into or exercisable for our Common Stock could cause the market price of our Common Stock to decline and result in additional dilution to our stockholders.
We may issue additional shares of Common Stock, warrants, options, or other equity-linked securities in connection with future financings, acquisitions, equity incentive plans, or the settlement of outstanding obligations. The issuance of additional shares of Common Stock, or securities convertible into or exercisable for shares of Common Stock, will dilute the ownership interest of existing common stockholders and could depress the market price of our Common Stock. Sales of substantial amounts of our Common Stock in the public market, or the perception that such sales could occur, could also adversely affect the market price of our Common Stock.
IN ADDITION TO THE ABOVE RISKS, BUSINESSES ARE OFTEN SUBJECT TO RISKS NOT FORESEEN OR FULLY APPRECIATED BY MANAGEMENT. IN REVIEWING THIS FILING, POTENTIAL INVESTORS SHOULD KEEP IN MIND THAT OTHER POSSIBLE RISKS MAY ADVERSELY IMPACT OUR BUSINESS OPERATIONS AND THE VALUE OF OUR SECURITIES.
Item 1B. Unresolved Staff Comments.
None.
Item 1C. Cybersecurity.
We believe cybersecurity risk management is an important part of its overall risk management efforts. The Company has a policy of transparency regarding our data collection, use, retention and sharing practices, and it is our commitment to implement appropriate technical security measures to protect all Company stakeholders and manage third party risk.
Our operations may, in some cases, involve the
storage, transmission and other processing of customer and research data or sales information. Cyberattacks and other malicious internet-based
activity continue to increase, and cloud-based platform providers of services are expected to continue to be targeted. Threats include
traditional computer “hackers,” malicious code (such as viruses and worms), phishing attacks, employee theft or misuse and
denial-of-service attacks, and use of artificial intelligence.
Depending on the environment and system, we implement and maintain various technical, physical, and organizational measures, processes, standards and policies designed to manage and mitigate material risks from cybersecurity threats, including, for example, periodic cybersecurity testing and cybersecurity awareness training for employees.
The Company is actively engaged in
We use
In addition, the Board will oversee any cybersecurity risk management framework and a dedicated committee of the Board or an officer appointed by the Board will review and approve any cybersecurity policies, strategies and risk management practices. The Board (or designated committee or officer) will receive periodic updates on cybersecurity risks, including emerging threats, mitigation efforts and incident response activities. The updates will be provided at least annually, or more frequently as needed, to ensure cybersecurity risks are appropriately managed and integrated into our broader risk oversight strategy.
Cybersecurity Risk
In 2023, the SEC adopted new rules to enhance and standardize disclosures regarding cybersecurity risk management, strategy, governance, and incidents by public companies that are subject to the reporting requirements of the Exchange Act. These require current disclosure about material cybersecurity incidents, as well as requiring periodic disclosures about a public company’s processes to assess, identify, and manage material cybersecurity risks, management’s role in assessing and managing material cybersecurity risks, and the board of directors’ oversight of cybersecurity risks. If we fail to comply with these rules, we could be subject to various regulatory sanctions, including financial penalties.
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State regulators have been increasingly active in implementing privacy and cybersecurity standards and regulations. Recently, several states have adopted regulations requiring certain financial institutions to implement cybersecurity programs and providing detailed requirements with respect to these programs, including data encryption requirements. Many states have also recently implemented or modified their data breach notification, information security and data privacy requirements. We expect this trend of state-level activity in those areas to continue and are continually monitoring developments where our customers are located.
Risks and exposures related to cybersecurity attacks, including litigation and enforcement risks, are expected to be elevated for the foreseeable future due to the rapidly evolving nature and sophistication of these threats, as well as due to the expanding use of Internet banking, mobile banking, and other technology-based products and services by us.
Governance
Risks from Cybersecurity Threats
As of the date of this Annual Report, we are not aware of any material risks from cybersecurity threats that have materially affected or are reasonably likely to materially affect the Company, including our business strategy, results of operations, or financial condition. However, we cannot provide assurance that we will not experience any such event in the future.
Item 2. Properties.
Our principal executive office is located at 120 Newport Center Drive, Newport Beach, CA 92660. The office has 1,650 square feet, and the lease is on a month-to-month basis. The monthly rent is $9,273.50.
The following table sets forth the leases term and monthly rent:
| Lease Term | Address | Space (square feet) |
Average Monthly Rent |
|||||||
| Month to Month | 120 Newport Center Drive, Newport Beach, CA 92660 | 1,650 | $ | 9,273.50 | ||||||
Some members of our management work outside of these premises in office space that we do not rent.
Item 3. Legal Proceedings.
As of the date of this Annual Report, there are no active legal proceedings pending or threatened against the Company. However, from time to time, we may be subject to various legal claims and proceedings that arise from the normal course of business activities, including, third party intellectual property infringement claims against us in the form of letters and other forms of communication. Litigation or any other legal or administrative proceeding, regardless of the outcome, could result in substantial cost, diversion of our resources, including management’s time and attention, and, depending on the nature of the claims, reputational harm. In addition, if any litigation results in an unfavorable outcome, there exists the possibility of a material adverse impact on our results of operations, prospects, cash flows, financial position and brand.
Item 4. Mine Safety Disclosures.
Not Applicable.
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PART II
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
Our Common Stock is currently quoted on The Nasdaq Capital Market under the symbol “ELAB.” We had 1,936,757 shares of Common Stock issued and outstanding as of December 31, 2025 (such number of Common Stock on a pre-reverse stock split basis, not reflecting the Company’s 1-for-4 reverse stock split which occurred on January 6, 2026 and 1-for-6 reverse stock split which occurred on March 10, 2026.
Holders of Capital Stock
As of December 31, 2025, we had 40 record holders of our Common Stock.
Stock Option Grants
As of December 31, 2025, the Company had no options outstanding to purchase Common Stock. As of December 31, 2025, no shares of Common Stock were issued under the 2025 Equity Incentive Plan. The 2025 Plan superseded the 2020 Plan and outstanding awards made under the 2020 Plan remained outstanding. As of December 31, 2025, there were 6 options outstanding from the 2020 Plan.
Transfer Agent
The transfer agent for our Common Stock is VStock Transfer, LLC. The transfer agent’s telephone number and address is (212) 828-8436 and 18 Lafayette Place Woodmere, New York 11598.
Dividends
To date, we have not declared or paid any dividends on our Common Stock. We currently do not anticipate paying any cash dividends in the foreseeable future on our Common Stock. Although we intend to retain our earnings, if any, to finance the exploration and growth of our business, the Board of Directors has the discretion to declare and pay dividends in the future.
Payment of dividends in the future will depend upon our earnings, capital requirements, and any other factors that our Board deems relevant.
Nasdaq Compliance
On November 7, 2024, we received a letter from Nasdaq (the “Bid Price Deficiency Letter”) granting an exception for us to cure our lack of compliance with the bid price requirement in Listing Rule 5550(a)(2) (such rule, the “Bid Price Rule,” and such deficiency of the Bid Price Rule, the “Bid Price Deficiency”). In the Bid Price Deficiency Letter, Nasdaq permitted our continued listing on Nasdaq on the conditions that: (1) on or before December 26, 2024, we complete a reverse split at a ratio sufficient to maintain long-term compliance with the Bid Price Rule; and (2) on or before January 9, 2025, we demonstrate compliance with the Bid Price Rule.
On January 14, 2025, the Company received a letter from Nasdaq (“Compliance Letter”) stating the Company had demonstrated compliance with the Bid Price Rule.
Recent Sales of Unregistered Securities
There were no equity securities of the registrant sold by the registrant during the period covered by this Annual Report that were not registered under the Securities Act.
Item 6. [Reserved]
Not applicable.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operation.
The information set forth in this section contains certain “forward-looking statements”, including, among others (i) expected changes in our revenue and profitability, (ii) prospective business opportunities and (iii) our strategy for financing our business. Forward-looking statements are statements other than historical information or statements of current condition. Some forward-looking statements may be identified by use of terms such as “believes”, “anticipates”, “intends” or “expects”. These forward-looking statements relate to our plans, liquidity, ability to complete financing and purchase capital expenditures, growth of our business including entering into future agreements with companies, and plans to successfully develop and obtain approval to market our product. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs.
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Although we believe that our expectations with respect to the forward-looking statements are based upon reasonable assumptions within the bounds of our knowledge of our business and operations, in light of the risks and uncertainties inherent in all future projections, the inclusion of forward-looking statements in this Annual Report should not be regarded as a representation by us or any other person that our objectives or plans will be achieved.
We assume no obligation to update these forward-looking statements to reflect actual results or changes in factors or assumptions affecting forward-looking statements.
Our revenues and results of operations could differ materially from those projected in the forward-looking statements as a result of numerous factors, including, but not limited to, the following: the risk of significant natural disaster, the inability of our company to insure against certain risks, inflationary and deflationary conditions and cycles, currency exchange rates, and changing government regulations domestically and internationally affecting our products and businesses.
You should read the following discussion and analysis in conjunction with the Financial Statements and Notes attached hereto, and the other financial data appearing elsewhere in this Annual Report.
US Dollars are denoted herein by “USD”, “$” and “dollars”.
Organization and Overview of Operations
On December 31, 2024, the Company entered into an asset purchase agreement (the “Asset Purchase Agreement”) with an unrelated third party, pursuant to which the Company agreed to sell, and the unrelated third party agreed to purchase, the Company’s skincare business. The sale of the skincare business was consummated on January 16, 2025.
Prior to entering into the Asset Purchase Agreement, the Company’s principal business was operating a skincare development company engaged in the design, manufacture, and marketing of skincare products in the skincare industry. After the sale of the skincare business, the Company changed its principal business. PMGC Holdings Inc. is a diversified holding company that manages and grows its portfolio through strategic acquisitions, investments, and development across various industries.
As part of its diversification and growth strategy, the Company completed the following acquisitions during the third quarter of 2025:
| ● | On July 7, 2025, the Company completed the acquisition of Pacific Sun Packaging Inc., a California-based custom IT packaging company. |
| ● | On July 18, 2025, the Company acquired AGA Precision Systems LLC, a California-based CNC machining company. |
| ● | On October 26, 2025, the Company, through its wholly owned subsidiary AGA Precision Systems LLC, acquired certain assets of Indarg Engineering, Inc., a California-based precision CNC machining business. |
The Company manages and operates a diverse portfolio of wholly owned subsidiaries, as of December 31, 2025:
| ● | NorthStrive BioSciences Inc. – Biosciences is a biopharmaceutical company focusing on the development and acquisition of cutting-edge aesthetic medicines and therapeutic products. This company’s lead asset, EL-22, is leveraging a first-in-class engineered probiotic approach to address obesity’s pressing issue of preserving muscle while on weight loss treatments, including GLP-1 receptor agonists. For more information, please visit www.northstrivebio.com. | |
| ● | PMGC Research Inc. – PMGC Research was based in Canada and dedicated to medical scientific research and development efforts, utilizing Canadian research grants and partnering with leading Canadian Universities, with aims of pushing the boundaries of innovation. On November 12, 2025, PMGC Research was dissolved. |
| ● | PMGC Capital LLC – PMGC Capital is a multi-strategy investment firm focused on direct investments, strategic lending, and acquiring undervalued companies and assets across diverse markets. This company’s mission is to identify and seize high-potential opportunities, delivering sustainable growth and maximizing returns on capital. |
| ● | Pacific Sun Packaging Inc. – Pacific Sun is a California-based custom IT packaging company providing innovative, sustainable, and technology-driven packaging solutions to industrial and consumer markets. |
| ● | AGA Precision Systems LLC. – AGA is a California-based precision engineering and CNC machining company specializing in the design and production of high-tolerance components for industrial and technology applications. In October 2025, AGA acquired substantially all the operating assets of Indarg Engineering, Inc. AGA expands PMGC’s advanced manufacturing footprint and enhances its capacity to deliver vertically integrated engineering and production solutions across multiple sectors. |
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Outlook
Management’s Plans
Over the next twelve months, we intend to focus on:
| ● | Increasing revenue by achieving successful returns on capital through PMGC Capital LLC, our multi-strategy investment vehicle, by acquiring and managing undervalued assets, public and private investments, and structured financing opportunities. |
| ● | Establishing new wholly owned subsidiaries to develop and commercialize newly acquired or licensed assets across various industries. |
| ● | Utilizing clinical validation studies to strengthen the commercial potential and scientific credibility of our portfolio companies’ technologies. |
| ● | Advancing clinical development to progress NorthStrive Biosciences, Inc.’s clinical assets toward Investigational New Drug (IND) applications. |
| ● | Pursuing additional acquisitions of operating business-to-business companies with positive EBITDA. |
| ● | Evaluating potential opportunities such as out licensing our biotechnology applications, potential spin-offs, and creating new publicly traded companies, such as Special Purpose Acquisition Corporations (“SPACs”). |
Results of Operations
Comparison of the Years Ended December 31, 2025 and 2024.
The following table provides certain selected financial information for continuing operations for the periods presented:
| Year Ended December 31, 2025 | Year Ended December 31, 2024 | Change | ||||||||||
| Revenue | 590,084 | - | 590,084 | |||||||||
| Cost of goods sold | 404,770 | - | 404,770 | |||||||||
| Gross profit | 185,314 | - | 185,314 | |||||||||
| Marketing and Promotion | $ | 200,940 | 292,522 | (91,582 | ) | |||||||
| Consulting Fees | $ | 1,769,505 | 1,367,273 | 402,232 | ||||||||
| Office and Administration | $ | 2,238,660 | 1,092,576 | 1,146,084 | ||||||||
| Professional Fees | $ | 1,423,021 | 563,242 | 859,779 | ||||||||
| Investor Relations | $ | 253,333 | 208,326 | 45,007 | ||||||||
| Research and Development | $ | 147,010 | 104,654 | 42,356 | ||||||||
| Repair and maintenance | 717,654 | - | 717,654 | |||||||||
| Total operating expenses | $ | 7,067,262 | 3,663,566 | 3,403,696 | ||||||||
| Other income (expense)1 | $ | (867,820 | ) | (353,148 | ) | (514,672 | ) | |||||
| Net loss from continuing operations | $ | (7,780,740 | ) | (4,016,714 | ) | (3,764,026 | ) | |||||
| Basic and dilutive loss per common share – continuing operations | $ | (382.301 | ) | (4,239.702 | ) | 3,857.401 | ||||||
| Weighted average number of shares outstanding – basic and diluted | 20,352 | 947 | ||||||||||
| 1 | Other expenses relate to finance cost, interest income, interest expense, dividend income, unrealized fair value gain/loss on investment, realized loss on sale of investments, fair value change on derivative liabilities, gain on the termination of the intangible asset and fair value gain/loss on derivative liability, gain on extinguish of related party debt, impairment on prepaid expense and loss on disposal of PP&E. |
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Revenue
Revenue for the year ended December 31, 2025, was $590,084 as compared to $nil for the year ended December 31, 2024, an increase of $590,084. Revenue was generated by the Company’s newly acquired subsidiaries.
Our revenue by category is as follows:
| For the year Ended December 31, 2025 | ||||
| Pacific Sun – Sale of IT packaging | $ | 374,874 | ||
| AGA – Machine work | 215,210 | |||
| Total Revenue | $ | 590,084 | ||
Cost of Revenue
Cost of revenue for the year ended December 31, 2025, was $404,770 as compared to $nil for the year ended December 31, 2024.
The increase in cost of revenue is directly attributed to the increase in sales during the year ended December 31, 2025, compared to 2024. The following is a breakdown of the components of the cost of revenue:
| For the year ended December 31, 2025 | Pacific Sun – Sale of IT packaging | AGA – Machine work | Total | |||||||||
| Cost of inventory | $ | 208,402 | $ | 109,347 | $ | 317,749 | ||||||
| Sales commission | 6,875 | - | 6,875 | |||||||||
| Assembly and manufacturing expense | 1,088 | 23,560 | 24,648 | |||||||||
| Shipping and handling cost | 48,466 | 6,149 | 54,615 | |||||||||
| Inventory write down and wastage | 883 | - | 883 | |||||||||
| Total Cost of Revenue | $ | 265,714 | $ | 139,056 | $ | 404,770 | ||||||
Gross Profit
Gross profit for the year ended December 31, 2025, was $185,314, as compared to $nil for the year ended December 31, 2024, an increase of $185,314. This represents an overall gross margin percentage of 31.4% for the year ended December 31, 2025, compared to $nil in 2024. The increase in gross profit and gross margin percentage was primarily attributable to the inclusion of revenues generated from the newly acquired subsidiaries.
The following is a breakdown of gross profit percentage by category:
| For the year Ended December 31, 2025 | ||||
| Pacific Sun – Sale of IT packaging | 29.1 | % | ||
| AGA – Machine work | 35.4 | % | ||
| Overall Gross Profit Percentage | 31.4 | % | ||
The gross margin percentage on the sale of IT packaging is negatively impacted by the fair value adjustment to inventory recorded as part of the purchase price allocation. This adjustment is expensed to cost of revenue as inventory is sold. Normalizing for this adjustment, the gross margin percentage on the sale of IT packaging would have been 49.2%.
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Research and Development Expenses
Research and development expenses for the year ended December 31, 2025, were $147,010 compared to $104,654 for the year ended December 31, 2024, an increase of $42,356. Research and development related to the Company’s spending on clinical validation studies. The increase in research and development was mainly driven by the Company continuously working on its research project of EL-22 and the costs of its Type B pre-Investigational New Drug (“pre-IND”) meeting with the U.S. Food and Drug Administration.
Marketing and Promotion
Marketing and promotion expenses for the year ended December 31, 2025, were $200,940 compared to $292,522 for the year ended December 31, 2024, a decrease of $91,582. During the year ended December 31, 2024, the Company engaged an investor relations agency under a $125,000 agreement signed on January 5, 2024, to support external communications and investor engagement efforts. No comparable agreement was entered into during the year ended December 31, 2025.
Office and Administrative Expenses
Office and administrative expenses for the year ended December 31, 2025, were $2,238,660, compared to $1,092,576 for year ended December 31, 2024, an increase of $1,146,084. The increase was driven by higher business activity levels, general price increases, and a shift in cost responsibilities following the disposition of the Company’s skincare business. The newly acquired businesses contributed $508,291 to office and administrative expenses since the acquisitions.
Consulting Fees
Consulting fees for the year ended December 31, 2025, were $1,769,505, compared to $1,367,273 for the year ended December 31, 2024, an increase of $402,232. The Company’s Chief Executive Officer, Chief Financial Officer, and Chairman provide services in a consulting capacity. The increase was primarily driven by bonus-related consulting expenses of $871,600 (2024 – $350,000), representing contractual bonuses approved by the Board of Directors and the Compensation Committee. The increases were partially offset by a decrease in external consulting services.
Professional Fees
Professional fees for the year ended December 31, 2025, was $1,423,021, compared to $563,242 for the year ended December 31, 2024, an increase of $859,779. Professional fees are comprised of legal, audit and accounting services. The increase during 2025, was primarily due to an increase in audit, legal and accounting services given the Company’s corporate restructuring, business acquisition due diligence, and financing efforts conducted during the year ended December 31, 2025.
Investor Relations
Investor relations expenses for the year ended December 31, 2025, were $253,333, compared to $208,326 for the year ended December 31, 2024, an increase of $45,007. The increase is primarily attributable to an increase in public relations and media coverage expenses during the year ended December 31, 2025 compared to the year ended December 31, 2024.
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Repairs and Maintenance
Repairs and maintenance expenses for the year ended December 31, 2025, were $717,654, with no comparable expense in the year ended December 31, 2024. Following the acquisition of AGA and certain assets of Indarg Engineering, the Company incurred cost on building maintenance, machine repair and recalibration of equipment. These costs were necessary to optimize operations and maintain the useful lives of equipment acquired in the acquisition.
Other income (expense)
Other income (expense) for the year ended December 31, 2025, amounted to a net loss of $ 867,820, compared to net loss of $353,148 for the year ended December 31, 2024, representing an unfavorable variance of $514,672. The variance was primarily attributable to $500,000 of impairment on prepaid expense, $179,479 of finance costs, $113,917 of realized losses on investments, and $216,043 of unrealized losses on investments recognized during 2025, whereas no comparable amounts were recorded in the prior year and a decrease in fair value gain on derivative liabilities from $369,158 in the prior year to $214,167 in the current year. In addition, the Company recognized a $32,432 loss on the disposal of property and equipment during the year. These unfavorable items were partially offset by several favorable changes compared to the prior year, including a $490,563 decrease in interest expense to $244,634 in 2025 from $735,197 in 2024, $107,190 higher interest income, $15,550 of dividend income, a $129,613 gain on the termination of an intangible asset, a $31,261 gain on extinguishment of related-party debt, and a $31,028 increase in other income.
Liquidity and Capital Resources
The accompanying consolidated financial statements have been prepared on a going concern basis, which implies the Company will continue to realize its assets and discharge its liabilities in the normal course of business. The continuation of the Company as a going concern is dependent upon the continued financial support from its shareholders, the ability of the Company to obtain necessary equity financing to continue operations, and ultimately the attainment of profitable operations.
As of December 31, 2025 and 2024, the Company had a net working capital of $2,928,959 and $4,251,867, respectively, and has an accumulated deficit of $21,017,440 and $13,269,627, respectively. Furthermore, for the years ended December 31, 2025 and 2024, the Company incurred a net loss of $7,747,813 and $6,245,737, respectively and used $5,933,881 and $5,486,980, respectively of cash flows for operating activities. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern. These consolidated financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.
Our principal liquidity requirements are for working capital, capital expenditure and research and development. We fund our liquidity requirements primarily through cash on hand and the issuance of common and preferred stock. As of December 31, 2025, we had cash of $5,402,333, with $3,984,453 as of December 31, 2024.
The Company expects an improvement in liquidity and capital resources, including cash obtained from any sale of investment securities it currently owns. Cash flows used in discontinued operating and investing activities and assets and liabilities held for sale has been excluded from our analysis. The Company may be paid additional earn-out consideration in connection with the sale of its skincare business, consisting of potential payments for each year ending on the anniversary of the closing date of the disposition during the five-year period following the closing equal to 5% of the sales generated during such year from the existing products as of the closing and a one-time payment of $500,000 if the buyer achieves $500,000 in revenue from sales of the existing hair and scalp products as of the closing on or before the 24-month anniversary of the closing date of the disposition. The Company plans to use the cash obtained from any sale of investment securities or earnout payment for working capital.
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The following table provides selected financial data as of December 31, 2025, and December 31, 2024, respectively (excluding assets and liabilities held for sale).
| December 31, 2025 | December 31, 2024 | Change | ||||||||||
| Current assets | $ | 6,871,255 | $ | 4,858,193 | $ | 2,013,062 | ||||||
| Current liabilities | $ | 3,942,296 | $ | 1,250,218 | $ | 2,692,078 | ||||||
| Working capital | $ | 2,928,959 | $ | 3,607,975 | $ | (679,016 | ) | |||||
The following table summarizes our cash flows from operating, investing and financing activities from continuing operations:
| Year Ended December 31, 2025 | Year Ended December 31, 2024 | Change | ||||||||||
| Cash used in operating activities | $ | (5,802,550 | ) | $ | (2,800,601 | ) | $ | (3,001,949 | ) | |||
| Cash used in investing activities | $ | (2,765,154 | ) | $ | (601,404 | ) | $ | (2,163,750 | ) | |||
| Cash provided by financing activities | $ | 10,116,738 | $ | 6,757,500 | $ | 3,359,238 | ||||||
Cash Flow from Operating Activities
For the year ended December 31, 2025, net cash flows used in operating activities for continuing operations was $5,802,550 compared to $2,800,601 used during the year ended December 31, 2024, respectively, primarily due to net loss and timing of settlement of assets and liabilities.
Cash Flows from Investing Activities
During the year ended December 31, 2025, and 2024, we used $2,765,154 and $601,404, respectively, in investing activities. The increase was primarily driven by business acquisition activity of $2,162,756, purchases of investments of $1,789,044, equipment purchases of $442,255, earnout payments of $114,969, and purchases of intangible assets of $6,000. These uses of cash were partially offset by $1,762,201 proceeds from the sale of investments and $127,300 related to the issuance of a promissory note.
Cash Flows from Financing Activities
During the year ended December 31, 2025, we had net cash flow provided by financing activities of $10,116,738 compared to cash flow provided by financing activities of $6,757,500 in 2024. During 2025, the Company received $3,990,007 from the initial pre-paid purchase under its equity purchase facility (ELOC), $1,672,103 from the issuance of common stock under its At-the-Market (“ATM”) sales agreement, and $1,245,306 from a registered direct offering of common stock and prefunded warrants. In addition, the Company received $1,698,058 from the exercise of Series A warrants and $1,511,443 from the exercise of replacement warrants issued on January 27, 2025. These inflows were partially offset by $179 used for the repurchase of shares.
Critical Accounting Policies and Significant Judgments and Estimates
This discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”). The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company regularly evaluates estimates and assumptions related to revenue recognition, the collectability of receivables, valuation of inventory, fair value of investments in securities, derivative liabilities and stock options, useful lives and recoverability of long-lived assets, and deferred income tax asset valuation allowances. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgements about the carrying value of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from those estimates. Estimates and assumptions are reviewed periodically, and the effects of revisions are reflected in the consolidated financial statements in the period they are determined.
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Business Combinations
The Company accounts for business combinations using the acquisition method of accounting in accordance with ASC 805, Business Combinations. Under this method, the purchase consideration transferred is measured at fair value on the acquisition date and allocated to the identifiable assets acquired and liabilities assumed based on their estimated fair values. Any excess of the purchase consideration over the fair value of the identifiable net assets acquired is recorded as goodwill.
Acquisition-related costs (such as legal, due diligence, and advisory fees) are expensed as incurred and presented within general and administrative expenses in the consolidated statements of operations.
Contingent consideration, if any, is recorded at fair value on the acquisition date and subsequently remeasured at each reporting period, with changes in fair value recognized in earnings in accordance with ASC 805-30-35 and ASC 450, Contingencies.
During the year ended December 31, 2025, the Company completed three acquisitions—Pacific Sun Packaging Inc. AGA Precision Systems LLC and certain assets of Indarg Engineering, Inc. —which were accounted for under ASC 805. The initial purchase price allocations are preliminary and subject to adjustment upon completion of final valuation analyses.
Foreign Currency Translation
The Company’s functional and reporting currency is the U.S. dollar. The functional currency of the Company’s Canadian subsidiary, PMGC Research Inc. (“PMGC Research”) is the Canadian dollar. Monetary assets and liabilities denominated in foreign currencies are translated using the exchange rate prevailing at the balance sheet date. Non-monetary assets, liabilities, and items recorded in income arising from transactions denominated in foreign currencies are translated at rates of exchange in effect at the date of the transaction. Gains and losses arising on translation or settlement of foreign currency denominated transactions or balances are included in the determination of income.
The accounts of PMGC Research are translated to U.S. dollars using the current rate method. Accordingly, assets and liabilities are translated into U.S. dollars at the period-end exchange rate while revenues and expenses are translated at the average exchange rates during the period. Related exchange gains and losses are included in a separate component of stockholders’ equity as accumulated other comprehensive income (loss).
Revenue Recognition
Revenue is recognized in accordance with ASC 606, Revenue from Contracts with Customers, when control of the promised goods or services is transferred to the customer, in an amount that reflects the consideration the Company expects to receive.
For Pacific Sun Packaging Inc., revenue is recognized at a point in time upon shipment or delivery, as control transfers to the customer at that stage. For AGA Precision Systems LLC, which includes Indarg Engineering, Inc., revenue from CNC machining and precision component manufacturing is recognized at a point in time when control of the finished parts transfers to the customer. Standard shipping terms are FOB shipping point, resulting in transfer of control upon shipment. In limited delivery arrangements where AGA delivers parts to the customer’s dock, control transfers upon customer receipt.
Convertible debt and embedded derivative liabilities
Hybrid financial instruments with a convertible debt host contract and embedded derivative liability conversion feature are bifurcated and accounted for separately. The embedded derivative liability is initially and subsequently measured at fair value in accordance with ASC 815-15 Derivatives and Hedging — Embedded Derivatives. The convertible debt host contract is accounted for at amortized cost in accordance with ASC 470, Debt and Convertible Instruments.
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Stock-Based Compensation
Employees - The Company accounts for share-based compensation under the fair value method which requires all such compensation to employees, including the grant of employee stock options, to be calculated based on its fair value at the measurement date (generally the grant date), and recognized in the consolidated statement of operations over the requisite service period.
Nonemployees - During June 2018, the FASB issued ASU 2018-07, Compensation-Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting (“ASU 2018-07”) to simplify the accounting for share-based payments to nonemployees by aligning it with the accounting for share-based payments to employees. Under the requirements of ASU 2018-07, the Company accounts for share-based compensation to non-employees under the fair value method which requires all such compensation to be calculated based on the fair value at the measurement date (generally the grant date) and recognized in the statement of operations over the requisite service period.
During the years ended December 31, 2025 and 2024, the Company recorded $(19,160) and $97,167, respectively, in share-based compensation expense, of which $60,440 and $(79,600) and $93,449 and $3,718, respectively is included in office and administration and discontinued operations, respectively. Within discontinued operations for the years ended December 31, 2025 and 2024, $(73,768) and $(5,832), and ($599) and $4,317, respectively is included in office and administration and research and development, respectively.
Determining the appropriate fair value model and the related assumptions requires judgment. During the year ended December 31, 2025 and the year ended 2024, the fair value of each option grant was estimated using a Black-Scholes option-pricing model.
The expected volatility represents the historical volatility of comparable publicly traded companies in similar industries, adjusted for variables such as stock price, market capitalization and life cycle. Due to limited historical data, the expected term for options granted is equal to the contractual life. The risk-free interest rate is based on a treasury instrument whose term is consistent with the expected life of stock options. The Company has not paid and does not anticipate paying cash dividends on its shares of common stock; therefore, the expected dividend yield is assumed to be zero.
Off-Balance Sheet Arrangements
We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditure or capital resources that is material to investors.
JOBS Act
On April 5, 2012, the Jumpstart Our Business Startups Act (the “JOBS Act”) was signed into law. The JOBS Act contains provisions that, among other things, eases certain reporting requirements for qualifying public companies. We will qualify as an “emerging growth company” and under the JOBS Act will be allowed to comply with new or revised accounting pronouncements based on the effective date for private (not publicly traded) companies. We are electing to delay the adoption of new or revised accounting standards, and as a result, we may not comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for non-emerging growth companies. As a result, our financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates.
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Future Related Party Transactions
The Corporate Governance Committee of our Board of Directors is required to approve all related party transactions. All related party transactions are made or entered into on terms that are no less favorable to use than can be obtained from unaffiliated third parties.
Impact of Inflation
We do not believe the impact of inflation on our Company is material.
Inflation Risk
We are also exposed to inflation risk. Inflationary factors, such as increases in labor costs, could impair our operating results. Although we do not believe that inflation has had a material impact on our financial position or results of operations to date, a high rate of inflation in the future may have an adverse effect on our ability to maintain current levels of gross margin and operating expenses.
Market Risk
Market risk is the risk of loss arising from adverse changes in market rates and prices. Our market risk exposure is generally limited to those risks that arise in the normal course of business, as we do not engage in speculative, non-operating transactions, nor do we utilize financial instruments or derivative instruments for trading purposes.
Item 7A. Quantitative and Qualitative Disclosures about Market Risk.
We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item.
Item 8. Financial Statements and Supplementary Data
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
On December 17, 2024, the Company dismissed TPS Thayer, LLC (“TPS”) as its independent registered public accounting firm. The Board of Directors and Audit Committee participated in and approved the decision to change the Company’s independent registered public accounting firm. During the Company’s fiscal years ending in December 31, 2023 and December 31, 2022, there were (i) no disagreements with TPS on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of TPS, would have caused TPS to make reference to the subject matter of the disagreements in connection with its report, and (ii) with the exception of material weaknesses related to reconciliation of various accounts, lack of precision and accuracy to properly reflect in the financial statements, no “reportable events,” as such term is defined in Item 304(a)(1)(v) of Regulation S-K.
Effective December 20, 2024, the Company engaged HTL International, LLC (“HTL”) as its new independent registered public accounting firm. During the two fiscal years ended December 31, 2023 and December 31, 2022 and through December 20, 2024, the Company did not consult with HTL regarding any of the following: the application of accounting principles to a specific transaction, either completed or proposed; the type of audit opinion that might be rendered on the Company’s financial statements, and none of the following was provided to the Company: (a) a written report, or (b) oral advice that HTL concluded was an important factor considered by the Company in reaching a decision as to accounting, auditing or financial reporting issue; or any matter that was subject of a disagreement, as that term is defined in Item 304(a)(1)(iv) of Regulation S-K.
The Company has not had any disagreements with our accountants or auditors that would need to be disclosed pursuant to Item 304 of Regulation S-K promulgated under the Securities Act.
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Item 9A. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
Pursuant to Rule 13a-15(b) under the Exchange Act, the Company carried out an evaluation, with the participation of the Company’s management, including the Company’s Chief Executive Officer (the Company’s principal executive officer and principal financial and accounting officer), of the effectiveness of the Company’s disclosure controls and procedures (as defined under Rule 13a-15(e) under the Exchange Act) as of the end of the period covered by this Annual Report. Based upon that evaluation, the Company’s Chief Executive Officer concluded that the Company’s disclosure controls and procedures are effective to ensure that information required to be disclosed by the Company in the reports that the Company files or submits under the Exchange Act, is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to the Company’s management, including the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.
Management’s Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Exchange Act Rule 13a-15(f) and 15d-15(f) under the Exchange Act. Internal control over financial reporting is a process used to provide reasonable assurance regarding the reliability of our financial reporting and the preparation of our financial statements for external purposes in accordance with U.S. GAAP. Internal control over financial reporting includes policies and procedures that pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets; provide reasonable assurance that transactions are recorded as necessary to permit preparation of our financial statements in accordance with U.S. GAAP, and that our receipts and expenditures are being made only in accordance with the authorization of our Board and management; and provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on our financial statements.
Any system of internal control, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the objectives of the system are met. Because of the inherent limitations in all internal control systems, no system of internal control over financial reporting can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected.
Our management conducted an evaluation of the effectiveness of our internal control over financial reporting as of December 31, 2025. Based on this evaluation, management concluded that our internal control over financial reporting was effective as of December 31, 2025.
Remediation of Previously Reported Material Weakness
As previously disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, management identified a material weakness in our internal control over financial reporting related to insufficiently designed and operating controls surrounding accounting policies and controls, including standardized reconciliation schedules to ensure the Company’s books and records are maintained in accordance with GAAP.
During the fiscal year ended December 31, 2025, the Company implemented remediation measures to address the previously identified material weakness, including hiring additional accounting and finance personnel with the requisite knowledge, training and experience in U.S. GAAP and public company reporting requirements, and implementing standardized reconciliation procedures and enhanced review processes over the Company’s financial close and reporting cycle.
Based on management’s evaluation as of December 31, 2025, the Company has concluded that the previously reported material weakness has been remediated and that the Company’s internal control over financial reporting is effective as of December 31, 2025.
Changes in Internal Controls over Financial Reporting
Other than the remediation measures described above, no change in our internal control over financial reporting occurred during the fiscal year ended December 31, 2025, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
Item 9B. Other Information.
During the year ended December 31, 2025, no director
or officer
The Company has adopted an insider trading policy governing the purchase, sale, and/or other dispositions of the Company’s securities by directors, officers and employees, or the registrant itself, that have been designed to promote compliance with insider trading laws, rules and regulations, and Nasdaq’s listing standards.
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
None.
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PART III
Item 10. Directors, Executive Officers and Corporate Governance.
The following table sets forth certain information with respect to our directors, executive officers and significant employees.
| Name | Age | Position | ||
| Executive Officers: | ||||
| Graydon Bensler | 34 | Non-Employee Chief Executive Officer, Chief Financial Officer and Director | ||
| Non-Executive Directors: | ||||
| Braeden Lichti | 41 | Non-Employee, Non-Executive Chairman of the Board | ||
| Jeffrey Parry(1)(2)(3) | 64 | Independent Director and Chair of Nominating Committee | ||
| George Kovalyov(1)(2)(3) | 39 | Independent Director and Chair of Compensation Committee | ||
| Juliana Daley(1)(2)(3) | 36 | Independent Director and Chair of the Audit Committee |
| (1) | Member of the Audit Committee. |
| (2) | Member of the Compensation Committee. |
| (3) | Member of the Nominating Committee. |
Each of our directors serves for a term of one year ending on the date of the subsequent annual meeting of stockholders following the annual meeting at which such director was elected. Notwithstanding the foregoing, each director is to serve until his or her successor is elected and qualified or until his death, resignation or removal. Our Board appoints our officers, and each officer is to serve until his or her successor is appointed and qualified or until his or her death, resignation or removal.
Graydon Bensler, CFA, Non-Employee Chief Executive Officer, Chief Financial Officer and Director
Mr. Bensler has served as our Chief Executive Officer since June 2024 and Chief Financial Officer since inception and a director since June 9, 2020. Mr. Bensler is a financial professional and analyst with over eight years of experience in financial consulting and management for both private businesses and US/Canadian publicly traded companies and is a CFA Charterholder (CFA). Mr. Bensler is the founder and sole owner of GB Capital Ltd, a privately held holding company he founded in 2019 and which company is engaged in capital markets advisory, financial consulting, and management. In 2017, Mr. Bensler co-founded an education technology curriculum management and scheduling company that was implemented in academic schools in Canada and the United States. From 2017 to 2019, Mr. Bensler was an account manager at a leading Canadian investor relations firm where he represented publicly traded companies across a wide range of sectors and worked directly with investment banks, investment brokers and company executives and directors. During his tenure at this investor relations firm, Mr. Bensler created and conveyed messaging about his clients’ strategic position in the market and successfully guided several companies through multiple financings. From 2019 to 2021, Mr. Bensler was a Senior Associate at Evans & Evans, a Canadian boutique investment banking firm where he led valuations and going public transactions for Canadian and United States companies. In this capacity, Mr. Bensler gained strong knowledge of the capital markets, public company compliance requirements, and regularly interfaced with regulators, auditors, board and executive management. We believe that Mr. Bensler’s past experience as our Chief Financial Officer, his familiarity with both the banking and the financial consulting sectors and his having served as an account manager for similarly situated companies makes him a qualified director for our Company.
Mr. Bensler received his Bachelor of Management and Organizational Studies degree from the University of Western Ontario, with specialization in Finance, and is a CFA Charterholder.
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Braeden Lichti, Non-Employee, Non-Executive Chairman of the Board
Braeden Lichti is the founder and Chief Executive Officer of BWL Investments Ltd., a privately held holding corporation he established in 2016, and NorthStrive Companies, Inc., a U.S. based investment, advisory and management services company he founded in 2021. Mr. Lichti also serves as Chairman of Hydromer, Inc., a global leader in surface modification and coating solutions, focusing on hydrophilic, thromboresistant and antimicrobial coatings for medical devices and various industrial applications. Established in 1980 and headquartered in Concord, North Carolina, Mr. Lichti co-founded PMGC Holdings Inc. in 2020 and has served as its advisor and has been a principal stockholder since its formation. We believe that Mr. Lichti’s past experience as a company founder, director and advisor, and his extensive capital markets and executive experience makes him a qualified director for our Company.
Jeffrey Parry, Independent Director, Chair of the Nominating Committee and member of the of Audit Committee and Compensation Committee
Mr. Parry was appointed as an independent director in June 2023 and is a partner of Mystic Marine Advisors LLC, a Connecticut based advisory firm he founded in 1998 focused on emerging and turnaround situations for strategic and financial stakeholders. Jeffrey served as Executive Chairman of TBS Shipping Limited from 2012 to 2018 where he led a successful restructuring and co-founded Valhalla Shipping, Inc with an $167 million equity investment by institutional investors. From July 2008 to October 2009, Mr. Parry was the Chief Executive Officer of Nasdaq-listed Aries Maritime Transport Limited and led a successful turn-around and sale to strategic investors. Mr. Parry was a Managing Director of Poten & Partners, an international energy advisor, from 2001 to 2007 where in 2006 he co-founded Poten Capital Services LLC, a New York based broker-dealer. Earlier in his career, Mr. Parry founded Cool FM and 7X Television in Athens, Greece and served as President of One Fifth Avenue Apartment Corporation. Since 2010, Jeffrey has served as an independent director of Nasdaq listed Globus Maritime Ltd. where he sits on the audit committee. Mr. Parry holds a BA from Brown University and MBA from Columbia University. His educational and professional experience in business, his background and familiarity in investment banking, and his having served as a director of a company listed on Nasdaq makes him a qualified director candidate for our Company.
George Kovalyov, Independent Director, Chair of the Compensation Committee and member of the of Audit Committee and Nominating Committee
Mr. Kovalyov has acted as Chief Financial Officer and Treasurer of Marizyme, Inc. since December 2021. Since November 2022, Mr. Kovalyov has also been a director of DGTL Holdings Inc. Previously he served as the chief operating officer and director of Health Logic Interactive Inc. (“HLII”) from September 2020 to November 2021, and as HLII’s chief financial officer from December 2021 to September 2022. In addition, Mr. Kovalyov served as a director and audit committee member of Margaret Lake Diamonds Inc. from January 2021 to August 2022. From September 2018 to September 2020, Mr. Kovalyov was VP of Finance and director of Phivida Holdings Inc., a brand of cannabidiol-infused foods, beverages and clinical products. From October 2016 to September 2020, Mr. Kovalyov was the principal owner of Schindler and Company, an accounting consulting firm. Mr. Kovalyov is a chartered accountant and is a member of Chartered Professional Accountants of Canada. Mr. Kovalyov is qualified to serve on the Board due to his extensive accounting and finance experience.
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Juliana Daley, CPA Independent Director, Chair of the Audit Committee and member of the of Compensation Committee and Nominating Committee
Ms. Daley was appointed as an independent director in June 2023 and holds over eleven years of accounting, controller, and financial reporting experience in the public sector. Ms. Daley has worked a variety of industries in both the United States and Canada. Since July 2021, Ms. Daley has served as Manager of Accounting at Anavex Life Sciences Corp. (NASDAQ: AVXL), a clinical-stage biopharmaceutical company based in New York, NY that is focused on developing treatments for debilitating neurodegenerative and neurodevelopmental diseases. In addition, from August 2021 to July 2022, she served as an independent director and audit committee chair to Vegano Foods (CSE: VAGN) during Vegano Food’s initial public offering in February 2022. From October 2015 to July 2021, Ms. Daley was a Manager of Financial Reporting and Advisory Services to various public companies in the United States and Canada, through her position with the accounting firm, Treewalk (previously ACM Management, Inc.). At Treewalk Ms. Daley assisted clients in meeting their quarterly and annual reporting requirements including the preparation of complete financial reporting packages and managing assurance engagements from start to finish. At Treewalk, she also served as chief financial officer to Makena Resources Inc. (CSE: MKNA) (April 2018 - April 2019) and Naked Brand Group Inc. (NASDAQ: NAKD) (March 2018 - June 2018) until the completion of their prospective mergers in April 2019 and June 2018, respectively. From September 2011 to April 2015, Ms. Daley was employed with Naked Brand Group Inc., where she worked in the accounting department, serving as controller from August 2013 until her departure in April 2015, and where she was also responsible for assisting in various operational functions including EDI implementation, ERP implementation, inventory management, information technology and office administration. From July 2021 to present, Ms. Daley has acted as manager of accounting at Anavex Life Sciences where she assists to in the finalization of all internal reporting, budgeting, and operational matters such as annual SOX audits, quarterly reviews, IT audits, and annual audits. Ms. Daley’s expertise in financial accounting for public companies and her having served as a chief financial officer and controller on companies listed on United States public exchanges makes her a qualified director candidate for our company.
Term of Office
Our directors are appointed for a one-year term to hold office until the next annual general meeting of our shareholders or until removed from office in accordance with our bylaws. Our officers are appointed by our board of directors and hold office until removed by the board.
Board Leadership Structure and Risk Oversight
Our Board has responsibility for the oversight of our risk management processes and, either as a whole or through its committees, regularly discusses with management our major risk exposures, their potential impact on our business and the steps we take to manage them. The risk oversight process includes receiving regular reports from Board committees and members of senior management to enable our Board to understand our risk identification, risk management and risk mitigation strategies with respect to areas of potential material risk, including operations, finance, legal, regulatory, cybersecurity, strategic and reputational risk.
Director Independence
Our Board is composed of a majority of “independent directors” as defined under the rules of Nasdaq. We use the definition of “independence” applied by Nasdaq to make this determination. Nasdaq Listing Rule 5605(a)(2) provides that an “independent director” is a person other than an officer or employee of the company or any other individual having a relationship which, in the opinion of the Company’s Board, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. The Nasdaq listing rules provide that a director cannot be considered independent if:
| ● | the director is, or at any time during the past three (3) years was, an employee of the company; |
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| ● | the director or a family member of the director accepted any compensation from the company in excess of $120,000 during any period of twelve (12) consecutive months within the three (3) years preceding the independence determination (subject to certain exemptions, including, among other things, compensation for board or board committee service); |
| ● | the director or a family member of the director is a partner in, controlling shareholder of, or an executive officer of an entity to which the company made, or from which the company received, payments in the current or any of the past three fiscal years that exceed 5% of the recipient’s consolidated gross revenue for that year or $200,000, whichever is greater (subject to certain exemptions); |
| ● | the director or a family member of the director is employed as an executive officer of an entity where, at any time during the past three (3) years, any of the executive officers of the company served on the compensation committee of such other entity; or |
| ● | the director or a family member of the director is a current partner of the company’s outside auditor, or at any time during the past three (3) years was a partner or employee of the company’s outside auditor, and who worked on the company’s audit. |
Under such definitions, our Board has undertaken a review of the independence of each director. Based on information provided by each director concerning his background, employment and affiliations, our Board has determined that Jeffrey Parry, George Kovalyov and Juliana Daley are independent directors of the Company.
Board Committees
We have established three committees under the board of directors: an audit committee, a compensation committee and a nominating committee. We have adopted a charter for each of the three committees. Copies of our committee charters are posted on our corporate investor relations website.
Each committee’s members and functions are described below.
Audit Committee. Our Audit Committee consists of Jeffrey Parry, George Kovalyov and Juliana Daley. Ms. Daley is the Chairman of our Audit Committee. We have determined that these directors satisfy the “independence” requirements of Nasdaq Rule 5605 and Rule 10A-3 under the Securities Exchange Act of 1934. Our Board of Directors has determined that Ms. Daley qualifies as an audit committee financial expert and has the accounting or financial management expertise as required under Item 407(d)(5)(ii) and (iii) of Regulation S-K. The Audit Committee will oversee our accounting and financial reporting processes and the audits of the financial statements of our company. The Audit Committee is responsible for, among other things:
| ● | appointing the independent auditors and pre-approving all auditing and non-auditing services permitted to be performed by the independent auditors; |
| ● | reviewing with the independent auditors any audit problems or difficulties and management’s response; |
| ● | discussing the annual audited financial statements with management and the independent auditors; |
| ● | reviewing the adequacy and effectiveness of our accounting and internal control policies and procedures and any steps taken to monitor and control major financial risk exposures; |
| ● | reviewing and approving all proposed related party transactions; |
| ● | monitoring management’s communication and implementation of the Company’s anti-fraud policy; |
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| ● | reviewing the Company’s cybersecurity mitigation measures and practices periodically; |
| ● | meeting separately and periodically with management and the independent auditors; and |
| ● | monitoring compliance with our code of business conduct and ethics, including reviewing the adequacy and effectiveness of our procedures to ensure proper compliance. |
Compensation Committee. Our Compensation Committee consists of Jeffrey Parry, George Kovalyov and Juliana Daley. Mr. Kovalyov is the Chairman of our Compensation Committee. The compensation committee assists the board in reviewing and approving the compensation structure, including all forms of compensation, relating to our directors and executive officers. Our chief executive officer may not be present at any committee meeting during which his compensation is deliberated. The compensation committee is responsible for, among other things:
| ● | reviewing and approving, or recommending to the board for its approval, the compensation for our chief executive officer and other executive officers; |
| ● | reviewing and recommending to the shareholders for determination with respect to the compensation of our directors; |
| ● | reviewing periodically and approving any incentive compensation or equity plans, programs or similar arrangements; and |
| ● | selecting compensation consultant, legal counsel or other adviser only after taking into consideration all factors relevant to that person’s independence from management. |
Nomination Committee. Our Nomination Committee consists of Jeffrey Parry, George Kovalyov and Juliana Daley. Mr. Parry is the chairman of our nomination committee. The nomination committee assists the board of directors in selecting individuals qualified to become our directors and in determining the composition of the board and its committees. The nomination committee is responsible for, among other things:
| ● | selecting and recommending to the board nominees for election by the shareholders or appointment by the board; |
| ● | reviewing annually with the Board the current composition of the Board with regards to characteristics such as independence, knowledge, skills, experience and diversity; |
| ● | making recommendations on the frequency and structure of Board meetings and monitoring the functioning of the committees of the Board; and |
| ● | advising the Board periodically with regards to significant developments in the law and practice of corporate governance as well as our compliance with applicable laws and regulations, and making recommendations to the board on all matters of corporate governance and on any remedial action to be taken. |
Family Relationships
There are no family relationships between any of our directors or executive officers.
Certain Legal Proceedings
To our knowledge, no director, independent director, or executive officer of the Company has been a party in any legal proceeding material to an evaluation of his ability or integrity during the past ten years.
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Code of Ethics
The Company adopted a Code of Ethics applicable to its directors, officers, and employees. This includes our principal executive officer, principal financial officer, and principal accounting officer or controller, or persons performing similar functions. The full text of our Code of Ethics is posted on our website.
Insider Trading Policy
The Company has
Compensation Recovery Policy
Under the Sarbanes-Oxley Act, in the event of misconduct that results in a financial restatement that would have reduced a previously paid incentive amount, we can recoup those improper payments from our executive officers. The SEC also recently adopted rules which direct national stock exchanges to require listed companies to implement policies intended to recoup bonuses paid to executives if the company is found to have misstated its financial results.
In 2023, we adopted an executive compensation recovery policy or “Clawback Policy” in compliance with Nasdaq rules. Under our Clawback Policy, if we are required to prepare an accounting restatement due to material noncompliance with the financial reporting requirements under any United States securities laws, we will be entitled to recover (and will seek to recover), from our executive officers, any excess incentive-based compensation received by our executive officers during the three-year period prior to the date on which we are required to prepare the restatement. This policy applies to both equity-based and cash compensation awards. The “excess compensation” is the difference between the actual amount that was paid and the amount that would have been paid if the financial statements were prepared properly in the first instance.
Involvement in Certain Legal Proceedings
To our knowledge, none of our current directors or executive officers has, during the past 10 years:
| ● | been convicted in a criminal proceeding or been subject to a pending criminal proceeding (excluding traffic violations and other minor offenses); |
| ● | had any bankruptcy petition filed by or against the business or property of the person, or of any partnership, corporation or business association of which he was a general partner or executive officer, either at the time of the bankruptcy filing or within two (2) years prior to that time; |
| ● | been subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction or federal or state authority, permanently or temporarily enjoining, barring, suspending or otherwise limiting, his or her involvement in any type of business, securities, futures, commodities, investment, banking, savings and loan, or insurance activities, or to be associated with persons engaged in any such activity; |
| ● | been found by a court of competent jurisdiction in a civil action or by the SEC or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated; |
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| ● | been the subject of, or a party to, any federal or state judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated (not including any settlement of a civil proceeding among private litigants), relating to an alleged violation of any federal or state securities or commodities law or regulation, any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order, or any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or |
| ● | been the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Exchange Act), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member. |
Item 11. Executive Compensation.
Introduction
We are an emerging growth company, as defined in the JOBS Act. As an emerging growth company, we will be exempt from certain requirements related to executive compensation, including, but not limited to, the requirements to hold a nonbinding advisory vote on executive compensation and to provide information relating to the ratio of total compensation of our Chief Executive Officer to the median of the annual total compensation of all of our employees, each as required by the Investor Protection and Securities Reform Act of 2010, which is part of the Dodd-Frank Wall Street Reform and Consumer Protection Act.
This section provides an overview of our executive compensation programs, including a narrative description of the material factors necessary to understand the information disclosed in the summary compensation table below.
Our named executive officers (“Named Executive Officers” or “NEOs”) are:
| ● | Graydon Bensler, Chief Executive Officer and Chief Financial Officer. |
The objective of our compensation program is to provide a total compensation package to each NEO that will enable us to attract, motivate and retain outstanding individuals, align the interests of our executive team with those of our equity holders, encourage individual and collective contributions to the successful execution of our short- and long-term business strategies and reward NEOs for performance.
Compensation of Directors and Named Executive Officers
The following table presents information regarding the total compensation (excluding equity-based compensation reported) awarded to, earned by, and paid to our NEOs for services rendered to us in all capacities for the years indicated.
| Name and Principal Position | Year | Salary ($) | Bonus ($) | Option Awards ($) | Total ($) | |||||||||||||||
| Graydon Bensler | 2025 | $ | 262,000 | $ | 435,800 | - | $ | 697,800 | ||||||||||||
| Chief Executive Officer, Chief Financial Officer and Director | 2024 | $ | 196,333 | $ | 195,000 | $ | - | $ | 391,333 | |||||||||||
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Compensation Arrangements with Named Executive Officers
Graydon Bensler
Mr. Bensler serves as Chief Executive Officer and Chief Financial Officer of the Company, which positions he accepted the Board’s appointment for as of the close of business on June 21, 2024. On October 25, 2024, the Company entered into the Second Amended and Restated Consulting Agreement for Non-Employee Chief Executive Officer (the “Second Amended GB Capital Consulting Agreement”) with GB Capital Ltd, a British Colombia, Canada corporation (“GB Capital”) wholly owned by Mr. Bensler. The Second Amended GB Capital Consulting Agreement amended and restated the terms of that certain Amended and Restated Consulting Agreement between the Company and GB Capital for Non-Employee Chief Executive Officer dated June 1, 2020 (the “Original GB Capital Consulting Agreement”). The Original GB Capital Consulting Agreement was amended and restated again on June 21, 2024 pursuant to that certain Amended and Restated Consulting Agreement for Non-Employee Chief Executive Officer between the Company and GB Capital. Under the Second Amended GB Capital Consulting Agreement, GB Capital agreed to designate Mr. Graydon Bensler, Director of GB Capital, to perform the Services (as defined in the Second Amended GB Capital Consulting Agreement).
Pursuant to the terms of the Second Amended GB Capital Consulting Agreement, as consideration for Mr. Bensler’s services as non-employee Chief Executive Officer of the Company, the Company would pay GB Capital a consultant fee of $250,000 per annum and certain bonuses. Upon execution of the Second Amended GB Capital Consulting Agreement, the Company would make the following payments to GB Capital (such payments, the Bensler Sign-on Bonuses”): (i) a one-time bonus of $175,000, with (A) $100,000 of such bonus to be paid to GB Capital in cash and (B) $75,000 of such bonus to be remitted to GB Capital in Series B Preferred Stock, with the cash equivalent of such shares of Series B Preferred Stock to be determined by mutual agreement of the Company and GB Capital, and provided such issuance of Series B Preferred Stock was approved by the Company’s stockholders. In the Board’s sole discretion, it may also award GB Capital a bonus at the end of the applicable fiscal year in the amounts it determines in its sole discretion (each of such bonuses, the “GB Capital Annual Bonus”), provided that GB Capital meets the Board’s performance objectives for GB Capital and GB Capital is engaged by the Company for such fiscal year in full. The target of the Annual Bonus is 125% or greater of the Bensler Annual Consultant Fee. For the avoidance of doubt, the first fiscal year for which the Company will consider whether GB Capital qualifies for the GB Capital Annual Bonus is the fiscal year in which the Effective Date falls. Pursuant to the Second Amended GB Capital Consulting Agreement, the Company shall also pay GB Capital in the first fiscal quarter of 2026 a bonus in the amount of $60,000 if the Company has a positive adjusted Earnings Before Interest, Taxes, Depreciation, and Amortization (“EBITDA”) in 2025. Subject to the terms of the Second Amended GB Capital Consulting Agreement, GB Capital is also entitled to each of the following bonus payments (collectively, the “GB Capital Milestone Bonuses”). Such GB Capital Milestone Bonuses are payable upon the occurrence of the following events, at which time the Company shall remit the applicable Milestone Bonuses to GB Capital as follows:
| (i) | the Company shall pay GB Capital $50,000 for each Company acquisition consummated, provided the target company of such acquisition has $2,000,000 in annual revenue or more upon consummation of such acquisition; | |
| (ii) | the Company shall pay GB Capital $50,000 upon any closing of an equity or equity-linked financing of the Company which results in net proceeds being raised in such financing of $3,000,000 in a fiscal quarter (the closing which qualifies GB Capital for such payment, the “GB Triggering Equity Financing,” and such payment, the “GB Equity Financing Bonus”). For the avoidance of doubt, GB Capital is entitled only to a one-time payment of the GB Equity Financing Bonus $50,000 per fiscal quarter and the Company will not make further payments as an Equity Financing Bonus in spite of the occurrence of any of the following events: (A) the closing of any equity or equity-linked financings subsequent to the GB Triggering Equity Financing in such fiscal quarter which result in proceeds of $3,000,000 to the Company; (B) any closings for the same equity financing round subsequent to the GB Triggering Equity Financing in such fiscal quarter which result in additional proceeds of $3,000,000 or more to the Company); |
| (iii) | if and when the Company achieves each of the targeted EBITDA amounts in one fiscal quarter, as set forth in this Section 1(e)(iii) (each of such amounts, “EBITDA Milestone”), the Company shall pay GB Capital a fee equal to 25% of the applicable EBITDA Milestone (such fee, the “EBITDA Milestone Bonus”: (A) $50,000; (B) $150,000; (C) $250,000; (D) $350,000. For the avoidance of doubt, GB Capital may only receive a one-time payment of the EBITDA Milestone Bonus in each fiscal quarter, upon the Company’s achievement of the applicable EBITDA Milestone, and the Company will not make further payments to GB Capital as the EBITDA Milestone Bonus even upon achievement of an EBITDA Milestone in the same fiscal quarter which value exceeds the value of the first EBITDA Milestone GB Capital has achieved in such fiscal quarter; and | |
| (iv) | the Company shall pay GB Capital $300,000 each time the Company achieves a Market Valuation (as defined in the Second Amended GB Capital Consulting Agreement) of $50,000,000 and $100,000,000, provided that each of such Market Valuations continues for each at least 5 consecutive Trading Days (as defined in the Second Amended GB Capital Consulting Agreement). |
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Additionally, GB Capital may elect to accrue the GB Capital Milestone Bonuses and convert the cash amount of the Bensler Milestone Bonus into shares of the Company’s Common Stock or preferred stock. In such event, the conversion ratio of the Bensler Milestone Bonus shall be determined by mutual agreement between the Company and GB Capital.
On October 25, 2024, the Company entered into the Amendment to the Second Amended GB Capital Consulting Agreement which stipulated that the Company’s issuances of Series B Preferred Stock to GB Capital as the Bensler Sign-on Bonuses, were subject to stockholder approval.
On April 3, 2025, the Company entered into Amendment No. 2 to the Second Amended GB Capital Consulting Agreement, which amended and restated paragraph 1e of Exhibit B of the Second Amended GB Capital Consulting Agreement, to include the following:
“e. Milestone-based Cash Bonuses. Upon the occurrence of the following events, the Company shall remit the applicable cash bonuses to the Consultant as set forth in this Section 1(e) and subject to the terms and conditions of this Section 1(e):
(i) The Company shall pay the Consultant $50,000 for each Company acquisition consummated, provided the target company of such acquisition has $2,000,000 in annual revenue or more upon consummation of such acquisition;
(ii) The Company shall pay the Consultant $50,000 upon any closing of an equity or equity-linked financing of the Company which results in net proceeds being raised in such financing of $3,000,000 in a fiscal quarter (the closing which qualifies the Consultant for such payment, the “Triggering Equity Financing,” and such payment, the “Equity Financing Bonus”). For the avoidance of doubt, the Consultant is entitled only to a one-time payment of the Equity Financing Bonus $50,000 per fiscal quarter and the Company will not make further payments as an Equity Financing Bonus in spite of the occurrence of any of the following events: (A) the closing of any equity or equity-linked financings subsequent to the Triggering Equity Financing in such fiscal quarter which result in proceeds of $3,000,000 to the Company; (B) any closings for the same equity financing round subsequent to the Triggering Equity Financing in such fiscal quarter which result in additional proceeds of $3,000,000 or more to the Company.
(iii) If and when the Company achieves each of the targeted EBITDA amounts in one fiscal quarter, as set forth in this Section 1(e)(iii) (each of such amounts, “EBITDA Milestone”), the Company shall pay the Consultant a fee equal to 25% of the applicable EBITDA Milestone (such fee, the “EBITDA Milestone Bonus”: (A) $50,000; (B) $150,000; (C) $250,000; (D) $350,000. For the avoidance of doubt, the Consultant may only receive a one-time payment of the EBITDA Milestone Bonus in each fiscal quarter, upon the Company’s achievement of the applicable EBITDA Milestone, and the Company will not make further payments to the Consultant as the EBITDA Milestone Bonus even upon achievement of an EBITDA Milestone in the same fiscal quarter which value exceeds the value of the first EBITDA Milestone the Consultant has achieved in such fiscal quarter.
(iv) Company shall pay the Consultant $50,000 each time the Company achieves a Market Valuation (as defined below) of $5,000,000, $10,000,000, $15,000,000, $20,000,000, and $25,000,000 (each of such payments, “Valuation Payment”); provided that each of such Market Valuations continue for each at least five (5) consecutive Trading Days (as defined below), and provided further that the Company may only recover any erroneously awarded amounts in Valuation Payments for one (1) year following the date of such erroneous award.
(v) The Company shall pay the Consultant $600,000 each time the Company achieves a Market Valuation of $50,000,000 and $100,000,000, provided that each of such Market Valuations continues for each at least 5 consecutive Trading Days.
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(vi) In any calendar year, the Company shall remit the Consultant a one-time payment of $300,000 upon the Company’s achievement of its first positive EBITDA of $2,000,000 for such calendar year.
(vii) The Board, in its sole discretion, may award a cash or equity bonus payment (“Licensing Milestone Bonus”) to the Consultant upon the Company or any of its Subsidiaries’ (as defined below) entry into a license agreement which provides for either: (A) the Company or Subsidiary’s license of any intellectual property rights of the Company or Subsidiary to another party, including the license of intellectual property rights of the Company or Subsidiary to each other; or (B) a third party’s license of intellectual property rights to the Company or Subsidiary; provided, however, that if the Board determines to award the Licensing Milestone Bonus to the Consultant in the form of preferred stock, such preferred stock issuance is subject to the approval of the Company’s shareholders.
(viii) Notwithstanding anything to the contrary in this Second A&R Agreement, the Consultant may elect to accrue the payments due to the Consultant under Section 1(e) of this Exhibit B (each, a “Milestone Bonus”) convert the cash amount of the Milestone Bonus into shares of the Company’s common stock or preferred stock. In such event, the conversion ratio of the Milestone Bonus shall be determined by mutual agreement between the Company and the Consultant, provided, however, that if the Consultant determines to receive the Milestone Bonus payment in the form of preferred stock, the Milestone Bonus payment is subject to the approval of the Company’s shareholders.”
Capitalized terms used in the text quoted immediately above have the meanings set forth in Amendment No. 2 to the Second Amended GB Capital Consulting Agreement.
Amendment No. 2 to the Second Amended GB Capital Consulting Agreement further clarified that the equity grants made to GB Capital under Section 2 of Exhibit B of the GB Consulting Agreement, if determined by the Board to be in the form of preferred stock, is subject to the approval of the Company’s shareholders.
Amendment No. 2 to the Second Amended GB Capital Consulting Agreement also deleted Section 4a of the GB Consulting Agreement in its entirety. The foregoing summary of Amendment No. 2 to the Second Amended GB Capital Consulting Agreement does not purport to be complete and is subject to and is qualified in its entirety by a copy of Amendment No. 2 to the Second Amended GB Capital Consulting filed herein as Exhibit 10.9.
On August 12, 2025, the Company entered into Amendment No. 3 to the Second Amended GB Capital Consulting Agreement, which provided for the Company’s grant of a fully vested award in the form of either: (i) restricted stock units (“RSUs”), (ii) restricted stock, or (iii) cash (each, an “Acquisition Award”) to GB Capital on the consummation of any acquisition of (i) an entity, (ii) assets, or (iii) capital stock by the Company or any Subsidiary (as defined below). The amount of the Acquisition Award will be calculated based on the total purchase price of the consummated acquisition, regardless of whether or not such purchase price is paid in cash, stock, assumed debt, or other consideration (such purchase price, the “Acquisition Value”), and will be determined as follows:
| ● | Acquisition Value from $0 to $5,000,000 – GB Capital is entitled to an Acquisition Award of 5% of the Acquisition Value; |
| ● | Acquisition Value over $5,000,000 to $10,000,000 – GB Capital is entitled to an Acquisition Award of 6% of the Acquisition Value; |
| ● | Acquisition Value over $10,000,000 to $20,000,000 – GB Capital is entitled to an Acquisition Award of 7% of the Acquisition Value; and |
| ● | Acquisition Value over $20,000,000 – GB Capital is entitled to an Acquisition Award of 8% of the Acquisition Value. |
In addition to the determinations of Acquisition Value set forth above, the Compensation Committee may, in its sole discretion, determine to award GB Capital an additional 1% of the applicable percentage of the Acquisition Value if: (i) the Board and/or Compensation Committee projects the applicable acquisition to be earnings before interest, tax, depreciation, and amortization (EBITDA) or net income accretive within twelve (12) months of closing or (b) the Compensation Committee deems the applicable acquisition as an advancement to the Company’s long-term growth objectives, competitive positioning, and/or operational capabilities.
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If GB Capital elects to receive its Acquisition Award in the form of RSUs or restricted stock, the number of RSUs (“RSU Award Amount”) or restricted stock granted shall equal (x) the dollar value of the Acquisition Award divided by (y) the trailing five (5) day volume-weighted average price (VWAP) of the Company’s Common Stock ending on the trading day prior to the acquisition closing date (such RSU Award Amount rounded down to the nearest whole share). The RSUs or restricted stock granted to GB Capital will be fully vested and shall not be subject to any further service or performance conditions.
Acquisition Awards may, at the Board’s discretion and in compliance with applicable law, be issued directly to GB Capital or any other designated entity of GB Capital. All such Acquisition Awards shall be subject to applicable securities laws and the terms of the Company’s then-effective equity incentive plan or other applicable grant policy.
“Person” means an individual, a partnership, a limited liability company, a corporation, an association, a joint stock company, a trust, a joint venture, an unincorporated organization, any other entity, or a governmental entity.
“Subsidiary” means, with respect to any Person, any corporation, limited liability company, partnership, joint venture or other legal entity of which such Person (either above or through or together with any other Subsidiary) owns, directly or indirectly, more than 50% of the stock or other equity interests the holders of which are generally entitled to vote for the election of the board of directors or other governing body of such entity.
Amendment No. 3 to the Second Amended GB Capital Consulting Agreement also provided for the name change of the Second Amended GB Capital Consulting Agreement, going forward, to “Consulting and Services Agreement for Non-Employee Chief Executive Officer.” Amendment No. 3 to the Second Amended GB Capital Consulting Agreement is filed as Exhibit 10.17 herein.
On October 16, 2025, the Company entered into Amendment No. 4 to the Consulting and Services Agreement for Non-Employee Chief Executive Officer (“Amendment No. 4 to the GB Capital Consulting Agreement”) with GB Capital.
Amendment No. 4 to the Consulting and Services Agreement for Non-Employee Chief Executive Officer between the Company and GB Capital (the “GB Capital Consulting Agreement”) modified the terms of the GB Capital Consulting Agreement as follows:
| a. | Add terms to Section 3 to provide for a monthly housing reimbursement of $8,000 to GB Capital solely for the purpose of facilitating its performance of services in Newport Beach, California. |
| b. | Amend and restate Section 5’s provisions regarding GB Capital’s independent contractor relationship with the Company; |
| c. | Amend and restate Section 6’s provisions regarding GB Capital’s determination of the method, detail, and means of performing its services, subject to the results required by the Company set forth in the GB Capital Consulting Agreement and applicable Statements of Work, if any; |
| d. | Amend and restate subsection 6(b)’s provisions regarding GB Capital’s ineligibility for the Company’s employee benefits; |
| e. | Amend and restate subsection 6(c)’s provisions regarding GB Capital’s tax responsibilities for compensation paid under the GB Capital Consulting Agreement; |
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| f. | Add subsection 6(d) to provide for GB Capital’s express authorization to enter into contracts and make commitments on behalf of the Company, subject to any limitations or approval requirements established by the Board or as otherwise provided in writing by the Company; |
| g. | Add subsection 6(e) to provide for GB Capital’s non-exclusive engagement as consultant under the GB Capital Consulting Agreement and permit GB Capital’s to provide services to other clients and other clients and to engage in other business activities; and |
| h. | Add subsection 6(f) to state that the GB Capital Consulting Agreement does not create an employment, agency, partnership, fiduciary, or joint venture relationship between the Parties. |
Additionally, Amendment No. 4 to the GB Capital Consulting Agreement replaces all references to “severance payment”, “Severance Payment”, and “Severance Event”) in the GB Capital Consulting Agreement with “termination payment,” “Termination Payment,” and “Termination Event,” respectively, on a nomenclature basis without changing the parties’ substantive rights or obligations.
Except as expressly amended in Amendment No. 4 to the GB Capital Consulting Agreement, the GB Capital Consulting Agreement remains in full force and effect. The foregoing summary does not purport to be complete and is qualified in its entirety by reference to the full text of Amendment No. 4 to the GB Capital Consulting Agreement, a copy of which is filed as Exhibit 10.28 herein.
Director Compensation
The Company pays each of its independent directors $55,500 in compensation for their services to the Company as independent directors. The Company’s current independent directors are paid this annual compensation on a quarterly basis, or $13,875 at each fiscal quarter’s end.
We previously compensated our independent directors for their services as directors through a mix of cash and stock options. In addition to in-person attendance bonuses, we intend to reimburse our non-employee directors for reasonable travel and out-of-pocket expenses incurred in connection with attending Board and Board committee meetings.
Equity Incentive Awards
The Company has historically granted stock options to its employees, including its executive officers, under the Amended 2020 Equity Incentive Plan (“2020 Plan”).
On September 15, 2025 (the “2025 Plan Effective Date”), the 2025 Plan became effective.
As of the 2025 Plan Effective Date, the 2025 Plan superseded the 2020 Plan, and any shares of Common Stock underlying awards already made under the 2020 Plan will be issued from the 2025 Plan. On the Plan Effective Date, (i) outstanding awards made under the 2020 Plan will remain outstanding, and such awards will remain subject to the original award terms; and (ii) shares subject to any outstanding awards made under the 2020 Plan will be administered from the share reserve of the 2025 Plan. The 2025 Plan is filed herein as Exhibit 10.1.
The purpose of the 2025 Plan is to attract and retain the best available personnel for positions of substantial responsibility, to provide additional incentive to employees, directors and consultants, and to promote the success of our business. The administrator of the 2025 Plan (the “Administrator”) may, in its sole discretion, amend, alter, suspend or terminate the 2025 Plan, or any part thereof, at any time and for any reason. We will obtain stockholder approval of any 2025 Plan amendment to the extent necessary and desirable to comply with legal and regulatory requirements relating to the administration of equity-based awards. Unless earlier terminated by the Administrator, the 2025 Plan will terminate ten years after the 2025 Plan Effective Date.
Any capitalized terms used in this “2025 Equity Incentive Plan” subsection and not otherwise defined herein have the meaning given to that term in the 2025 Plan.
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Authorized Shares
Initially, the maximum number of shares of our Common Stock that may be subject to awards under the 2025 Plan is 169,281, or 25% of the issued and outstanding shares of Common Stock as of the 2025 Plan Effective Date. Subject to adjustment upon dividends or other distributions, recapitalizations, stock splits, reorganizations, merger, consolidations, split-ups, spin-offs, combinations, changes in control, repurchases or exchange of Shares or other securities of the Company as provided in Section 12 of the 2025 Plan, the number of shares of Common Stock reserved and available for issuance under the 2025 Plan will be (i) no less than twenty five percent (25%) of the shares of Common Stock issued and outstanding as of the 2025 Plan Effective Date; (ii) on January 1 of each calendar year after the 2025 Plan Effective Date, will automatically increase by an amount equal to the lesser of: (A) ten percent (10%) of the shares of Common Stock issued and outstanding as of January 1 of the applicable calendar year; and (B) such lesser amount as determined by the Administrator, in its sole discretion.
Additionally, if an Award expires or becomes unexercisable without having been exercised in full, is surrendered pursuant to an exchange program, or, with respect to restricted stock, is forfeited to or repurchased by the Company due to the failure to vest, the unpurchased shares of Common Stock (or for Awards other than Options the forfeited or repurchased Shares) which were subject thereto will become available for future grant or sale under the 2025 Plan (unless the 2025 Plan has terminated). Shares of Common Stock that have actually been issued under the 2025 Plan under any Award will not be returned to the 2025 Plan and will not become available for future distribution under the 2025 Plan; provided, however, that if shares of Common Stock issued pursuant to Awards of Restricted Stock are repurchased by the Company or are forfeited to the Company due to the failure to vest or upon certain events, such shares of Common Stock will become available for future grant under the 2025 Plan. Shares of Common Stock used to pay the exercise price of an Award or to satisfy the tax withholding obligations related to an Award will become available for future grant or sale under the 2025 Plan. To the extent an Award under the 2025 Plan is paid out in cash rather than shares of Common Stock, such cash payment will not result in reducing the number of shares of Common Stock available for issuance under the 2025 Plan. Notwithstanding the foregoing and, subject to adjustment as provided in Section 12, the maximum number of shares of Common Stock that may be issued upon the exercise of Incentive Stock Options will equal the aggregate number of shares reserved and issuable under the 2025 Plan, plus, to the extent allowable under Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”), and the Treasury Regulations promulgated under the Code, any shares of Common Stock that become available for issuance under the 2025 Plan pursuant to Section 3(b) of the 2025 Plan (shares of Common Stock which were subject to Awards which have: expired or becomes unexercisable without having been exercised in full, surrendered pursuant to an exchange program, or with respect to restricted stock, is forfeited to or repurchased by the Company due to the failure to vest, the unpurchased shares of Common Stock (or for Awards other than Options the forfeited or repurchased Shares).
Plan Administration
The 2025 Plan will be administered by (i) the Compensation Committee or (ii) the Board, if the Compensation Committee does not exist, and in any event, the administrator of the 2025 Plan shall administer the 2025 Plan in compliance with Applicable Laws. Subject to the provisions of the 2025 Plan, and in the case of the Compensation Committee, subject to the specific duties delegated by the Board to the Compensation Committee, the Administrator will have the authority, in its discretion: (A) to determine the Fair Market Value; (B) to select the Service Providers to whom Awards may be granted under the 2025 Plan; (C) to determine the number of Shares to be covered by each Award granted under the 2025 Plan; (D) to approve forms of Award Agreements for use under the 2025 Plan; (E) to determine the terms and conditions, not inconsistent with the terms of the 2025 Plan, of any Award granted under the 2025 Plan, of which terms and conditions include, but are not limited to, the exercise price, the time or times when Awards may be exercised (which may be based on performance criteria), any vesting acceleration or waiver of forfeiture restrictions, and any restriction or limitation regarding any Award or the Shares of Common Stock relating thereto, based in each case on such factors as the Administrator will determine; (F) to institute and determine the terms and conditions of an Exchange Program; (G) to construe and interpret the terms of the 2025 Plan and Awards granted pursuant to the 2025 Plan; (H) to prescribe, amend and rescind rules and regulations relating to the 2025 Plan, including rules and regulations relating to sub-plans established for the purpose of satisfying applicable foreign laws or for qualifying for favorable tax treatment under applicable foreign laws; (I) to modify or amend each Award (subject to the amendment and termination provisions of the 2025 Plan), including but not limited to, the discretionary authority to extend the post-termination exercisability period of Awards and to extend the maximum term of an Option (subject to the Option term provisions set forth in the 2025 Plan; (J) to allow Participants to satisfy withholding tax obligations in a manner prescribed in Section 13 of the 2025 Plan; (K) to authorize any person to execute on behalf of the Company any instrument required to effect the grant of an Award previously granted by the Administrator; (L) to allow a Participant to defer the receipt of the payment of cash or the delivery of shares of Common Stock that otherwise would be due to such Participant under an Award; and (M) to make all other determinations deemed necessary or advisable for administering the 2025 Plan. The Administrator’s decisions, determinations and interpretations will be final and binding on all Participants and any other holders of Awards.
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“Fair Market Value” means as of any date, the value of Common Stock determined as follows:
| (i) | if the Common Stock is listed on any established stock exchange or a national market system, including without limitation The Nasdaq Global Select Market, The Nasdaq Global Market or The Nasdaq Capital Market of The Nasdaq Stock Market LLC, its Fair Market Value will be the closing sales price for such stock (or the closing bid, if no sales were reported) as quoted on such exchange or system on the day of determination, as reported in The Wall Street Journal or such other source as the Administrator deems reliable; |
| (ii) | if the Common Stock is regularly quoted by a recognized securities dealer but selling prices are not reported, the Fair Market Value of a Share will be the mean between the high bid and low asked prices for the Common Stock on the day of determination (or, if no bids and asks were reported on that date, as applicable, on the last trading date such bids and asks were reported), as reported in The Wall Street Journal or such other source as the Administrator deems reliable; and |
| (iii) | in the absence of an established market for the Common Stock, the Fair Market Value will be determined in good faith by the Administrator using one of the valuation methods set forth in Section 1.409A-1(b)(5)(iv)(B)(2) of the Treasury Regulation. Such determination shall be conclusive and binding on all persons. |
Eligibility
Under the 2025 Plan, Non-statutory Stock Options, Restricted Stock, Restricted Stock Units and other equity awards granted may be granted to Service Providers. Additionally, Incentive Stock Options may be granted only to Employees.
Stock Options
Subject to the terms and provisions of the 2025 Plan, the Administrator, at any time and from time to time, may grant Options in such amounts as the Administrator, in its sole discretion, will determine. Each Award of an Option will be evidenced by an Award Agreement that will specify the exercise price, the term of the Option, the number of shares of Common Stock subject to the Option, the exercise restrictions, if any, applicable to the Option, and such other terms and conditions as the Administrator, in its sole discretion, will determine. Each Option will be designated in the Award Agreement as either an Incentive Stock Option or a Non-statutory Stock Option. Notwithstanding such designation, however, to the extent that the aggregate Fair Market Value of the shares of Common Stock with respect to which Incentive Stock Options are exercisable for the first time by the Participant during any calendar year (under all plans of the Company and any Parent or Subsidiary) exceeds one hundred thousand dollars ($100,000), such Options will be treated as Non-statutory Stock Options.
The term of each Option will be stated in the Award Agreement; provided, however, that the term will be no more than five (5) years from the date of grant thereof. In the case of an Incentive Stock Option granted to a Participant who, at the time the Incentive Stock Option is granted, owns stock representing more than ten percent (10%) of the total combined voting power of all classes of stock of the Company or any Parent or Subsidiary, the term of the Incentive Stock Option will be five (5) years from the date of grant or such shorter term as may be provided in the Award Agreement. The terms of outstanding Awards may be amended without shareholder approval to reduce the exercise price of outstanding Options, or to cancel outstanding Options in exchange for cash, other Awards, or Options with an exercise price that is less than the exercise price of the original Option, to the extent permitted by Applicable Law or the listing rules of Nasdaq.
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The per share exercise price for the shares of Common Stock to be issued pursuant to the exercise of an Option will be determined by the Administrator, but will be no less than one hundred percent (100%) of the Fair Market Value per Share on the date of grant. As to an Incentive Stock Option granted to an Employee who owns stock representing more than ten percent (10%) of the voting power of all classes of stock of the Company or any Parent or Subsidiary, the per share exercise price will be no less than one hundred ten percent (110%) of the Fair Market Value per Share on the date of grant. Options may be granted with a per share exercise price of less than one hundred percent (100%) of the Fair Market Value per Share on the date of grant pursuant to a transaction described in, and in a manner consistent with, Code Section 424(a).
At the time an Option is granted, the Administrator will fix the period within which the Option may be exercised and will determine any conditions that must be satisfied before the Option may be exercised. The Administrator will determine the acceptable form of consideration for exercising an Option, including the method of payment. In the case of an Incentive Stock Option, the Administrator will determine the acceptable form of consideration at the time of grant. Such consideration may consist entirely of: (i) cash; (ii) check; (iii) promissory note, to the extent permitted by Applicable Laws; (iv) other Shares, provided that such Shares have a Fair Market Value on the date of surrender equal to the aggregate exercise price of the Shares as to which such Option will be exercised and provided further that accepting such Shares will not result in any adverse accounting consequences to the Company, as the Administrator determines in its sole discretion; (v) consideration received by the Company under cashless exercise program (whether through a broker or otherwise) implemented by the Company in connection with the 2025 Plan; (vi) by net exercise; (vii) such other consideration and method of payment for the issuance of Shares to the extent permitted by Applicable Law; or (viii) any combination of the foregoing methods of payment. In making its determination as to the type of consideration to accept, the Administrator will consider if acceptance of such consideration may be reasonably expected to benefit the Company.
Any Option granted under the 2025 Plan will be exercisable according to the terms of the 2025 Plan and at such times and under such conditions as determined by the Administrator and set forth in the Award Agreement. An Option may not be exercised for a fraction of a share of Common Stock.
Restricted Stock
Subject to the terms and provisions of the 2025 Plan, the Administrator, at any time and from time to time, may grant Shares of Restricted Stock to Service Providers in such amounts as the Administrator, in its sole discretion, will determine. Each Award of Restricted Stock will be evidenced by an Award Agreement that will specify the Period of Restriction, the number of Shares granted, and such other terms and conditions as the Administrator, in its sole discretion, will determine. Unless the Administrator determines otherwise, the Company as escrow agent will hold Shares of Restricted Stock until the restrictions on such Shares have lapsed. Except as provided in the 2025 Plan or as the Administrator determines, shares of Restricted Stock may not be transferred until the end of the applicable Period of Restriction (as defined below). The Administrator, in its sole discretion, may impose such other restrictions on Shares of Restricted Stock as it may deem advisable or appropriate. Except as otherwise provided in the 2025 Plan, Shares of Restricted Stock covered by each Restricted Stock grant made under the 2025 Plan will be released from escrow as soon as practicable after the last day of the Period of Restriction or at such other time as the Administrator may determine. The Administrator, in its discretion, may accelerate the time at which any restrictions will lapse or be removed. During the Period of Restriction, Service Providers holding Shares of Restricted Stock granted under the 2025 Plan may exercise full voting rights with respect to those Shares, unless the Administrator determines otherwise.
“Period of Restriction” means the period during which the transfer of shares of Restricted Stock are subject to restrictions and therefore, the shares of Common Stock are subject to a substantial risk of forfeiture. Such restrictions may be based on the passage of time, the achievement of target levels of performance, or the occurrence of other events as determined by the Administrator.
During the Period of Restriction, Service Providers holding shares of Restricted Stock will be entitled to receive all dividends and other distributions paid with respect to such shares, unless the Administrator provides otherwise. If any such dividends or distributions are paid in shares of Common Stock, the shares of Common Stock will be subject to the same restrictions on transferability and forfeitability as the shares of Restricted Stock with respect to which they were paid. On the date set forth in the Award Agreement, the Restricted Stock for which restrictions have not lapsed will revert to the Company and again will become available for grant under the 2025 Plan.
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Restricted Stock Units
Subject to the terms and provisions of the 2025 Plan, the Administrator, at any time and from time to time, may grant Restricted Stock Units to Service Providers in such amounts as the Administrator, in its sole discretion, will determine. Each Award of Restricted Stock Units will be evidenced by an Award Agreement that will specify the terms, conditions, and restrictions (if any) related to the grant, including the number of Restricted Stock Units.
The Administrator will set vesting criteria in its discretion, which, depending on the extent to which the criteria are met, will determine the number of Restricted Stock Units that will be paid out to the Participant. A Restricted Stock Unit Award may vest upon completion of a specified period of service with the Company or a Subsidiary and/or based on the achievement of certain performance goals during the applicable performance period, as set forth in the Participant’s Award Agreement. If Restricted Stock Units vest based upon satisfaction of performance goals, then the Administrator will: (x) determine the nature, length and starting date of any performance period for the Restricted Stock Units; (y) select the performance goals to be used to measure the performance; and (z) determine what additional vesting conditions, if any, should apply. Upon meeting the applicable vesting criteria, the Participant will be entitled to receive a payout as determined by the Administrator. Notwithstanding the foregoing, at any time after the grant of Restricted Stock Units, the Administrator, in its sole discretion, may reduce or waive any vesting criteria that must be met to receive a payout. The Administrator may, in its sole discretion, award dividend equivalents in connection with the grant of Restricted Stock Units that may be settled in cash, in Shares of equivalent value, or in some combination thereof. Payment of earned Restricted Stock Units will be made upon the date(s) determined by the Administrator and set forth in the Award Agreement. The Administrator, in its sole discretion, may only settle earned Restricted Stock Units in cash, Shares, or a combination of both. On the date set forth in the Award Agreement, all Shares underlying any unvested, unlapsed, unearned Restricted Stock Units will be forfeited to the Company for future issuance.
Other Awards
Other forms of Awards valued in whole or in part by reference to, or otherwise based on, Common Stock, including the appreciation in value thereof may be granted either alone or in addition to the specified Awards provided for in the 2025 Plan. Subject to the provisions of the 2025 Plan, the Board will have sole and complete discretion to determine the persons to whom and the time or times at which such Other Awards will be granted, the number of shares of Common Stock (or the cash equivalent thereof) to be granted pursuant to such other Awards and all other terms and conditions of such other Awards.
Non-transferability of Awards
Unless determined otherwise by the Administrator, Awards may not be sold, pledged, assigned, hypothecated, or otherwise transferred in any manner other than by will or by the laws of descent and distribution, and may be exercised, during the lifetime of the Participant, only by the Participant. If the Administrator makes an Award transferable, such Award may only be transferred (i) by will, (ii) by the laws of descent and distribution, or (iii) as permitted by Rule 701 of the Securities Act of 1933, as amended (the “Securities Act”).
Certain Adjustments
In the event that any dividend or other distribution (whether in the form of cash, shares of Common Stock, other securities, or other property), recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase, or exchange of shares of Common Stock or other securities of the Company, or other change in the corporate structure of the Company affecting the shares of Common Stock occurs, the Administrator, in order to prevent diminution or enlargement of the benefits or potential benefits intended to be made available under the 2025 Plan, the Company will adjust the number and class of shares of Common Stock that is reserved and issuable under the 2025 Plan and/or the number, class, and price of shares of Common Stock covered by each outstanding Award.
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Dissolution or Liquidation
In the event of the proposed dissolution or liquidation of the Company, the Administrator will notify each Participant as soon as practicable prior to the effective date of such proposed transaction. To the extent it has not been previously exercised, an Award will terminate immediately prior to the consummation of such proposed action.
Merger or Change in Control
In the event of a merger or Change in Control (as defined below), each outstanding Award will be treated as the Administrator determines (subject to the provisions of the following paragraph) without a Participant’s consent including, without limitation, that: (i) Awards will be assumed, or substantially equivalent Awards will be substituted, by the acquiring or succeeding corporation (or an affiliate thereof) with appropriate adjustments as to the number and kind of shares and prices; (ii) upon written notice to a Participant, that the Participant’s Awards will terminate upon or immediately prior to the consummation of such merger or Change in Control; (iii) outstanding Awards will vest and become exercisable, realizable, or payable, or restrictions applicable to an Award will lapse, in whole or in part prior to or upon consummation of such merger or Change in Control, and, to the extent the Administrator determines, terminate upon or immediately prior to the effectiveness of such merger or Change in Control; (iv) (A) the termination of an Award in exchange for an amount of cash and/or property, if any, equal to the amount that would have been attained upon the exercise of such Award or realization of the Participant’s rights as of the date of the occurrence of the transaction (and, for the avoidance of doubt, if as of the date of the occurrence of the transaction the Administrator determines in good faith that no amount would have been attained upon the exercise of such Award or realization of the Participant’s rights, then such Award may be terminated by the Company without payment), or (B) the replacement of such Award with other rights or property selected by the Administrator in its sole discretion; or (v) any combination of the foregoing. In taking any of the actions permitted under this Section 12(c), the Administrator will not be obligated to treat all Awards, all Awards held by a Participant, or all Awards of the same type, similarly.
In the event that the successor corporation does not assume or substitute for the Award (or portion thereof), the Participant will fully vest in and have the right to exercise all of his or her outstanding Options, including Shares as to which such Awards would not otherwise be vested or exercisable, all restrictions on Restricted Stock will lapse, and, with respect to Awards with performance-based vesting, all performance goals or other vesting criteria will be deemed achieved at one hundred percent (100%) of target levels and all other terms and conditions met. In addition, if an Option is not assumed or substituted in the event of a merger or Change in Control, the Administrator will notify the Participant in writing or electronically that the Option will be exercisable for a period of time determined by the Administrator in its sole discretion, and the Option will terminate upon the expiration of such period.
An Award will be considered assumed if, following the merger or Change in Control, the Award confers the right to purchase or receive, for each Share subject to the Award immediately prior to the merger or Change in Control, the consideration (whether stock, cash, or other securities or property) received in the merger or Change in Control by holders of Common Stock for each Share held on the effective date of the transaction (and if holders were offered a choice of consideration, the type of consideration chosen by the holders of a majority of the outstanding Shares); provided, however, that if such consideration received in the merger or Change in Control is not solely common stock of the successor corporation or its Parent, the Administrator may, with the consent of the successor corporation, provide for the consideration to be received upon the exercise of an Option, for each Share subject to such Award, to be solely common stock of the successor corporation or its Parent equal in fair market value to the per share consideration received by holders of Common Stock in the merger or Change in Control.
Notwithstanding anything in Section 12(c) of the 2025 Plan to the contrary, an Award that vests, is earned or paid-out upon the satisfaction of one or more performance goals will not be considered assumed if the Company or its successor modifies any of such performance goals without the Participant’s consent; provided, however, a modification to such performance goals only to reflect the successor corporation’s post-Change in Control corporate structure will not be deemed to invalidate an otherwise valid Award assumption.
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Notwithstanding anything in Section 12(c) of the 2025 Plan to the contrary, if a payment under an Award Agreement is subject to Code Section 409A and if the change in control definition contained in the Award Agreement does not comply with the definition of “change of control” for purposes of a distribution under Code Section 409A, then any payment of an amount that is otherwise accelerated under this Section 12 will be delayed until the earliest time that such payment would be permissible under Code Section 409A without triggering any penalties applicable under Code Section 409A.
“Change in Control” means any of the following events:
| (i) | A change in the ownership of the Company which occurs on the date that any one person, or more than one person acting as a group (“Person”), acquires ownership of the stock of the Company that, together with the stock held by such Person, constitutes more than 50% of the total voting power of the stock of the Company, except that any change in the ownership of the stock of the Company as a result of a private financing of the Company that is approved by the Board will not be considered a Change in Control; |
| (ii) | If the Company has a class of securities registered pursuant to Section 12 of the Exchange Act, a change in the effective control of the Company which occurs on the date that a majority of members of the Board is replaced during any twelve (12) month period by Directors whose appointment or election is not endorsed by a majority of the members of the Board prior to the date of the appointment or election. For purposes of this clause (ii), if any Person is considered to be in effective control of the Company, the acquisition of additional control of the Company by the same Person will not be considered a Change in Control; or |
| (iii) | A change in the ownership of a substantial portion of the Company’s assets which occurs on the date that any Person acquires (or has acquired during the twelve (12) month period ending on the date of the most recent acquisition by such person or persons) assets from the Company that have a total gross fair market value equal to or more than 50% of the total gross fair market value of all of the assets of the Company immediately prior to such acquisition or acquisitions. For purposes of this subsection (iii), gross fair market value means the value of the assets of the Company, or the value of the assets being disposed of, determined without regard to any liabilities associated with such assets. |
For purposes of the definition of Change in Control, persons will be considered to be acting as a group if they are owners of a corporation that enters into a merger, consolidation, purchase or acquisition of stock, or similar business transaction with the Company. Notwithstanding the foregoing, a transaction will not be deemed a Change in Control unless the transaction qualifies as a change in control event within the meaning of Code Section 409A, as it has been and may be amended from time to time, and any proposed or final Treasury Regulations and Internal Revenue Service guidance that has been promulgated or may be promulgated thereunder from time to time. Further, and for the avoidance of doubt, a transaction will not constitute a Change in Control if: (i) its sole purpose is to change the jurisdiction of the Company’s incorporation; or (ii) its sole purpose is to create a holding company that will be owned in substantially the same proportions by the persons who held the Company’s securities immediately before such transaction.
Treatment of Awards on Termination of Relationship as a Service Provider
Unless otherwise provided by the Administrator, if a Participant ceases to be a Service Provider, other than upon the Participant’s termination as the result of the Participant’s death or Disability, any unvested portion of any applicable Awards will be forfeited and shares of Common Stock covered by any vested portion of the applicable Awards that have not been issued to the Participant or its designees, as applicable, pursuant to the exercise or settlement thereof during the period beginning on the date of cessation of the Participant as a Service Provider until three (3) months thereafter, will revert to the 2025 Plan. Notwithstanding the immediately preceding sentence, if the Service Provider is terminated for Cause, any Award issued to such terminated Service Provider will be forfeited, regardless of any vested or unvested portion of such Award, and in the case of such forfeiture, the Shares covered by the Award will revert to the 2025 Plan.
Unless otherwise provided by the Administrator, if a Participant ceases to be a Service Provider as a result of the Participant’s Disability, (i) the vested portion of the Option shall remain exercisable for the amount set forth in the Award Agreement (but in no event later than the expiration of the term of the Option as set forth in the Award Agreement), and if no time is specified in the Award Agreement, the vested portion of the Option shall remain exercisable for twelve (12) months following the Participant’s termination, and (ii) the unvested portion shall remain exercisable for three (3) months following the Participant’s termination due to Disability, and after such three (3) months the Shares underlying the unvested portion of the Option will be forfeited and revert to the 2025 Plan. If after termination the Participant does not exercise his or her Option within the time specified herein, the Option will terminate, and the Shares covered by such Option will revert to the 2025 Plan.
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Unless otherwise provided by the Administrator, if a Participant dies while a Service Provider, the Option may be exercised within such period of time as is specified in the Award Agreement (but in no event later than the expiration of the term of such Option as set forth in the Award Agreement) to the extent that the Option is vested on the date of death, by the Participant’s designated beneficiary, provided such beneficiary has been designated prior to the Participant’s death in a form acceptable to the Administrator. If no such beneficiary has been designated by the Participant, then such Option may be exercised by the personal representative of the Participant’s estate or by the person(s) to whom the Option is transferred pursuant to the Participant’s will or in accordance with the laws of descent and distribution. In the absence of a specified time in the Award Agreement, the Option shall remain exercisable for twelve (12) months following the Participant’s termination. Unless otherwise provided by the Administrator, if at the time of death Participant is not vested as to his or her entire Option, the Shares covered by the unvested portion of the Option will immediately revert to the 2025 Plan. If the Option is not so exercised within the time specified herein, the Option will terminate, and the Shares covered by such Option will revert to the 2025 Plan.
Clawback
Awards will be subject to any Company clawback policy that the Company is required to adopt pursuant to the listing standards of any national securities exchange or association on which the Company’s securities are listed or as is otherwise required by the Dodd-Frank Wall Street Reform and Consumer Protection Act or other applicable laws. The administrator also may specify in an award agreement that the participant’s rights, payments or benefits with respect to an award will be subject to reduction, cancellation, forfeiture or recoupment upon the occurrence of certain specified events. The Administrator may require a participant to forfeit, return or reimburse the Company all or a portion of the Award or shares issued under the Award, any amounts paid under the Award and any payments or proceeds paid or provided upon disposition of the shares issued under the Award in order to comply with such clawback policy or Applicable Laws.
U.S. Federal Income Tax Consequences
The 2025 Plan is, in part, is a qualified plan for federal income tax purposes. As such, the Company is entitled to (i) withhold and deduct from future wages of the Participant, or make other arrangements for the collection of, all legally required amounts necessary to satisfy any and all federal, state and local withholding and employment-related tax requirements attributable to a qualified stock option, including, without limitation, the grant, exercise or vesting of, or payment of dividends with respect to, a qualified stock option or a disqualifying disposition of stock received upon exercise of a qualified stock option, or (ii) require the Participant promptly to remit the amount of such withholding to the Company before taking any action, including issuing any shares of Common Stock, with respect to a qualified stock option.
Amendment and Termination
The Board may at any time amend, alter, suspend or terminate the 2025 Plan. The Company shall obtain stockholder approval of any Plan amendment to the extent necessary and desirable to comply with Applicable Laws. Additionally, the Company shall obtain stockholder approval for each of the following: (i) increases to the shares of Common Stock reserved and issuable under the 2025 Plan other than as set forth in Section 3(c)(ii) to 3(c)(iii) of the 2025 Plan (evergreen and adjustment provisions of the 2025 Plan); (ii) any changes to the applicable prices that a Participant may pay for with regard to applicable Awards granted under the 2025 Plan, provided, however, that the terms of outstanding Awards may be amended without shareholder approval to reduce the exercise price of outstanding Options, or to cancel outstanding Options in exchange for cash, other Awards, or Options with an exercise price that is less than the exercise price of the original Option; (iii) changes to the 2025 Plan which would expand eligibility for Participant or potential Participants’ Awards; (iv) changes to the 2025 Plan which would materially increase Participants’ or potential Participants’ benefits available under the 2025 Plan; and (v) changes to the 2025 Plan which would expand the types of Awards provided under the 2025 Plan. Notwithstanding anything to the contrary in the 2025 Plan, the terms of outstanding Awards may be amended without shareholder approval to reduce the exercise price of outstanding Options, or to cancel outstanding Options in exchange for cash, other Awards, or Options with an exercise price that is less than the exercise price of the original Option to the extent permitted by applicable law or the listing rules of the applicable trading market.
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No amendment, alteration, suspension or termination of the 2025 Plan will impair the rights of any Participant, unless mutually agreed otherwise between the Participant and the Administrator, which agreement must be in writing and signed by the Participant and the Company. Termination of the 2025 Plan will not affect the Administrator’s ability to exercise the powers granted to it under the 2025 Plan with respect to Awards granted under the 2025 Plan prior to the date of such termination.
As of December 31, 2025, no options to purchase shares of Common Stock under the Plan were outstanding, and 7,752 shares were available for future grant. Each option granted under the Plan will carry a term of no more than 10 years from the date of grant and the Plan will remain in effect until it is terminated by the Board. The term and vesting periods for options granted under the Plan are determined by the Board. The summary does not contain a complete description of all provisions of the 2025 Plan and is qualified in its entirety by reference to the 2025 Plan, a copy of which is filed as Exhibit 10.1 to this Annual Report.
Policies and Practices for Granting Certain Equity Awards
Our policies and practices regarding the granting of equity awards are carefully designed to ensure compliance with applicable securities laws and to maintain the integrity of our executive compensation program. The Compensation Committee is responsible for the timing and terms of equity awards to executives and other eligible employees.
The timing of equity award grants is determined with consideration to a variety of factors, including but not limited to, the achievement of pre-established performance targets, market conditions and internal milestones. The Company does not follow a predetermined schedule for the granting of equity awards; instead, each grant is considered on a case-by-case basis to align with the Company’s strategic objectives and to ensure the competitiveness of our compensation packages.
In determining the timing and terms of an equity award, the Board or the Compensation Committee may consider material nonpublic information to ensure that such grants are made in compliance with applicable laws and regulations. The Board’s or the Compensation Committee’s procedures to prevent the improper use of material nonpublic information in connection with the granting of equity awards include oversight by legal counsel and, where appropriate, delaying the grant of equity awards until the public disclosure of such material nonpublic information.
The Company is committed to maintaining transparency in its executive compensation practices and to making equity awards in a manner that is not influenced by the timing of the disclosure of material nonpublic information for the purpose of affecting the value of executive compensation. The Company regularly reviews its policies and practices related to equity awards to ensure they meet the evolving standards of corporate governance and continue to serve the best interests of the Company and its shareholders.
Equity Compensation Plan Information
The table below sets forth information concerning securities granted under equity compensation plans approved and not approved by security holders of the Company and the weighted average exercise price for such securities as of December 31, 2025.
| Plan Category | Number of securities to be issued upon exercise of outstanding options, warrants and rights | Weighted- average exercise price of outstanding options, warrants and rights | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) | |||||||||
| (a) | (b) | (c) | ||||||||||
| Equity compensation plans approved by security holders | 6 | $265,384 | 7,746 | |||||||||
| Equity compensation plans not approved by security holders | - | $ | - | - | ||||||||
| Total | 6 | $ | 265,384 | 7,746 | ||||||||
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Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
The following table sets forth certain information regarding the ownership of the Company’s Common Stock and Series B Preferred Stock as of March 30, 2026 by: (i) each director and nominee for director; (ii) each executive officer named in the Summary Compensation Table; (iii) all executive officers and directors of the Company as a group; and (iv) all those known by the Company to be beneficial owners of more than five percent (5%) of its Common Stock and Series B Preferred Stock.
We have determined beneficial ownership in accordance with the rules and regulations of the SEC, and the information is not necessarily indicative of beneficial ownership for any other purpose. In general, under these rules a beneficial owner of a security includes any person who, directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise has or shares voting power or investment power with respect to such security. A person is also deemed to be a beneficial owner of a security if that person has the right to acquire beneficial ownership of such security within 60 days of March 30, 2026. Except as indicated by the footnotes below, we believe, based on information furnished to us, that the persons and entities named in the table below have sole voting and sole investment power with respect to all shares that they beneficially own, subject to applicable community property laws.
Percentage ownership is based on 1,159,112 shares of Common Stock and 6,372,874 shares of outstanding Series B Preferred Stock as of March 30, 2026.
| Number of Shares Beneficially Owned | Beneficial Ownership Percentages | |||||||||||||||||||
| Name and Address of Beneficial Owner (1) | Common Stock | Series B Preferred Stock | Percent of Common Stock | Percent of Series B Preferred Stock (2) | Percent of Voting Stock (2) | |||||||||||||||
| Officers and Directors | ||||||||||||||||||||
| Braeden Lichti, Non-employee, Non-Executive Chairman of the Board | 35 | (3) | 3,336,437 | (4) | * | % | 52.35 | % | 44.30 | % | ||||||||||
| Graydon Bensler, Non-Employee Chief Executive Officer, Chief Financial Officer and Director | 10 | (5) | 3,036,437 | (6) | * | % | 47.65 | % | 40.31 | % | ||||||||||
| Jeffrey Parry, Director | 2 | (7) | 0 | * | % | 0 | % | *% | ||||||||||||
| George Kovalyov, Director | 0 | 0 | * | % | 0 | % | *% | |||||||||||||
| Juliana Daley, Director | 2 | (8) | 0 | * | % | 0 | % | *% | ||||||||||||
| All executive officers and directors as a group (5 persons) | 49 | (9) | 6,372,874 | * | % | 100 | % | 84.64 | % | |||||||||||
| 5%+ Stockholders of Series B Preferred Stock | ||||||||||||||||||||
| Northstrive Companies Inc. (10) | ** | 3,336,437 | (4) | ** | 52.35 | % | 44.30 | % | ||||||||||||
| GB Capital Ltd (11) | ** | 3,036,437 | (6) | ** | 47.65 | % | 40.31 | % | ||||||||||||
| 5%+ Stockholders of Common Stock | ||||||||||||||||||||
| * | Denotes less than one (1%) percent. |
| ** | This shareholder is not a 5% or greater holder of Common Stock, only a 5% or greater holder of Series B Preferred Stock. |
| (1) | Unless otherwise indicated, the business address of each of the individuals is our address of c/o PMGC Inc., 120 Newport Center Drive, Newport Beach, CA 92660. |
| (2) | Rounded to the nearest tenth percent. |
| (3) | Consists of (i) 2 shares of Common Stock that Mr. Lichti has the right to acquire from us within 60 days of March 30, 2026 pursuant to the exercise of stock options previously granted under the Amended 2020 Equity Incentive Plan, (ii) 32 shares of Common Stock held by Northstrive Companies Inc., of which Mr. Lichti has sole voting and dipositive power over the shares, and (iii) 1 share of Common Stock underlying warrants held by BWL Investments Ltd. |
| (4) | These shares of Series B Preferred Stock are held through Northstrive Companies Inc., a California corporation wholly owned by Braeden Lichti, the Company’s Non-employee, Non-Executive Chairman. Mr. Lichti has sole voting and dispositive power over these shares. |
| (5) | Consists of (i) 8 shares of Common Stock held by GB Capital Ltd, of which Mr. Bensler has sole voting and dipositive power over the shares and (ii) 2 shares of Common Stock that Mr. Bensler has the right to acquire from us within 60 days of March 30, 2026 pursuant to the exercise of stock options previously granted under the Amended 2020 Equity Incentive Plan. |
| (6) | These shares of Series B Preferred Stock are held through GB Capital Ltd, a British Columbia, Canada corporation wholly owned by Graydon Bensler, the Company’s Non-employee Chief Executive Officer, Chief Financial Officer, and Director. Mr. Bensler has sole voting and dispositive power over these shares. |
| (7) | Consists of (i) 1 share of Common Stock and (ii) 1 share of Common Stock that Mr. Parry has the right to acquire from us within 60 days of March 30, 2026, pursuant to the exercise of stock options previously granted under the Amended 2020 Equity Incentive Plan. |
| (8) | Consists of (i) 1 share of Common Stock and (ii) 1 share of Common Stock that Ms. Daley has the right to acquire from us within 60 days of March 30, 2026, pursuant to the exercise of stock options previously granted under the Amended 2020 Equity Incentive Plan. |
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| (9) | Consists of (i) 42 shares of Common Stock beneficially owned by our directors and executive officers, (ii) 6 shares of Common Stock underlying outstanding options, exercisable within 60 days of March 30, 2026 and (iii) 1 share of Common Stock underlying warrants. |
| (10) | Northstrive Companies Inc. is an entity wholly owned by Braeden Lichti, the Company’s Non-employee, Non-executive Chairman. Mr. Lichti has sole voting and dispositive power over the shares of Series B Preferred Stock held by Northstrive Companies Inc. |
| (11) | GB Capital Ltd is an entity wholly owned by Graydon Bensler, the Company’s Non-employee Chief Executive Officer, Chief Financial Officer, and Director. Mr. Bensler has sole voting and dispositive power over the shares of Series B Preferred Stock held by GB Capital Ltd. |
Item 13. Certain Relationships and Related Transactions, and Director Independence.
Our Audit Committee, pursuant to its written charter, is responsible for reviewing and approving related party transactions to the extent we enter into such transactions. The Audit Committee will consider all relevant factors when determining whether to approve a related party transaction, including whether the related party transaction is on terms no less favorable than terms generally available to an unaffiliated third-party under the same or similar circumstances and the extent of the related party’s interest in the transaction. These procedures are intended to determine whether any such related party transaction impairs the independence of a director or presents a conflict of interest on the part of a director, employee or officer.
The following is a summary of transactions entered since January 1, 2024 to which we have been a party in which the amount involved exceeded or will exceed $109,308.19, which represents 1% of the average of our total assets amounts as of December 31, 2025 and 2024), and in which any of our directors, executive officers or, to our knowledge, beneficial owners of more than 5% of our capital stock or any member of the immediate family of any of the foregoing persons had or will have a direct or indirect material interest, other than equity and other compensation, termination, change in control and other arrangements, which are described under “Executive and Director Compensation.” We also describe below certain other transactions with our directors, executive officers and stockholders.
GB Capital Ltd
The Company paid consulting fees of $412,000 and $391,333 to GB Capital Ltd, a company controlled by Graydon Bensler, Chief Executive Officer, Chief Financial Officer and Director in 2025 and 2024, respectively.
The Company incurred consulting fees of $697,800 and $391,333 to GB Capital Ltd, a company wholly owned by Graydon Bensler, our current non-employee Chief Executive Officer, Chief Financial Officer and Director in 2025 and 2024, respectively. In the 2025 fiscal year, the Company paid GB Capital $262,000 in consulting fees under GB Capital’s Consulting and Services Agreement for Non-Employee Chief Executive Officer. As of December 31, 2025, the Company has $285,800 due to GB Capital in contract performance bonus payments and has paid $150,000 to GB Capital in contract performance bonus payments under GB Capital’s Consulting and Services Agreement for Non-Employee Chief Executive Officer.
On July 25, 2025, the Company entered into the GB Capital Secondment Agreement with GB Capital, pursuant to which GB Capital agreed to second certain of its employees (each, a “GB Capital Employee” and, collectively, the “GB Capital Employees”), on an exclusive basis, to the Company from time to time to provide certain services in accordance with the terms of the GB Capital Secondment Agreement. The GB Capital Employees will remain employees of GB Capital during their respective periods of secondment (each, a “GB Capital Secondment Period”) and will not be employees of the Company.
Under the GB Capital Secondment Agreement, GB Capital shall pay each Employee’s salary, incentives, health and retirement benefits, and other applicable compensation or benefits GB Capital Employee is entitled to as an employee of GB Capital. As consideration for GB Capital making GB Capital Employees available to provide services during the GB Capital Secondment Period, the Company shall reimburse GB Capital on a monthly basis based on (i) an agreed hourly rate set forth in Exhibit A of the GB Capital Secondment Agreement, multiplied by (ii) actual hours worked by the GB Capital Employee. Except as otherwise set forth in the GB Capital Secondment Agreement, each party to the GB Capital Secondment Agreement shall bear its own costs and expenses in connection with the GB Capital Secondment Agreement. However, if any extraordinary costs or expenses not contemplated by the GB Capital Agreement arise in connection with the GB Capital Agreement, including travel and expenses, the Company will reimburse GB Capital for such costs and expenses, provided that (i) the Company provided its written consent prior to GB Capital’s incurrence of such costs and expenses, and (ii) such costs and expenses are documented to the reasonable satisfaction of the Company.
Pursuant to the terms of the GB Capital Secondment Agreement, each GB Capital Employee will provide services to the Company as agreed between the parties up to the number of hours per week specified in Exhibit A. Further, each GB Capital Employee shall provide services at the Company’s principal place of business or such other place as the parties may agree. The Company has full and exclusive responsibility for each GB Capital Employee’s actions performed in service to the Company during the GB Capital Secondment Period.
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The Company may terminate the services provided by any GB Capital Employee at any time by providing at least fifteen (15) days’ prior written notice of termination to GB Capital, provided that the Company may terminate any GB Capital Employee’s secondment at any time, without advance notice, in the event of the GB Capital Employee’s misconduct, violation of the Company’s policies, or any conduct that the Company reasonably determines may be detrimental to the business or reputation of the Company. Upon the termination of any GB Capital Employee’s employment with GB Capital, any GB Capital Employee’s services to the Company will also terminate, and if such employment with GB Capital is terminated, GB Capital shall provide notice of the same to the Company no later than the close of business on the same day such termination becomes effective. GB Capital may terminate the GB Capital Secondment Agreement by providing at least 90 days’ written notice of termination to the Company. The Company may terminate the GB Capital Secondment Agreement by providing at least 30 days’ written notice of termination to GB Capital. The GB Capital Secondment Agreement may be terminated by either party upon 10 days’ written notice if the other party breaches or is in default of any provision of the GB Capital Secondment Agreement and does not cure such breach or default within such 10 day period, with such notice to be made and delivered to the addresses as provided by the applicable party.
The foregoing summary of the GB Capital Secondment Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the GB Capital Secondment Agreement, a copy of which is included as Exhibit 10.15 herein.
On October 16, 2025, the Company entered into Amendment No. 1 to the GB Capital Secondment Agreement with GB Capital (“Amendment No. 1 to the GB Capital Secondment Agreement”). Amendment No. 1 to the GB Capital Secondment Agreement amends the GB Capital Secondment Agreement as follows:
| a. | The effective date of the GB Capital Secondment Agreement was amended to October 16, 2025. |
| b. | Section 4 of the GB Capital Secondment Agreement was amended and supplemented to state that the seconded employees of GB Capital (“GB Capital Seconded Employees”) are classified as exempt under applicable law and will be paid on a salary basis, while non-exempt GB Capital Seconded Employees will be paid hourly, with overtime in accordance with law. Amendment No. 1 to the GB Capital Secondment Agreement also added terms to Section 4 providing for: GB Capital Seconded Employees’s eligibility to participate in the Company’s group health plans on the same terms as similarly situated employees; and GB Capital’s proposal of milestone-driven bonuses or incentive payments for GB Capital Seconded Employees, subject to the Company’s prior written approval. |
| c. | Terms were added to Section 5 providing for: (i) the Company’s reimbursement to GB Capital for all costs and expenses associated with any GB Capital Seconded Employee’s use of a company car in the course of providing services to the Company: (ii) the Company’s reimbursement to GB Capital for reasonable costs and expenses incurred in providing office space for GB Capital Seconded Employees during the secondment period, including rent, utilities, and related overhead, to the extent such office space is used for the performance of services for the Company; (iii) the Company’s provision of a mobile phone and/or reimbursement for certain costs associated with the phone if in performing the secondment, a mobile phone and/or associated service plan is reasonably required; and (iv) the Company’s reimbursement to GB Capital for fees actually incurred in connection with the hiring and onboarding of GB Capital Seconded Employees. |
| d. | Amendment No. 1 to the GB Capital Secondment Agreement replaced Exhibit A of the GB Capital Secondment Agreement with a new Exhibit A setting forth (i) approved GB Capital Seconded Employees; and (ii) the Company’s payment of a fee equal to 30% of aggregate employment costs for all of the GB Capital Seconded Employees. Any additions of employees beyond those set forth in Exhibit A requires prior review and approval by the Board. |
Except as expressly amended by Amendment No. 1 to the GB Capital Secondment Agreement, all other terms and conditions of the GB Capital Secondment Agreement remain unchanged and in full force and effect. The foregoing summary of Amendment No. 1 to the GB Capital Secondment Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of Amendment No. 1 to the GB Capital Secondment Agreement, a copy of which is filed as Exhibit 10.26 herein.
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As of December 31, 2025, the Company has paid GB Capital a total of $159,996 for management fees, bonuses and fees and reimbursements under the Secondment Agreement. This amount includes $31,755 in management fees and $128,241 in expense reimbursements. The reimbursed expenses cover costs and bonuses for seconded GB Capital employees working on the Company’s operations, reimbursements for third party recruiting and temporary staffing fees paid by GB Capital and other personnel-related operating expenses required to operate the Company’s wholly owned subsidiaries.
Northstrive Companies Inc.
The Company incurred consulting fees of $764,600 and $365,900 to Northstrive Companies Inc., a company wholly owned by our Non-Employee, Non-Executive Chairman, Braeden Lichti, in 2025 and 2024, respectively. In the fiscal year ending December 31, 2025, the Company has paid $328,800 to Northstrive in consulting fees under Northstrive’s Consulting and Services Agreement for Non-Employee, Non-Executive Chairman, and has $285,800 due to Northstrive in bonus payments. As of December 31, 2025, the Company has $285,800 due to Northstrive in bonus payments and has paid $150,000 to Northstrive in bonus payments under Northstrive’s Consulting and Services Agreement for Non-Employee, Non-Executive Chairman.
As amended and agreed to on May 1, 2023, and as effective on January 4, 2022, we entered into a consulting agreement (the “Northstrive Consulting Agreement”) with Northstrive Companies Inc., a California corporation (“Northstrive”) owned and managed by Braeden Lichti. Pursuant to the Northstrive Consulting Agreement, Northstrive is to assist us in a variety of business matters, including assistance in our overall investor outreach and communications strategy, and advising us on becoming a “public” company. As of December 31, 2025, the Company had $324,736 due to Northstrive. We retained the option, but not the obligation to issue the amount of Compensation due Northstrive in shares of our Common Stock equal to our series A preferred stock price at $1.34138 per share (pre 200:1 stock consolidation, pre 1-for-7 reverse stock split, pre 1-for-3.5 reverse stock split) equal to the value of the Compensation due to Northstrive for services provided through and up to March 31, 2023 and $3.00 per share (pre 200:1 stock consolidation, pre 1-for-7 split, and pre 1-for-3.5 Split). On June 21, 2024, we entered into the Amended and Restated Consulting Agreement with Northstrive (the “First Amended Northstrive Consulting Agreement”), pursuant to which Mr. Lichti would serve as non-executive Chairman of the Company. As consideration for his services as non-executive Chairman, the Company agreed to pay Northstrive $16,000 per month. For the fiscal year ended December 31, 2025, we paid Northstrive $328,800 under the Northstrive Consulting Agreement. The First Amended Northstrive Consulting Agreement was filed as Exhibit 10.13 in the Form S-1 filed with the SEC on February 12, 2025 and is incorporated herein by reference.
On October 25, 2024, the Company entered into the Second Amended and Restated Consulting Agreement for Non-Executive Chairman (the “Second Amended Northstrive Companies Consulting Agreement”) with Northstrive. The Second Amended Northstrive Companies Consulting Agreement provided that, as consideration for Mr. Lichti’s provision of his services as non-executive Chairman, as set forth more fully in such agreement, the Company would compensate Northstrive as such: (i) an annual consultant fee of $300,000 per annum (the “Lichti Annual Consultant Fee”), 1/12 of which Lichti Annual Consultant Fee will be paid to Northstrive once per calendar month (“Northstrive Payment Cycle”), provided that Northstrive performs the Services required to be performed in each Northstrive Payment Cycle. The Company agreed that upon execution of the Second Amended Northstrive Companies Consulting Agreement, the Company would make the following payments to Northstrive (such payments, the “Northstrive Sign-on Bonuses”): (A) a one-time bonus of $175,000, with (I) $100,000 of such bonus to be paid to Northstrive in cash and (II) $75,000 of such bonus to be remitted to Northstrive in Series B Preferred Stock, with the cash equivalent of such shares of Series B Preferred Stock to be determined by mutual agreement of the Company and Northstrive; and (B) 300,000 shares of Series B Preferred Stock. In the Board’s sole discretion, it may also award Northstrive a bonus at the end of the applicable fiscal year in the amounts it determines in its sole discretion (each of such bonuses, the “Northstrive Annual Bonus”), provided that Northstrive meets the Board’s performance objectives for Northstrive and Northstrive is engaged by the Company for such fiscal year in full. The target of the Northstrive Annual Bonus is 125% or greater of the Lichti Annual Consultant Fee.
Subject to the terms of the Second Amended Northstrive Companies Consulting Agreement, Northstrive is also entitled to each of the following bonus payments (collectively, the “Northstrive Milestone Bonuses”). Such Northstrive Milestone Bonuses are payable upon the occurrence of the following events, at which time the Company shall remit the applicable Northstrive Milestone Bonuses to Northstrive as follows:
| (i) | The Company shall pay Northstrive $150,000 for each Company acquisition consummated, provided that the target company of such acquisition has $2,000,000 in annual revenue or more upon consummation of the acquisition. |
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| (ii) | The Company shall pay Northstrive $50,000 upon any closing of an equity or equity-linked financing of the Company which results in net proceeds being raised in such financing of $3,000,000 in a fiscal quarter (the closing which qualifies Northstrive for such payment, the “Northstrive Triggering Equity Financing,” and such payment, the “Northstrive Equity Financing Bonus”). For the avoidance of doubt, Northstrive is entitled only to a one-time payment of the Northstrive Equity Financing Bonus $50,000 per fiscal quarter and the Company will not make further payments as a Northstrive Equity Financing Bonus in spite of the occurrence of any of the following events: (A) the closing of any equity or equity-linked financings subsequent to the Northstrive Triggering Equity Financing in such fiscal quarter which result in proceeds of $3,000,000 to the Company; (B) any closings for the same equity financing round subsequent to the Northstrive Triggering Equity Financing in such fiscal quarter which result in additional proceeds of $3,000,000 or more to the Company. |
| (iii) | The Company shall pay Northstrive $75,000 each time the Company achieves a Market Valuation (as defined in the Second Amended Northstrive Companies Consulting Agreement) of $10,000,000, $20,000,000, $30,000,000, and $40,000,000 (each of such payments, “Northstrive Valuation Payment”), provided that each of such market valuations continue for each at least five (5) consecutive Trading Days, and provided further that the Company may only recover any erroneously awarded amounts in Northstrive Valuation Payments for one (1) year following the date of such erroneous award. |
| (iv) | The Company shall pay Northstrive $300,000 each time the Company achieves a Market Valuation of $50,000,000 and $100,000,000, provided that each of such Market Valuations continues for each at least two (2) consecutive Trading Days. |
Notwithstanding anything to the contrary stated in the Second Amended Northstrive Companies Consulting Agreement, Northstrive may elect to accrue the Northstrive Milestone Bonuses and convert the cash amount of the Northstrive Milestone Bonus into shares of the Company’s common stock or preferred stock. In such event, the conversion ratio of the Northstrive Milestone Bonus shall be determined by mutual agreement between the Company and Northstrive. The Second Amended Northstrive Companies Consulting Agreement was filed as Exhibit 10.20 in the Form S-1 filed with the SEC on February 12, 2025 and is incorporated herein by reference.
On October 25, 2024, the Company entered into the Amendment to the Second Amended Northstrive Companies Consulting Agreement, which stipulated that the Company’s issuances of Series B Preferred Stock to Northstrive as the Northstrive Sign-on Bonuses, were subject to stockholder approval. The Amendment to the Second Amended Northstrive Companies Consulting Agreement is filed as Exhibit 10.22 in the Form S-1 filed with the SEC on February 12, 2025 and is incorporated herein by reference. For the fiscal year ended December 31, 2025, we paid Northstrive $328,800 under the Second Amended Northstrive Companies Consulting Agreement.
On April 3, 2025, the Company entered into Amendment No. 2 to the Second Amended Northstrive Companies Consulting Agreement, which amended and restated paragraph 1d of Exhibit B of the Second Amended and Restated Northstrive Companies Consulting Agreement to include:
“d. Milestone-based Cash Bonuses. Upon the occurrence of the following events, the Company shall remit the applicable cash bonuses to the Consultant as set forth in this Section 1(d) and subject to the terms and conditions of this Section 1(d):
(i) The Company shall pay the Consultant $150,000 for each Company acquisition consummated, provided the target company of such acquisition has $2,000,000 in annual revenue or more upon consummation of the acquisition;
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(ii) The Company shall pay the Consultant $50,000 upon any closing of an equity or equity-linked financing of the Company which results in net proceeds being raised in such financing of $3,000,000 in a fiscal quarter (the closing which qualifies the Consultant for such payment, the “Triggering Equity Financing,” and such payment, the “Equity Financing Bonus”). For the avoidance of doubt, the Consultant is entitled only to a one-time payment of the Equity Financing Bonus $50,000 per fiscal quarter and the Company will not make further payments as an Equity Financing Bonus in spite of the occurrence of any of the following events: (A) the closing of any equity or equity-linked financings subsequent to the Triggering Equity Financing in such fiscal quarter which result in proceeds of $3,000,000 to the Company; (B) any closings for the same equity financing round subsequent to the Triggering Equity Financing in such fiscal quarter which result in additional proceeds of $3,000,000 or more to the Company.
(iii) The Company shall pay the Consultant $50,000 each time the Company achieves a Market Valuation (as defined below) of $5,000,000, $10,000,000, $15,000,000, $20,000,000, and $25,000,000 (each of such payments, “Valuation Payment”); provided that each of such Market Valuations continue for each at least five (5) consecutive Trading Days (as defined below), and provided further that the Company may only recover any erroneously awarded amounts in Valuation Payments for one (1) year following the date of such erroneous award.
(iv) The Company shall pay the Consultant $600,000 each time the Company achieves a Market Valuation of $50,000,000 and $100,000,000; provided that each of such Market Valuations continues for each at least two (2) consecutive Trading Days.
(v) The Board, in its sole discretion, may award a cash or equity bonus payment (“Licensing Milestone Bonus”) to the Consultant upon the Company or any of its Subsidiaries’ (as defined below) entry into a license agreement which provides for (A) the Company or Subsidiary’s license of any intellectual property rights of the Company or Subsidiary to another party, including the license of intellectual property rights of the Company or Subsidiary to each other, or (B) a third party’s license of intellectual property rights to the Company or Subsidiary; provided, however, that if the Board determines to award the Licensing Milestone Bonus to the Consultant in the form of preferred stock, such preferred stock issuance is subject to the approval of the Company’s shareholders.
“Subsidiary” means any corporation or other entity of which a majority of (i) the voting power of the voting equity securities or (ii) the outstanding equity interests is owned, directly or indirectly, by the Company.”
(vi) Notwithstanding anything to the contrary in this Second A&R Agreement, the Consultant may elect to accrue the payments due to the Consultant under Section 1(d) of this Exhibit B (each, a “Milestone Bonus”) convert the cash amount of the Milestone Bonus into shares of the Company’s common stock or preferred stock. In such event, the conversion ratio of the Milestone Bonus shall be determined by mutual agreement between the Company and the Consultant, provided, however, that if the Consultant determines to receive the Milestone Bonus payment in the form of preferred stock, the Milestone Bonus payment is subject to the approval of the Company’s shareholders.”
Capitalized terms used in the text quoted immediately above have the meanings set forth in Amendment No. 2 to the Second Amended Northstrive Companies Consulting Agreement. The Second Amended Northstrive Consulting Agreement further clarified that (the equity grants made to Northstrive under Section 2 of Exhibit B of the Northstrive Consulting Agreement, if determined by the Board to be in the form of preferred stock, is subject to the approval of the Company’s shareholders. The foregoing summary of Amendment No. 2 to the Second Amended Northstrive Consulting Agreement does not purport to be complete and is subject to and is qualified in its entirety by a copy of Amendment No. 2 to the Second Amended Northstrive Consulting Agreement, filed as Exhibit 10.8 herein.
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On August 12, 2025, the Company entered into Amendment No. 3 to the Second Amended Northstrive Consulting Agreement, which provided for the Company’s grant of Acquisition Awards (as defined below) to Northstrive on the consummation of any acquisition of (i) an entity, (ii) assets, or (iii) capital stock by the Company or any Subsidiary (as defined below). The amount of the Acquisition Award will be calculated based on the total purchase price of the consummated acquisition, regardless of whether or not such purchase price is paid in cash, stock, assumed debt, or other consideration (such purchase price, the “Agreement Acquisition Value”), and will be determined as follows:
| (i) | Agreement Acquisition Value from $0 to $5,000,000 – Northstrive is entitled to an Acquisition Award of 5% of the Northstrive Agreement Acquisition Value; |
| (ii) | Agreement Acquisition Value over $5,000,000 to $10,000,000 – Northstrive is entitled to an Acquisition Award of 6% of the Northstrive Agreement Acquisition Value; |
| (iii) | Agreement Acquisition Value over $10,000,000 to $20,000,000 – Northstrive is entitled to an Acquisition Award of 7% of the Northstrive Agreement Acquisition Value; and |
| (iv) | Agreement Acquisition Value over $20,000,000 - Northstrive is entitled to an Acquisition Award of 8% of the Northstrive Agreement Acquisition Value. |
In addition to the determinations of Agreement Acquisition Value set forth above, the Compensation Committee may, in its sole discretion, determine to award Northstrive an additional 1% of the applicable percentage of the Acquisition Value if: (i) the Board and/or Compensation Committee projects the applicable acquisition to be earnings before interest, tax, depreciation, and amortization (EBITDA) or net income accretive within twelve (12) months of closing or (b) the Compensation Committee deems the applicable acquisition as an advancement to the Company’s long-term growth objectives, competitive positioning, and/or operational capabilities.
If Northstrive elects to receive its Acquisition Award in the form of RSUs or restricted stock, the number of RSUs (“RSU Award Amount”) or restricted stock granted shall equal (x) the dollar value of the Acquisition Award divided by (y) the trailing five (5) day volume-weighted average price (VWAP) of the Company’s common stock ending on the trading day prior to the acquisition closing date (such RSU Award Amount rounded down to the nearest whole share). The RSUs or restricted stock granted to Northstrive will be fully vested and shall not be subject to any further service or performance conditions.
Amendment No. 3 to the Second Amended Northstrive Consulting Agreement also provided for the name change of the Second Amended Northstrive Consulting Agreement, going forward, to “Consulting and Services Agreement for Non-Employee, Non-Executive Chairman.” Amendment No. 3 to the Second Amended Northstrive Consulting Agreement is filed as Exhibit 10.16 herein.
On October 16, 2025, the Company entered into Amendment No. 4 to the Northstrive Consulting Agreement with Northstrive.
Amendment No. 4 to the Northstrive Consulting Agreement modified the terms of the Consulting and Services Agreement for Non-Employee, Non-Executive Chairman between the Company and Northstrive dated October 25, 2024 as follows:
| a. | Amend subsection 1(a) to state that NorthStrive’s the “Non-Executive Chairman” title is for consulting purposes only and does not confer officer, employee, or director status on Northstrive. |
| b. | Replace all references to “Severance Payment” and “Severance Event” in Section 4 to “Termination Payment” and “Termination Event.” |
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| c. | Amend Section 4 to: (i) additionally provide that Northstrive is entitled to payment for all services performed and approved expenses incurred up to the effective date of termination of the Northstrive Consulting Agreement, (ii) remove any references in Section 4 to the requirement that Northstrive execute a separation agreement and release of claims as a condition to payment, and (iii) remove any language stating the Northstrive’s unvested options will not accelerate on termination not for Cause. |
| d. | Amend Section 6 to state that Northstrive shall determine the method, details, and means of performing its services, subject only to the results required by the Company. |
| e. | Amend and restate subsection 6(a) to provide that Northstrive is expressly authorized to enter into contracts and make commitments on behalf of the Company, subject to any limitations or approval requirements established by the Board or as otherwise provided in writing by the Company. |
| f. | Amend and restate subsection 6(b)’s provisions regarding Northstrive’s ineligibility for the Company’s employee benefits; |
| g. | Amend and restate subsection 6(c)’s provisions regarding Northstrive’s tax responsibilities for compensation paid under the Northstrive Consulting Agreement; |
| h. | Amend Section 7 to state that Northstrive retains the right to provide services to others, subject to applicable noncompete/conflict provisions in the Northstrive Consulting Agreement; and |
| i. | Add a new subsection 10(a) to emphasize that Northsrive does not have an employment relationship, partnership, joint venture, fiduciary, or agency relationship with the Company under the Northstrive Consulting Agreement. |
Capitalized terms used the description of Amendment No. 4 to the Northstrive Consulting Agreement in this Annual Report have the meanings set forth therein.
Except as expressly amended in Amendment No. 4 to the Northstrive Consulting Agreement, the Northstrive Consulting Agreement remains in full force and effect. The foregoing summary does not purport to be complete and is qualified in its entirety by reference to the full text of Amendment No. 4 to the Northstrive Consulting Agreement, a copy of which is filed as Exhibit 10.29 herein.
Secondment Agreement with Northstrive
On May 7, 2025, the Company entered into a Secondment Agreement with Northstrive, pursuant to which Northstrive agreed to second certain of its employees (each, a “Northstrive Employee” and, collectively, the “Northstrive Employees”) to the Company from time to time to provide certain services in accordance with the terms of the Northstrive Secondment Agreement. The Northstrive Employees will remain employees of Northstrive during their respective periods of secondment (each, a “Northstrive Employee Secondment Period”) and will not be employees of the Company. Under the Northstrive Secondment Agreement, Northstrive shall pay each Northstrive Employee’s salary, incentives, health and retirement benefits, and other applicable compensation or benefits Northstrive Employee is entitled to as an employee of Northstrive. As consideration for Northstrive making Northstrive Employees available to provide services during the Northstrive Employee Secondment Period, the Company will reimburse Northstrive on a monthly basis based on (i) an agreed hourly rate set forth in the Secondment Agreement, multiplied by (ii) actual hours worked by the Northstrive Employee. Except as otherwise set forth in the Northstrive Secondment Agreement, each party to the Northstrive Secondment Agreement shall bear its own costs and expenses in connection with the Northstrive Secondment Agreement. However, if any extraordinary costs or expenses not contemplated by the Northstrive Secondment Agreement arise in connection with the Northstrive Secondment Agreement, including travel and expenses, the Company will reimburse Northstrive for such costs and expenses, provided that (i) the Company provided its written consent prior to Northstrive’s incurrence of such costs and expenses, and (ii) such costs and expenses are documented to the reasonable satisfaction of the Company.
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Pursuant to the terms of the Northstrive Secondment Agreement, each Northstrive Employee will provide services to the Company as agreed between the parties up to the number of hours per week specified in the Northstrive Secondment Agreement. Further, each Northstrive Employee shall provide services at the Company’s principal place of business or such other place as the parties may agree. The Company has full and exclusive responsibility for each Northstrive Employee’s actions performed in service to the Company during the Northstrive Secondment Period.
The Company may terminate the services provided by any Northstrive Employee at any time by providing at least fifteen (15) days’ prior written notice of termination to Northstrive. Upon the termination of any Northstrive Employee’s employment with Northstrive, any Northstrive Employee’s services to the Company will also terminate, and if such employment with Northstrive is terminated, Northstrive shall provide notice of the same to the Company. Either party may terminate the Northstrive Secondment Agreement by providing at least 90 days’ written notice of termination to the other party. If a party is in breach or default of any provision of the Northstrive Secondment Agreement and does not cure such breach or default within ten (10) days, the other party may terminate the Agreement upon ten (10) days’ written notice to the other party, with such notice to be made pursuant to the terms of the Northstrive Secondment Agreement.
The Northstrive Secondment Agreement contains customary provisions relating to confidentiality, indemnification, and limitations on liability. The foregoing summary of the Northstrive Secondment Agreement does not purport to be complete and is subject to and are qualified in their entirety by a copy of the Northstrive Secondment Agreement, filed herein as Exhibit 10.11.
As of December 31, 2025, the Company has paid NorthStrive a total of $382,707 for management fees, bonuses and fees and reimbursements under the Secondment Agreement. This amount includes $65,263 in management fees and $317,444 in expense reimbursements. The reimbursed expenses cover costs and bonuses for seconded NorthStrive employees working on the Company’s operations, reimbursements for third party recruiting and temporary staffing fees paid by Northstrive, and other personnel-related operating expenses required to operate the Company’s wholly owned subsidiaries.
On October 16, 2025, the Company entered into Amendment No. 1 to the Northstrive Secondment Agreement with Northstrive.
Amendment No. 1 to the Northstrive Secondment Agreement amends the Northstrive Secondment Agreement as follows:
| a. | The effective date of the Northstrive Secondment Agreement was amended to October 16, 2025. |
| b. | Section 4 of the Northstrive Secondment Agreement was amended and supplemented to state that the Northstrive Seconded Employees are classified as exempt under applicable law and will be paid on a salary basis, while non-exempt Northstrive Seconded Employees will be paid hourly, with overtime in accordance with law. Amendment No. 1 to the Northstrive Secondment Agreement also added terms to Section 4 providing for: Northstrive Seconded Employees’ eligibility to participate in the Company’s group health plans on the same terms as similarly situated employees; and Northstrive’s proposal of milestone-driven bonuses or incentive payments for Northstrive Seconded Employees, subject to the Company’s prior written approval. |
On June 19, 2024, the Company entered into an Unsecured Revolving Line of Credit Promissory Note (the “Revolving Note”) with NorthStrive Fund II LP, an entity owned and controlled by Braeden Lichti. The Revolving Note provided for a $200,000 unsecured line of credit to the Company with a maturity date of June 19, 2025, and interest calculated at the rate of twenty percent (20.0%) per annum on the outstanding principal balance through the maturity date. Under the Revolving Note, the Company may prepay any outstanding balance of the Revolving Note at any time, provided that interest due on the Revolving Note is simultaneously satisfied in full. As of the date of this Proxy Statement, the Revolving Note has been repaid in full. The largest aggregate amount of principal outstanding in the last two (2) fiscal years was $200,000, and the interest paid in that time was $40,000.
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Other Agreements with Our Stockholders
Share Repurchases
On March 7, 2025, the Company entered into two share buyback purchase agreements with two of its existing shareholders, pursuant to which the Company repurchased, in the aggregate, 11 shares of Common Stock (such share amount on a pre-adjusted basis and 4 on an as-adjusted basis) from such shareholders at a price of $5.0617 per share (such dollar amount on a pre-adjusted basis and $13.00 on an as-adjusted basis). These share repurchases were consummated on the same date. These shareholders had initially approached the Company for the share repurchases.
On March 18, 2025, the Company entered into a securities purchase agreement with an existing shareholder, pursuant to which the Company purchased 30 shares of Common Stock (such share amount on a pre-adjusted basis and 9 on a as-adjusted basis) from such shareholder at a purchase price of $4.235 per share (such dollar amount on a pre-adjusted basis and $14.82 on an as-adjusted basis), and a warrant to purchase 36 shares of Common Stock (such share amount on a pre-adjusted basis and 11 on an as-adjusted basis) at an exercise price of $4,200.00 per share (such dollar amount on a pre-adjusted basis and $14,700 on an as-adjusted basis), at a purchase price of $0.01 (such dollar amount on a pre-adjusted basis and $0.035 on an as-adjusted basis). The total purchase price of such common stock and the warrant was equal to approximately $127. The purchase of such Common Stock and warrant was consummated on the same date. The shareholder had initially approached the Company for the share repurchases and purchase of the warrant.
Registered Direct Offering
On March 21, 2025, the Company entered into a securities purchase agreement (the “Securities Purchase Agreement”) with certain institutional investors in connection with a registered direct offering for the offer and sale of 129,145 shares of the Company’s Common Stock (such share amount on a pre-adjusted basis and 36,899 on an as-adjusted basis) and pre-funded warrants to purchase 165,305 shares of Common Stock” (such share amount on a pre-adjusted basis and 47,230 on an as-adjusted basis), in the aggregate (such offering, the “Registered Direct Offering”). Pursuant to the Securities Purchase Agreement, the Company also agreed to, amongst other things, adjustment terms in the Pre-Funded Warrants, issuance of the shares underlying the Pre-Funded Warrants upon the exercise of the Pre-Funded Warrants, in accordance with the terms of the Pre-Funded Warrants, and the Parties agreed to customary representations and warranties and agreements and indemnification rights and obligations. The Pre-Funded Warrants have an exercise price of $0.0001 per share and each Pre-Funded Warrant is exercisable for one share of Common Stock (the shares underlying the Pre-Funded Warrants, the “Warrant Shares”). A holder of the Pre-Funded Warrants (“Holder”) will not have the right to exercise any portion of its Pre-Funded Warrants if the Holder, together with its affiliates, would beneficially own in excess of 4.99% (or, at the election of the Holder, such limit may be increased to up to 9.99%) of the number of Common Stock outstanding immediately after giving effect to such exercise. The Pre-Funded Warrants will be immediately exercisable (subject to the aforementioned beneficial ownership limitation) and may be exercised at any time until all of the Pre-Funded Warrants are exercised in full. The Pre-Funded Warrant may be exercised, in whole or in part, at such time by means of a cashless exercise, under which cashless exercise the Holder is entitled to receive a number of Warrant Shares under the terms of the Pre-Funded Warrants. The exercise price of the Pre-Funded Warrants is subject to adjustment for stock splits, stock dividends, stock combinations, and similar capital transactions or such other event as further described in the Pre-Funded Warrants. As more fully described in the Securities Purchase Agreement, Holders are also entitled to acquire Purchase Rights (as defined in the Pre-Funded Warrants) upon subsequent rights offerings conducted by the Company, are entitled to certain pro rata distributions, and may be issued shares of Common Stock upon the occurrence of a Fundamental Transaction (as defined in the Pre-Funded Warrants).
88
The shares of Common Stock, the Pre-Funded Warrants, and the Warrant Shares were offered pursuant to the (i) registration statement on Form S-3 (File No. 333-284505) filed with the SEC on January 27, 2025 and declared effective by the SEC on February 7, 2025, and the (ii) prospectus supplement filed with the SEC on March 24, 2025.
The Registered Direct Offering was consummated on March 24, 2025. The Company received net proceeds of approximately $1,245,305.76 from the Offering, after deducting offering expenses payable by the Company, including placement agent fees, legal fees, and clearing fees. The Company intends to use the net proceeds from the Offering for general corporate purposes and potential acquisitions of operating companies, which companies are yet to be identified at this time.
Director Independence
Mr. Parry, Ms. Daley, and Mr. Kovalyov are each “independent” within the meaning of Nasdaq Rule 5605(b)(1).
Item 14. Principal Accounting Fees and Services.
The following table sets forth fees billed to us by our independent auditor for the years ended December 31, 2025, and 2024, for (i) services rendered for the audit of our annual consolidated financial statements and the review of our quarterly consolidated financial statements, (ii) services rendered that are reasonably related to the performance of the audit or review of our consolidated financial statements that are not reported as audit fees, and (iii) services rendered in connection with tax preparation, compliance, advice and assistance.
| SERVICES | 2025 | 2024 | ||||||
| Audit fees | $ | 155,000 | $ | 60,000 | ||||
| Audit-related fees | 69,500 | 27,000 | ||||||
| Tax fees | - | - | ||||||
| All other fees | - | - | ||||||
| Total fees | $ | 224,500 | $ | 87,000 | ||||
Audit fees and audit related fees represent amounts billed for professional services rendered for the audit of our annual consolidated financial statements and the review of our interim consolidated financial statements. Before our independent accountants were engaged to render these services, their engagement was approved by our Directors.
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PART IV
Item 15. Exhibits and Financial Statement Schedules.
| (a) | The following documents are filed as part of this Annual Report: |
| (1) | Financial Statements: |
The audited balance sheet of the Company as of December 31, 2025, the related statements of operations and comprehensive loss, changes in stockholders’ equity and cash flows for the year then ended, the footnotes thereto, and the report of HTL International, LLC, independent auditors, are filed herewith.
| (2) | Financial Schedules: |
None
Financial statement schedules have been omitted because they are either not applicable or the required information is included in the financial statements or notes hereto.
| (3) | Exhibits: |
The exhibits listed in the accompanying index to exhibits are filed or incorporated by reference as part of this Report.
| (b) | The following are exhibits to this Report and, if incorporated by reference, we have indicated the document previously filed with the SEC in which the exhibit was included. |
Certain of the agreements filed as exhibits to this Report contain representations and warranties by the parties to the agreements that have been made solely for the benefit of the parties to the agreement. These representations and warranties:
| ● | may have been qualified by disclosures that were made to the other parties in connection with the negotiation of the agreements, which disclosures are not necessarily reflected in the agreements; |
| ● | may apply standards of materiality that differ from those of a reasonable investor; and |
| ● | were made only as of specified dates contained in the agreements and are subject to subsequent developments and changed circumstances. |
Accordingly, these representations and warranties may not describe the actual state of affairs as of the date that these representations and warranties were made or at any other time. Investors should not rely on them as statements of fact.
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91
| † | Information in this exhibit identified by brackets is confidential and has been excluded pursuant to Item 601(b)(10)(iv) of Regulation S-K because it is both (i) not material and (ii) the type the Company treats as private or confidential. |
| + | Management contract or compensatory plan |
ITEM 16. FORM 10-K SUMMARY
We have elected not to provide a summary of the information provided in this Annual Report.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| PMGC HOLDINGS INC. | ||
| By: | /s/ Graydon Bensler | |
| Graydon Bensler | ||
| Chief
Executive Officer and Chief Financial Officer (Principal Executive Officer and Principal Financial and Accounting Officer) | ||
Each person whose signature appears below constitutes and appoints Graydon Bensler as his or her attorney-in-fact, with the power of substitution, for him or her in any and all capacities, to sign any amendments to this Annual Report on Form 10-K and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that each of said attorneys-in-fact, or his or her substitute or substitutes, may do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Exchange Act of 1934, this Annual Report on Form 10-K has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
| Name | Position | Date | ||
| /s/ Graydon Bensler | Chief Executive Officer, Chief Financial Officer and Director | March 30, 2026 | ||
| Graydon Bensler | (Principal Executive Officer and Principal Financial and Accounting Officer) | |||
| /s/ Braeden Lichti | Chairman of the Board of Directors | March 30, 2026 | ||
| Braeden Lichti | ||||
| /s/ Jeffrey Parry | Director | March 30, 2026 | ||
| Jeffrey Parry | ||||
| /s/ Juliana Daley | Director | March 30, 2026 | ||
| Juliana Daley | ||||
| /s/ George Kovalyov | Director | March 30, 2026 | ||
| George Kovalyov |
93
Consolidated Financial Statements of
PMGC Holdings Inc. (formerly Elevai Labs Inc.)
For the years ended
December 31, 2025 and 2024
(Expressed in United States Dollars)
F-1
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Audit Committee and Shareholders of
PMGC Holdings Inc.
Opinion on The Financial Statements
We have audited the accompanying consolidated balance sheets of PMGC Holdings, Inc (formerly Elevai Labs, Inc) and subsidiaries (the “Company”) as of December 31, 2025 and 2024, and the related consolidated statements of operations and other comprehensive loss, changes in shareholders’ equity, and cash flows for the years ended, December 31, 2025 and 2024, and the related notes (collectively referred to as “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the consolidated financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its consolidated cash flows for the year ended December 31, 2025 and 2024, in accordance with accounting principles generally accepted in the United States of America.
Going Concern
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As described in Note 2 to the financial statements the Company has suffered recurring losses from operations and has cash flows used in operations that raise substantial doubt about its ability to continue as a going concern. Management’s plans regarding these matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatements of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provided a reasonable basis for our opinion.
/s/ HTL International, LLC
HTL International, LLC
We have served as PMGC Holdings, Inc’s auditor since 2024.
March 30, 2026
Address: 12 Greenway Plaza, Suite 1100, Houston, TX 77046
Firm ID:
F-2
PMGC Holdings Inc. (formerly Elevai Labs Inc.)
Consolidated Balance Sheets
(Expressed in United States dollars)
| As of: | December 31, 2025 | December 31, 2024 | ||||||
| ASSETS | ||||||||
| Current Assets | ||||||||
| Cash | $ | $ | ||||||
| Receivables, net | ||||||||
| Prepaids and deposits | ||||||||
| Inventory | ||||||||
| Other receivables | ||||||||
| Investment in securities- current | ||||||||
| Assets held for sale | ||||||||
| Total Current Assets | ||||||||
| Operating lease right-of-use-assets | ||||||||
| Investment in securities-noncurrent | ||||||||
| Property and equipment, net | ||||||||
| Intangibles, net | ||||||||
| Goodwill | ||||||||
| TOTAL ASSETS | $ | $ | ||||||
| LIABILITIES | ||||||||
| Current Liabilities | ||||||||
| Accounts payable and accrued liabilities | $ | $ | ||||||
| Due to related parties | ||||||||
| Current portion of consideration payable | ||||||||
| Current portion of operating lease liability | ||||||||
| Derivative liabilities | ||||||||
| Current portion of promissory notes payable | ||||||||
| Convertible debt | ||||||||
| Liabilities held for sale | ||||||||
| Total Current Liabilities | ||||||||
| Promissory notes payable | ||||||||
| Operating lease liability | ||||||||
| Deferred tax liabilities | ||||||||
| Consideration payable | ||||||||
| TOTAL LIABILITIES | $ | $ | ||||||
| Commitments and Contingencies | ||||||||
| EQUITY | ||||||||
| Preferred stock $ | ||||||||
| Common stock, $ | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated other comprehensive income | ( | ) | ( | ) | ||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| TOTAL EQUITY | ||||||||
| TOTAL LIABILITIES AND EQUITY | $ | $ | ||||||
| (1) |
The accompanying notes are an integral part of these consolidated financial statements
F-3
PMGC Holdings Inc. (formerly Elevai Labs Inc.)
Consolidated Statements of Operations and Comprehensive Loss
For the years ended December 31, 2025 and 2024
(Expressed in United States dollars)
| December 31, 2025 | December 31, 2024 | |||||||
| Revenue | ||||||||
| Total revenue | ||||||||
| Cost of Goods Sold | ||||||||
| Gross margin | ||||||||
| Operating expenses | ||||||||
| Bad debt expense | ||||||||
| Depreciation and amortization | ||||||||
| Marketing and promotion | ||||||||
| Consulting fees | ||||||||
| Office and administrative | ||||||||
| Professional fees | ||||||||
| Investor relations | ||||||||
| Research and development | ||||||||
| Repairs and maintenance | ||||||||
| Foreign exchange (gain) loss | ||||||||
| Travel and entertainment | ||||||||
| Total operating expenses | $ | |||||||
| Other income (expense) | ||||||||
| Finance cost on ELOC | ( | ) | ||||||
| Change in fair value of derivative liabilities | ||||||||
| Gain on the termination of intangible assets | ||||||||
| Loss on disposal of PP&E | ( | ) | ||||||
| Gain on extinguishment of related-party debt | ||||||||
| Interest income | ||||||||
| Interest expense | ( | ) | ( | ) | ||||
| Impairment on prepaid expense | ( | ) | ||||||
| Dividend income | ||||||||
| Other Income | ||||||||
| Realized gain (loss) on investments | ( | ) | ||||||
| Unrealized gain (loss) on investments | ( | ) | ||||||
| Loss from continuing operations before tax | $ | ( | ) | ( | ) | |||
| Deferred tax expense | ( | ) | ||||||
| Net loss from continuing operations | $ | ( | ) | ( | ) | |||
| Income (loss) from discontinued operations | ( | ) | ||||||
| Total net loss | ( | ) | ( | ) | ||||
| Other comprehensive income (loss) | ||||||||
| Currency translation adjustment | ( | ) | ( | ) | ||||
| Total comprehensive loss | $ | ( | ) | ( | ) | |||
| Basic and diluted loss per share: | ||||||||
| Continuing operations | $ | ( | ) | ( | ) | |||
| Discontinued operations | $ | ( | ) | |||||
| Weighted average shares outstanding(1) | ||||||||
| (1) |
The accompanying notes are an integral part of these consolidated financial statements
F-4
PMGC Holdings Inc. (formerly Elevai Labs Inc.)
Consolidated Statements of Changes in Stockholders’ Equity
For the years ended December 31, 2025 and 2024
(Expressed in United States dollars)
| Common Stock | Series B Preferred Stock | Additional paid-in |
Accumulated | Accumulated other comprehensive |
||||||||||||||||||||||||||||
| Number of | Amount | Number of | Amount | capital | deficit | income | Total | |||||||||||||||||||||||||
| shares # | $ | shares # | $ | $ | $ | $ | $ | |||||||||||||||||||||||||
| Balance, January 1, 2024(1) | ( |
) | ||||||||||||||||||||||||||||||
| Issued and issuable shares for acquisition of intangible assets | - | |||||||||||||||||||||||||||||||
| Issued pursuant to public offering | - | |||||||||||||||||||||||||||||||
| Issued pursuant to Securities Purchase Agreement | - | |||||||||||||||||||||||||||||||
| Exercise of Series B Warrants | - | ( |
) | |||||||||||||||||||||||||||||
| Share-based compensation | - | - | ||||||||||||||||||||||||||||||
| Net loss for the year | - | - | ( |
) | ( |
) | ||||||||||||||||||||||||||
| Currency translation adjustment | - | - | ( |
) | ( |
) | ||||||||||||||||||||||||||
| Balance, December 31, 2024 | ( |
) | ( |
) | ||||||||||||||||||||||||||||
| Balance, January 1, 2025 | ( |
) | ( |
) | ||||||||||||||||||||||||||||
| Settlement of accrued bonus liability | - | |||||||||||||||||||||||||||||||
| Issued and issuable shares for acquisition of intangible assets | - | |||||||||||||||||||||||||||||||
| Exercise of Series A Warrants | - | |||||||||||||||||||||||||||||||
| Issued pursuant to the registered direct offering | - | |||||||||||||||||||||||||||||||
| Repurchase of shares and warrants | ( |
) | - | ( |
) | ( |
) | |||||||||||||||||||||||||
| Round up shares due to reverse stock splits | - | |||||||||||||||||||||||||||||||
| Exercise of Pre-funded Warrants | - | |||||||||||||||||||||||||||||||
| Issuance of common shares under ATM program | - | |||||||||||||||||||||||||||||||
| Exercise of replacement warrants | - | |||||||||||||||||||||||||||||||
| Issuance of commitment shares of ELOC | - | |||||||||||||||||||||||||||||||
| Issuance of Pre-Delivery shares of ELOC | - | |||||||||||||||||||||||||||||||
| Issuance of common shares in settlement of the Initial Pre-Paid Purchase | ||||||||||||||||||||||||||||||||
| Share-based compensation | - | - | ( |
) | ( |
) | ||||||||||||||||||||||||||
| Net loss for the year | - | - | ( |
) | ( |
) | ||||||||||||||||||||||||||
| Currency translation adjustment | - | - | ( |
) | ( |
) | ||||||||||||||||||||||||||
| Balance, December 31, 2025 | ( |
) | ( |
) | ||||||||||||||||||||||||||||
| (1) |
The accompanying notes are an integral part of these consolidated financial statement
F-5
PMGC Holdings Inc. (formerly Elevai Labs Inc.)
Consolidated Statements of Cash Flows
For the years ended December 31, 2025 and 2024
(Expressed in United States dollars)
| December 31, 2025 | December 31, 2024 | |||||||
| Operating activities | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Bad debt expense | ||||||||
| Depreciation and amortization | ||||||||
| Finance cost on ELOC | ||||||||
| Share-based compensation | ( | ) | ||||||
| Straight-line rent expense | ( | ) | ( | ) | ||||
| Change in fair value of derivative liabilities | ( | ) | ( | ) | ||||
| Non-cash interest expense | ||||||||
| R&D costs for intangible assets | ||||||||
| Gain on termination of intangible asset | ( | ) | ||||||
| Loss on sale of Skincare | ||||||||
| Loss on disposal of PP&E | ||||||||
| Gain on extinguishment of related-party debt | ( | ) | ||||||
| Realized loss on sale of investments | ||||||||
| Unrealized loss on investments | ||||||||
| Impairment on prepaid expense | ||||||||
| Deferred tax expense | ||||||||
| Changes in operating assets and liabilities: | ||||||||
| Receivables | ( | ) | ( | ) | ||||
| Prepaid expenses and deposits | ||||||||
| Inventory | ( | ) | ||||||
| Accounts payable and accrued liabilities | ||||||||
| Customer deposits | ( | ) | ( | ) | ||||
| Due to related parties | ( | ) | ||||||
| Cash flows used in operating activities1 | $ | ( | ) | $ | ( | ) | ||
| Investing activities | ||||||||
| Purchase of equipment | ( | ) | ( | ) | ||||
| Purchase of intangible assets | ( | ) | ( | ) | ||||
| Purchase of investments | ( | ) | ( | ) | ||||
| Proceeds from sale of investments | ||||||||
| Issuance of promissory note | ( | ) | ||||||
| Net cash paid in business combinations | ( | ) | ||||||
| Cash flows used in investing activities1 | $ | ( | ) | $ | ( | ) | ||
| Financing activities | ||||||||
| Exercise of Series A warrants, net | ||||||||
| Proceeds from the registered direct offering, net | ||||||||
| Proceeds from issuance of common stock and warrants, net | ||||||||
| Proceeds from issuance of Notes, net | ||||||||
| Repayment of Notes | ( | ) | ||||||
| Repurchase of shares and warrants | ( | ) | ||||||
| Issuance of common stock under ATM agreement, net | ||||||||
| Exercise of replacement warrants, net | ||||||||
| Proceeds from the initial Pre-Paid Purchase of ELOC, net | ||||||||
| Cash flows provided by financing activities | $ | $ | ||||||
| Effect of exchange rate changes on cash | ( | ) | ||||||
| Increase in cash | ||||||||
| Cash, beginning of year | ||||||||
| Cash, ending of year | $ | $ | ||||||
| Supplemental cash flow information: | ||||||||
| Cash paid for interest | ||||||||
| Cash paid for taxes | ||||||||
| Non-cash Investing and Financing transactions: | ||||||||
| Common stock issued and issuable on acquisition of intangible asset | ||||||||
| Shares received as proceeds for the sale of Skincare | ||||||||
| Series B preferred shares issues to settle accrued bonus liability | ||||||||
| Consideration payable settled through termination of the agreement | ||||||||
| Commitment shares on the ELOC | ||||||||
| Common stock issued to settle a portion of the ELOC | ||||||||
| Settled of outstanding promissory note in business combination | ||||||||
| 1 |
The accompanying notes are an integral part of these consolidated financial statements
F-6
PMGC Holdings Inc. (formerly Elevai Labs Inc.)
Notes to the Consolidated Financial Statements
For the years ended December 31, 2025 and 2024
(Expressed in United States dollars)
| 1. | Organization and nature of operations |
PMGC Holdings Inc. (formerly Elevai
Labs Inc.) (“PMGC”) was incorporated under the laws of the State of Delaware on
On April 29, 2024, PMGC Impasse Corp (“Skincare”) and Northstrive Biosciences Inc. (“BioSciences”) were incorporated under the laws of the state of Delaware. PMGC is the sole shareholder of Skincare and BioSciences. The purpose of Skincare is to operate the Company’s skincare business, while the purpose of BioSciences is to hold and develop the Company’s intellectual property. Effective May 1, 2024, PMGC transferred its operating assets and liabilities relating to its skincare business to Skincare in exchange for common stock of Skincare. On November 13, 2024, PMGC Capital LLC (“PMGC Capital”) was incorporated under the laws of the state of Nevada, PMGC is the sole shareholder of PMGC Capital.
On December 31, 2024, PMGC and Skincare entered into an asset purchase agreement (the “Asset Purchase Agreement”) with an unrelated third party, pursuant to which PMGC agreed to sell, and the unrelated third party agreed to purchase, PMGC’s skincare business. The sale of the skincare business closed on January 16, 2025. In accordance with Accounting Standards Codification (“ASC”) 205-20 “Discontinued Operations”, the assets and liabilities and the results of operations of the skincare business have been presented in these consolidated financial statements as assets and liabilities held for sale and discontinued operations. The Company also retrospectively adjusted the audited consolidated statement of operations and comprehensive loss for the three and year ended December 31, 2024, to reflect discontinued operations separately from continuing operations (Note 4).
Prior to entering into the Asset Purchase Agreement, the Company’s principal business was operating a skincare development company engaged in the design, manufacture, and marketing of skincare products in the skincare industry. With the sale of its skincare business, the Company changed its principal business. After this sale, PMGC became a diversified holding company that manages and grows its portfolio through strategic acquisitions, investments, and development across various industries.
As part of its diversification and growth strategy, the Company completed the following acquisitions during the fiscal year 2025:
| ● | On July 7, 2025, the Company completed the acquisition of Pacific Sun Packaging Inc., a California-based custom IT packaging company (Note 5). |
| ● | On July 18, 2025, the Company acquired AGA Precision Systems LLC, a California-based CNC machining company (Note 5). |
F-7
PMGC Holdings Inc. (formerly Elevai Labs Inc.)
Notes to the Consolidated Financial Statements
For the years ended December 31, 2025 and 2024
(Expressed in United States dollars)
| ● | On October 26, 2025, the Company, through its wholly owned subsidiary AGA Precision Systems LLC, acquired certain assets of Indarg Engineering, Inc., a California-based precision CNC machining business (Note 5). |
PMGC currently manages and operates a diverse portfolio of wholly owned subsidiaries:
| ● | Northstrive BioSciences Inc. – a biopharmaceutical company focusing on the development and acquisition of cutting-edge aesthetic medicines and therapeutic products. Our lead asset, EL-22, is leveraging a first-in-class engineered probiotic approach to address obesity’s pressing issue of preserving muscle while on weight loss treatments, including GLP-1 receptor agonists. |
| ● | PMGC Research Inc. – PMGC Research was based in Canada and dedicated to medical scientific research and development efforts, utilizing Canadian research grants and partnering with leading Canadian Universities to push the boundaries of innovation. On November 12, 2025, PMGC Research was dissolved. |
| ● | PMGC Capital LLC – a multi-strategy investment firm focused on direct investments, strategic lending, and acquiring undervalued companies and assets across diverse markets. Our mission is to identify and seize high-potential opportunities, delivering sustainable growth and maximizing returns on capital. |
| ● | Pacific Sun Packaging Inc.- a California-based custom IT packaging company providing innovative, sustainable, and technology-driven packaging solutions to industrial and consumer markets. |
| ● | AGA Precision Systems LLC. - a California-based precision engineering and CNC machining company specializing in the design and production of high-tolerance components for industrial and technology applications. In October 2025, AGA acquired substantially all the operating assets of Indarg Engineering, Inc. AGA expands PMGC’s advanced manufacturing footprint and enhances its capacity to deliver vertically integrated engineering and production solutions across multiple sectors. |
| 2. | Going Concern |
These audited consolidated financial statements have been prepared on a going concern basis, which implies the Company will continue to realize its assets and discharge its liabilities in the normal course of business. The continuation of the Company as a going concern is dependent upon the continued financial support from its shareholders and the ability of the Company to obtain necessary equity financing to continue operations, and ultimately the attainment of profitable operations.
As of December 31, 2025 and 2024, the
Company had a net working capital of $
The assessment of whether the going concern assumption is appropriate requires management to take into account all available information about the future, which is at least, but not limited to, twelve (12) months from the date the financial statements are issued. The Company is aware that material uncertainties related to events or conditions may cast substantial doubt upon the Company’s ability to continue as a going concern.
F-8
PMGC Holdings Inc. (formerly Elevai Labs Inc.)
Notes to the Consolidated Financial Statements
For the years ended December 31, 2025 and 2024
(Expressed in United States dollars)
Management’s plans that alleviate substantial doubt about the Company’s ability to continue as a going concern include: (a) raising additional debt or equity financing and (b) the acquisition of cash flow generating assets or businesses. Although the Company has been successful in raising funds in the past, and expects to do so in the future, there are no guarantees that it will be able to raise funds as anticipated.
| 3. | Summary of Significant Accounting Policies |
Basis of Presentation
The consolidated financial statements of the Company have been prepared in accordance with rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) and generally accepted accounting principles in the United States (“U.S. GAAP”) and are expressed in U.S. dollars. These consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany accounts and transactions were eliminated upon consolidation.
This summary of significant accounting policies of the Company is presented to assist in understanding the Company’s consolidated financial statements. The consolidated financial statements and notes are representations of the Company’s management who are responsible for their integrity and objectivity. These accounting policies conform to accounting principles generally accepted in the United States of America and have been consistently applied in the preparation of the consolidated financial statements.
Principles of Consolidation
The consolidated financial statements
include the accounts of PMGC and its
Use of Estimates
The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company regularly evaluates estimates and assumptions related to revenue recognition, the collectability of receivables, valuation of inventory, fair value of derivative liabilities and stock options, useful lives and recoverability of long-lived assets, and deferred income tax asset valuation allowances. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgements about the carrying value of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from those estimates. Estimates and assumptions are reviewed periodically, and the effects of revisions are reflected in the consolidated financial statements in the period they are determined.
Emerging Growth Company
The Company is an “Emerging Growth Company”, as defined in Section 2(a) of the Securities Act of 1933, as amended (the “Securities Act”), as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it has taken advantage of certain exemptions that are not applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding anon binding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.
F-9
PMGC Holdings Inc. (formerly Elevai Labs Inc.)
Notes to the Consolidated Financial Statements
For the years ended December 31, 2025 and 2024
(Expressed in United States dollars)
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 reporting 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 election to opt out is irrevocable.
The Company 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 and private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard.
Foreign Currency Translation
The Company’s functional and reporting currency is the U.S. dollar. The functional currency of PMGC Research is the Canadian dollar. Monetary assets and liabilities denominated in foreign currencies are translated using the exchange rate prevailing at the balance sheet date. Non-monetary assets, liabilities, and items recorded in income arising from transactions denominated in foreign currencies are translated at rates of exchange in effect at the date of the transaction. Gains and losses arising on translation or settlement of foreign currency denominated transactions or balances are included in the determination of income.
The accounts of PMGC Research are translated to U.S. dollars using the current rate method. Accordingly, assets and liabilities are translated into U.S. dollars at the period-end exchange rate while revenues and expenses are translated at the average exchange rates during the period. Related exchange gains and losses are included in a separate component of stockholders’ equity as accumulated other comprehensive income (loss).
Business Combinations
The Company accounts for business combinations using the acquisition method of accounting in accordance with ASC 805, Business Combinations. Under this method, the purchase consideration transferred is measured at fair value on the acquisition date and allocated to the identifiable assets acquired and liabilities assumed based on their estimated fair values. Any excess of the purchase consideration over the fair value of the identifiable net assets acquired is recorded as goodwill.
Acquisition-related costs (such as legal, due diligence, and advisory fees) are expensed as incurred and presented within general and administrative expenses in the consolidated statements of operations.
Contingent consideration, if any, is recorded at fair value on the acquisition date and subsequently remeasured at each reporting period, with changes in fair value recognized in earnings in accordance with ASC 805-30-35 and ASC 450, Contingencies.
During the fiscal year of 2025, the Company completed three acquisitions—Pacific Sun Packaging Inc., AGA Precision Systems LLC and Indarg Engineering Inc.—which were accounted for under ASC 805. The initial purchase price allocations are preliminary and subject to adjustment upon completion of final valuation analyses (Note 5).
Goodwill and Intangible Assets
Goodwill arising from business combinations represents the excess of the purchase price over the fair value of identifiable net assets acquired. Goodwill is not amortized but is tested for impairment annually or more frequently if events or circumstances indicate that the carrying amount may not be recoverable, in accordance with ASC 350, Intangibles – Goodwill and Other.
F-10
PMGC Holdings Inc. (formerly Elevai Labs Inc.)
Notes to the Consolidated Financial Statements
For the years ended December 31, 2025 and 2024
(Expressed in United States dollars)
Goodwill recognized from the 2025 acquisitions primarily reflects expected synergies, operational efficiencies, workforce know-how, and future growth opportunities within the Company’s manufacturing segment.
Identifiable intangible assets acquired in business combinations are recorded at fair value as of the acquisition date and are amortized on a straight-line basis over their estimated useful lives.
In accordance with ASC 730 “Research and development costs”, an acquired in-process researched and development (“IPR&D”) intangible asset with an alternative future use is capitalized, in accordance with ASC 350, and amortized over its useful life. Although IPR&D assets are likely to be finite-lived, amortization does not begin until the research and development projects are completed. In accordance with the IPR&D asset purchase agreement, the Company is required to meet development milestones starting with the initiation of a pre-clinical IND-enabling study within 2 years of the acquisition date and ending with obtaining marketing approval from the FDA within 9 years of the acquisition date. Management assesses impairment indicators at each reporting period end.
The Company’s current classes and estimated useful lives of intangible assets are as follows:
| Intangible asset | Estimated useful life | |
| Customer relationship | ||
| Brand | ||
| Backlog | ||
| License #2 – MOA |
Revenue Recognition
The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers, when control of promised goods or services is transferred to customers in an amount that reflects the consideration to which the Company expects to be entitled. The Company’s revenue is derived from (i) the sale of standard IT packaging products through Pacific Sun Packaging Inc. and (ii) CNC machining and precision manufacturing services through AGA Precision Systems LLC. Contracts with customers are generally established through customer purchase orders, which specify product or service details, pricing, and payment terms, typically due within 30 to 60 days.
For both revenue streams, each contract contains a single performance obligation, consisting of either the delivery of finished goods or the delivery of completed machined parts. Activities such as design, setup, tooling, and production processes are not distinct and are considered inputs into a single combined output. Accordingly, the entire transaction price, which is generally a fixed amount based on agreed-upon unit pricing and quantities, is allocated to the single performance obligation. The Company does not generally enter into arrangements with multiple performance obligations or significant financing components. Revenue is recognized at a point in time when control transfers to the customer, which is typically upon shipment under FOB shipping point terms or, in limited cases, upon delivery where shipping terms require.
The Company evaluates whether it acts as a principal or agent for each revenue stream. For both packaging product sales and precision manufacturing services, the Company acts as the principal because it controls the goods or services prior to transfer, bears inventory and production risk, and has primary responsibility for fulfillment. Accordingly, revenue is recognized on a gross basis.
AGA assesses variable consideration, including expected returns, rejections, and credits, at contract inception and throughout the contract term in accordance with ASC 606. Customers may reject non-conforming parts, which are typically reworked, replaced, or credited. The Company estimates expected returns based on historical experience and records a reduction of revenue, along with a corresponding refund liability and return asset, as applicable. Such amounts have historically not been material.
AGA provides assurance-type warranties that products conform to customer specifications. These warranties do not represent separate performance obligations and are accounted for under ASC 460. The Company evaluates the need for a warranty reserve based on historical experience; however, warranty-related costs have not been material. Warranty coverage is limited to defects in conformance and excludes misuse or modifications, and the Company’s liability is limited to the contract amount.
Pacific Sun evaluates variable consideration, including expected returns and credits, at contract inception and throughout the contract term in accordance with ASC 606. Customers may receive replacements or credits for defective or incorrect products; however, general return rights are not provided. The Company estimates expected returns based on historical experience and records a reduction of revenue, along with a corresponding refund liability and return asset, as applicable. Such amounts have not been material for the periods presented.
F-11
PMGC Holdings Inc. (formerly Elevai Labs Inc.)
Notes to the Consolidated Financial Statements
For the years ended December 31, 2025 and 2024
(Expressed in United States dollars)
Pacific Sun does not provide formal warranty programs. Defective products are addressed through replacement or credit and are accounted for as variable consideration under ASC 606. Related amounts have not been material for the periods presented.
Inventory
Inventory entirely consists of IT packaging purchased and sold by Pacific Sun as finished goods and parts for machining purchased by AGA as raw materials. Inventory is stated at the lower cost or net realizable value. Cost is determined using the First in First out (FIFO) method. Net realizable value is determined on the basis of anticipated sales proceeds less the estimated selling expenses. To assess the need for an allowance due to obsolescence or a decline in net realizable value, management evaluates inventory aging in conjunction with expected future sales and compares the cost of inventory to its net realizable value. If the carrying amount exceeds net realizable value; an allowance is recorded to write down the inventory to its estimated net realizable value.
Investments in securities
Investments in securities include publicly traded equity securities and a convertible debenture that is convertible at any time into publicly traded securities. These investments are classified as trading securities and are reported at fair value, with both realized and unrealized gains and losses recognized in earnings. Publicly traded securities have readily determinable fair values and are measured in accordance with ASC 321 – Accounting for Equity Interests. The convertible debenture is measured at fair value under ASC 320 – Investments – Debt Securities.
Investments in securities also include private company stock. The Company has elected to account for investments in equity securities without readily determinable fair values at cost minus impairment, if any, as permitted under ASC 321 “Investments – Equity Securities”. However, if the Company identifies observable price changes in orderly transactions for the identical or a similar investment of the same issuer, the Company shall measure the investment in equity security at fair value as of the date that the observable transaction occurred. At each reporting period, the Company makes a qualitative assessment considering impairment indicators to evaluate whether each equity investment without readily determinable fair value is impaired. Impairment indicators include, but are not limited to, the following:
| ● | A significant deterioration in the earnings performance, credit rating, asset quality, or business prospects of the investee; |
| ● | A significant adverse change in the regulatory, economic, or technological environment of the investee; |
| ● | A significant adverse change in the general market condition of either the geographical area or the industry in which the investee operates; |
| ● | A bona fide offer to purchase, an offer by the investee to sell, or a completed auction process for the same or similar investment for an amount less than the carrying amount of that investment; |
| ● | Factors that raise significant concerns about the investee’s ability to continue as a going concern, such as negative cash flows from operations, working capital deficiencies, or noncompliance with statutory capital requirements or debt covenants. |
If equity security without a readily determinable fair value is deemed to be impaired based on the qualitative factors, the Company will estimate the fair value of the investment to determine the amount of the impairment loss, if any. No impairment loss related to such securities was recognized during the year ended December 31, 2025.
The cost of securities sold is determined using the specific identification or average cost method. Investments, including publicly traded shares and those that management intends to convert into equity upon favorable market conditions, are classified as current assets on the consolidated balance sheet.
F-12
PMGC Holdings Inc. (formerly Elevai Labs Inc.)
Notes to the Consolidated Financial Statements
For the years ended December 31, 2025 and 2024
(Expressed in United States dollars)
Discontinued Operations, and Assets and Liabilities Held for Sale
The Company classify long-lived assets, or disposal groups comprised of assets and liabilities, as held for sale in the period in which the following six criteria are met, (i) management, having the authority to approve the action, commits to a plan to sell the group of assets and liabilities; (ii) the assets and liabilities are available for immediate sale in its present condition, subject only to terms that are usual and customary; (iii) an active program to locate a buyer and other actions required to complete the plan to sell have been initiated; (iv) the sale is probable and is expected to be completed within one year; (v) the property is being actively marketed for sale at a price that is reasonable in relation to its current fair value; and (vi) actions necessary to complete the plan of sale indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn, in accordance with Accounting Standard Codification (“ASC”) 360, Property, Plant and Equipment. A business classified as held for sale is recorded at the lower of its carrying amount or estimated fair value less cost to sell. If the carrying amount of the business exceeds its estimated fair value less cost to sell, a loss is recognized. Assets and liabilities related to a business classified as held for sale are segregated in the current and prior balance sheets in the period in which the business is classified as held for sale, resulting in changes to the presentation of certain prior period amounts. The Company ceases depreciation and amortization on long-lived assets (or disposal groups) classified as held for sale and measures them at the lower of carrying value or estimated fair value less cost to sell.
The Company reports the results of operations of a business as discontinued operations if a disposal represents a strategic shift that has (or will have) a major effect on the Company’s operations and financial results when the business is classified as held for sale, in accordance with ASC 360, and ASC 205-20, Presentation of Financial Statements – Discontinued Operations. Under ASC 360, assets may be classified as held for sale even though discontinued operations classification is not met. The results of discontinued operations are reported in Net loss from discontinued operations, net of tax in the accompanying consolidated statements of operations and comprehensive loss for current and prior periods, including any gain or loss recognized on closing or adjustment of the carrying amount to fair value less cost to sell. All other notes to these consolidated financial statements present the results of continuing operations and exclude amounts related to discontinued operations for all periods presented.
Research and Development
Research and development costs are expensed as incurred in accordance with ASC 730, Research and Development. The Company incurs research and development costs in the pursuit of new products and improving the formulation of existing products. Examples of research costs include laboratory research, studies, surveys, and other activities aimed at acquiring new knowledge. Development costs include expenses incurred in the process of applying research findings or other knowledge to a plan or design for a new product or process. Examples of development costs include engineering, design, testing, and other activities aimed at developing a product or process for commercial production.
Development costs may be capitalized if the following criteria are met: (1) technological feasibility has been established, (2) the Company intends to complete the product or process. (3) the Company has the ability to use or sell the product or process, (4) the product or process will generate future economic benefits, and (5) the costs can be reliably measured.
As of December 31, 2025 and 2024, the Company has not capitalized any development cost.
Marketing and Promotion
Costs associated with marketing and promoting the Company’s products are expensed when incurred.
Leases
The Company accounts for leases in accordance with ASC 842, “Leases”. We determine if an arrangement meets the definition of a lease at inception of the contract. Leases are classified as either operating or finance leases. All of the Company’s leases have been assessed as operating leases. Accounting for operating leases, other than short term leases, results in operating lease right-of-use (“ROU”) assets, operating lease liabilities - current, and operating lease liabilities - noncurrent on the balance sheets.
F-13
PMGC Holdings Inc. (formerly Elevai Labs Inc.)
Notes to the Consolidated Financial Statements
For the years ended December 31, 2025 and 2024
(Expressed in United States dollars)
ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As our lease do not provide an implicit rate, we use our incremental borrowing rate based on the estimated rate of interest for collateralized borrowing over a similar term of the lease payments at commencement date. The operating lease ROU asset also includes any lease payments made and excludes lease incentives. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term.
Income Taxes
The Company accounts for income taxes
using the asset and liability method in accordance with ASC 740, “Income Taxes”. The asset and liability method provides
that deferred income tax assets and liabilities are recognized for the expected future tax consequence of temporary differences between
the financial reporting and taxes basis of assets and liabilities, and for operating loss and tax credit carryforwards. Deferred income
tax assets and liabilities are measured using the currently enacted tax rates and laws that will be in effect when the differences are
expected to reverse. The Company records a valuation allowance to reduce deferred income tax assets to the amount that it believes more
likely than not to be realized. In making such a determination, the Company considers all available positive and negative evidence, including
future reversals of existing taxable temporary differences, projected future taxable income tax planning, strategies and results of recent
operations. If the Company determines that such deferred tax assets will be recognized in the future in excess of the net recorded amount,
then the deferred tax asset valuation will be adjusted which would reduce the provision for income taxes. Significant judgments and estimates
are required in the determination of the consolidated income tax expense. As of December 31, 2025 and 2024, the Company recorded $
The Company records uncertain tax provisions in accordance with ASC 740 based on a two-step process whereby (1) a determination is made about whether it is more likely than not that the tax positions will be sustained based on the technical merits of the position and (2) for those tax positions that meet the more likely than not recognition threshold, the Company recognizes the largest amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority.
As of December 31, 2025 and 2024, the Company did not have any amounts recorded pertaining to uncertain tax positions. The Company recognizes interest and penalties related to uncertain tax positions in office and administrative expense. The Company did not incur any penalties or interest during the years ended December 31, 2025 and 2024.
Concentration of Credit Risk
Cash, receivables, other receivables and refundable deposits are the only financial instruments that are potentially subject to credit risk. The Company places its cash in what it believes to be credit-worthy financial institutions. Receivables relate to the timing differences in receiving proceeds from sales transactions processed through on customers’ credit. Refundable deposits relate to the Company’s security deposit on lease agreements.
F-14
PMGC Holdings Inc. (formerly Elevai Labs Inc.)
Notes to the Consolidated Financial Statements
For the years ended December 31, 2025 and 2024
(Expressed in United States dollars)
Risks and Uncertainties
The Company is subject to risks from, among other things, competition associated with the industry in general, regulatory environment, other risks associated with financing, liquidity requirements, rapidly changing customer requirements, limited operating history, foreign currency exchange rates and the volatility of public markets.
Contingencies
Certain conditions may exist as of the date the consolidated financial statements are issued, which may result in a loss to the Company, but which will only be resolved when one or more future events occur or fail to occur. The Company’s management and legal counsel assess such contingent liabilities, and such assessment inherently involves judgement. In assessing loss contingencies related to legal proceedings that are pending against the Company or un-asserted claims that may result in such proceedings, the Company’s legal counsel evaluates the perceived merits of any legal proceedings or un-asserted claims as well as the perceived merits of the amount of relief sought or expected to be sought.
If the assessment of a contingency indicates it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s consolidated financial statements. If the assessment indicates that a potential material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss if determinable and material would be disclosed. Loss contingencies considered to be remote by management are generally not disclosed unless they involve guarantees, in which case the guarantee would be disclosed.
Cash and Cash Equivalents
Cash includes cash on hand and cash in demand deposits. Cash equivalents include all highly liquid instruments with original maturities of three months or less. As of December 31, 2025 and 2024, the Company did not hold any cash equivalents.
Receivables
All receivables under standard terms
are due thirty (30) days from the date billed. If the funds are not received within thirty (30) days, the customer is contacted to arrange
payment. The Company uses the allowance for credit losses method to account for uncollectable receivables. As of December 31, 2025 and
2024, there was no allowance for credit losses related to receivables recorded. During the year ended December 31, 2025, the Company
wrote off $
F-15
PMGC Holdings Inc. (formerly Elevai Labs Inc.)
Notes to the Consolidated Financial Statements
For the years ended December 31, 2025 and 2024
(Expressed in United States dollars)
Property, Plant and Equipment
Property and equipment is stated at
cost less accumulated depreciation. Renewals and betterments that materially extend the life of assets are capitalized. Expenditure on
maintenance and repairs are expensed as incurred. Property and equipment is depreciated using the straight-line method.
| Machinery equipment | |
| Furniture and office equipment | |
| Computers | |
| Leasehold improvement |
The Company ceases to depreciate property and equipment on the date that it is reclassified to assets held for sale.
Impairment of Long-Lived Assets
The Company reviews long-lived assets such as equipment for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. If the total of the expected undiscounted future cash flows is less than the carrying value of the asset, a loss is recognized for the excess of the carrying amount over the fair value of the asset.
The Company’s policy for long-lived assets requires judgement in determining whether the present value of future expected economic benefits exceeds capitalized costs. The policy requires management to make certain estimates and assumptions about future economic benefits related to its operations. Estimates and assumptions may change if new information becomes available. If information becomes available suggesting that the recovery of capitalized cost is unlikely, the capitalized cost is written off/impaired to the consolidated statement of operations.
Derivative Financial Instruments
The Company does not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks. The Company evaluates all of its financial instruments, including issued stock purchase warrants, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the consolidated statement of operations. For derivative instruments that qualify for equity classification under ASC 815-40 are recorded in stockholders’ equity at fair value on the issuance date and are not subsequently remeasured, unless reclassification is required due to changes in facts and circumstances. The Company reassesses the classification of derivative instruments at each reporting date. The Company uses the Black-Scholes or Binomial option-pricing model to value the derivative instruments at inception and subsequent valuation dates, generally applying the Black-Scholes model for instruments with standard terms and the Binomial model for instruments that include more complex features, such as variable settlement provisions, early exercise features, or path-dependent assumptions. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is reassessed at the end of each reporting period.
F-16
PMGC Holdings Inc. (formerly Elevai Labs Inc.)
Notes to the Consolidated Financial Statements
For the years ended December 31, 2025 and 2024
(Expressed in United States dollars)
Common Stock Warrants
The Company classifies as equity any warrants that (i) require physical settlement or net-share settlement or (ii) provide the Company with a choice of net-cash settlement or settlement in its own shares (physical settlement or net-share settlement). The Company classifies as assets or liabilities any warrants that (i) require net-cash settlement (including a requirement to net cash settle the contract if an event occurs and if that event is outside the Company’s control), (ii) gives the counterparty a choice of net-cash settlement or (iii) that contain reset provisions that do not qualify for the scope exception. The Company assesses classification of its common stock warrants at each reporting date to determine whether a change in classification is required. Warrants classified as liabilities are initially recorded at fair value, with gains and losses arising from changes in fair value recognized in other income (expenses) in the consolidated statements of operations at each period end while such instruments remain outstanding.
Financial Instruments and Fair Value Measurements
The Company analyzes all financial instruments with features of both liabilities and equity under ASC 480, “Distinguishing Liabilities from Equity,” and ASC 815 “Derivatives and Hedging”.
ASC 820, “Fair Value Measurements and Disclosures,” requires disclosure of the fair value of financial instruments held by the Company. ASC 825, “Financial Instruments,” defines fair value, and establishes a three-level valuation hierarchy for disclosures of fair value measurement that enhances disclosure requirements for fair value measures. The carrying amounts reported in the consolidated balance sheets for receivables and current liabilities each qualify as financial instruments and are a reasonable estimate of their fair values because of the short period of time between the origination of such instruments and their expected realization and their current market rate of interest. The three levels of valuation hierarchy are defined as follows:
Level 1
Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.
Level 2
Level 2 applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data.
Level 3
Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.
The Company’s financial instruments
consist of cash, trade and other receivables, investment in securities, accounts payable and accrued liabilities, amounts due to related
parties, consideration payable, promissory notes payable, convertible debt, and derivative liabilities. Except for cash, investment in
securities, and derivative liabilities, the carrying amounts of the Company’s financial instruments approximate their fair values
due to their short-term nature. Cash is measured and recognized at fair value based on Level 1 input for all periods presented. Investment
in securities is measured and recognized at fair value based on Level 1, Level 2 and Level 3 inputs as at December 31, 2025.
F-17
PMGC Holdings Inc. (formerly Elevai Labs Inc.)
Notes to the Consolidated Financial Statements
For the years ended December 31, 2025 and 2024
(Expressed in United States dollars)
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||
| December 31, 2025: | ||||||||||||||||
| Cash | $ | $ | $ | $ | ||||||||||||
| Investment in securities | ||||||||||||||||
| Derivative liabilities | ||||||||||||||||
| $ | $ | $ | $ | |||||||||||||
| December 31, 2024: | ||||||||||||||||
| Cash | $ | $ | $ | $ | ||||||||||||
| Investment in securities | ||||||||||||||||
| Derivative liabilities | ||||||||||||||||
| $ | $ | $ | $ | |||||||||||||
Loss per Share
The Company computes net income (loss) per share in accordance with ASC 260, “Earnings per Share”. ASC 260 requires presentation of both basic and diluted earnings per share (“EPS”) on the face of the consolidated statement of operations. Basic EPS is computed by dividing net income (loss) available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential shares of common stock outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all potential shares if their effect is anti-dilutive.
The Company’s stock options and warrants outstanding during the years ended December 31, 2025 and 2024, are considered potential common shares that could dilute earnings per share but were not included in the diluted loss per share computation because their effect was antidilutive for the periods presented. As a result, there is no difference between the computation of basic and diluted loss per shares for the periods presented.
Share-Based Compensation
Employees - The Company accounts for share-based compensation under the fair value method which requires all such compensation to employees, including the grant of employee stock options, to be calculated based on its fair value at the measurement date (generally the grant date), and recognized in the consolidated statement of operations over the requisite service period.
Nonemployees - During June 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2018-07, Compensation-Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting (“ASU 2018-07”) to simplify the accounting for share-based payments to nonemployees by aligning it with the accounting for share-based payments to employees. Under the requirements of ASU 2018-07, the Company accounts for share-based compensation to non-employees under the fair value method which requires all such compensation to be calculated based on the fair value at the measurement date (generally the grant date) and recognized in the statement of operations over the requisite service period.
During the years ended December 31,
2025 and 2024, the Company recorded $(
F-18
PMGC Holdings Inc. (formerly Elevai Labs Inc.)
Notes to the Consolidated Financial Statements
For the years ended December 31, 2025 and 2024
(Expressed in United States dollars)
Determining the appropriate fair value model and the related assumptions requires judgment. During the years ended December 31, 2025 and 2024, the fair value of each option grant was estimated using a Black-Scholes option-pricing model.
The expected volatility represents the historical volatility of comparable publicly traded companies in similar industries, adjusted for variables such as stock price, market capitalization and life cycle. Due to limited historical data, the expected term for options granted is equal to the contractual life. The risk-free interest rate is based on a treasury instrument whose term is consistent with the expected life of stock options. The Company has not paid and does not anticipate paying cash dividends on its shares of common stock; therefore, the expected dividend yield is assumed to be zero.
Convertible debentures
The Company accounts for convertible debentures in accordance with ASC 470, Debt. Convertible debentures are recorded at face value less unamortized issuance costs, assuming the conversion feature does not meet the requirements for bifurcation.
If the conversion feature does not meet the requirements to be classified as equity, it is bifurcated and accounted for separately as a derivative liability under ASC 815, Derivatives and Hedging, and measured at fair value, with subsequent changes recognized in earnings. If the conversion feature meets the equity classification criteria, no separate accounting for the conversion feature is required, and the entire instrument is classified as a liability.
Interest expense is recognized using the effective interest method, which includes the amortization of any debt issuance costs and discounts or premiums.
Debt Modifications and Extinguishments
The Company evaluates modifications to convertible debt instruments in accordance with ASC 470-50, Modifications and Extinguishments.
A modification is deemed to be substantial if:
| ● | The present value of the cash flows under the terms of the modified debt differs by at least 10% from the present value of the remaining cash flows under the original debt terms, using the original effective interest rate (the “10% Test”); or |
| ● | The modification results in a change in the embedded conversion option that requires re-evaluation under ASC 815. |
If the modification is determined to be substantial, the original debt is extinguished, and the modified instrument is accounted for as a new debt issuance.
The Company also assesses whether a modification constitutes a troubled debt restructuring under ASC 470-60. A restructuring is considered troubled if the Company is experiencing financial difficulty and the creditor has granted a concession.
For modifications that are not substantial,
the Company accounts for the changes prospectively, adjusting the effective interest rate to reflect the revised cash flows. In evaluating
convertible debt where the conversion option is bifurcated as a derivative liability before and after the modification, the
F-19
PMGC Holdings Inc. (formerly Elevai Labs Inc.)
Notes to the Consolidated Financial Statements
For the years ended December 31, 2025 and 2024
(Expressed in United States dollars)
New Accounting Standards
Recently Adopted Accounting Standards
In June 2022, the FASB issued ASU 2022-03, ASC Subtopic 820 “Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions”. The FASB is issuing this Update (1) to clarify the guidance in Topic 820, Fair Value Measurement, when measuring the fair value of an equity security subject to contractual restrictions that prohibit the sale of an equity security, (2) to amend a related illustrative example, and (3) to introduce new disclosure requirements for equity securities subject to contractual sale restrictions that are measured at fair value in accordance with Topic 820.
Stakeholders asserted that the language in the illustrative example resulted in diversity in practice on whether the effects of a contractual restriction that prohibits the sale of an equity security should be considered in measuring that equity security’s fair value. Some stakeholders apply a discount to the price of an equity security subject to a contractual sale restriction, whereas other stakeholders consider the application of a discount to be inappropriate under the principles of Topic 820.
For public business entities, the amendments in this Update are effective for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years. The adoption of this standard did not have a significant impact on the Company’s consolidated financial statements.
In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”), intended to improve reportable segments disclosure requirements primarily through enhanced disclosures about significant segment expenses.
In December 2023, the FASB issued “ASU 2023-09—Income Taxes (Topic 740)—Improvements to Income Tax Disclosures” (“ASU 2023-09”) which amends the Codification to enhance the transparency and decision usefulness of income tax disclosures. ASU 2023-09 requires additional disaggregation of the reconciliation between the statutory and effective tax rate for an entity and of income taxes paid, both of which are disclosures required by current GAAP. The amendments improve the transparency of income tax disclosures by requiring (1) consistent categories and greater disaggregation of information in the rate reconciliation and (2) income taxes paid disaggregated by jurisdiction. The amendments in ASU 2023-09 apply to all entities that are subject to Topic 740, Income Taxes. For public business entities, the amendments in ASU 2023-09 are effective for annual periods beginning after December 15, 2024. The Company adopted the ASU prospectively for the period ending December 31, 2025, the effect being only related to our disclosures with no impact on our results of operations or financial condition.
ASU 2023-07 includes a requirement to disclose significant segment expenses that are regularly provided to the CODM and included within each reported measure of segment profit or loss, the title and position of the CODM, an explanation of how the CODM uses the reported measure(s) of segment profit or loss in assessing segment performance and deciding how to allocate resources, and all segments’ profit or loss and assets disclosures. ASU 2023-07 is effective for all public companies for fiscal years beginning after December 15, 2023, and interim periods for the interim period beginning on January 1, 2025. Adoption of ASU 2023-07 did not have a material impact on the Company’s consolidated financial statement.
In November 2024, the FASB issued ASU 2024-03, Expense Disaggregation Disclosures (Subtopic 220-40), which requires enhanced disclosures of the nature and composition of certain expense captions presented in the income statement, including inventory purchases, employee compensation, depreciation, and other significant expenses. The Company adopted this guidance during the year ended December 31, 2025. The adoption of this guidance did not have a material impact on the Company’s consolidated financial statements but resulted in additional disclosures in the notes to the consolidated financial statements.
F-20
PMGC Holdings Inc. (formerly Elevai Labs Inc.)
Notes to the Consolidated Financial Statements
For the years ended December 31, 2025 and 2024
(Expressed in United States dollars)
Recently Issued Accounting Standards
The Company assesses the adoption impacts of recently issued, but not yet effective, accounting standards by the Financial Accounting Standards Board on the Company’s consolidated financial statements.
There are no recently issued accounting standards which may have effect on the Company’s consolidated financial statements.
| 4. | Assets and liabilities held for sale and Discontinued operations |
Pursuant to the Asset Purchase Agreement,
the Company agreed to sell its skincare business for (i)
Following the Closing, which occurred
on January 16, 2025 (such date, the “Closing Date”), buyer will pay additional earn-out consideration for the sale, if and
when payable: (a) buyer will pay, for each year ending on the anniversary of the Closing Date during the five-year period following the
Closing, an amount, if any, equal to
The following table summarizes the major line items for the skincare business that are included in loss from discontinued operations, net of taxes in the consolidated statements of operations:
| December 31, 2025 | December 31, 2024 | |||||||
| Revenue | $ | $ | ||||||
| Cost of goods sold | ||||||||
| Gross profit | $ | $ | ||||||
| Expenses | ||||||||
| Depreciation | ||||||||
| Marketing and promotion | ||||||||
| Consulting fees | ||||||||
| Office and administrative | ||||||||
| Professional fees | ||||||||
| Investor relations | ||||||||
| Research and development | ||||||||
| Foreign exchange (gain) loss | ( | ) | ||||||
| Travel and entertainment | ||||||||
| Total expenses | $ | |||||||
| Other income | ||||||||
| Interest expense | ( | ) | ||||||
| Loss on the sale of Skincare | ( | ) | ||||||
| Net income (loss) from discontinued operations | $ | ( | ) | |||||
F-21
PMGC Holdings Inc. (formerly Elevai Labs Inc.)
Notes to the Consolidated Financial Statements
For the years ended December 31, 2025 and 2024
(Expressed in United States dollars)
The following table summarizes the carrying amounts of major classes of assets and liabilities of discontinued operations as at the Closing Date (January 16, 2025) and December 31, 2024:
| Closing Date January 16, 2025 | December 31, 2024 | |||||||
| Assets | ||||||||
| Receivables, net | ||||||||
| Inventory | ||||||||
| Prepaid expenses and deposits | ||||||||
| Property and equipment | ||||||||
| Right of use asset | ||||||||
| Total assets held for sale | ||||||||
| Liabilities | ||||||||
| Accounts payable and accrued liabilities | ||||||||
| Customer deposits | ||||||||
| Lease liability | ||||||||
| Total liabilities held for sale | ||||||||
| Total assets and liabilities held for sale, net | ||||||||
The Company recorded a loss on sale
of discontinued operations of $
The following represents the cash flows from operating and investing activities of discontinued operations for the years ended December 31, 2025 and 2024:
| December 31, 2025 | December 31, 2024 | |||||||
| Cashflows used in operating activities | $ | ( | ) | $ | ( | ) | ||
| Cashflows used in investing activities | ( | ) | ||||||
| 5. | Business combinations |
Pacific Sun Packaging Inc.
On July 7, 2025, the Company completed
the acquisition of
The contingent consideration was recognized
at fair value as of the acquisition date and is classified as a liability. The fair value was estimated using a probability-weighted
discounted cash flow approach, incorporating management’s revenue projections and an estimated discount rate of approximately
As of December 31, 2025, the estimated
fair value of the contingent consideration liability was $
F-22
PMGC Holdings Inc. (formerly Elevai Labs Inc.)
Notes to the Consolidated Financial Statements
For the years ended December 31, 2025 and 2024
(Expressed in United States dollars)
In connection with the acquisition,
the Company agreed to pay retention bonuses for past services to the remaining employees of the Company. The working capital target of
the acquired business was set at $
The acquisition was accounted for under ASC 805, Business Combinations, with PMGC Holdings Inc., identified as the acquirer.
The purchase price was allocated to the acquired assets and assumed liabilities based on their estimated fair values as of the acquisition date, determined with assistance from an independent valuation specialist.
The resulting allocation is summarized below:
| Cash | $ | |||
| Promissory note and interest | ||||
| Sign on bonus | ||||
| Earn out payment payable | ||||
| Working capital adjustment | ||||
| Total consideration | $ | |||
| Net assets (liabilities) acquired of the Company: | ||||
| Cash | $ | |||
| Receivables, net | ||||
| Prepaid expenses and deposits | ||||
| Inventory | ||||
| Property and equipment | ||||
| Intangible - customer relationships | ||||
| Intangible – brand name | ||||
| Accounts payable and accrued liabilities | ( | ) | ||
| Total net assets (liabilities) | $ | |||
| Goodwill | $ |
Goodwill recognized primarily reflects expected synergies from integrating Pacific Sun’s operations and workforce and is not expected to be deductible for tax purposes. The results of Pacific Sun’s operations are included in the consolidated financial statements beginning July 7, 2025.
AGA Precision Systems LLC
On July 18, 2025, the Company acquired
F-23
PMGC Holdings Inc. (formerly Elevai Labs Inc.)
Notes to the Consolidated Financial Statements
For the years ended December 31, 2025 and 2024
(Expressed in United States dollars)
The acquisition was accounted for as
a business combination under ASC 805, and the purchase price was allocated to the identifiable assets acquired and liabilities assumed
based on their estimated fair values as of the acquisition date, as determined by an independent valuation specialist.
| Cash | $ | |||
| Working capital adjustment | ||||
| Total consideration | $ | |||
| Net assets (liabilities) acquired of the Company: | ||||
| Cash | $ | |||
| Receivables, net | ||||
| Prepaid expenses and deposits | ||||
| Property and equipment | ||||
| Intangible - Customer Relationships | ||||
| Intangible - Backlog | ||||
| Accounts payable and accrued liabilities | ( | ) | ||
| Total net assets (liabilities) | $ | |||
| Goodwill | $ |
Goodwill represents the assembled workforce and expected operating synergies and is not expected to be deductible for income tax purposes. The results of AGA’s operations are included in the consolidated financial statements beginning July 18, 2025.
Indarg Engineering, Inc.
On October 26, 2025, AGA Precision Systems LLC, a wholly owned subsidiary of the Company, acquired substantially all of the operating assets of Indarg Engineering, Inc., a California-based provider of high-tolerance precision machining services, including CNC machining, prototyping, and quality inspection for aerospace, defense, and industrial sectors.
The acquisition was accounted for as
a business combination under ASC 805, and the purchase price was allocated to the identifiable assets acquired and liabilities assumed
based on their estimated fair values as of the acquisition date, as determined by an independent valuation specialist.
| Cash | $ | |||
| Promissory note | ||||
| Total consideration | $ | |||
| Net assets (liabilities) acquired of the Company: | ||||
| Inventory | ||||
| Prepaid expenses and deposits | ||||
| Property and equipment | ||||
| Intangible - Customer Relationships | ||||
| Total net assets (liabilities) | $ | |||
| Goodwill | $ |
F-24
PMGC Holdings Inc. (formerly Elevai Labs Inc.)
Notes to the Consolidated Financial Statements
For the years ended December 31, 2025 and 2024
(Expressed in United States dollars)
The aggregate purchase price for the
acquired business was $
Goodwill represents the value of the assembled workforce, expected operating synergies, and other intangible benefits that do not qualify for separate recognition. The goodwill recognized from the acquisition is not expected to be deductible for income tax purposes. The results of operations have been included in the Company’s consolidated financial statements beginning October 26, 2025.
| 6. | Short term loan receivable |
On May 30, 2025, the Company entered
into a secured promissory note agreement with an individual, pursuant to which the Company loaned $
On July 7, 2025, the outstanding principal
and accrued interest totaling $
| 7. | Receivables, net |
As of December 31, 2025, and December
31, 2024, receivables consisted of trade receivables of $
| 8. | Prepaids and Deposits |
As of December 31, 2025 and 2024, prepaid and deposits consisted of the following:
| December 31, 2025 | December 31, 2024 | |||||||
| Prepaid expenses | $ | $ | ||||||
| Deposits | ||||||||
| $ | $ | |||||||
During the year ended December 31, 2025, the
Company impaired a $
| 9. | Inventory |
As of September 30, 2025, and December 31, 2024, inventory consisted of the following:
| December 31, 2025 | December 31, 2024 | |||||||
| Finished goods | $ | $ | ||||||
| Raw materials | ||||||||
| $ | $ | |||||||
Cost of inventory recognized as expense
in cost of sales for the year ended December 31, 2025 and 2024, totaled $
F-25
PMGC Holdings Inc. (formerly Elevai Labs Inc.)
Notes to the Consolidated Financial Statements
For the years ended December 31, 2025 and 2024
(Expressed in United States dollars)
| 10. | Investment in securities |
The Company’s investments consist of publicly traded equity securities, warrants and a convertible debenture. These investments are reported under ASC 321 – Investments in Equity Securities and ASC 320 – Investments – Debt Securities, as applicable. The Company has classified the investments as held for trading.
The following table summarizes the changes in investments for the year ended December 31, 2025 and 2024:
| Public Company Investments | Private Company Investment | Convertible Debenture and Warrants | Total | |||||||||||||
| Balance, December 31, 2023 | ||||||||||||||||
| Purchases | ||||||||||||||||
| Balance, December 31, 2024 | $ | |||||||||||||||
| Purchases | $ | |||||||||||||||
| Transfer | ( | ) | ||||||||||||||
| Acquired in the sale of Skincare business | ||||||||||||||||
| Proceeds on sale | ( | ) | ( | ) | ||||||||||||
| Interest income | ||||||||||||||||
| Conversion of debenture | ( | ) | ||||||||||||||
| Realized loss | ( | ) | ( | ) | ||||||||||||
| Unrealized gain (loss) | ( | ) | ( | ) | ||||||||||||
| Balance, December 31, 2025 | $ | |||||||||||||||
The Company accounts for investments
in warrants as equity securities in accordance with ASC 321, Investments—Equity Securities, and measures such investments at fair
value, with changes in fair value recognized in earnings. As of December 31, 2025, the Company held warrants with an estimated fair value
of approximately $
The valuation was calibrated by applying a discount, which was determined based on the cash paid to acquire the warrants relative to the implied intrinsic value at that date. The Company considers the transaction price and underlying share price to represent observable market inputs, and no significant unobservable inputs were used in the valuation at the reporting date.
Key inputs used in the valuation included:
| ● | Underlying share price: $ |
| ● | Exercise price: $ |
| ● | Number of warrants: |
Based on the nature of the valuation inputs, the warrants are classified within Level 2 of the fair value hierarchy under ASC 820, Fair Value Measurement.
F-26
PMGC Holdings Inc. (formerly Elevai Labs Inc.)
Notes to the Consolidated Financial Statements
For the years ended December 31, 2025 and 2024
(Expressed in United States dollars)
Fair Value Measurement
The following table presents the Company’s financial instruments measured at fair value on a recurring basis as of December 31, 2025 and 2024, in accordance with the fair value hierarchy of ASC 820:
| December 31, 2025 | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
| Equity securities | $ | |||||||||||||||
| Warrants | ||||||||||||||||
| Total | $ | |||||||||||||||
| December 31, 2024 | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
| Equity securities | $ | |||||||||||||||
| Total | $ | |||||||||||||||
| 11. | Property, plant and equipment |
| Computers | Machinery & Equipment | Furniture and office equipment | Leasehold improvement | Total | ||||||||||||||||
| Cost | ||||||||||||||||||||
| Balance, December 31, 2023 | $ | |||||||||||||||||||
| Foreign currency translation | ( | ) | ( | ) | ||||||||||||||||
| Balance, December 31, 2024 | $ | |||||||||||||||||||
| Business combinations | ||||||||||||||||||||
| Additions | ||||||||||||||||||||
| Disposal | ( | ) | ( | ) | ||||||||||||||||
| Foreign currency translation | ||||||||||||||||||||
| Balance, December 31, 2025 | $ | $ | ||||||||||||||||||
| Accumulated depreciation | ||||||||||||||||||||
| Balance, December 31, 2023 | $ | |||||||||||||||||||
| Depreciation | ||||||||||||||||||||
| Foreign currency translation | ( | ) | ( | ) | ||||||||||||||||
| Balance, December 31, 2024 | $ | |||||||||||||||||||
| Depreciation | ||||||||||||||||||||
| Disposal | ( | ) | ( | ) | ||||||||||||||||
| Foreign currency translation | ( | ) | ( | ) | ||||||||||||||||
| Balance, December 31, 2025 | $ | |||||||||||||||||||
| Net book value | ||||||||||||||||||||
| December 31, 2024 | $ | |||||||||||||||||||
| December 31, 2025 | $ | |||||||||||||||||||
F-27
PMGC Holdings Inc. (formerly Elevai Labs Inc.)
Notes to the Consolidated Financial Statements
For the years ended December 31, 2025 and 2024
(Expressed in United States dollars)
| 12. | Intangible assets, net |
| License #1 | License # 2 (IPR&D asset) | Customer relationship | Brand | Backlog | Total | |||||||||||||||||||
| Cost: | ||||||||||||||||||||||||
| Balance, December 31, 2024 | $ | |||||||||||||||||||||||
| Additions | ||||||||||||||||||||||||
| Business combinations | ||||||||||||||||||||||||
| Termination of agreement | ( | ) | ( | ) | ||||||||||||||||||||
| Balance, December 31, 2025 | $ | |||||||||||||||||||||||
| Accumulated amortization: | ||||||||||||||||||||||||
| Balance, December 31, 2024 | $ | |||||||||||||||||||||||
| Amortization | ||||||||||||||||||||||||
| Termination of agreement | ( | ) | ( | ) | ||||||||||||||||||||
| Balance, December 31, 2025 | $ | |||||||||||||||||||||||
| Net book value: | ||||||||||||||||||||||||
| December 31,2024 | $ | |||||||||||||||||||||||
| December 31, 2025 | ||||||||||||||||||||||||
License #1:
On January 15, 2024, the Company entered
into a license agreement with a Biotechnology company to use their proprietary technology and process to assist in formulating stem cells
(“License #1”). The term of the license is
| a) | $ |
| b) | $ |
| c) | $ |
| 1 | Effective February 27, 2025, the Company and the biotechnology company entered into a mutual termination agreement to terminate the Company’s right to License # 1 and to release the Company of the remaining undiscounted obligation payable of $ |
The cost of License #1 was measured
at $
F-28
PMGC Holdings Inc. (formerly Elevai Labs Inc.)
Notes to the Consolidated Financial Statements
For the years ended December 31, 2025 and 2024
(Expressed in United States dollars)
| Consideration payable | ||||
| Consideration payable – undiscounted | $ | |||
| Discount on initial recognition | ( | ) | ||
| Fair value on initial recognition | $ | |||
| Paid in cash | ( | ) | ||
| Accretion | ||||
| Balance, December 31, 2024 | $ | |||
| Accretion | ||||
| Termination of agreement | ( | ) | ||
| Balance, December 31, 2025 | $ | |||
As a result of the termination, the
Company derecognized the associated intangible asset and the related consideration payable, recognizing a gain of $
License #2:
On April 30, 2024, the Company entered into an exclusive license agreement with a pharmaceutical company granting the Company rights to develop, manufacture, and commercialize licensed products (the license granted under this license agreement, “License # 2”). The Company has classified License # 2 as an IPR&D asset resulting in only the acquisition costs plus any transaction costs to be capitalized upon acquisition. The research and development project associated with License # 2 is not yet complete and as a result the Company has not yet determined the useful life of the IPR&D asset.
The Company paid consideration of $
The Black-Scholes Option Pricing Model requires six basic data inputs: the exercise or strike price, expected time to expiration or exercise, the risk-free interest rate, the current stock price, the estimated volatility of the stock price in the future, and the dividend rate. Changes to these inputs could produce a significantly higher or lower fair value measurement.
The following assumptions were used in the Black-Scholes option pricing model:
| Initial recognition – April 30, 2024 | ||||
| Risk-free interest rate | ||||
| Expected life | ||||
| Expected dividend rate | % | |||
| Expected volatility | % | |||
F-29
PMGC Holdings Inc. (formerly Elevai Labs Inc.)
Notes to the Consolidated Financial Statements
For the years ended December 31, 2025 and 2024
(Expressed in United States dollars)
The consultant who assisted in acquiring
License # 2 is to receive
| ● | May 3, 2024: |
| ● | August 1, 2024: |
| ● | November 1, 2024: |
| ● | February 2, 2025: |
The cost of License # 2 IPR&D asset
is $
On February 18, 2025, Northstrive Biosciences Inc. submitted a pre-Investigational New Drug (“pre-IND”) meeting request to the U.S. Food and Drug Administration (“FDA”) for EL-22, a potential obesity therapy designed to promote fat loss and preserve muscle mass when used in combination with GLP-1 receptor agonists.
On March 21, 2025, the Company entered
into a first amendment to the exclusive license agreement covering License # 2, expanding the licensed fields in the exclusive license
agreement to include all uses in animal health, including all applications as a feed additive. The Company paid $
The shares issued to the pharmaceutical
company are unregistered and subject to trading restrictions for six months from the issue date resulting in a fair value discount adjustment
of $
The first amendment to the exclusive license agreement did not result in a remeasurement of the intangible asset under ASC 350 – Intangibles – Goodwill and Other, as it does not constitute a new acquisition or recognition event. The Company will continue to monitor the asset for impairment indicators consistent with U.S. GAAP.
The Black-Scholes Option Pricing Model requires six basic data inputs: the exercise or strike price, expected time to expiration or exercise, the risk-free interest rate, the current stock price, the estimated volatility of the stock price in the future, and the dividend rate. Changes to these inputs could produce a significantly higher or lower fair value measurement.
The following assumptions were used in the Black-Scholes option pricing model:
| Initial recognition – March 26, 2025 | ||||
| Risk-free interest rate | % | |||
| Expected life | ||||
| Expected dividend rate | % | |||
| Expected volatility | % | |||
F-30
PMGC Holdings Inc. (formerly Elevai Labs Inc.)
Notes to the Consolidated Financial Statements
For the years ended December 31, 2025 and 2024
(Expressed in United States dollars)
On May 12, 2025, the Company entered into a second amendment to an existing license agreement related to License # 2. The second amendment to the license agreement clarified the scope and terms of use within the animal health field. Key changes included clarification that certain provisions regarding (i) the exclusive license granted to the pharmaceutical company, (ii) milestone payment obligations of the Company, (iii) research and development obligations of the Company, (iv) recording obligations of the Company, (v) development data provisions, (vi) regulatory responsibilities of the Company, (vii) commercialization plan obligations of the Company, did not apply to licensing rights granted under the license agreement as the rights applied to the animal health field. The second amendment’s provisions also narrowed the Company’s payment obligations as to royalty payments on direct sales and a proportion of amounts received from sublicensees, as the payment related to the animal health field. There was no cost associated with the second amendment.
As License #2 is an IPR&D intangible asset, the Company is required to perform an annual impairment test. In accordance with ASC 350 “Intangibles—Goodwill and Other”, the Company has the option to perform a qualitative assessment first, to determine if it is more likely than not that the IPR&D intangible asset is impaired. Only if the qualitative test indicates that it is more likely than not that the intangible asset is impaired, is the Company required to calculate the fair value of the intangible asset and perform a quantitative impairment test. Under the qualitative analysis, the Company determined that it is more likely than not that the intangible asset is not impaired, and as a result was not required to perform a quantitative test as of December 31, 2025.
Customer relationship
In connection with the acquisition
of AGA Precision Systems, the Company recognized an intangible asset for customer relationships, representing the value associated with
the acquired customer base, including both contractual and non-contractual relationships, and the expected future economic benefits from
recurring business with such customers. The customer relationships intangible asset was recorded at its estimated fair value as of the
acquisition date in accordance with ASC 805, Business Combinations. The fair value of customer relationships was determined using an
income approach, specifically the multi-period excess earnings method (“MPEE”), which estimates the present value of cash
flows attributable solely to the existing customer base after deducting contributory asset charges for supporting assets. Based on this
methodology, the fair value of customer relationships was determined to be approximately $
In connection with the acquisition
of Pacific Sun Packaging, the Company recognized an intangible asset for customer relationships, representing the value associated with
the acquired customer base, including both contractual and non-contractual relationships, and the expected future economic benefits from
recurring business with such customers. The customer relationships intangible asset was recorded at its estimated fair value of approximately
$
In connection with the acquisition
of Indarg Engineering, Inc. , the Company recognized an intangible asset for customer relationships, representing the value associated
with the acquired customer base, including both contractual and non-contractual relationships, and the expected future economic benefits
from recurring business with such customers. The customer relationships intangible asset was recorded at its estimated fair value of
approximately $
F-31
PMGC Holdings Inc. (formerly Elevai Labs Inc.)
Notes to the Consolidated Financial Statements
For the years ended December 31, 2025 and 2024
(Expressed in United States dollars)
The Company evaluated the customer relationships intangible asset for impairment and determined that no impairment indicators were present as of December 31, 2025.
Brand
In connection with the acquisition
of Pacific Sun Packaging, the Company recognized an intangible asset for the Pacific Sun brand name, representing the value associated
with brand recognition, market presence, and customer awareness within the electronics packaging industry. The brand intangible asset
was recorded at its estimated fair value of approximately $
The fair value of the brand was determined
using an income approach, specifically the relief-from-royalty (“RFR”) method, which estimates the present value of royalties
that the Company is deemed to avoid by owning the brand name rather than licensing it. The valuation was based on projected revenues
attributable to the brand, an estimated royalty rate of approximately
The brand is amortized on a straight-line
basis over an estimated useful life of
Backlog
In connection with the AGA Precision
Systems, the Company recognized an intangible asset for backlog, representing confirmed customer purchase orders and contractual commitments
on hand as of the acquisition date that are expected to be fulfilled and recognized as revenue within a short period, generally within
the subsequent fiscal year. Backlog is considered a finite-lived intangible asset and was recognized separately from customer relationships
to avoid double counting of economic benefits. The fair value of backlog was determined using an income approach, which estimates the
earnings attributable to the fulfillment of existing orders, and was determined to be approximately $
| 13. | Operating Leases |
The Company’s subsidiaries, AGA and Pacific Sun, entered into non-cancelable operating leases for the office and warehouse spaces occupied to operate its business.
The Pacific Sun lease was executed
on July 9, 2025, and the Company committed to monthly lease payments of $
F-32
PMGC Holdings Inc. (formerly Elevai Labs Inc.)
Notes to the Consolidated Financial Statements
For the years ended December 31, 2025 and 2024
(Expressed in United States dollars)
The AGA lease was executed on July
19, 2025, and the Company committed to monthly lease payments of $
The Company used a discount rate of
The Company recognized a total lease
cost related to its non-cancelable operating leases of $
The Company recognizes right-of-use (“ROU”) assets and corresponding lease liabilities for operating leases in accordance with ASC 842, Leases. ROU assets represent the Company’s right to use underlying leased assets over the lease term and are initially measured at the amount of the lease liability, adjusted for initial direct costs, prepaid lease payments, and lease incentives.
As of December 31, 2025, the Company’s
operating lease ROU assets had a carrying value of approximately $
As of December 31, 2025 and 2024, the
Company recorded a security deposit of $
Future minimum lease payments under the Company’s operating leases that have an initial non-cancelable lease term in excess of one year at December 31, 2025, are as follows:
| As at December 31, 2025 | Lease payments ($) | |||
| 2026 | ||||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| 2030 and thereafter | ||||
| Total future payments | $ | |||
| Less: imputed interest | ( | ) | ||
| Operating lease liabilities | $ | |||
| Operating lease liabilities-current | $ | |||
| Operating lease liabilities- non-current | $ | |||
| 14. | Convertible debt under ELOC Agreement |
On September 23, 2025, the Company
entered into a securities purchase agreement, establishing an equity line of credit of up to $
F-33
PMGC Holdings Inc. (formerly Elevai Labs Inc.)
Notes to the Consolidated Financial Statements
For the years ended December 31, 2025 and 2024
(Expressed in United States dollars)
On September 26, 2025, the Company
consummated the first pre-paid purchase under the equity line of credit with a principal amount of $
The principal and accrued interest
is convertible at any time during the three-year term at the option of the investor, in whole or in part, at a price that equals
The Company is accounting for the convertible debt host contract under ASC 470-20 at amortized cost and has determined that the conversion option meets the definition of an embedded derivative liability which is separately accounted for at fair value in accordance with ASC 815-15 Derivatives and Hedging — Embedded Derivatives (Note 15).
During the month of December 2025,
the Company settled outstanding principal of $ $
As of December 31, 2025, the remaining
derivative liability associated with the conversion feature was $
Subsequent to December 31, 2025, the
Company settled the remaining outstanding principal of $
A continuity of the amortized cost of the convertible debt host contract is as follows:
| Convertible debt | ||||
| Balance, January 1, 2025 | $ | |||
| Principal | ||||
| Fair value of embedded derivative liability | ( | ) | ||
| Allocation of original issue discount and issuance cost (1) | ( | ) | ||
| Accretion | ||||
| Interest expense | ||||
| Repayment through common stock | ( | ) | ||
| Balance, December 31, 2025 | $ | |||
| (1) |
F-34
PMGC Holdings Inc. (formerly Elevai Labs Inc.)
Notes to the Consolidated Financial Statements
For the years ended December 31, 2025 and 2024
(Expressed in United States dollars)
| 15. | Derivative liabilities |
Liability classified stock purchase warrants
A continuity of the Company’s common stock purchase derivative liability warrants is as follows:
| Derivative liabilities | ||||
| Outstanding, December 31, 2023 | $ | |||
| Change in fair value of derivative liabilities | ( | ) | ||
| Outstanding, December 31, 2024 | $ | |||
| Change in fair value of derivative liabilities | ||||
| Outstanding, December 31, 2025 | $ | |||
We determined the derivative liabilities to be a Level 3 fair value measurement and used the Black-Scholes Option Pricing Model to calculate the fair value as of initial recognition and at subsequent period ends through December 31, 2024. Given the exercise price of these warrants compared to the fair market value of the Company’s shares, the value is deemed to be $.
As of December 31, 2025, the following liability classified stock purchase warrants were outstanding:
| Outstanding | Expiry date | Weighted average exercise price ($) | ||||
As of December 31, 2025 and 2024, the
weighted average life of derivative liability classified stock purchase warrants outstanding was
Embedded derivative liabilities
The Company determined that the fair
value of embedded derivative liability separated from the convertible debt host contract, issued in connection with the ELOC Agreement
(Note 14), had an initial fair value of $
During the month of December 2025,
the Company issued common shares to partially settle the outstanding balance of the convertible debt under the ELOC Agreement. In connection
with these settlements, the Company derecognized $
The derivative liability was remeasured
at fair value as of December 31, 2025 using the Binomial option pricing model. The estimated fair value at December 31, 2025 was $
F-35
PMGC Holdings Inc. (formerly Elevai Labs Inc.)
Notes to the Consolidated Financial Statements
For the years ended December 31, 2025 and 2024
(Expressed in United States dollars)
We determined the derivative liability
to be a Level 3 fair value measurement and used a Binomial Option Pricing Model to calculate the fair value as of initial recognition
and through December 31, 2025.
| Initial | December 31, 2025 | |||||||
| Risk-free interest rate | % | % | ||||||
| Expected life | ||||||||
| Expected dividend rate | % | % | ||||||
| Expected volatility | % | % | ||||||
| Exercise price | $ | $ | ||||||
| Number of steps | ||||||||
The following table presents the changes in the Company’s Level 3 derivative liability for the year ended December 31, 2025:
| Amount | ||||
| Balance, September 26, 2025 (initial recognition) | $ | |||
| Change in fair value | ( | ) | ||
| Derecognition upon settlement of convertible debt | ( | ) | ||
| Balance, December 31, 2025 | $ | |||
Subsequent to December 31, 2025, the
Company settled the remaining outstanding principal of $
| 16. | Equity |
Common Stock
Authorized
As of December 31, 2025, and December
31, 2024, the Company had
Issued and outstanding
As of December 31, 2025 and 2024, the
Company had
Transactions during the year ended December 31, 2025
On January 28, 2025, the Company entered
into and completed a warrant inducement transaction with the holders of its Series A Common Stock Purchase Warrants pursuant to a warrant
inducement agreement (“Series A Warrants”). Under the warrant inducement agreement, the exercise price of the outstanding
Series A Warrants was reduced from $
On February 2, 2025, the Company issued
On March 7, 2025, the Company repurchased
F-36
PMGC Holdings Inc. (formerly Elevai Labs Inc.)
Notes to the Consolidated Financial Statements
For the years ended December 31, 2025 and 2024
(Expressed in United States dollars)
On March 10, 2025, the Company effected a 1-for-7 reverse stock split of its issued and outstanding common stock. As a result of the reverse stock split, every seven shares of the Company’s common stock issued and outstanding were automatically combined into one share, with any fractional shares rounded in accordance with the Company’s governing documents. The reverse stock split did not change the number of authorized shares or the par value of the common stock. All share and per share amounts presented in the accompanying consolidated financial statements, including earnings (loss) per share and weighted-average shares outstanding, have been retroactively adjusted to reflect the reverse stock split for all periods presented. In addition, all outstanding stock options, warrants, and other equity-linked instruments were proportionately adjusted in accordance with their respective terms.
On March 18, 2025, the Company entered
into a securities purchase agreement with an existing investor to repurchase
On March 21, 2025, the Company entered
into a Securities Purchase Agreement between the Company and certain institutional investors with respect to a registered direct offering
for the offer and sale of
On March 26, 2025, the Company entered
into a first amendment to the exclusive license agreement covering License # 2 (Note 12), expanding its rights to include the growing
animal health market. The Company issued
On August 22, 2025, the Company entered
into warrant inducement agreements with certain existing common stock purchase warrant holders. Under these warrant inducement agreements,
the exercise price of the outstanding replacement warrants was reduced from $
On September 2, 2025, the Company effected a 1-for-3.5 reverse stock split of its issued and outstanding common stock. Under the terms of the reverse stock split, each three and one-half shares of common stock were combined into one share, with fractional shares treated in accordance with applicable provisions. The reverse stock split did not affect the authorized number of shares or the par value per share. All historical share and per share data included in these consolidated financial statements have been retroactively restated to reflect the reverse stock split for all periods presented. Corresponding adjustments were made to outstanding equity awards, including stock options and warrants, to preserve their economic value.
On September 23, 2025, in connection
with the ELOC Agreement, the Company issued
During the year ended December 31,
2025, the Company sold an aggregate of 7,827 shares of common stock under its at-the-market (ATM) equity offering program, generating
total gross proceeds of approximately $
F-37
PMGC Holdings Inc. (formerly Elevai Labs Inc.)
Notes to the Consolidated Financial Statements
For the years ended December 31, 2025 and 2024
(Expressed in United States dollars)
During the month of December 2025,
the Company issued an aggregate of 49,693 shares of common stock in settlement of amounts outstanding under its ELOC arrangement (Note
14). The shares were issued in multiple tranches between December 8, 2025 and December 31, 2025 pursuant to purchase notices delivered
under the ELOC agreement. The shares issued settled outstanding principal of $ $
Transactions during the year ended December 31, 2024
On April 30, 2024, the Company issued
On May 3, 2024, the Company committed
to issue
On August 2, 2024, the Company issued
On September 24, 2024, the Company
issued
Preferred Stock
Authorized
As of December 31, 2025, and December
31, 2024, the Company had
Issued and outstanding
As at December 31, 2025 and 2024, the
Company had
Transactions during the year ended December 31, 2025, and 2024
On March 26, 2025, at a special meeting
of the Company’s shareholders, the shareholders approved the issuance of
F-38
PMGC Holdings Inc. (formerly Elevai Labs Inc.)
Notes to the Consolidated Financial Statements
For the years ended December 31, 2025 and 2024
(Expressed in United States dollars)
Equity Warrants
Transactions during the year ended December 31, 2025.
On January 28, 2025, in connection
with the warrant inducement agreement (see above) and the exercise of the Series A Warrants, the Company issued
On March 18, 2025, the Company entered
into a securities purchase agreement with an existing investor to repurchase warrants to purchase
On March 24, 2025, the Company consummated
a registered direct offering with institutional investors, issuing
On April 14, 2025, all
On August 22, 2025, the Company
entered into a warrant inducement agreement with existing warrant holders to amend and reprice their outstanding common stock
purchase warrants and issue new common stock purchase warrants to the existing warrant holders. These holders’ existing
warrants were repriced from $
Transactions during the year ended December 31, 2024
On September 24, 2024, with each of
the
On September 24, 2024, the Company
issued
F-39
PMGC Holdings Inc. (formerly Elevai Labs Inc.)
Notes to the Consolidated Financial Statements
For the years ended December 31, 2025 and 2024
(Expressed in United States dollars)
As of December 31, 2025, the following equity warrants were outstanding:
| Outstanding | Expiry date | Weighted average exercise price ($) | ||||||
As of December 31, 2025 and 2024, the
weighted average life of equity warrants outstanding was
Stock Options
The Company has a stock option plan
included in the Company’s 2025 Equity Incentive Plan (the “Plan”) where the Board of Directors or any of its committees
can grant Incentive Stock Options, Nonstatutory Stock Options, and Restricted Stock to employees, advisors and directors of the Company.
As of December 31, 2025 and 2024, the aggregate number of shares allocated and made available for issuance pursuant to stock options
granted under the Plan shall not exceed
Transactions during the year ended December 31, 2025
There was no stock option activity during the year ended December 31, 2025.
Transactions during the year ended December 31, 2024
In January 2024, the Company granted
On March 6, 2024, the Company granted
The continuity of stock options for the years ended December 31, 2025 and 2024 is summarized below:
| Number of stock options | Weighted average exercise price | |||||||
| Outstanding, December 31, 2023 | ||||||||
| Granted | ||||||||
| Forfeited | ( | ) | ||||||
| Outstanding, December 31, 2024 | ||||||||
| Granted | ||||||||
| Forfeited/Cancelled | ( | ) | ( | ) | ||||
| Expired | ( | ) | ( | ) | ||||
| Outstanding, December 31, 2025 | ||||||||
F-40
PMGC Holdings Inc. (formerly Elevai Labs Inc.)
Notes to the Consolidated Financial Statements
For the years ended December 31, 2025 and 2024
(Expressed in United States dollars)
As of December 31, 2025, the following options were outstanding, entitling the holders thereof the right to purchase one common stock for each option held as follows:
| Outstanding | Vested | Expiry date | Weighted average exercise price ($) | |||||||||
| | | |||||||||||
As of December 31, 2025, and December
31, 2024, the weighted average life of stock options outstanding was 5.98 years and
With the sale of the Company’s
skincare business on January 16, 2025,
| 17. | Related Party Transactions |
Related parties consist of the following individuals and corporations:
| ● | Braeden Lichti, Non-executive Chairman |
| ● | Jordan Plews, Former Director (resigned December 23, 2024) and CEO of Skincare and BioSciences (resigned January 16, 2025) |
| ● | Graydon Bensler, non-employee CFO, CEO and Director |
| ● | Tim Sayed, Former Chief Medical Officer and Former Director (resigned August 1, 2024) |
| ● | Brenda Buechler, Former Chief Marketing Officer (termination effective June 20, 2024) |
| ● | Christoph Kraneiss, Former Chief Commercial Officer (termination effective June 20, 2024) |
| ● | Jeffrey Parry, Director (appointed June 1, 2023) |
| ● | Julie Daley, Director (appointed June 1, 2023) |
| ● | Crystal Muilenburg, Former Director (appointed June 1, 2023, resigned February 29, 2024) |
| ● | George Kovalyov, Director (appointed March 1, 2024) |
| ● | GB Capital Ltd., controlled by Graydon Bensler |
| ● | JP Bio Consulting LLC, controlled by Jordan Plews |
| ● | BWL Investments Ltd., controlled by Braeden Lichti |
| ● | Northstrive Companies Inc., controlled by Braeden Lichti |
| ● | Mystic Marine Advisors, controlled by Jeffrey Parry |
Key management personnel include those
persons having authority and responsibility for planning, directing, and controlling the activities of the Company as a whole. The Company
has determined that key management personnel consist of members of the Company’s Board of Directors, corporate officers, and individuals
with more than
F-41
PMGC Holdings Inc. (formerly Elevai Labs Inc.)
Notes to the Consolidated Financial Statements
For the years ended December 31, 2025 and 2024
(Expressed in United States dollars)
Remuneration attributed to key management personnel are summarized as follows:
| December 31, 2025 | December 31, 2024 | |||||||
| Consulting fees | $ | $ | ||||||
| Management fees | ||||||||
| Salaries | ||||||||
| Director fees | ||||||||
| Share-based compensation | ||||||||
| $ | $ | |||||||
During the year ended December 31, 2025:
The Company incurred consulting fees
and contracted performance bonuses of $
The Company incurred consulting fees
and contracted performance bonuses of $ $
The Company incurred director’s
fees of $
The Company incurred director’s
fees of $
The Company incurred director’s
fees of $
The Company incurred management fees
of $
The Company incurred management fees
of $
Jordan Plews, Former Director and former
CEO of Skincare and BioSciences, earned a Salary of $
Brenda Buechler, Former Chief Marketing
Officer, earned a Salary of $ and $
Christoph Kraneiss, Former Chief Commercial
Officer, earned a Salary of $ and $
During the year ended December 31, 2025, and 2024, the Company issued the following stock options to related parties:
On March 1, 2024, the Company
granted
F-42
PMGC Holdings Inc. (formerly Elevai Labs Inc.)
Notes to the Consolidated Financial Statements
For the years ended December 31, 2025 and 2024
(Expressed in United States dollars)
Details of the fair value of the options granted to each individual and the related expense recorded for the years ended December 31, 2025 and 2024 are as follows:
| December 31, 2025 | December 31, 2024 | Grant date fair value | ||||||||||
| Braeden Lichti, Non-executive Chairman | $ | $ | $ | |||||||||
| Graydon Bensler, CEO, CFO and Director | ||||||||||||
| Jordan Plews, Former Director and former CEO of Skincare and BioSciences2 | ||||||||||||
| Tim Sayed, Former Chief Medical Officer and Former Director1 | ( | ) | ||||||||||
| Jeffrey Parry, Director | ||||||||||||
| Julie Daley, Director | ||||||||||||
| Crystal Muilenburg, Former Director1 | ( | ) | ||||||||||
| George Kovalyov, Director | ||||||||||||
| Brenda Buechler, Former Chief Marketing Officer1 | ( | ) | ||||||||||
| Christoph Kraneiss, Former Chief Commercial Officer1 | ( | ) | ||||||||||
| $ | $ | $ | ||||||||||
| 1 |
| 2 |
As of December 31, 2025 and 2024, the
Company had $
As of December 31, 2025, the Company
had $
As of December 31, 2025, the Company
recorded accrued director fees payable to related parties of $
These amounts are unsecured, non-interest bearing and are due on demand.
| 18. | Income Tax |
During the years ended December 31,
2025 and 2024, there is $ and $
The components of loss from continuing operations before provision for income taxes for the years ended December 31, 2025 and 2024 consist of the following:
| Year Ended December 31, | ||||||||
| 2025 | 2024 | |||||||
| Domestic | ( | ) | ( | ) | ||||
| Foreign | ( | ) | ||||||
| ( | ) | ( | ) | |||||
F-43
PMGC Holdings Inc. (formerly Elevai Labs Inc.)
Notes to the Consolidated Financial Statements
For the years ended December 31, 2025 and 2024
(Expressed in United States dollars)
There were no cash income taxes paid (refunded) during the years ended December 31, 2025 or 2024.
The components of income tax expense from continuing operations for the years ended December 31, 2025 and 2024 are as follows:
| Year Ended December 31, | ||||||||
| 2025 | 2024 | |||||||
| Current Taxes | ||||||||
| Federal | ||||||||
| State | ||||||||
| Foreign | ||||||||
| Total Current Taxes | ||||||||
| Deferred Taxes | ||||||||
| Federal | ||||||||
| State | ||||||||
| Foreign | ||||||||
| Total Deferred Taxes | ||||||||
| Total Tax Expense / (Benefit) | ||||||||
A reconciliation of the U.S. federal statutory income tax rate to the Company’s effective continuing operations income tax rate is as follows:
| Rate Reconciliation | As at December 31, 2025 | |||||||
| Income Taxes at Statutory Rates | ( | ) | % | |||||
| State Income Tax, Net of Federal Effect * | - | % | ||||||
| Foreign Tax Effects | % | |||||||
| Canada | ||||||||
| Foreign Rate Differential | ( | ) | % | |||||
| Permanent Items | ( | ) | % | |||||
| Write off deferrals due to dissolution | - | % | ||||||
| Change in Valuation Allowance | ( | ) | % | |||||
| Effects of Changes in Tax Laws or Rates | % | |||||||
| Effects of Cross-Border Tax Laws | % | |||||||
| Tax Credits | % | |||||||
| Changes in Valuation Allowance | - | % | ||||||
| Non-taxable or Non-deductible Items | % | |||||||
| Permanent Items | - | % | ||||||
| Changes in Unrecognized Tax Benefits | % | |||||||
| Other | % | |||||||
| Other | ( | ) | % | |||||
| Provision for income taxes | - | % | ||||||
| * |
F-44
PMGC Holdings Inc. (formerly Elevai Labs Inc.)
Notes to the Consolidated Financial Statements
For the years ended December 31, 2025 and 2024
(Expressed in United States dollars)
As previously disclosed prior to the adoption of ASU 2023-09, the difference between the provision (benefit) for income taxes and the amount computed by applying the U.S. federal income tax rate for the year ended December 31, 2024 is as follows:
| December 31, 2024 | ||||
| Net loss before income tax | ( | ) | ||
| Effective tax rate | % | |||
| U.S. income tax at federal statutory rate | ( | ) | ||
| State Income Tax, Net of Federal Benefits | ||||
| Share-based compensation | ||||
| Other non-deductible items | ||||
| Foreign exchange | ||||
| Tax rate differences | ||||
| Change in Valuation Allowance | ||||
| Tax expense (recovery) | ||||
The components of the Company’s deferred tax assets and liabilities related to continuing operations at December 31, 2025 and 2024, consisted of:
| December 31, 2025 | December 31, 2024 | |||||||
| Deferred tax assets: | ||||||||
| Net operating loss carry forward | ||||||||
| Lease Liability | ||||||||
| Accruals and reserves | ||||||||
| Other | ||||||||
| ( | ) | ( | ) | |||||
| Valuation allowance | ||||||||
| Total deferred tax assets | ||||||||
| Deferred tax liabilities: | ||||||||
| Right of Use asset | ( | ) | ||||||
| Other | ( | ) | ||||||
| ( | ) | |||||||
| Total deferred tax liabilities | ( | ) | ||||||
| Net deferred tax assets | ||||||||
The Company has evaluated the positive
and negative evidence bearing upon its ability to realize its deferred tax assets, which are composed principally of net operating loss
carry forwards. Management has considered the Company’s history of cumulative net losses incurred since inception and has concluded
that it is more likely than not that the Company will not realize the benefits of its federal and state net deferred tax assets. Accordingly,
a full valuation allowance has been established against the net deferred tax assets as of December 31, 2025 and 2024. The Company reevaluates
the positive and negative evidence at each reporting period. During the year ended December 31, 2025, the valuation allowance increased
by approximately
At December 31, 2025, the Company had
U.S. federal and state net operating loss carryforwards of $
The utilization of net operating losses and tax credit carryforwards may be subject to an annual limitation as a result of ownership changes that have occurred previously or may occur in the future. Under Sections 382 and 383 of the Internal Revenue Code (the Code), a corporation that undergoes and ownership change may be subject to limitations on its ability to utilize its pre-change net operating losses and other tax attributes otherwise available to offset future taxable income or tax liability. An ownership change is defined as a cumulative change of 50% or more in the ownership positions of certain stockholders during a rolling 3-year period. The Company has not completed a formal study to determine if any ownership changes within the meaning of Code Section 382 and 383 have occurred. If such ownership change has occurred, the Company’s ability to use its net operating losses or tax credit carryforwards may be restricted, which could require the Company to pay federal or state income taxes earlier than would be required if such limitations were not in effect.
F-45
PMGC Holdings Inc. (formerly Elevai Labs Inc.)
Notes to the Consolidated Financial Statements
For the years ended December 31, 2025 and 2024
(Expressed in United States dollars)
The Company recognizes the financial statement benefit of a tax position only when it determines that the position is more likely than not to be sustained upon examination by the relevant taxing authority. For tax positions that meet the more-likely-than-not threshold, the amount recognized in the financial statements is measured as the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the taxing authority. The Company records interest related to uncertain tax positions as interest expense and penalties within general and administrative expenses.
As of December 31, 2025 and 2024, the Company had no unrecognized tax benefits.
The Company is subject to taxation in the United States and various state jurisdictions. The Company is no longer subject to taxation in Canada following the dissolution of its Canadian subsidiary. There are currently no ongoing examinations by taxing authorities.
The Company’s U.S. federal and
state tax years 2021 through 2024 remain open for examination, generally for three and four years, respectively, from the date of utilization
of any net operating loss carryforwards. The Company’s Canadian tax years remain open for examination by the Canadian tax authority
for
On July 4, 2025, the One Big Beautiful
Bill Act (“OBBBA”) was enacted, introducing several changes to U.S. tax laws affecting corporations. Key provisions include
the expensing of domestic research expenditures, an increase in the limitation on the deduction of interest expense to
These provisions became effective for the Company during the three months ended September 30, 2025. The Company evaluated the impact of the new legislation and determined that it did not have a material effect on the Company’s current or future effective income tax rate or cash taxes paid.
| 19. | Commitments and Contingencies |
There were commitments as of December 31, 2025, and December 31, 2024, or during the periods then ended.
As of December 31, 2024, the Company had an ongoing dispute that arose in the normal course of business. In February 2025, solely to avoid the cost and burdens associated with litigation, the Company and the other parties to this dispute entered into a settlement agreement to fully and finally resolve any and all claims between them, without the Company or any party admitting any liability or fault. Due to the confidential nature of the settlement agreement, the Company is not in a position to disclose the terms of the settlement; however, the amounts payable by the Company to the parties and their legal counsel is included in accounts payable and accrued liabilities as of December 31, 2024. The amounts were paid in full by December 31, 2025.
As of December 31, 2025, the Company had an ongoing dispute that arose in the normal course of business and mediation discussions are ongoing. It is not yet possible to predict the likelihood of an unfavorable outcome, or the amount or range of potential loss.
F-46
PMGC Holdings Inc. (formerly Elevai Labs Inc.)
Notes to the Consolidated Financial Statements
For the years ended December 31, 2025 and 2024
(Expressed in United States dollars)
| 20. | Concentrations |
Customers
For the year ended December 31, 2025,
the Company had 4 key customers that represented approximately
| The year Ended December 31, 2025 | ||||
| Customer 1 | % | |||
| Customer 2 | % | |||
| Customer 3 | % | |||
| Customer 1 | % | |||
| % | ||||
Suppliers
During the year ended December 31,
2025, the Company had 2 key suppliers that represented approximately 35% of the cost incurred in the purchase of inventory.
| The year Ended December 31, 2025 | ||||
| Supplier 1 | % | |||
| Supplier 2 | % | |||
| % | ||||
The Company continually evaluates the performance of its suppliers and the availability of alternatives to substitute or supplement its inventory production supply chain. The Company believes that a breakdown in supply from one of its key suppliers would be overcome in a short amount of time given the availability of alternatives.
| 21. | Reportable Segments and Geographic Areas |
The Company’s continuing operations
consist of
F-47
PMGC Holdings Inc. (formerly Elevai Labs Inc.)
Notes to the Consolidated Financial Statements
For the years ended December 31, 2025 and 2024
(Expressed in United States dollars)
The following is a summary of the Company’s operations for the year ended December 31, 2025, and assets and liabilities as of December 31, 2025, split between reportable segments:
| Corporate, Treasury and Biosciences | IT Packaging Solutions | Precision Engineering and Machining | Total | |||||||||||||
| Revenue | $ | $ | $ | $ | ||||||||||||
| Cost of sales | $ | $ | $ | $ | ||||||||||||
| Gross profit | $ | $ | $ | $ | ||||||||||||
| Expenses | $ | $ | $ | $ | ||||||||||||
| Other income (expense) | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | ||||||
| Net loss from continuing operations | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Current Assets | $ | $ | $ | $ | ||||||||||||
| Non-current assets | $ | $ | $ | $ | ||||||||||||
| Total Assets | $ | $ | $ | $ | ||||||||||||
| Current liabilities | $ | $ | $ | $ | ||||||||||||
| Non-current liabilities | $ | $ | $ | $ | ||||||||||||
| Total Liabilities | $ | $ | $ | $ | ||||||||||||
| Total Equity | $ | $ | $ | $ | ||||||||||||
All of the Company’s revenue is generated with customers located in the United States. The majority of the Company’s continuing operations are conducted from and its assets are located in the United States. PMGC Research, the Company’s Canadian subsidiary, was located in Canada and provided limited operational support and research.
| 22. | Subsequent Events |
Management has evaluated events subsequent to the year ended December 31, 2025 up to March 27, 2026, for transactions and other events that may require adjustment of and/or disclosure in the consolidated financial statements.
On January 6, 2026 and March 10, 2026,
the Company completed reverse stock splits of its common shares on a ratio of
On January 7, 2026, the Company consummated
Secured Pre-Paid Purchase #2 under its previously disclosed equity purchase facility. The Second Pre-Paid Purchase had an original principal
amount of $
F-48
PMGC Holdings Inc. (formerly Elevai Labs Inc.)
Notes to the Consolidated Financial Statements
For the years ended December 31, 2025 and 2024
(Expressed in United States dollars)
On January 7, the Company settled the
remaining outstanding principal under its ELOC arrangement of $
On January 13, 2026, the Company consummated
Secured Pre-Paid Purchase #3 under the same equity purchase facility. The Third Pre-Paid Purchase had an original principal amount of
$
On February 2, 2026, the Company completed
the acquisition of
On February 6, 2026, the Company consummated
Secured Pre-Paid Purchase #4 under the same equity purchase facility. The Fourth Pre-Paid Purchase had an original principal amount of
$
On March 4, 2026, the Company filed
a Certificate of Amendment to effect a 1-for-6 reverse stock split of its common stock, which became effective on March 10, 2026. Each
six issued and outstanding shares of common stock were automatically combined into
F-49
Exhibit 10.1
PMGC HOLDINGS INC.
2025 EQUITY INCENTIVE PLAN
Effective Date: September 15, 2025
1. Purposes of the Plan. The purposes of this 2025 Equity Incentive Plan are:
| ● | to attract and retain the best available personnel for positions of substantial responsibility, |
| ● | to provide additional incentive to Employees, Directors and Consultants, and |
| ● | to promote the success of the Company’s business. |
The Plan permits the grant of Incentive Stock Options, Non-statutory Stock Options, Restricted Stock, and Restricted Stock Units, and other equity awards.
2. Definitions. As used herein, the following definitions will apply:
(a) “Administrator” means the Compensation Committee of the Board or the Board, if the Compensation Committee of the Board does not exist, which administration will be executed, in any event, in accordance with Section 4 of the Plan.
(b) “Applicable Laws” means the requirements relating to the administration of equity-based awards under U.S. state corporate laws, U.S. federal and state securities laws, the Code, any stock exchange or quotation system on which the Common Stock is listed or quoted and the applicable laws of any foreign country or jurisdiction where Awards are, or will be, granted under the Plan.
(c) “Award” means: (i) individually or collectively, a grant of Options, Restricted Stock, Restricted Stock Units, and other equity awards, each of such grants under the Plan; and (ii) awards made under the Company’s former equity incentive plan, the Amended 2020 Equity Incentive Plan.
(d) “Award Agreement” means the written or electronic agreement setting forth the terms and provisions applicable to each Award granted under the Plan. The Award Agreement is subject to the terms and conditions of the Plan.
(e) “Board” means the Board of Directors of the Company.
(f) “Cause” means:
| (i) | with respect to an Employee, (A) as such term is defined in the individual employment agreement or other engagement agreement between the Employee and the Company, or (B) if no such agreement is in place, then “Cause” mean any one of the following: (1) conviction of any felony involving moral turpitude or affecting the Company; (2) any failure to carry out, as an Employee of the Company a reasonable directive of the Chief Executive Officer, the Board or the Employee’s direct supervisor, which involves the business of the Company and which was capable of being lawfully performed by the Employee; (3) embezzlement or theft of funds of the Company; (4) any breach of the Employee’s fiduciary duties or duties of care of the Company (if any); including, without limitation, self-dealing, prohibited disclosure of confidential information of, or relating to, the Company, or engagement in any business competitive to the business of the Company; (5) any conduct (other than conduct in good faith) reasonably determined by the Board to be materially detrimental to the Company, and (6) any other circumstances under which the Company is entitled to terminate Employee’s employment with the Company without paying the Employee severance pay under Applicable Laws; |
| (ii) | with respect to a Consultant, (A) as such term is defined in the individual engagement agreement between the Consultant and the Company or the Parent or Subsidiary, or (B) if no such agreement is in place, then “Cause” shall mean any one of the following: (1) conviction of any felony involving moral turpitude or affecting the Company; (2) any failure to carry out, as a Consultant of the Company, the Parent or Subsidiary a reasonable directive of the Chief Executive Officer, the Board or the Consultant’s direct supervisor, each at the Company, Parent, or Subsidiary (as applicable), which involves the business of the Company, the Parent, or Subsidiary (as applicable) and which was capable of being lawfully performed by the Consultant; (3) embezzlement or theft of funds of the Company, Parent, or Subsidiary; (4) any breach of the Consultant’s fiduciary duties or duties of care of the Company, Parent, or Subsidiary (if any, and as applicable); including, without limitation, self-dealing, prohibited disclosure of confidential information of, or relating to, the Company, or engagement in any business competitive to the business of the Company, Parent, or Subsidiary; (5) any conduct (other than conduct in good faith) reasonably determined by the Board to be materially detrimental to the Company, Parent, or Subsidiary, and (6) any other circumstances under which the Company is entitled to terminate Consultant without reimbursing the Consultant under Applicable Laws; |
| (iii) | with respect to a Director, as such term is defined in the individual engagement between the Director and the Company, whether such engagement agreement is a Director Agreement, consulting agreement, or such other agreement. |
(g) “Change in Control” means the occurrence of any of the following events:
(i) Change in Ownership of the Company. A change in the ownership of the Company which occurs on the date that any one person, or more than one person acting as a group (“Person”), acquires ownership of the stock of the Company that, together with the stock held by such Person, constitutes more than 50% of the total voting power of the stock of the Company, except that any change in the ownership of the stock of the Company as a result of a private financing of the Company that is approved by the Board will not be considered a Change in Control; or
(ii) Change in Effective Control of the Company. If the Company has a class of securities registered pursuant to Section 12 of the Exchange Act, a change in the effective control of the Company which occurs on the date that a majority of members of the Board is replaced during any twelve (12) month period by Directors whose appointment or election is not endorsed by a majority of the members of the Board prior to the date of the appointment or election. For purposes of this clause (ii), if any Person is considered to be in effective control of the Company, the acquisition of additional control of the Company by the same Person will not be considered a Change in Control; or
(iii) Change in Ownership of a Substantial Portion of the Company’s Assets. A change in the ownership of a substantial portion of the Company’s assets which occurs on the date that any Person acquires (or has acquired during the twelve (12) month period ending on the date of the most recent acquisition by such person or persons) assets from the Company that have a total gross fair market value equal to or more than 50% of the total gross fair market value of all of the assets of the Company immediately prior to such acquisition or acquisitions. For purposes of this subsection (iii), gross fair market value means the value of the assets of the Company, or the value of the assets being disposed of, determined without regard to any liabilities associated with such assets.
For purposes of this Section 2(g), persons will be considered to be acting as a group if they are owners of a corporation that enters into a merger, consolidation, purchase or acquisition of stock, or similar business transaction with the Company.
2
Notwithstanding the foregoing, a transaction will not be deemed a Change in Control unless the transaction qualifies as a change in control event within the meaning of Code Section 409A, as it has been and may be amended from time to time, and any proposed or final Treasury Regulations and Internal Revenue Service guidance that has been promulgated or may be promulgated thereunder from time to time.
Further, and for the avoidance of doubt, a transaction will not constitute a Change in Control if: (i) its sole purpose is to change the jurisdiction of the Company’s incorporation; or (ii) its sole purpose is to create a holding company that will be owned in substantially the same proportions by the persons who held the Company’s securities immediately before such transaction.
(g) “Code” means the Internal Revenue Code of 1986, as amended. Any reference to a section of the Code herein will be a reference to any successor or amended section of the Code.
(h) “Common Stock” means the common stock of the Company, par value $0.0001.
(i) “Company” means PMGC Holdings Inc., a Nevada corporation, or any successor thereto.
(j) “Consultant” means any person, including an advisor, engaged by the Company or a Parent or Subsidiary to render services to such entity.
(k) “Director” means a member of the Board.
(l) “Disability” means total and permanent disability as defined in Code Section 22(e)(3), provided that in the case of Awards other than Incentive Stock Options, the Administrator in its discretion may determine whether a permanent and total disability exists in accordance with uniform and non-discriminatory standards adopted by the Administrator from time to time.
(m) “Effective Date” means the effective date of this Plan, September 15, 2025.
(n) “Employee” means any person, including officers and Directors, employed by the Company or any Parent or Subsidiary of the Company. Neither service as a Director nor payment of a director’s fee by the Company will be sufficient to constitute “employment” by the Company.
(o) “Exchange Act” means the Securities Exchange Act of 1934, as amended.
(p) “Exchange Program” means a program under which (i) outstanding Awards are surrendered or cancelled in exchange for Awards of the same type (which may have higher or lower exercise prices and different terms), Awards of a different type, and/or cash, (ii) Participants would have the opportunity to transfer any outstanding Awards to a financial institution or other person or entity selected by the Administrator, and/or (iii) the exercise price of an outstanding Award is reduced or increased. The Administrator will determine the terms and conditions of any Exchange Program in its sole discretion.
(q) “Fair Market Value” means, as of any date, the value of Common Stock determined as follows:
(i) If the Common Stock is listed on any established stock exchange or a national market system, including without limitation the Nasdaq Global Select Market, the Nasdaq Global Market or the Nasdaq Capital Market of The Nasdaq Stock Market, its Fair Market Value will be the closing sales price for such stock (or the closing bid, if no sales were reported) as quoted on such exchange or system on the day of determination, as reported in The Wall Street Journal or such other source as the Administrator deems reliable;
(ii) If the Common Stock is regularly quoted by a recognized securities dealer but selling prices are not reported, the Fair Market Value of a Share will be the mean between the high bid and low asked prices for the Common Stock on the day of determination (or, if no bids and asks were reported on that date, as applicable, on the last trading date such bids and asks were reported), as reported in The Wall Street Journal or such other source as the Administrator deems reliable; or
3
(iii) In the absence of an established market for the Common Stock, the Fair Market Value will be determined in good faith by the Administrator using one of the valuation methods set forth in Section 1.409A-1(b)(5)(iv)(B)(2) of the Treasury Regulation. Such determination shall be conclusive and binding on all persons.
(r) “Incentive Stock Option” means an Option that by its terms qualifies and is otherwise intended to qualify as an incentive stock option within the meaning of Code Section 422 and the regulations promulgated thereunder.
(s) “Non-statutory Stock Option” means an Option that by its terms does not qualify or is not intended to qualify as an Incentive Stock Option.
(t) “Option” means a stock option granted pursuant to the Plan.
(u) “Parent” means a “parent corporation,” whether now or hereafter existing, as defined in Code Section 424(e).
(v) “Participant” means the holder of an outstanding Award.
(w) “Period of Restriction” means the period during which the transfer of Shares of Restricted Stock are subject to restrictions and therefore, the Shares are subject to a substantial risk of forfeiture. Such restrictions may be based on the passage of time, the achievement of target levels of performance, or the occurrence of other events as determined by the Administrator.
(x) “Plan” means this 2025 Equity Incentive Plan.
(y) “Restricted Stock” means Shares issued pursuant to an Award of Restricted Stock under Section 7 of the Plan, or issued pursuant to the early exercise of an Option.
(zz) “Restricted Stock Units” means a bookkeeping entry representing an amount equal to the Fair Market Value of one Share, granted pursuant to Section 8 of this Plan. Each Restricted Stock Unit represents an unfunded and unsecured obligation of the Company.
(aa) “Service Provider” means an Employee, Director or Consultant. For purposes of clarification, a member of the board of directors (or similar governing body) of any Subsidiary shall be deemed to be a Service Provider.
(bb) “Share” means a share of the Common Stock, as adjusted in accordance with Section 12 of the Plan.
(cc) “Subsidiary” means a “subsidiary corporation,” whether now or hereafter existing, as defined in Code Section 424(f).
3. Stock Subject to the Plan.
(a) Stock Subject to the Plan. Subject to the provisions of Section 12 of the Plan, the maximum aggregate number of Shares that may be subject to Awards and sold under the Plan is 169,281 Shares. The Shares may be authorized but unissued, or reacquired Common Stock.
(b) Lapsed Awards. If an Award expires or becomes unexercisable without having been exercised in full, is surrendered pursuant to an Exchange Program, or, with respect to Restricted Stock, is forfeited to or repurchased by the Company due to the failure to vest, the unpurchased Shares (or for Awards other than Options the forfeited or repurchased Shares) which were subject thereto will become available for future grant or sale under the Plan (unless the Plan has terminated). Shares that have actually been issued under the Plan under any Award will not be returned to the Plan and will not become available for future distribution under the Plan; provided, however, that if Shares issued pursuant to Awards of Restricted Stock are repurchased by the Company or are forfeited to the Company due to the failure to vest, such Shares will become available for future grant under the Plan. Shares used to pay the exercise price of an Award or to satisfy the tax withholding obligations related to an Award will become available for future grant or sale under the Plan. To the extent an Award under the Plan is paid out in cash rather than Shares, such cash payment will not result in reducing the number of Shares available for issuance under the Plan. Notwithstanding the foregoing and, subject to adjustment as provided in Section 12, the maximum number of Shares that may be issued upon the exercise of Incentive Stock Options will equal the aggregate Share number stated in Section 3(a), plus, to the extent allowable under Code Section 422 and the Treasury Regulations promulgated thereunder, any Shares that become available for issuance under the Plan pursuant to this Section 3(b).
4
(c) Share Reserve. The Company, during the term of this Plan, will at all times reserve and keep available such number of Shares as will be sufficient to satisfy the requirements of the Plan, provided that: (i) on the Effective Date, the Company shall reserve and keep available for issuance under this Plan no less than twenty five percent (25%) of the Shares issued and outstanding as of the Effective Date; (ii) notwithstanding anything to the contrary in this Plan, on January 1 of each calendar year after the Effective Date, the number of shares of Common Stock reserved and available for issuance under this Plan will automatically increase by an amount equal to the lesser of: (A) ten percent (10%) of the Shares issued and outstanding as of January 1 of the applicable calendar year; and (B) such lesser amount as determined by the Board, in its sole discretion; and (iii) on the occurrence of any event set forth in Section 12, the number of Shares reserved and available for issuance under this Plan will be adjusted pursuant to the terms of Section 12. Notwithstanding anything to the contrary in this Section 3(c) and subject to Section 17(b), any increases to the Shares reserved and issuable under this Plan other than as set forth in subclauses 3(c)(ii) and 3(c)(iii) herein will require stockholder approval.
4. Administration of the Plan.
(a) Procedure. The Plan will be administered by (A) the Compensation Committee or (B) the Board, if the Compensation Committee does not exist, and in any event, the Administrator shall administer the Plan in compliance with Applicable Laws.
(b) Powers of the Administrator. Subject to the provisions of the Plan, and in the case of the Compensation Committee, subject to the specific duties delegated by the Board to the Compensation Committee, the Administrator will have the authority, in its discretion:
(i) to determine the Fair Market Value;
(ii) to select the Service Providers to whom Awards may be granted hereunder;
(iii) to determine the number of Shares to be covered by each Award granted hereunder;
(iv) to approve forms of Award Agreements for use under the Plan;
(v) to determine the terms and conditions, not inconsistent with the terms of the Plan, of any Award granted hereunder. Such terms and conditions include, but are not limited to, the exercise price, the time or times when Awards may be exercised (which may be based on performance criteria), any vesting acceleration or waiver of forfeiture restrictions, and any restriction or limitation regarding any Award or the Shares relating thereto, based in each case on such factors as the Administrator will determine;
(vi) to institute and determine the terms and conditions of an Exchange Program;
(vii) to construe and interpret the terms of the Plan and Awards granted pursuant to the Plan;
(viii) to prescribe, amend and rescind rules and regulations relating to the Plan, including rules and regulations relating to sub-plans established for the purpose of satisfying applicable foreign laws or for qualifying for favorable tax treatment under applicable foreign laws;
5
(ix) to modify or amend each Award (subject to Section 17(c)), including but not limited to the discretionary authority to extend the post-termination exercisability period of Awards and to extend the maximum term of an Option (subject to Section 6(d));
(x) to allow Participants to satisfy withholding tax obligations in a manner prescribed in Section 13;
(xi) to authorize any person to execute on behalf of the Company any instrument required to effect the grant of an Award previously granted by the Administrator;
(xii) to allow a Participant to defer the receipt of the payment of cash or the delivery of Shares that otherwise would be due to such Participant under an Award; and
(xiii) to make all other determinations deemed necessary or advisable for administering the Plan.
(c) Effect of Administrator’s Decision. The Administrator’s decisions, determinations and interpretations will be final and binding on all Participants and any other holders of Awards.
5. Eligibility. Non-statutory Stock Options, Restricted Stock, and Restricted Stock Units may be granted to Service Providers. Incentive Stock Options may be granted only to Employees.
6. Stock Options.
(a) Grant of Options. Subject to the terms and provisions of the Plan, the Administrator, at any time and from time to time, may grant Options in such amounts as the Administrator, in its sole discretion, will determine.
(b) Option Agreement. Each Award of an Option will be evidenced by an Award Agreement that will specify the exercise price, the term of the Option, the number of Shares subject to the Option, the exercise restrictions, if any, applicable to the Option, and such other terms and conditions as the Administrator, in its sole discretion, will determine.
(c) Limitations. Each Option will be designated in the Award Agreement as either an Incentive Stock Option or a Non-statutory Stock Option. Notwithstanding such designation, however, to the extent that the aggregate Fair Market Value of the Shares with respect to which Incentive Stock Options are exercisable for the first time by the Participant during any calendar year (under all plans of the Company and any Parent or Subsidiary) exceeds one hundred thousand dollars ($100,000), such Options will be treated as Non-statutory Stock Options. For purposes of this Section 6(c), Incentive Stock Options will be taken into account in the order in which they were granted, the Fair Market Value of the Shares will be determined as of the time the Option with respect to such Shares is granted, and calculation will be performed in accordance with Code Section 422 and Treasury Regulations promulgated thereunder.
(d) Term of Option. The term of each Option will be stated in the Award Agreement; provided, however, that the term will be no more than five (5) years from the date of grant thereof. In the case of an Incentive Stock Option granted to a Participant who, at the time the Incentive Stock Option is granted, owns stock representing more than ten percent (10%) of the total combined voting power of all classes of stock of the Company or any Parent or Subsidiary, the term of the Incentive Stock Option will be five (5) years from the date of grant or such shorter term as may be provided in the Award Agreement. Notwithstanding anything to the contrary set forth in this Plan, the exercise price of the Option may not be amended without approval of the Company’s shareholders and such amendment(s), if any, shall comply with Applicable Laws.
6
(e) Option Exercise Price and Consideration.
(i) Exercise Price. The per Share exercise price for the Shares to be issued pursuant to the exercise of an Option will be determined by the Administrator, but will be no less than one hundred percent (100%) of the Fair Market Value per Share on the date of grant. In addition, in the case of an Incentive Stock Option granted to an Employee who owns stock representing more than ten percent (10%) of the voting power of all classes of stock of the Company or any Parent or Subsidiary, the per Share exercise price will be no less than one hundred ten percent (110%) of the Fair Market Value per Share on the date of grant. Notwithstanding the foregoing provisions of this Section 6(e)(i), Options may be granted with a per Share exercise price of less than one hundred percent (100%) of the Fair Market Value per Share on the date of grant pursuant to a transaction described in, and in a manner consistent with, Code Section 424(a).
(ii) Waiting Period and Exercise Dates. At the time an Option is granted, the Administrator will fix the period within which the Option may be exercised and will determine any conditions that must be satisfied before the Option may be exercised.
(iii) Form of Consideration. The Administrator will determine the acceptable form of consideration for exercising an Option, including the method of payment. In the case of an Incentive Stock Option, the Administrator will determine the acceptable form of consideration at the time of grant. Such consideration may consist entirely of: (1) cash; (2) check; (3) promissory note, to the extent permitted by Applicable Laws; (4) other Shares, provided that such Shares have a Fair Market Value on the date of surrender equal to the aggregate exercise price of the Shares as to which such Option will be exercised and provided further that accepting such Shares will not result in any adverse accounting consequences to the Company, as the Administrator determines in its sole discretion; (5) consideration received by the Company under cashless exercise program (whether through a broker or otherwise) implemented by the Company in connection with the Plan; (6) by net exercise; (7) such other consideration and method of payment for the issuance of Shares to the extent permitted by Applicable Laws; or (8) any combination of the foregoing methods of payment. In making its determination as to the type of consideration to accept, the Administrator will consider if acceptance of such consideration may be reasonably expected to benefit the Company.
(f) Exercise of Option.
(i) Procedure for Exercise; Rights as a Stockholder. Any Option granted hereunder will be exercisable according to the terms of the Plan and at such times and under such conditions as determined by the Administrator and set forth in the Award Agreement. An Option may not be exercised for a fraction of a Share.
An Option will be deemed exercised when the Company receives: (i) notice of exercise (in such form as the Administrator may specify from time to time) from the person entitled to exercise the Option, and (ii) full payment for the Shares with respect to which the Option is exercised (together with applicable tax withholding). Full payment may consist of any consideration and method of payment authorized by the Administrator and permitted by the Award Agreement and the Plan. Shares issued upon exercise of an Option will be issued in the name of the Participant or, if requested by the Participant, in the name of the Participant and his or her spouse. Until the Shares are issued (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company), no right to vote or receive dividends or any other rights as a stockholder will exist with respect to the Shares subject to an Option, notwithstanding the exercise of the Option. The Company will issue (or cause to be issued) such Shares promptly after the Option is exercised. No adjustment will be made for a dividend or other right for which the record date is prior to the date the Shares are issued, except as provided in Section 11.
Exercising an Option in any manner will decrease the number of Shares thereafter available, both for purposes of the Plan and for sale under the Option, by the number of Shares as to which the Option is exercised.
(ii) Termination of Relationship as a Service Provider. Unless otherwise provided by the Administrator, if a Participant ceases to be a Service Provider, other than upon the Participant’s termination as the result of the Participant’s death or Disability, any unvested portion of any applicable Awards will be forfeited and Shares covered by any vested portion of the applicable Awards that have not been issued to the Participant or its designees, as applicable, pursuant to the exercise or settlement thereof during the period beginning on the date of cessation of the Participant as a Service Provider until three (3) months thereafter will revert to the Plan Notwithstanding the immediately preceding sentence in this Section 6(f)(ii), if the Service Provider is terminated for Cause, any Award issued to such terminated Service Provider will be forfeited, regardless of any vested or unvested portion of such Award, and in the case of such forfeiture, the Shares covered by the Award will revert to the Plan.
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(iii) Disability of Participant. Unless otherwise provided by the Administrator, if a Participant ceases to be a Service Provider as a result of the Participant’s Disability, (A) the vested portion of the Option shall remain exercisable for the amount set forth in the Award Agreement (but in no event later than the expiration of the term of the Option as set forth in the Award Agreement), and if no time is specified in the Award Agreement, the vested portion of the Option shall remain exercisable for twelve (12) months following the Participant’s termination, and (B) the unvested portion shall remain exercisable for three (3) months following the Participant’s termination due to Disability, and after such three (3) months the Shares underlying the unvested portion of the Option will be forfeited and revert to the Plan. If after termination the Participant does not exercise his or her Option within the time specified herein, the Option will terminate, and the Shares covered by such Option will revert to the Plan.
(iv) Death of Participant. Unless otherwise provided by the Administrator, if a Participant dies while a Service Provider, the Option may be exercised within such period of time as is specified in the Award Agreement (but in no event later than the expiration of the term of such Option as set forth in the Award Agreement) to the extent that the Option is vested on the date of death, by the Participant’s designated beneficiary, provided such beneficiary has been designated prior to the Participant’s death in a form acceptable to the Administrator. If no such beneficiary has been designated by the Participant, then such Option may be exercised by the personal representative of the Participant’s estate or by the person(s) to whom the Option is transferred pursuant to the Participant’s will or in accordance with the laws of descent and distribution. In the absence of a specified time in the Award Agreement, the Option shall remain exercisable for twelve (12) months following the Participant’s termination. Unless otherwise provided by the Administrator, if at the time of death Participant is not vested as to his or her entire Option, the Shares covered by the unvested portion of the Option will immediately revert to the Plan. If the Option is not so exercised within the time specified herein, the Option will terminate, and the Shares covered by such Option will revert to the Plan.
(g) Repricing of Options. Notwithstanding anything to the contrary in this Plan, the terms of outstanding Awards may be amended without shareholder approval to reduce the exercise price of outstanding Options, or to cancel outstanding Options in exchange for cash, other Awards, or Options with an exercise price that is less than the exercise price of the original Option to the extent permitted by applicable law or the listing rules of the applicable trading market.
7. Restricted Stock.
(a) Grant of Restricted Stock. Subject to the terms and provisions of the Plan, the Administrator, at any time and from time to time, may grant Shares of Restricted Stock to Service Providers in such amounts as the Administrator, in its sole discretion, will determine.
(b) Restricted Stock Agreement. Each Award of Restricted Stock will be evidenced by an Award Agreement that will specify the Period of Restriction, the number of Shares granted, and such other terms and conditions as the Administrator, in its sole discretion, will determine. Unless the Administrator determines otherwise, the Company as escrow agent will hold Shares of Restricted Stock until the restrictions on such Shares have lapsed.
(c) Transferability. Except as provided in this Section 7 or as the Administrator determines, Shares of Restricted Stock may not be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated until the end of the applicable Period of Restriction.
(d) Other Restrictions. The Administrator, in its sole discretion, may impose such other restrictions on Shares of Restricted Stock as it may deem advisable or appropriate.
(e) Removal of Restrictions. Except as otherwise provided in this Section 7, Shares of Restricted Stock covered by each Restricted Stock grant made under the Plan will be released from escrow as soon as practicable after the last day of the Period of Restriction or at such other time as the Administrator may determine. The Administrator, in its discretion, may accelerate the time at which any restrictions will lapse or be removed.
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(f) Voting Rights. During the Period of Restriction, Service Providers holding Shares of Restricted Stock granted hereunder may exercise full voting rights with respect to those Shares, unless the Administrator determines otherwise.
(g) Dividends and Other Distributions. During the Period of Restriction, Service Providers holding Shares of Restricted Stock will be entitled to receive all dividends and other distributions paid with respect to such Shares, unless the Administrator provides otherwise. If any such dividends or distributions are paid in Shares, the Shares will be subject to the same restrictions on transferability and forfeitability as the Shares of Restricted Stock with respect to which they were paid.
(h) Return of Restricted Stock to Company. On the date set forth in the Award Agreement, the Restricted Stock for which restrictions have not lapsed will revert to the Company and again will become available for grant under the Plan.
8. Restricted Stock Units.
(a) Grant of Restricted Stock Units. Subject to the terms and provisions of the Plan, the Administrator, at any time and from time to time, may grant Restricted Stock Units to Service Providers in such amounts as the Administrator, in its sole discretion, will determine.
(b) Restricted Stock Unit Agreement. Each Award of Restricted Stock Units will be evidenced by an Award Agreement that will specify the terms, conditions, and restrictions (if any) related to the grant, including the number of Restricted Stock Units.
(c) Vesting Criteria and Other Terms. The Administrator will set vesting criteria in its discretion, which, depending on the extent to which the criteria are met, will determine the number of Restricted Stock Units that will be paid out to the Participant. A Restricted Stock Unit Award may vest upon completion of a specified period of service with the Company or a Subsidiary and/or based on the achievement of certain performance goals during the applicable performance period, as set forth in the Participant’s Award Agreement. If Restricted Stock Units vest based upon satisfaction of performance goals, then the Administrator will: (x) determine the nature, length and starting date of any performance period for the Restricted Stock Units; (y) select the performance goals to be used to measure the performance; and (z) determine what additional vesting conditions, if any, should apply.
(d) Earning Restricted Stock Units. Upon meeting the applicable vesting criteria, the Participant will be entitled to receive a payout as determined by the Administrator. Notwithstanding the foregoing, at any time after the grant of Restricted Stock Units, the Administrator, in its sole discretion, may reduce or waive any vesting criteria that must be met to receive a payout.
(e) Dividend Equivalents. The Administrator may, in its sole discretion, award dividend equivalents in connection with the grant of Restricted Stock Units that may be settled in cash, in Shares of equivalent value, or in some combination thereof.
(f) Form and Timing of Payment. Payment of earned Restricted Stock Units will be made upon the date(s) determined by the Administrator and set forth in the Award Agreement. The Administrator, in its sole discretion, may only settle earned Restricted Stock Units in cash, Shares, or a combination of both.
(g) Cancellation. On the date set forth in the Award Agreement, all Shares underlying any unvested, unlapsed, unearned Restricted Stock Units will be forfeited to the Company for future issuance.
9. Compliance With Code Section 409A. Awards will be designed and operated in such a manner that they are either exempt from the application of, or comply with, the requirements of Code Section 409A, except as otherwise determined in the sole discretion of the Administrator. The Plan and each Award Agreement under the Plan is intended to be exempt from the requirements of Code Section 409A and will be construed and interpreted in accordance with such intent, except as otherwise determined in the sole discretion of the Administrator. To the extent that an Award or payment, or the settlement or deferral thereof, is subject to Code Section 409A the Award will be granted, paid, settled or deferred in a manner that will meet the requirements of Code Section 409A, such that the grant, payment, settlement or deferral will not be subject to the additional tax or interest applicable under Code Section 409A.
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10. Leaves of Absence/Transfer Between Locations. Unless the Administrator provides otherwise, vesting of Awards granted hereunder will be suspended during any unpaid leave of absence. A Participant will not cease to be an Employee in the case of (i) any leave of absence approved by the Company or (ii) transfers between locations of the Company or between the Company, its Parent, or any Subsidiary. For purposes of Incentive Stock Options, no such leave may exceed three (3) months, unless reemployment upon expiration of such leave is guaranteed by statute or contract. If reemployment upon expiration of a leave of absence approved by the Company is not so guaranteed, then six (6) months following the first (1st) day of such leave, any Incentive Stock Option held by the Participant will cease to be treated as an Incentive Stock Option and will be treated for tax purposes as a Non-statutory Stock Option.
11. Limited Transferability of Awards. Unless determined otherwise by the Administrator, Awards may not be sold, pledged, assigned, hypothecated, or otherwise transferred in any manner other than by will or by the laws of descent and distribution, and may be exercised, during the lifetime of the Participant, only by the Participant.
12. Adjustments; Dissolution or Liquidation; Merger or Change in Control.
(a) Adjustments. In the event that any dividend or other distribution (whether in the form of cash, Shares, other securities, or other property), recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase, or exchange of Shares or other securities of the Company, or other change in the corporate structure of the Company affecting the Shares occurs, the Administrator, in order to prevent diminution or enlargement of the benefits or potential benefits intended to be made available under the Plan, the Company will adjust the number and class of Shares that is reserved and issuable under the Plan and/or the number, class, and price of Shares covered by each outstanding Award.
(b) Dissolution or Liquidation. In the event of the proposed dissolution or liquidation of the Company, the Administrator will notify each Participant as soon as practicable prior to the effective date of such proposed transaction. To the extent it has not been previously exercised, an Award will terminate immediately prior to the consummation of such proposed action.
(c) Merger or Change in Control. In the event of a merger or Change in Control, each outstanding Award will be treated as the Administrator determines (subject to the provisions of the following paragraph) without a Participant’s consent including, without limitation, that: (i) Awards will be assumed, or substantially equivalent Awards will be substituted, by the acquiring or succeeding corporation (or an affiliate thereof) with appropriate adjustments as to the number and kind of shares and prices; (ii) upon written notice to a Participant, that the Participant’s Awards will terminate upon or immediately prior to the consummation of such merger or Change in Control; (iii) outstanding Awards will vest and become exercisable, realizable, or payable, or restrictions applicable to an Award will lapse, in whole or in part prior to or upon consummation of such merger or Change in Control, and, to the extent the Administrator determines, terminate upon or immediately prior to the effectiveness of such merger or Change in Control; (iv) (A) the termination of an Award in exchange for an amount of cash and/or property, if any, equal to the amount that would have been attained upon the exercise of such Award or realization of the Participant’s rights as of the date of the occurrence of the transaction (and, for the avoidance of doubt, if as of the date of the occurrence of the transaction the Administrator determines in good faith that no amount would have been attained upon the exercise of such Award or realization of the Participant’s rights, then such Award may be terminated by the Company without payment), or (B) the replacement of such Award with other rights or property selected by the Administrator in its sole discretion; or (v) any combination of the foregoing. In taking any of the actions permitted under this Section 12(c), the Administrator will not be obligated to treat all Awards, all Awards held by a Participant, or all Awards of the same type, similarly.
In the event that the successor corporation does not assume or substitute for the Award (or portion thereof), the Participant will fully vest in and have the right to exercise all of his or her outstanding Options, including Shares as to which such Awards would not otherwise be vested or exercisable, all restrictions on Restricted Stock will lapse, and, with respect to Awards with performance-based vesting, all performance goals or other vesting criteria will be deemed achieved at one hundred percent (100%) of target levels and all other terms and conditions met. In addition, if an Option is not assumed or substituted in the event of a merger or Change in Control, the Administrator will notify the Participant in writing or electronically that the Option will be exercisable for a period of time determined by the Administrator in its sole discretion, and the Option will terminate upon the expiration of such period.
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For the purposes of this Section 12(c), an Award will be considered assumed if, following the merger or Change in Control, the Award confers the right to purchase or receive, for each Share subject to the Award immediately prior to the merger or Change in Control, the consideration (whether stock, cash, or other securities or property) received in the merger or Change in Control by holders of Common Stock for each Share held on the effective date of the transaction (and if holders were offered a choice of consideration, the type of consideration chosen by the holders of a majority of the outstanding Shares); provided, however, that if such consideration received in the merger or Change in Control is not solely common stock of the successor corporation or its Parent, the Administrator may, with the consent of the successor corporation, provide for the consideration to be received upon the exercise of an Option, for each Share subject to such Award, to be solely common stock of the successor corporation or its Parent equal in fair market value to the per share consideration received by holders of Common Stock in the merger or Change in Control.
Notwithstanding anything in this Section 12(c) to the contrary, an Award that vests, is earned or paid-out upon the satisfaction of one or more performance goals will not be considered assumed if the Company or its successor modifies any of such performance goals without the Participant’s consent; provided, however, a modification to such performance goals only to reflect the successor corporation’s post-Change in Control corporate structure will not be deemed to invalidate an otherwise valid Award assumption.
Notwithstanding anything in this Section 12(c) to the contrary, if a payment under an Award Agreement is subject to Code Section 409A and if the change in control definition contained in the Award Agreement does not comply with the definition of “change of control” for purposes of a distribution under Code Section 409A, then any payment of an amount that is otherwise accelerated under this Section 12 will be delayed until the earliest time that such payment would be permissible under Code Section 409A without triggering any penalties applicable under Code Section 409A.
13. Tax Withholding.
(a) Withholding Requirements. Prior to the delivery of any Shares or cash pursuant to an Award (or exercise thereof), the Company will have the power and the right to deduct or withhold, or require a Participant to remit to the Company, an amount sufficient to satisfy federal, state, local, foreign or other taxes (including the Participant’s FICA obligation) required to be withheld with respect to such Award (or exercise thereof).
(b) Withholding Arrangements. The Administrator, in its sole discretion and pursuant to such procedures as it may specify from time to time, may permit a Participant to satisfy such tax withholding obligation, in whole or in part by (without limitation) (i) paying cash, (ii) electing to have the Company withhold otherwise deliverable Shares having a Fair Market Value equal to the minimum statutory amount required to be withheld, (iii) delivering to the Company already-owned Shares having a Fair Market Value equal to the statutory amount required to be withheld, provided the delivery of such Shares will not result in any adverse accounting consequences, as the Administrator determines in its sole discretion, or (iv) selling a sufficient number of Shares otherwise deliverable to the Participant through such means as the Administrator may determine in its sole discretion (whether through a broker or otherwise) equal to the amount required to be withheld. The amount of the withholding requirement will be deemed to include any amount which the Administrator agrees may be withheld at the time the election is made, not to exceed the amount determined by using the maximum federal, state or local marginal income tax rates applicable to the Participant with respect to the Award on the date that the amount of tax to be withheld is to be determined. The Fair Market Value of the Shares to be withheld or delivered will be determined as of the date that the taxes are required to be withheld.
14. No Effect on Employment or Service. Neither the Plan nor any Award will confer upon a Participant any right with respect to continuing the Participant’s relationship as a Service Provider with the Company, nor will they interfere in any way with the Participant’s right or the Company’s right to terminate such relationship at any time, with or without cause, to the extent permitted by Applicable Laws.
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15. Date of Grant. The date of grant of an Award will be, for all purposes, the date on which the Administrator makes the determination granting such Award, or such other later date as is determined by the Administrator. Notice of the determination will be provided to each Participant within a reasonable time after the date of such grant.
16. Term of Plan. Subject to Section 20, the Plan will become effective upon its adoption by the Board. Unless sooner terminated under Section 17, it will continue in effect for a term of ten (10) years from the later of (a) the effective date of the Plan or (b) the earlier of the most recent Board or stockholder approval of an increase in the number of Shares reserved for issuance under the Plan.
17. Amendment and Termination of the Plan.
(a) Amendment and Termination. The Board may at any time amend, alter, suspend or terminate the Plan.
(b) Stockholder Approval. The Company shall obtain stockholder approval of any Plan amendment to the extent necessary and desirable to comply with Applicable Laws. Additionally, the Company shall obtain stockholder approval for each of the following: (i) increases to the Shares reserved and issuable under the Plan other than as set forth in Section 3(c)(ii) to 3(c)(iii) of this Plan; (ii) any changes to the applicable prices Participants pay for applicable Awards made under this Plan, provided, however, that the terms of outstanding Awards may be amended without shareholder approval to reduce the exercise price of outstanding Options, or to cancel outstanding Options in exchange for cash, other Awards, or Options with an exercise price that is less than the exercise price of the original Option, pursuant to Section 6(g); (iii) changes to the Plan which would expand eligibility for Participant or potential Participants’ Awards; (iv) changes to the Plan which would materially increase Participants’ or potential Participants’ benefits available under the Plan; and (v) changes to the Plan which would expand the types of Awards provided under the Plan.
(c) Effect of Amendment or Termination. No amendment, alteration, suspension or termination of the Plan will impair the rights of any Participant, unless mutually agreed otherwise between the Participant and the Administrator, which agreement must be in writing and signed by the Participant and the Company. Termination of the Plan will not affect the Administrator’s ability to exercise the powers granted to it hereunder with respect to Awards granted under the Plan prior to the date of such termination.
18. Conditions Upon Issuance of Shares.
(a) Legal Compliance. Shares will not be issued pursuant to the exercise of an Award unless the exercise of such Award and the issuance and delivery of such Shares will comply with Applicable Laws and will be further subject to the approval of counsel for the Company with respect to such compliance.
(b) Investment Representations. As a condition to the exercise of an Award, the Company may require the person exercising such Award to represent and warrant at the time of any such exercise that the Shares are being purchased only for investment and without any present intention to sell or distribute such Shares if, in the opinion of counsel for the Company, such a representation is required.
19. Inability to Obtain Authority. The inability of the Company to obtain authority from any regulatory body having jurisdiction, which authority is deemed by the Company’s counsel to be necessary to the lawful issuance and sale of any Shares hereunder, will relieve the Company of any liability in respect of the failure to issue or sell such Shares as to which such requisite authority will not have been obtained.
20. Stockholder Approval. The Plan will be subject to approval by the stockholders of the Company within twelve (12) months after the date the Plan is adopted by the Board. Such stockholder approval will be obtained in the manner and to the degree required under Applicable Laws.
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21. Information to Participants. Beginning on the earlier of (i) the date that the aggregate number of Participants under this Plan is five hundred (500) or more and the Company is relying on the exemption provided by Rule 12h-1(f)(1) under the Exchange Act and (ii) the date that the Company is required to deliver information to Participants pursuant to Rule 701 under the Securities Act, and until such time as the Company becomes subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act, is no longer relying on the exemption provided by Rule 12h-1(f)(1) under the Exchange Act or is no longer required to deliver information to Participants pursuant to Rule 701 under the Securities Act, the Company shall provide to each Participant the information described in paragraphs (e)(3), (4), and (5) of Rule 701 under the Securities Act not less frequently than every six (6) months with the financial statements being not more than 180 days old and with such information provided either by physical or electronic delivery to the Participants or by written notice to the Participants of the availability of the information on an Internet site that may be password-protected and of any password needed to access the information. The Company may request that Participants agree to keep the information to be provided pursuant to this Section 20 confidential. If a Participant does not agree to keep the information to be provided pursuant to this Section 20 confidential, then the Company will not be required to provide the information unless otherwise required pursuant to Rule 12h-1(f)(1) under the Exchange Act or Rule 701 of the Securities Act.
22. Clawback. Awards are subject to any Company clawback policy that the Company is required to adopt pursuant to the listing standards of any national securities exchange or association on which the Company’s securities are listed or as is otherwise required by the Dodd-Frank Wall Street Reform and Consumer Protection Act or other applicable laws. The Administrator also may specify in an Award Agreement that the Participant’s rights, payments or benefits with respect to an award will be subject to reduction, cancellation, forfeiture or recoupment upon the occurrence of certain specified events. The Administrator may require a participant to forfeit, return or reimburse the Company all or a portion of the Award or shares issued under the Award, any amounts paid under the Award and any payments or proceeds paid or provided upon disposition of the shares issued under the Award in order to comply with such clawback policy or Applicable Laws.
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APPENDIX A
TO
PMGC HOLDINGS INC. 2025 EQUITY INCENTIVE PLAN
(for California residents only, to the extent required by 25102(o))
This Appendix A to the PMGC Holdings Inc. 2025 Equity Incentive Plan shall apply only to the Participants who are residents of the State of California and who are receiving an Award under the Plan. Capitalized terms contained herein shall have the same meanings given to them in the Plan, unless otherwise provided by this Appendix A. Notwithstanding any provisions contained in the Plan to the contrary and to the extent required by Applicable Laws, the following terms shall apply to all Awards granted to residents of the State of California, until such time as the Administrator amends this Appendix A or the Administrator otherwise provides.
(a) The term of each Option shall be stated in the Award Agreement, provided, however, that the term shall be no more than ten (10) years from the date of grant thereof.
(b) Unless determined otherwise by the Administrator, Awards may not be sold, pledged, assigned, hypothecated, or otherwise transferred in any manner other than by will or by the laws of descent and distribution, and may be exercised, during the lifetime of the Participant, only by the Participant. If the Administrator makes an Award transferable, such Award may only be transferred (i) by will, (ii) by the laws of descent and distribution, or (iii) as permitted by Rule 701 of the Securities Act of 1933, as amended (the “Securities Act”).
(c) If a Participant ceases to be a Service Provider, such Participant may exercise his or her Option within such period of time as specified in the Award Agreement, which shall not be less than thirty (30) days following the date of the Participant’s termination, to the extent that the Option is vested on the date of termination (but in no event later than the expiration of the term of the Option as set forth in the Award Agreement). In the absence of a specified time in the Award Agreement, the Option shall remain exercisable for three (3) months following the Participant’s termination.
(d) If a Participant ceases to be a Service Provider as a result of the Participant’s Disability, the Participant may exercise his or her Option within such period of time as specified in the Award Agreement, which shall be six (6) months following the date of the Participant’s termination, to the extent the Option is vested on the date of termination (but in no event later than the expiration of the term of such Option as set forth in the Award Agreement). In the absence of a specified time in the Award Agreement, the Option shall remain exercisable for twelve (12) months following the Participant’s termination.
(e) If a Participant dies while a Service Provider, the Option may be exercised within such period of time as specified in the Award Agreement, which shall not be less than six (6) months following the date of the Participant’s death, to the extent the Option is vested on the date of death (but in no event later than the expiration of the term of such Option as set forth in the Award Agreement) by the Participant’s designated beneficiary, personal representative, or by the person(s) to whom the Option is transferred pursuant to the Participant’s will or in accordance with the laws of descent and distribution. In the absence of a specified time in the Award Agreement, the Option shall remain exercisable for twelve (12) months following the Participant’s termination.
(f) No Award shall be granted to a resident of California more than ten (10) years after the earlier of the date of adoption of the Plan or the date the Plan is approved by the stockholders.
(g) In the event that any dividend or other distribution (whether in the form of cash, Shares, other securities, or other property), recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase, or exchange of Shares or other securities of the Company, or other change in the corporate structure of the Company affecting the Shares occurs, the Administrator, in order to prevent diminution or enlargement of the benefits or potential benefits intended to be made available under the Plan, will adjust the number and class of Shares that may be delivered under the Plan and/or the number, class, and price of Shares covered by each outstanding Award; provided, however, that the Administrator will make such adjustments to an Award required by Section 25102(o) of the California Corporations Code to the extent the Company is relying upon the exemption afforded thereby with respect to the Award.
(h) This Appendix A shall be deemed to be part of the Plan and the Administrator shall have the authority to amend this Appendix A in accordance with Section 17 of the Plan.
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PMGC HOLDINGS INC.
2025 EQUITY INCENTIVE PLAN
FORM OF STOCK OPTION AGREEMENT
Unless otherwise defined herein, the terms defined in the 2025 Equity Incentive Plan (the “Plan”) shall have the same meanings in this Stock Option Agreement (the “Option Agreement”).
I. NOTICE OF STOCK OPTION GRANT
Name: [●]
Address: [●]
The undersigned Participant has been granted an Option to purchase Common Stock of PMGC Holdings Inc. (the “Company”), subject to the terms and conditions of the Plan and this Option Agreement, as follows:
| Date of Grant: | |||
| Vesting Commencement Date: | |||
| Exercise Price per Share: | |||
| Total Number of Shares Granted: | |||
| Total Exercise Price: | |||
| Type of Option: | Incentive Stock Option | ||
| Non-statutory Stock Option | |||
| Term/Expiration Date: | |||
Vesting Schedule:
This Option shall be exercisable, in whole or in part, according to the following vesting schedule:
[●]
Termination Period:
This Option shall be exercisable for three (3) months after Participant ceases to be a Service Provider, unless such termination is due to Participant’s death or Disability, in which case this Option shall be exercisable for twelve (12) months after Participant ceases to be a Service Provider. Notwithstanding the foregoing sentence, in no event may this Option be exercised after the Term/Expiration Date as provided above and this Option may be subject to earlier termination as provided in Section 13(c) of the Plan. Any exercise of an Incentive Stock Option beyond the periods described above will be deemed to be a Non-statutory Stock Option.
II. AGREEMENT
1. Grant of Option. The Administrator of the Company hereby grants to the Participant named in the Notice of Stock Option Grant in Part I of this Option Agreement (“Participant”), an option (the “Option”) to purchase the number of Shares set forth in the Notice of Stock Option Grant, at the exercise price per Share set forth in the Notice of Stock Option Grant (the “Exercise Price”), and subject to the terms and conditions of the Plan, which is incorporated herein by reference. Subject to Section 18(c) of the Plan, in the event of a conflict between the terms and conditions of the Plan and this Option Agreement, the terms and conditions of the Plan shall prevail.
If designated in the Notice of Stock Option Grant as an Incentive Stock Option (“ISO”), this Option is intended to qualify as an Incentive Stock Option as defined in Section 422 of the Code. Nevertheless, to the extent that it exceeds the $100,000 rule of Code Section 422(d), or other amount set forth in that Code Section, this Option shall be treated as a Non-statutory Stock Option (“NSO”). Further, if for any reason this Option (or portion thereof) shall not qualify as an ISO, then, to the extent of such nonqualification, such Option (or portion thereof) shall be regarded as a NSO granted under the Plan. In no event shall the Administrator, the Company or any Parent or Subsidiary or any of their respective employees or directors have any liability to Participant (or any other person) due to the failure of the Option to qualify for any reason as an ISO.
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2. Exercise of Option.
(a) Right to Exercise. Subject to the Termination Period set forth in the Notice of Option Grant, this Option shall be exercisable during its term in accordance with the Vesting Schedule set out in the Notice of Stock Option Grant and with the applicable provisions of the Plan and this Option Agreement. If application of the applicable vesting percentage causes a fractional share, such share shall be rounded down to the nearest whole share for each month except for the last month in such vesting period, at the end of which last month the Option shall become exercisable for the full remainder of the Shares.
(b) Method of Exercise. This Option shall be exercisable by Participant (or in the case of exercise after the Participant’s death or incapacity, the Participant’s executor, administrator, heir or legatee, as the case may be) by delivery of an exercise notice in the form attached as Exhibit A (the “Exercise Notice”) or in a manner and pursuant to such procedures as the Administrator may determine, which shall state the election to exercise the Option, the number of Shares with respect to which the Option is being exercised (the “Exercised Shares”), and such other representations and agreements as may be required by the Company. The Exercise Notice shall be accompanied by payment of the aggregate Exercise Price as to all Exercised Shares, together with any applicable tax withholding. Simultaneous with the execution and delivery of the Exercise Notice, as requested by the Company, Participant shall also execute and deliver a counterpart signature page or joinder to any shareholders agreement, voting agreement and/or any other similar documentation applicable to the holders of Common Stock of the Company (“Stockholders Agreements”). This Option shall be deemed to be exercised upon receipt by the Company of (i) a fully executed Exercise Notice accompanied by the aggregate Exercise Price, together with any applicable tax withholding, and (ii) a counterpart signature page or joinder to the Stockholders Agreements. No Shares shall be issued pursuant to the exercise of an Option unless such issuance and such exercise comply with Applicable Laws. Assuming such compliance, for income tax purposes the Shares shall be considered transferred to Participant on the date on which the Option is exercised with respect to such Shares.
(c) Limits on Exercise. The Option may not be exercised unless such exercise is in compliance with all applicable federal and state securities laws, as they are in effect on the date of exercise. The Option may not be exercised as to fewer than one hundred (100) Shares unless it is exercised as to all Shares as to which the Option is then exercisable.
3. Participant’s Representations. In the event the Shares have not been registered under the Securities Act of 1933, as amended, at the time this Option is exercised, Participant shall, if required by the Company, concurrently with the exercise of all or any portion of this Option, deliver to the Company his or her Investment Representation Statement in the form attached hereto as Exhibit B.
4. Lock-Up Period. Participant hereby agrees that Participant shall not offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend, or otherwise transfer or dispose of, directly or indirectly, any Common Stock (or other securities) of the Company or enter into any swap, hedging or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of any Common Stock (or other securities) of the Company held by Participant (other than those included in the registration) for a period specified by the representative of the underwriters of Common Stock (or other securities) of the Company not to exceed one hundred and eighty (180) days following the effective date of any registration statement of the Company filed under the Securities Act (or such other period as may be requested by the Company or the underwriters to accommodate regulatory restrictions on (i) the publication or other distribution of research reports and (ii) analyst recommendations and opinions, including, but not limited to, the restrictions contained in FINRA Rule 2241(f)(4) or NYSE Rule 472(f)(4), or any successor provisions or amendments thereto).
Participant agrees to execute and deliver such other agreements as may be reasonably requested by the Company or the underwriter which are consistent with the foregoing or which are necessary to give further effect thereto. In addition, if requested by the Company or the representative of the underwriters of Common Stock (or other securities) of the Company, Participant shall provide, within ten (10) days of such request, such information as may be required by the Company or such representative in connection with the completion of any public offering of the Company’s securities pursuant to a registration statement filed under the Securities Act. The obligations described in this Section 4 shall not apply to a registration relating solely to employee benefit plans on Form S-8 or similar forms that may be promulgated in the future, or a registration relating solely to a Securities and Exchange Commission Rule 145 transaction on Form S-4 or similar forms that may be promulgated in the future. The Company may impose stop-transfer instructions with respect to the shares of Common Stock (or other securities) subject to the foregoing restriction until the end of said one hundred and eighty (180) day (or other) period. Participant agrees that any transferee of the Option or shares acquired pursuant to the Option shall be bound by this Section 4.
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5. Method of Payment. Payment of the aggregate Exercise Price shall be by any of the following, or a combination thereof, at the election of the Participant:
(a) cash;
(b) check;
(c) consideration received by the Company under a formal cashless exercise program adopted by the Company in connection with the Plan; or
(d) surrender of other Shares which (i) shall be valued at its Fair Market Value on the date of exercise, and (ii) must be owned free and clear of any liens, claims, encumbrances or security interests, if accepting such Shares, in the sole discretion of the Administrator, shall not result in any adverse accounting consequences to the Company.
6. Restrictions on Exercise. This Option may not be exercised until such time as the Plan has been approved by the stockholders of the Company, or if the issuance of such Shares upon such exercise or the method of payment of consideration for such shares would constitute a violation of any Applicable Law. The exercise of this Option may be contingent upon the Participant’s execution and delivery of any right of first refusal and co-sale agreement, stockholders agreement and/or any similar agreement as the Company may require in its sole discretion.
7. Non-Transferability of Option. This Option (and, prior to exercise, the Shares subject to this Option) may not be pledged, hypothecated or otherwise transferred or disposed of in any manner, including by entering into any short position, any “put equivalent position” or any “call equivalent position” (as defined in Rule 16a-1(h) and Rule 16a-1(b) of the Exchange Act, respectively), other than (i) by will or the laws of descent or distribution or (ii) to persons who are “family members” (as defined in Rule 701(c)(3) of the Securities Act of 1933, as amended) through gifts or domestic relations orders. This Option may be exercised during the lifetime of Participant only by Participant.
8. Term of Option. This Option may be exercised only within the term set out in the Notice of Stock Option Grant, and may be exercised during such term only in accordance with the Plan and the terms of this Option.
9. Tax Obligations.
(a) Tax Withholding. Participant agrees to make appropriate arrangements with the Company (or the Parent or Subsidiary employing or retaining Participant) for the satisfaction of all federal, state, local and foreign income and employment tax withholding requirements applicable to the Option exercise. Participant acknowledges and agrees that the Company may refuse to honor the exercise and refuse to deliver the Shares if such withholding amounts are not delivered at the time of exercise.
(b) Notice of Disqualifying Disposition of ISO Shares. If the Option granted to Participant herein is an ISO, and if Participant sells or otherwise disposes of any of the Shares acquired pursuant to the ISO on or before the later of (i) the date two (2) years after the Date of Grant, or (ii) the date one (1) year after the date of exercise, Participant shall immediately notify the Company in writing of such disposition. Participant agrees that Participant may be subject to income tax withholding by the Company on the compensation income recognized by Participant because of the early disposition by payment in cash or out of current wages or other compensation payable to the Participant.
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(c) Code Section 409A. Under Code Section 409A, an Option that vests after December 31, 2004 (or that vested on or prior to such date but which was materially modified after October 3, 2004) that was granted with a per Share exercise price that is determined by the Internal Revenue Service (the “IRS”) to be less than the Fair Market Value of a Share on the date of grant (a “discount option”) may be considered “deferred compensation.” An Option that is a “discount option” may result in (i) income recognition by Participant prior to the exercise of the Option, (ii) an additional twenty percent (20%) federal income tax, and (iii) potential penalty and interest charges. The “discount option” may also result in additional state income, penalty and interest tax to the Participant. Participant acknowledges that the Company cannot and has not guaranteed that the IRS will agree that the per Share exercise price of this Option equals or exceeds the Fair Market Value of a Share on the date of grant in a later examination. Participant agrees that if the IRS determines that the Option was granted with a per Share exercise price that was less than the Fair Market Value of a Share on the date of grant, Participant shall be solely responsible for Participant’s costs, including state and federal taxes, related to such a determination.
10. Company’s Right of First Refusal. Before any Shares held by Participant or any transferee (either being sometimes referred to herein as the “Holder”) may be sold or otherwise transferred (including transfer by gift or operation of law), the Company or its assignee(s) shall have a right of first refusal to purchase the Shares on the terms and conditions set forth in Section 7 (the “Right of First Refusal”) of the Exercise Notice.
11. Stockholders Agreement. Participant shall not be permitted to assign any Shares except in compliance with the terms, conditions and restrictions set forth in the Stockholders Agreement.
12. Privileges of Stock Ownership. The Participant shall not have any of the rights of a stockholder with respect to any Shares until the Shares are issued to the Participant.
13. Entire Agreement; Governing Law. The Plan is incorporated herein by reference. The Plan and this Option Agreement constitute the entire agreement of the parties with respect to the subject matter hereof and supersede in their entirety all prior undertakings and agreements of the Company and Participant with respect to the subject matter hereof, and may not be modified adversely to the Participant’s interest except by means of a writing signed by the Company and Participant. This Option Agreement is governed by the internal substantive laws but not the choice of law rules of New York.
14. No Guarantee of Continued Service. PARTICIPANT ACKNOWLEDGES AND AGREES THAT THE VESTING OF SHARES PURSUANT TO THE VESTING SCHEDULE HEREOF IS EARNED ONLY BY CONTINUING AS A SERVICE PROVIDER AT THE WILL OF THE COMPANY (OR THE PARENT OR SUBSIDIARY EMPLOYING OR RETAINING PARTICIPANT) AND NOT THROUGH THE ACT OF BEING HIRED, BEING GRANTED THIS OPTION OR ACQUIRING SHARES HEREUNDER. PARTICIPANT FURTHER ACKNOWLEDGES AND AGREES THAT THIS OPTION AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREUNDER AND THE VESTING SCHEDULE SET FORTH HEREIN DO NOT CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUED ENGAGEMENT AS A SERVICE PROVIDER FOR THE VESTING PERIOD, FOR ANY PERIOD, OR AT ALL, AND SHALL NOT INTERFERE IN ANY WAY WITH PARTICIPANT’S RIGHT OR THE RIGHT OF THE COMPANY (OR THE PARENT OR SUBSIDIARY EMPLOYING OR RETAINING PARTICIPANT) TO TERMINATE PARTICIPANT’S RELATIONSHIP AS A SERVICE PROVIDER AT ANY TIME, WITH OR WITHOUT CAUSE.
<Signature Page Follows>
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Participant acknowledges receipt of a copy of the Plan and represents that he or she is familiar with the terms and provisions thereof, and hereby accepts this Option subject to all of the terms and provisions thereof. Participant has reviewed the Plan and this Option in their entirety, has had an opportunity to obtain the advice of counsel prior to executing this Option and fully understands all provisions of the Option. Participant hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Administrator upon any questions arising under the Plan or this Option. Participant further agrees to notify the Company upon any change in the residence address indicated below.
| PARTICIPANT | PMGC HOLDINGS INC. | |
| Signature | Signature | |
| Print Name | Print Name | |
| Title | ||
| Residence Address |
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EXHIBIT A
2025 EQUITY INCENTIVE PLAN
EXERCISE NOTICE
PMGC Holdings Inc.
120 Newport Center Drive, Suite 249
Newport Beach, California 92660
Attention: Chief Executive Officer
1. Option. The person named below (the “Purchaser”) was granted an option (the “Option”) to purchase shares of Common Stock of PMGC Holdings Inc. (the “Company”) pursuant to the Company’s 2025 Equity Incentive Plan (the “Plan”), by the Notice of Stock Option Grant (the “Grant Notice”) and the Stock Option Agreement (the “Stock Option Agreement”) attached thereto, as described below.
Purchaser’s Name:
Social Security Number:
Address:
Date of Option Grant:
Number of Shares Initially Subject to Option:
Exercise Price per Share:
| Type of option: | ☐ Incentive | ☐ Nonqualified |
2. Exercise of Option. I hereby elect to exercise the Option to purchase the following number of Shares, as authorized by the Grant Notice and the Stock Option Agreement:
| Total Shares Purchased: | |
| Total Exercise Price: |
(Total Shares Purchased multiplied by the Exercise Price per Share)
3. Delivery of Payment. Participant herewith delivers to the Company the full purchase price of the Shares, as set forth in the Option Agreement, and any and all withholding taxes due in connection with the exercise of the Option in the following form(s), as authorized by my Stock Option Agreement:
| ☐ Cash (by check, with a copy attached hereto as Attachment 3): | ||||
| ☐ Cancellation of indebtedness of the Company owed to me: | $ |
| ☐ Tender of ___________ fully paid, nonassessable and vested shares of Company Common Stock (such shares must meet the eligibility requirements set forth in Section 6(e)(iii) of the Plan): | $ | |||
| ☐ Waiver of compensation due or accrued for services: | $ |
4. Title to Shares. The exact spelling of the name(s) under which I will take title to the Shares is:
____________________________________________________
____________________________________________________
I desire to take title to the Shares as follows:
☐ Individual, as separate property
☐ Husband and wife, as community property
☐ Joint Tenants
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5. Representations of Participant. Participant acknowledges that Participant has received, read and understands the Plan and the Option Agreement and agrees to abide by and be bound by their terms and conditions.
6. Rights as Stockholder. Until the issuance of the Shares (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company), no right to vote or receive dividends or any other rights as a stockholder shall exist with respect to the Common Stock subject to an Award, notwithstanding the exercise of the Option. The Shares shall be issued to Participant as soon as practicable after the Option is exercised in accordance with the Option Agreement. No adjustment shall be made for a dividend or other right for which the record date is prior to the date of issuance except as provided in Section 12 of the Plan.
7. Company’s Right of First Refusal. Before any Shares held by Participant or any transferee (either being sometimes referred to herein as the “Holder”) may be sold or otherwise transferred (including transfer by gift or operation of law), the Company or its assignee(s) shall have a right of first refusal to purchase the Shares on the terms and conditions set forth in this Section 7 (the “Right of First Refusal”).
(a) Notice of Proposed Transfer. The Holder of the Shares shall deliver to the Company a written notice (the “Notice”) stating: (i) the Holder’s bona fide intention to sell or otherwise transfer such Shares; (ii) the name and address of each proposed purchaser or other transferee (“Proposed Transferee”); (iii) the number of Shares to be transferred to each Proposed Transferee; and (iv) the bona fide cash price or other consideration for which the Holder proposes to transfer the Shares (the “Offered Price”), and (v) that the Holder acknowledges that the Notice is an offer to sell the Shares at the Offered Price to the Company or its assignee(s).
(b) Exercise of Right of First Refusal. At any time within thirty (30) days after receipt of the Notice, the Company and/or its assignee(s) may, by giving written notice to the Holder, elect to purchase all, but not less than all or with the consent of Holder, less than all, of the Shares proposed to be transferred to any one or more of the Proposed Transferees, at the purchase price determined in accordance with Section 7(c) below.
(c) Purchase Price. The purchase price (“Purchase Price”) for the Shares purchased by the Company or its assignee(s) under this Section 7 shall be the Offered Price; provided, however, if the Offered Price consists of no legal consideration (as, for example, in the case of transfer by gift), the purchase price will be the fair market value of the Shares as determined in good faith by the Board of Directors of the Company. If the Offered Price includes consideration other than cash, the cash equivalent value of the non-cash consideration shall be determined by the Board of Directors of the Company in good faith.
(d) Payment. Payment of the Purchase Price shall be made, at the option of the Company or its assignee(s), in cash (by check), by cancellation of all or a portion of any outstanding indebtedness of the Holder to the Company (or, in the case of repurchase by an assignee, to the assignee), or by any combination thereof within thirty (30) days after receipt of the Notice or in the manner and at the times set forth in the Notice.
(e) Holder’s Right to Transfer. If all of the Shares proposed in the Notice to be transferred to a given Proposed Transferee are not purchased by the Company and/or its assignee(s) as provided in this Section 7, then the Holder may sell or otherwise transfer such Shares to that Proposed Transferee at the Offered Price or at a higher price, provided that such sale or other transfer is consummated within one hundred and twenty (120) days after the date of the Notice, that any such sale or other transfer is effected in accordance with any applicable securities laws and that the Proposed Transferee agrees in writing that the provisions of this Section 7 shall continue to apply to the Shares in the hands of such Proposed Transferee. If the Shares described in the Notice are not transferred to the Proposed Transferee within such period, a new Notice shall be given to the Company, and the Company and/or its assignees shall again be offered the Right of First Refusal before any Shares held by the Holder may be sold or otherwise transferred.
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(f) Exception for Certain Family Transfers. Anything to the contrary contained in this Section 7 notwithstanding, the transfer of any or all of the Shares during the Participant’s lifetime or on the Participant’s death by will or intestacy to the Participant’s immediate family or a trust for the benefit of the Participant’s immediate family shall be exempt from the provisions of this Section 7. “Immediate Family” as used herein shall mean spouse or lineal descendant of Participant (whether natural or adopted). In such case, the transferee or other recipient shall receive and hold the Shares so transferred subject to the provisions of this Section 7, and there shall be no further transfer of such Shares except in accordance with the terms of this Section 7.
(g) Termination of Right of First Refusal. The Right of First Refusal shall terminate as to any Shares upon the earlier of (i) the first sale of Common Stock of the Company to the general public, or (ii) a Change in Control in which the successor corporation has equity securities that are publicly traded.
8. Tax Consultation. Participant understands that Participant may suffer adverse tax consequences as a result of Participant’s purchase or disposition of the Shares. Participant represents that Participant has consulted with any tax consultants Participant deems advisable in connection with the purchase or disposition of the Shares and that Participant is not relying on the Company for any tax advice.
9. Restrictive Legends and Stop-Transfer Orders.
(a) Legends. Participant understands and agrees that the Company shall cause the legends set forth below or legends substantially equivalent thereto, to be placed upon any certificate(s) evidencing ownership of the Shares together with any other legends that may be required by the Company or by state or federal securities laws:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE “ACT”) AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER THE ACT OR, IN THE OPINION OF COUNSEL SATISFACTORY TO THE ISSUER OF THESE SECURITIES, SUCH OFFER, SALE OR TRANSFER, PLEDGE OR HYPOTHECATION IS IN COMPLIANCE THEREWITH.
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFER AND A RIGHT OF FIRST REFUSAL HELD BY THE ISSUER OR ITS ASSIGNEE(S) AS SET FORTH IN THE EXERCISE NOTICE BETWEEN THE ISSUER AND THE ORIGINAL HOLDER OF THESE SHARES, A COPY OF WHICH MAY BE OBTAINED AT THE PRINCIPAL OFFICE OF THE ISSUER. SUCH TRANSFER RESTRICTIONS AND RIGHT OF FIRST REFUSAL ARE BINDING ON TRANSFEREES OF THESE SHARES.
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS ON TRANSFER FOR A PERIOD OF TIME FOLLOWING THE EFFECTIVE DATE OF THE UNDERWRITTEN PUBLIC OFFERING OF THE COMPANY’S SECURITIES SET FORTH IN AN AGREEMENT BETWEEN THE ISSUER AND THE ORIGINAL HOLDER OF THESE SHARES AND MAY NOT BE SOLD OR OTHERWISE DISPOSED OF BY THE HOLDER PRIOR TO THE EXPIRATION OF SUCH PERIOD WITHOUT THE CONSENT OF THE COMPANY OR THE MANAGING UNDERWRITER.
The Administrator reserves the right to include any other legends or restrictions on all certificates for Shares delivered as the Administrator recommends or deems advisable.
(b) Stop-Transfer Notices. Participant agrees that, in order to ensure compliance with the restrictions referred to herein, the Company may issue appropriate “stop transfer” instructions to its transfer agent, if any, and that, if the Company transfers its own securities, it may make appropriate notations to the same effect in its own records.
(c) Refusal to Transfer. The Company shall not be required (i) to transfer on its books any Shares that have been sold or otherwise transferred in violation of any of the provisions of this Exercise Notice or (ii) to treat as owner of such Shares or to accord the right to vote or pay dividends to any purchaser or other transferee to whom such Shares shall have been so transferred.
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10. Stockholders’ Agreement; Spousal Consent. As a condition for issuance of any Shares pursuant to this Exercise Notice, the Company may require Participant to execute and be bound by any right of first refusal and co-sale agreement, voting agreement, stockholders’ agreement or other similar agreement in existence at the time of exercise if such agreement applies to holders of the common stock of the Company. Additionally, if Participant is married on the date of this Exercise Notice, Participant’s spouse shall, as a condition of the Company’s obligations hereunder, execute and deliver to the Company a consent of spouse in the form attached as Exhibit C and/or such other form as the Company may require.
11. Successors and Assigns. The Company may assign any of its rights under this Exercise Notice to single or multiple assignees, and this Exercise Notice shall inure to the benefit of the successors and assigns of the Company. Subject to the restrictions on transfer herein set forth, this Exercise Notice shall be binding upon Participant and his or her heirs, executors, administrators, successors and assigns.
12. Interpretation. Any dispute regarding the interpretation of this Exercise Notice shall be submitted by Participant or by the Company forthwith to the Administrator, which shall review such dispute at its next regular meeting. The resolution of such a dispute by the Administrator shall be final and binding on all parties.
13. Governing Law; Severability. This Exercise Notice is governed by the internal substantive laws, without regard to the choice of law rules, of New York. In the event that any provision hereof becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable or void, this Exercise Notice shall continue in full force and effect.
14. Entire Agreement. The Plan and Option Agreement are incorporated herein by reference. This Exercise Notice, the Plan, the Option Agreement and the Investment Representation Statement constitute the entire agreement of the parties with respect to the subject matter hereof and supersede in their entirety all prior undertakings and agreements of the Company and Participant with respect to the subject matter hereof, and may not be modified adversely to the Participant’s interest except by means of a writing signed by the Company and Participant.
<signature page follows>
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| Submitted by: | Accepted by: | |
| PARTICIPANT | PMGC HOLDINGS INC. | |
| Signature | Signature | |
| Print Name | Print Name | |
| Address: | Title | |
| Address: | ||
| 120 Newport Center Drive, Suite 249 | ||
| Newport Beach, California 92660 | ||
| Date Received |
24
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written.
| COMPANY: | ||
| PMGC HOLDINGS INC. | ||
| By: | ||
| Name: | ||
| Title: | ||
| Address: | ||
| GRANTEE: | ||
| (Signature) | ||
| (Name) | ||
| Address: | ||
| SSN: | ||
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EXHIBIT B
INVESTMENT REPRESENTATION STATEMENT
| PARTICIPANT | : | |
| COMPANY | : | PMGC HOLDINGS INC. |
| SECURITY | : | COMMON STOCK |
| AMOUNT | : | |
| DATE | : |
In connection with the purchase of the above-listed Securities, the undersigned Participant represents to the Company the following:
(a) Participant is aware of the Company’s business affairs and financial condition and has acquired sufficient information about the Company to reach an informed and knowledgeable decision to acquire the Securities. Participant is acquiring these Securities for investment for Participant’s own account only and not with a view to, or for resale in connection with, any “distribution” thereof within the meaning of the Securities Act of 1933, as amended (the “Securities Act”).
(b) Participant acknowledges and understands that the Securities constitute “restricted securities” under the Securities Act and have not been registered under the Securities Act in reliance upon a specific exemption therefrom, which exemption depends upon, among other things, the bona fide nature of Participant’s investment intent as expressed herein. In this connection, Participant understands that, in the view of the Securities and Exchange Commission, the statutory basis for such exemption may be unavailable if Participant’s representation was predicated solely upon a present intention to hold these Securities for the minimum capital gains period specified under tax statutes, for a deferred sale, for or until an increase or decrease in the market price of the Securities, or for a period of one (1) year or any other fixed period in the future. Participant further understands that the Securities must be held indefinitely unless they are subsequently registered under the Securities Act or an exemption from such registration is available. Participant further acknowledges and understands that the Company is under no obligation to register the Securities. Participant understands that the certificate evidencing the Securities shall be imprinted with any legend required under applicable state securities laws.
(c) Participant is familiar with the provisions of Rule 701 and Rule 144, each promulgated under the Securities Act, which, in substance, permit limited public resale of “restricted securities” acquired, directly or indirectly from the issuer thereof, in a non-public offering subject to the satisfaction of certain conditions. Rule 701 provides that if the issuer qualifies under Rule 701 at the time of the grant of the Option to Participant, the exercise shall be exempt from registration under the Securities Act. In the event the Company becomes subject to the reporting requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, ninety (90) days thereafter (or such longer period as any market stand-off agreement may require) the Securities exempt under Rule 701 may be resold, subject to the satisfaction of the applicable conditions specified by Rule 144, including in the case of affiliates (1) the availability of certain public information about the Company, (2) the amount of Securities being sold during any three (3) month period not exceeding specified limitations, (3) the resale being made in an unsolicited “broker’s transaction”, transactions directly with a “market maker” or “riskless principal transactions” (as those terms are defined under the Securities Exchange Act of 1934) and (4) the timely filing of a Form 144, if applicable.
In the event that the Company does not qualify under Rule 701 at the time of grant of the Option, then the Securities may be resold in certain limited circumstances subject to the provisions of Rule 144, which may require (i) the availability of current public information about the Company; (ii) the resale to occur more than a specified period after the purchase and full payment (within the meaning of Rule 144) for the Securities; and (iii) in the case of the sale of Securities by an affiliate, the satisfaction of the conditions set forth in sections (2), (3) and (4) of the paragraph immediately above.
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(d) Participant further understands that in the event all of the applicable requirements of Rule 701 or 144 are not satisfied, registration under the Securities Act, compliance with Regulation A, or some other registration exemption shall be required; and that, notwithstanding the fact that Rules 144 and 701 are not exclusive, the Staff of the Securities and Exchange Commission has expressed its opinion that persons proposing to sell private placement securities other than in a registered offering and otherwise than pursuant to Rules 144 or 701 shall have a substantial burden of proof in establishing that an exemption from registration is available for such offers or sales, and that such persons and their respective brokers who participate in such transactions do so at their own risk. Participant understands that no assurances can be given that any such other registration exemption shall be available in such event.
| PARTICIPANT | |
| Signature | |
| Print Name | |
| Date |
27
EXHIBIT C
SPOUSAL CONSENT
The undersigned spouse of Participant has read, understands, and hereby approves the Exercise Notice between Participant and the Company (the “Agreement”). In consideration of the Company’s granting my spouse the right to purchase the Shares as set forth in the Agreement, the undersigned hereby agrees to be irrevocably bound by the Agreement and further agrees that any community property interest and any other interest shall similarly be bound by and subordinate to the requirements of the Agreement. The undersigned hereby appoints Participant as my attorney-in-fact with respect to any amendment or exercise of any rights under the Agreement, and the undersigned hereby agrees that the Company and the other shareholders of the Company need not seek any further consent from me and may deal solely with Participant in connection with all matters under the Agreement.
| Participant’s Spouse | ||
| Address: | ||
28
FORM OF RESTRICTED STOCK AWARD AGREEMENT
This Restricted Stock Award Agreement (this “Agreement”) is made and entered into as of _______________ (the “Grant Date”) by and between PMGC Holdings Inc., a Nevada corporation (the “Company”), and ______________ (the “Grantee”).
WHEREAS, the Company has adopted the 2025 Equity Incentive Plan (the “Plan”) pursuant to which awards of Restricted Stock may be granted; and
WHEREAS, the Administrator has determined that it is in the best interests of the Company and its stockholders to grant the award of Restricted Stock provided for herein.
NOW, THEREFORE, the parties hereto, intending to be legally bound, agree as follows:
1. Grant of Restricted Stock. Pursuant to Section 7 of the Plan, the Company hereby issues to the Grantee on the Grant Date a Restricted Stock Award consisting of, in the aggregate, _________ shares of Common Stock of the Company (the “Restricted Stock”), on the terms and conditions and subject to the restrictions set forth in this Agreement and the Plan. Capitalized terms that are used but not defined herein have the meaning ascribed to them in the Plan.
2. Consideration. The grant of the Restricted Stock is made in consideration of the services to be rendered by the Grantee to the Company.
3. Restricted Period; Vesting.
3.1. Except as otherwise provided herein, provided that the Grantee remains in Continuous Service through the applicable vesting date, and further provided that any additional conditions and performance goals set forth in Schedule I have been satisfied, the Restricted Stock will vest in accordance with the following schedule:
| Vesting Date | Shares of Common Stock | |
| [*] | [*] | |
| [*] | [*] |
The period over which the Restricted Stock vests is referred to as the “Restricted Period.”
3.2. The foregoing vesting schedule notwithstanding, if the Grantee’s continuous service terminates for any reason at any time before all of his or her Restricted Stock has vested other than death or retirement (in the case of a Director), termination of the Grantee’s continuous service is terminated by the Company, Parent, or Subsidiary (as applicable) for Disability, the Grantee’s unvested Restricted Stock shall be automatically forfeited upon such termination of Continuous Service and neither the Company, nor any Parent or Subsidiary, shall have any further obligations to the Grantee under this Agreement.
3.3. The foregoing vesting schedule notwithstanding, in the event of the Grantee’s death or if the Grantee’s Continuous Service is terminated by the Company, Parent, or Subsidiary for Disability, 100% of the unvested Restricted Stock shall vest as of the date of such termination.
4. Restrictions. Subject to any exceptions set forth in this Agreement or the Plan, during the Restricted Period, the Restricted Stock or the rights relating thereto may not be assigned, alienated, pledged, attached, sold or otherwise transferred or encumbered by the Grantee. Any attempt to assign, alienate, pledge, attach, sell or otherwise transfer or encumber the Restricted Stock or the rights relating thereto during the Restricted Period shall be wholly ineffective and, if any such attempt is made, the Restricted Stock will be forfeited by the Grantee and all of the Grantee’s rights to such shares shall immediately terminate without any payment or consideration by the Company.
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5. Rights as Stockholder; Dividends.
5.1. The Grantee shall be the record owner of the Restricted Stock until the shares of Common Stock are sold or otherwise disposed of, and shall be entitled to all of the rights of a stockholder of the Company including, without limitation, the right to vote such shares and receive all dividends or other distributions paid with respect to such shares. Notwithstanding the foregoing, any dividends or other distributions shall be subject to the same restrictions on transferability as the shares of Restricted Stock with respect to which they were paid.
5.2. The Company may issue stock certificates or evidence the Grantee’s interest by using a restricted book entry account with the Company’s transfer agent. Physical possession or custody of any stock certificates that are issued may be retained by the Company until such time as the Restricted Stock vests.
5.3. If the Grantee forfeits any rights he or she has under this Agreement in accordance with Section 3, the Grantee shall, on the date of such forfeiture, no longer have any rights as a stockholder with respect to the Restricted Stock and shall no longer be entitled to vote or receive dividends on such shares.
6. No Right to Continued Service. Neither the Plan nor this Agreement shall confer upon the Grantee any right to be retained in any position, as an Employee, Consultant or Director of the Company. Further, nothing in the Plan or this Agreement shall be construed to limit the discretion of the Company to terminate the Grantee’s Continuous Service at any time, with or without Cause.
7. Adjustments. If any change is made to the outstanding Common Stock or the capital structure of the Company, if required, the shares of Common Stock shall be adjusted or terminated in any manner as contemplated by Section 11 of the Plan.
8. Tax Liability and Withholding.
8.1. The Grantee shall be required to pay to the Company, and the Company shall have the right to deduct from any compensation paid to the Grantee pursuant to the Plan, the amount of any required withholding taxes in respect of the Restricted Stock and to take all such other action as the Administrator deems necessary to satisfy all obligations for the payment of such withholding taxes. The Administrator may permit the Grantee to satisfy any federal, state or local tax withholding obligation by any of the following means, or by a combination of such means: (a) tendering a cash payment; (b) authorizing the Company to withhold shares of Common Stock from the shares of Common Stock otherwise issuable or deliverable to the Grantee as a result of the vesting of the Restricted Stock; provided, however, that no shares of Common Stock shall be withheld with a value exceeding the minimum amount of tax required to be withheld by law; or (c) delivering to the Company previously owned and unencumbered shares of Common Stock.
8.2. Notwithstanding any action the Company takes with respect to any or all income tax, social insurance, payroll tax, or other tax-related withholding (“Tax-Related Items”), the ultimate liability for all Tax-Related Items is and remains the Grantee’s responsibility and the Company (a) makes no representation or undertakings regarding the treatment of any Tax-Related Items in connection with the grant or vesting of the Restricted Stock or the subsequent sale of any shares; and (b) does not commit to structure the Restricted Stock to reduce or eliminate the Grantee’s liability for Tax-Related Items.
9. Section 83(b) Election. The Grantee may make an election under Code Section 83(b) (a “Section 83(b) Election”) with respect to the Restricted Stock. Any such election must be made within thirty (30) days after the Grant Date. If the Grantee elects to make a Section 83(b) Election, the Grantee shall provide the Company with a copy of an executed version and satisfactory evidence of the filing of the executed Section 83(b) Election with the US Internal Revenue Service. The Grantee agrees to assume full responsibility for ensuring that the Section 83(b) Election is actually and timely filed with the US Internal Revenue Service and for all tax consequences resulting from the Section 83(b) Election.
10. Compliance with Law. The issuance and transfer of shares of Common Stock shall be subject to compliance by the Company and the Grantee with all applicable requirements of federal and state securities laws and with all applicable requirements of any stock exchange on which the Company’s shares of Common Stock may be listed. No shares of Common Stock shall be issued or transferred unless and until any then applicable requirements of state and federal laws and regulatory agencies have been fully complied with to the satisfaction of the Company and its counsel. The Grantee understands that the Company is under no obligation to register the shares of Common Stock with the Securities and Exchange Commission, any state securities commission or any stock exchange to effect such compliance.
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11. Legends. A legend may be placed on any certificate(s) or other document(s) delivered to the Grantee indicating restrictions on transferability of the shares of Restricted Stock pursuant to this Agreement or any other restrictions that the Administrator may deem advisable under the rules, regulations and other requirements of the Securities and Exchange Commission, any applicable federal or state securities laws or any stock exchange on which the shares of Common Stock are then listed or quoted.
12. Notices. Any notice required to be delivered to the Company under this Agreement shall be in writing and addressed to the Secretary of the Company at the Company’s principal corporate offices. Any notice required to be delivered to the Grantee under this Agreement shall be in writing and addressed to the Grantee at the Grantee’s address as shown in the records of the Company. Either party may designate another address in writing (or by such other method approved by the Company) from time to time.
13. Governing Law. This Agreement will be construed and interpreted in accordance with the laws of the State of New York without regard to conflict of law principles.
14. Interpretation. Any dispute regarding the interpretation of this Agreement shall be submitted by the Grantee or the Company to the Administrator for review. The resolution of such dispute by the Administrator shall be final and binding on the Grantee and the Company.
15. Restricted Stock Subject to Plan. This Agreement is subject to the Plan as approved by the Company’s stockholders. The terms and provisions of the Plan as it may be amended from time to time are hereby incorporated herein by reference. In the event of a conflict between any term or provision contained herein and a term or provision of the Plan, the applicable terms and provisions of the Plan will govern and prevail.
16. Successors and Assigns. The Company may assign any of its rights under this Agreement. This Agreement will be binding upon and inure to the benefit of the successors and assigns of the Company. Subject to the restrictions on transfer set forth herein, this Agreement will be binding upon the Grantee and the Grantee’s beneficiaries, executors, administrators and the person(s) to whom the Restricted Stock may be transferred by will or the laws of descent or distribution.
17. Severability. The invalidity or unenforceability of any provision of the Plan or this Agreement shall not affect the validity or enforceability of any other provision of the Plan or this Agreement, and each provision of the Plan and this Agreement shall be severable and enforceable to the extent permitted by law.
18. Discretionary Nature of Plan. The Plan is discretionary and may be amended, cancelled or terminated by the Company at any time, in its discretion. The grant of the Restricted Stock in this Agreement does not create any contractual right or other right to receive any Restricted Stock or other Awards in the future. Future Awards, if any, will be at the sole discretion of the Company. Any amendment, modification, or termination of the Plan shall not constitute a change or impairment of the terms and conditions of the Grantee’s employment with the Company.
19. Amendment. The Administrator has the right to amend, alter, suspend, discontinue or cancel the Restricted Stock, prospectively or retroactively; provided, that, no such amendment shall adversely affect the Grantee’s material rights under this Agreement without the Grantee’s consent.
20. No Impact on Other Benefits. The value of the Grantee’s Restricted Stock is not part of his normal or expected compensation for purposes of calculating any severance, retirement, welfare, insurance or similar employee benefit.
21. Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original but all of which together will constitute one and the same instrument. Counterpart signature pages to this Agreement transmitted by facsimile transmission, by electronic mail in portable document format (.pdf), or by any other electronic means intended to preserve the original graphic and pictorial appearance of a document, will have the same effect as physical delivery of the paper document bearing an original signature.
22. Acceptance. The Grantee hereby acknowledges receipt of a copy of the Plan and this Agreement. The Grantee has read and understands the terms and provisions thereof, and accepts the Restricted Stock subject to all of the terms and conditions of the Plan and this Agreement. The Grantee acknowledges that there may be adverse tax consequences upon the grant or vesting of the Restricted Stock or disposition of the shares and that the Grantee has been advised to consult a tax advisor prior to such grant, vesting or disposition.
[SIGNATURE PAGE FOLLOWS]
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FORM OF RESTRICTED STOCK UNIT AWARD AGREEMENT
This Restricted Stock Unit Award Agreement (the “Agreement”) between PMGC Holdings Inc., a Nevada corporation (the “Company”) and [*] (the “Award Recipient”) is effective as of [*] (the “Effective Date”). Any undefined terms appearing herein as defined terms shall have the same meaning as they do in the Company’s 2025 Equity Incentive Plan, as amended and/or restated from time to time (the “Plan”). The Company will provide a copy of the Plan to the Award Recipient upon request. Capitalized terms that are used but not defined herein have the meaning ascribed to them in the Plan.
WITNESSETH:
1. Award of Restricted Stock Units. Pursuant to the provisions of the Plan, the Company hereby awards the Award Recipient, subject to the terms and conditions of the Plan (incorporated herein by reference), and subject further to the terms and conditions in this Agreement, [*] restricted stock units (“RSUs” or the “Award”). Each RSU shall represent an unfunded, unsecured right for the Award Recipient to receive one (1) share of Common Stock, as described in this Agreement.
2. Ownership Rights. The Award Recipient has no voting or other ownership rights in the Company arising from the award of RSUs under this Agreement.
3. Dividends. The Award Recipient shall be credited with dividend equivalents equal to the dividends the Award Recipient would have received if the Award Recipient had been the owner of a number of shares of Common Stock equal to the number of RSUs credited to the Award Recipient on such dividend payment date (the “Dividend Equivalent”). Any Dividend Equivalent deriving from a cash dividend shall be converted into additional RSUs based on the Fair Market Value of Common Stock on the dividend payment date. Subject to the Plan, any Dividend Equivalent deriving from a dividend of shares of Common Stock shall be converted into additional RSUs on a one-for-one basis. The Award Recipient shall continue to be credited with Dividend Equivalents until the Settlement Date (defined below) (or, if applicable, the forfeiture of the corresponding Award). The Dividend Equivalents so credited shall be subject to the same terms and conditions as the corresponding Award, and they shall vest (or, if applicable, be forfeited) and be settled in the same manner and at the same time as the corresponding Award, as if they had been granted at the same time as such Award.
4. Vesting of Award. The unvested portion of the Award is subject to forfeiture. Subject to the terms of the Plan and this Agreement, including without limitation, fulfillment of the employment requirements in paragraph 8 below, the Award will vest in accordance with the following schedule (except in the case of the Award Recipient’s earlier Separation from Service due to death or Disability or an earlier Change of Control Transaction, as set forth in paragraph 6 below): [Percentage or fraction] of the RSUs covered by this Award shall vest on [Vesting Schedule] of the Effective Date of this Award, provided, however, that, any RSU representing a fractional share of Common Stock shall accumulate and vest on the next following vesting date on which the aggregate of vested fractional shares represents a whole share of Common Stock.
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5. Settlement. Once vested, the Award will be settled as follows:
In General. Subject to paragraph 11 of this Agreement the Award will be settled in Common Stock. Subject to the terms of the Plan, settlement of the vested portion of the Award shall occur on [*] (or if such date is not a business day, the business day immediately following such date); or, in the case of (i) the Award Recipient’s termination from service due to death or Disability or (ii) a Change of Control Transaction, settlement of the Award shall occur as of such earlier date set forth in paragraph 6 hereof (the “Settlement Date”). As soon as practicable (but in no event more than 30 days) following the Settlement Date, the Company shall , issue or cause there to be transferred to the Award Recipient (or, in the case of the Award Recipient’s death, to the Award Recipient’s designated beneficiary or estate, as applicable or, in the case of the Award Recipient’s Disability, to the Award Recipient’s guardian or legal representative, if applicable and if permissible under applicable law) a number of whole shares of Common Stock equal to the aggregate number of RSUs (rounded down to a whole number) granted to the Award Recipient under this Agreement (including, without limitation, the RSUs attributable to Dividend Equivalents) that are vested as of the Settlement Date (the “Settlement Shares”). Notwithstanding the foregoing, if the Award Recipient’s termination from service occurs due to Disability, any such settlement of the Award by reason of such termination from Service shall be delayed for six months from the date of the Award Recipient’s Separation from Service if the Participant is considered a “specified employee” for purposes of Section 409A of the Code (as determined in accordance with the methodology established by the Company as in effect on the date of Separation from Service).
(a) Termination of Rights. Upon the issuance or transfer of Settlement Shares in settlement of the Award (including, without limitation, the RSUs attributable to Dividend Equivalents), the Award shall be settled in full and the Award Recipient (or his or her designated beneficiary or estate, in the case of death) shall have no further rights with respect to the Award.
(b) Certificates or Book Entry. As of the Settlement Date, the Company shall, at the discretion of the Administrator or its designee, either issue one or more certificates in the Award Recipient’s name for such Settlement Shares or evidence book-entry registration of the Settlement Shares in the Award Recipient’s name (or, in the case of death, to the Award Recipient’s designated beneficiary, if any). No fractional shares of Common Stock shall be issued in settlement of the RSUs, and any fractional share of Common Stock that would otherwise be Settlement Stock as of the Settlement Date shall be settled through a cash payment based on the Fair Market Value of a share of Common Stock.
(c) Conditions to Delivery. Notwithstanding any other provision of this Agreement, the Company shall not be required to evidence book-entry registration or issue or deliver any certificate or certificates representing Settlement Shares in the event the Company reasonably anticipates that such registration, issuance or delivery would violate Federal securities laws or other applicable law; provided that the Company must evidence book-entry registration or issue or deliver said certificate or certificates at the earliest date at which the Company reasonably anticipates that such registration, issuance or delivery would not cause such violation.
(d) Legends. The Settlement Shares shall be subject to such stop transfer orders and other restrictions as the Administrator may deem reasonably advisable under the Plan or the rules, regulations, and other requirements of the Securities and Exchange Commission, any stock exchange upon which such Settlement Shares are listed, any applicable Federal or state laws or the Company’s Articles of of Incorporation, as amended, and Bylaws, and the Administrator may cause a legend or legends to be put on or otherwise apply to any certificates or book-entry position representing Settlement Shares to make appropriate reference to such restrictions.
6. Accelerated Vesting and Settlement on Change of Control Transaction and Termination From Service Due to Death and Disability. Notwithstanding anything in this Agreement to the contrary:
(a) Upon a Change of Control, the Award (including, without limitation, the RSUs attributable to Dividend Equivalents) shall immediately and fully vest and become nonforfeitable, and such Award shall be settled as soon as practicable (but in no event more than 30 days) following the date of such Change of Control; provided, however, that, in the event that such Change of Control does not qualify as an event described in Section 409A(a)(2)(A)(v) of the Code and the regulations thereunder, the Award shall not be settled until the first Settlement Date that is also a permissible payment event under Section 409A of the Code and the regulations thereunder (but shall not be subject to the forfeiture provisions of paragraph 8 hereof following such Change of Control).
(b) In the event of the Award Recipient’s Separation from Service due to death or Disability, the Award (including, without limitation, the RSUs attributable to Dividend Equivalents) shall immediately and fully vest and become nonforfeitable effective as of the date of the Award Recipient’s Separation from Service due to death or Disability, and such Award shall be settled as soon as practicable (but in no event more than 30 days) following the date of such Award Recipient’s Separation from Service due to death or Disability, as applicable.
(c) The Administrator shall have the sole and absolute discretion to determine whether the Award Recipient’s Separation from Service is by reason of Disability, as defined by the Plan and in accordance with Section 409A of the Code.
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7. Cancellation of Award. The Administrator has the right to cancel for no consideration all or any portion of the Award in accordance with the Plan if the Award Recipient has been terminated for Cause. The Administrator shall have the power and authority to suspend the vesting of or the right to receive Settlement Shares in respect of all or any portion of the Award if the Administrator makes in good faith the determination described in the preceding sentence. Any such suspension of an Award shall remain in effect until the suspension shall be presented to and acted on by the Administrator at its next meeting.
8. Service Requirements. Except as provided in this Agreement, in order to vest in and not forfeit the Award (or portion thereof, as the case may be), the Award Recipient must remain a Service Provider. If there is a termination from service for any reason (other than due to death or Disability) before a portion of the Award has fully vested, the Award Recipient will forfeit any portion of the Award and corresponding Dividend Equivalents that have not vested as of the date of such termination of service, unless otherwise provided by the Administrator.
9. No Right to Continued Service. Nothing in the Plan or this Agreement shall confer on the Award Recipient any right to continue as a Service Provider to the Company, the Parent, or a Subsidiary for any given period or on any specified terms nor in any way affect the Company’s, the Parent’s, or the Subsidiary’s right to terminate the Award Recipient’s employment without prior notice at any time for any reason or for no reason.
10. Transferability. Unless otherwise determined by the Administrator, the RSUs subject to this Award (including, without limitation, Dividend Equivalents) may not be assigned, alienated, pledged, attached, sold or otherwise transferred or encumbered by the Award Recipient otherwise than by will or by the laws of intestacy, and any such purported assignment, alienation, pledge, attachment, sale, transfer or encumbrance shall be void and unenforceable against the Company, Parent, or Subsidiary; provided, however, that the designation of a beneficiary shall not constitute an assignment, alienation, pledge, attachment, sale, transfer or encumbrance.
11. Adjustment in Award. The number of shares of Common Stock underlying this Award shall be subject to adjustment in accordance with Section 12 of the Plan, and the Administrator shall be authorized to make such other equitable adjustments of the Award or shares of Common Stock issuable pursuant thereto so that the value of the interest of the Award Recipient shall not be decreased by reason of the occurrence of such event. Any such adjustment shall be deemed conclusive and binding on the Company, the Award Recipient, his or her beneficiaries and all other interested parties.
12. Administration; Amendment. This Award has been made pursuant to a determination by the Administrator and/or the Board of Directors of the Company, and the Administrator shall have plenary authority to interpret, in its sole and absolute discretion, any provision of this Agreement and to make any determinations necessary or advisable for the administration of this Agreement. All such interpretations and determinations shall be final and binding on all persons, including the Company, the Award Recipient, his or her beneficiaries and all other interested parties. Subject to the terms of the Plan, this Agreement may be amended, in whole or in part, at any time by the Administrator; provided, however, that no amendment to this Agreement may adversely affect the Award Recipient’s rights under this Agreement without the Award Recipient’s consent except such an amendment made to cause the Award to comply with applicable law, stock exchange rules or accounting rules.
13. Binding Nature of Plan. The Award is subject to the Plan. The Award Recipient agrees to be bound by all terms and provisions of the Plan and related administrative rules and procedures, including, without limitation, terms and provisions and administrative rules and procedures adopted and/or modified after the granting of the Award. In the event any provisions hereof are inconsistent with those of the Plan, the provisions of the Plan shall control, except to the extent expressly modified herein pursuant to authority granted under the Plan.
14. Compliance with Laws and Regulations. The Award and the obligation of the Company to deliver the Settlement Shares subject to the Award are subject to compliance with all applicable laws, rules and regulations, to receipt of any approvals by any government or regulatory agency as may be required, and to any determinations the Company may make regarding the application of all such laws, rules and regulations.
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15. Notices. Any notice to the Company under this Agreement shall be in writing to the following address:
PMGC Holdings Inc.
120 Newport Center Drive, Suite 249
Newport Beach, CA 92660
Email: bensler.g@pmgcholdings.com
The Company will address any notice to the Award Recipient to his or her current address according to the Company’s personnel files. All written notices provided in accordance with this paragraph shall be deemed to be given when (a) delivered to the appropriate address(es) by hand or by a nationally recognized overnight courier service (costs prepaid); (b) sent by email; or (c) received by the addressee, if sent by U.S. mail to the appropriate address or by Company inter-office mail to the appropriate mail code. Either party may designate in writing some other address or facsimile number for notice under this Agreement.
16. Withholding. The Award Recipient authorizes the Company to withhold from his or her compensation, including the RSUs granted hereunder and the Settlement Shares issuable hereunder, to satisfy any income and employment tax withholding obligations in connection with this Award. No later than the date as of which an amount first becomes includible in the gross income of the Award Recipient for federal income tax purposes with respect to any Settlement Shares subject to this Award, the Award Recipient shall pay to the Company, or make arrangements satisfactory to the Company regarding the payment of, all federal, state and local income and employment taxes that are required by applicable laws and regulations to be withheld with respect to such amount. The Award Recipient agrees that the Company may delay delivery of the Settlement Shares until proper payment of such taxes has been made by the Award Recipient. Unless determined otherwise by the Administrator, the Award Recipient may satisfy such obligations under this paragraph 16 by any method authorized under the Plan.
17. Voluntary Participation. Participation in the Plan is voluntary. The value of the Award is an extraordinary item of compensation outside the scope of the Award Recipient’s employment contract, if any. As such, the Award is not part of normal or expected compensation for purposes of calculating any severance, resignation, redundancy, end of service payments, bonuses, long-service awards, pension or retirement benefits or similar payments.
18. Force and Effect. The various provisions of this Agreement are severable in their entirety. Any judicial or legal determination of invalidity or unenforceability of any one provision shall have no effect on the continuing force and effect of the remaining provisions.
19. Successors. This Agreement shall be binding upon and inure to the benefit of the successors of the respective parties.
20. Applicable Law. The validity, construction and effect of this Agreement and any rules and regulations relating to the Agreement shall be determined in accordance with the laws of the State of New York, unless preempted by federal law, and also in accordance with Internal Revenue Code Section 409A and any interpretive authorities promulgated thereunder.
IN WITNESS WHEREOF, this Agreement has been executed by an appropriate officer of PMGC Holdings Inc. and by the Award Recipient, both as of the day and year first above written.
PMGC HOLDINGS INC.
| By: | ||
| Name: | ||
| Title: |
| AWARD RECIPIENT | |
| Name: |
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Exhibit 19
INSIDER TRADING POLICY OF
PMGC HOLDINGS INC.
This Insider Trading Policy describes the standards of PMGC Holdings Inc. and its subsidiaries (the “Company”) on trading, and causing the trading of, the Company’s securities or securities of certain other publicly traded companies while in possession of confidential information. This Policy is divided into two parts: the first part prohibits trading in certain circumstances and applies to all directors, officers and employees and their respective immediate family members of the Company and the second part imposes special additional trading restrictions and applies to all (i) directors of the Company, (ii) executive officers of the Company (together with the directors, “Company Insiders”) , and (iii) certain other employees that the Company may designate from time to time as “Covered Persons” because of their position, responsibilities or their actual or potential access to material information.
One of the principal purposes of the federal securities laws is to prohibit so-called “insider trading.” Simply stated, insider trading occurs when a person uses material nonpublic information obtained through involvement with the Company to make decisions to purchase, sell, give away or otherwise trade the Company’s securities or the securities of certain other companies or to provide that information to others outside the Company. The prohibitions against insider trading apply to trades, tips and recommendations by virtually any person, including all persons associated with the Company, if the information involved is “material” and “nonpublic.” These terms are defined in this Policy under Part I, Section 3 below. The prohibitions would apply to any director, officer or employee who buys or sells securities on the basis of material nonpublic information that he or she obtained about the Company, its customers, suppliers, partners, competitors or other companies with which the Company has contractual relationships or may be negotiating transactions.
PART I
1. Applicability
This Policy applies to all trading or other transactions in (i) the Company’s securities, including common stock, options and any other securities that the Company may issue, such as preferred stock, notes, bonds and convertible securities, as well as to derivative securities relating to any of the Company’s securities, whether or not issued by the Company and (ii) the securities of certain other companies, including common stock, options and other securities issued by those companies as well as derivative securities relating to any of those companies’ securities.
This Policy applies to all employees of the Company, all officers of the Company and all members of the Company’s board of directors, officers, employees, and their respective family members.
2. General Policy: No Trading or Causing Trading While in Possession of Material Nonpublic Information
(a) No director, officer or employee or any of their immediate family members may purchase or sell, or offer to purchase or sell, any Company security, whether or not issued by the Company, while in possession of material nonpublic information about the Company. (The terms “material” and “nonpublic” are defined in Part I, Section 3(a) and (b) below.)
(b) No director, officer or employee or any of their immediate family members who knows of any material nonpublic information about the Company may communicate that information to (“tip”) any other person, including family members and friends, or otherwise disclose such information without the Company’s authorization.
(c) No director, officer or employee or any of their immediate family members may purchase or sell any security of any other publicly-traded company while in possession of material nonpublic information that was obtained in the course of his or her involvement with the Company. No director, officer or employee or any of their immediate family members who knows of any such material nonpublic information may communicate that information to, or tip, any other person, including family members and friends, or otherwise disclose such information without the Company’s authorization.
(d) For compliance purposes, you should never trade, tip or recommend securities (or otherwise cause the purchase or sale of securities) while in possession of information that you have reason to believe is material and nonpublic unless you first consult with, and obtain the advance approval of, the Compliance Officer (which is defined in Part I, Section 3(c) below).
(e) Covered Persons must “pre-clear” all trading in securities of the Company in accordance with the procedures set forth in Part II, Section 3 below.
3. Definitions
(a) Material. Insider trading restrictions come into play only if the information you possess is “material.” Materiality, however, involves a relatively low threshold. Information is generally regarded as “material” if it has market significance, that is, if its public dissemination is likely to affect the market price of securities, or if it otherwise is information that a reasonable investor would want to know before making an investment decision.
Information dealing with the following subjects is reasonably likely to be found material in particular situations:
(i) significant changes in the Company’s prospects;
(ii) significant write-downs in assets or increases in reserves;
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(iii) developments regarding significant litigation or government agency investigations;
(iv) liquidity problems;
(v) changes in earnings estimates or unusual gains or losses in major operations;
(vi) major changes in the Company’s management or the board of directors;
(vii) changes in dividends;
(viii) extraordinary borrowings;
(ix) major changes in accounting methods or policies;
(x) award or loss of a significant contract;
(xi) cybersecurity risks and incidents, including vulnerabilities and breaches;
(xii) changes in debt ratings;
(xiii) proposals, plans or agreements, even if preliminary in nature, involving mergers, acquisitions, divestitures, recapitalizations, strategic alliances, licensing arrangements, or purchases or sales of substantial assets; and
(xiv) offerings of Company securities.
Material information is not limited to historical facts but may also include projections and forecasts. With respect to a future event, such as a merger, acquisition or introduction of a new product, the point at which negotiations or product development are determined to be material is determined by balancing the probability that the event will occur against the magnitude of the effect the event would have on a company’s operations or stock price should it occur. Thus, information concerning an event that would have a large effect on stock price, such as a merger, may be material even if the possibility that the event will occur is relatively small. When in doubt about whether particular nonpublic information is material, you should presume it is material. If you are unsure whether information is material, you should either consult the Compliance Officer before making any decision to disclose such information (other than to persons who need to know it) or to trade in or recommend securities to which that information relates or assume that the information is material.
(b) Nonpublic. Insider trading prohibitions come into play only when you possess information that is material and “nonpublic.” The fact that information has been disclosed to a few members of the public does not make it public for insider trading purposes. To be “public” the information must have been disseminated in a manner designed to reach investors generally, and the investors must be given the opportunity to absorb the information. Even after public disclosure of information about the Company, you must wait until the close of business on the second trading day after the information was publicly disclosed before you can treat the information as public.
Nonpublic information may include:
(i) information available to a select group of analysts or brokers or institutional investors;
(ii) undisclosed facts that are the subject of rumors, even if the rumors are widely circulated; and
(iii) information that has been entrusted to the Company on a confidential basis until a public announcement of the information has been made and enough time has elapsed for the market to respond to a public announcement of the information, normally two trading days.
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As with questions of materiality, if you are not sure whether information is considered public, you should either consult with the Compliance Officer or assume that the information is nonpublic and treat it as confidential.
(c) Compliance Officer. The Company has appointed the Chief Financial Officer as the Compliance Officer for this Policy. The duties of the Compliance Officer include, but are not limited to, the following:
(i) assisting with implementation and enforcement of this Policy;
(ii) circulating this Policy to all employees and ensuring that this Policy is amended as necessary to remain up-to-date with insider trading laws;
(iii) pre-clearing all trading in securities of the Company by Covered Persons in accordance with the procedures set forth in Part II, Section 3 below; and
(iv) providing approval of any Rule 10b5-1 plans under Part II, Section 1(c) below and any prohibited transactions under Part II, Section 4 below.
(v) providing a reporting system with an effective whistleblower protection mechanism.
4. Exceptions
The trading restrictions of this Policy do not apply to exercising stock options granted under the Company’s current or future equity incentive plans or option plans for cash or the delivery of previously owned Company stock. However, the sale of any shares issued on the exercise of Company-granted stock options and any cashless exercise of Company-granted stock options are subject to trading restrictions under this Policy.
5. Violations of Insider Trading Laws
Penalties for trading on or communicating material nonpublic information can be severe, both for individuals involved in such unlawful conduct and their employers and supervisors, and may include jail terms, criminal fines, civil penalties and civil enforcement injunctions. Given the severity of the potential penalties, compliance with this Policy is absolutely mandatory.
(a) Legal Penalties. A person who violates insider trading laws by engaging in transactions in a company’s securities when he or she has material nonpublic information can be sentenced to a substantial jail term and required to pay a criminal penalty of several times the amount of profits gained or losses avoided.
In addition, a person who tips others may also be liable for transactions by the tippees to whom he or she has disclosed material nonpublic information. Tippers can be subject to the same penalties and sanctions as the tippees, and the SEC has imposed large penalties even when the tipper did not profit from the transaction.
The SEC can also seek substantial civil penalties from any person who, at the time of an insider trading violation, “directly or indirectly controlled the person who committed such violation,” which would apply to the Company and/or management and supervisory personnel. These control persons may be held liable for up to the greater of $1 million or three times the amount of the profits gained or losses avoided. Even for violations that result in a small or no profit, the SEC can seek penalties from a company and/or its management and supervisory personnel as control persons.
(b) Company-Imposed Penalties. Employees who violate this Policy may be subject to disciplinary action by the Company, including dismissal for cause. Any exceptions to the Policy, if permitted, may only be granted by the Compliance Officer and must be provided before any activity contrary to the above requirements takes place.
6. Inquiries
If you have any questions regarding any of the provisions of this Policy, please contact the Compliance Officer at 778-558-4949, 120 Newport Center Drive, Ste. 250, Newport Beach, CA 92660.
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PART II
1. Blackout Periods
All Covered Persons are prohibited from trading in the Company’s securities during blackout periods as defined below.
(a) Quarterly Blackout Periods. Trading in the Company’s securities is prohibited during the period beginning at the close of the market on two weeks before the end of each fiscal quarter and ending at the close of business on the second trading day following the date the Company’s financial results are publicly disclosed. During these periods, Covered Persons generally possess or are presumed to possess material nonpublic information about the Company’s financial results.
(b) Other Blackout Periods. From time to time, other types of material nonpublic information regarding the Company (such as negotiation of mergers, acquisitions or dispositions, investigation and assessment of cybersecurity incidents or new product developments) may be pending and not be publicly disclosed. While such material nonpublic information is pending, the Company may impose special blackout periods during which Covered Persons are prohibited from trading in the Company’s securities. If the Company imposes a special blackout period, it will notify the Covered Persons affected.
(c) Exception. These trading restrictions do not apply to transactions under a pre-existing written plan, contract, instruction, or arrangement under Rule 10b5-1 under the Securities Exchange Act of 1934 (an “Approved 10b5-1 Plan”) that:
(i) has been reviewed and approved at least one month in advance of any trades thereunder by the Compliance Officer (or, if revised or amended, such revisions or amendments have been reviewed and approved by the Compliance Officer at least one month in advance of any subsequent trades);
(ii) was entered into in good faith by the Covered Person at a time when the Covered Person was not in possession of material nonpublic information about the Company; and
(iii) gives a third party the discretionary authority to execute such purchases and sales, outside the control of the Covered Person, so long as such third party does not possess any material nonpublic information about the Company; or explicitly specifies the security or securities to be purchased or sold, the number of shares, the prices and/or dates of transactions, or other formula(s) describing such transactions.
2. Trading Window
Covered Persons are permitted to trade in the Company’s securities when no blackout period is in effect. Generally, this means that Covered Persons can trade during the period beginning on DAY THAT BLACKOUT PERIOD UNDER SECTION 1(A) ENDS and ending on DAY THAT NEXT BLACKOUT PERIOD UNDER SECTION 1(A) BEGINS. However, even during this trading window, a Covered Person who is in possession of any material nonpublic information should not trade in the Company’s securities until the information has been made publicly available or is no longer material. In addition, the Company may close this trading window if a special blackout period under Part II, Section 1(b) above is imposed and will re-open the trading window once the special blackout period has ended.
3. Pre-Clearance of Securities Transactions
(a) Because Company Insiders are likely to obtain material nonpublic information on a regular basis, the Company requires all such persons to refrain from trading, even during a trading window under Part II, Section 2 above, without first pre-clearing all transactions in the Company’s securities via a Request for Authority to Trade form, attached hereto as Exhibit A.
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(b) Subject to the exemption in subsection (d) below, no Company Insider may, directly or indirectly, purchase or sell (or otherwise make any transfer, gift, pledge or loan of) any Company security at any time without first obtaining prior approval from the Compliance Officer. These procedures also apply to transactions by such person’s spouse, other persons living in such person’s household and minor children and to transactions by entities over which such person exercises control.
(c) The Compliance Officer shall record the date each request is received and the date and time each request is approved or disapproved. Unless revoked, a grant of permission will normally remain valid until the close of trading two business days following the day on which it was granted. If the transaction does not occur during the two-day period, pre-clearance of the transaction must be re-requested.
(d) Pre-clearance is not required for purchases and sales of securities under an Approved 10b5-1 Plan. With respect to any purchase or sale under an Approved 10b5-1 Plan, the third party effecting transactions on behalf of the Company Insider should be instructed to send duplicate confirmations of all such transactions to the Compliance Officer.
4. Prohibited Transactions
(a) Company Insiders are prohibited from trading in the Company’s equity securities during a blackout period imposed under an “individual account” retirement or pension plan of the Company, during which at least 50% of the plan participants are unable to purchase, sell or otherwise acquire or transfer an interest in equity securities of the Company, due to a temporary suspension of trading by the Company or the plan fiduciary.
(b) Covered Persons, including any person’s spouse, other persons living in such person’s household and minor children and entities over which such person exercises control, are prohibited from engaging in the following transactions in the Company’s securities unless advance approval is obtained from the Compliance Officer:
(i) Short-term trading. Company Insiders who purchase Company securities may not sell any Company securities of the same class for at least six months after the purchase;
(ii) Short sales. Company Insiders/Covered Persons may not sell the Company’s securities short;
(iii) Options trading. Covered Persons may not buy or sell puts or calls or other derivative securities on the Company’s securities;
(iv) Trading on margin or pledging. Covered Persons may not hold Company securities in a margin account or pledge Company securities as collateral for a loan; and
(v) Hedging. Covered Persons may not enter into hedging or monetization transactions or similar arrangements with respect to Company securities.
5. Acknowledgment and Certification
All Covered Persons are required to sign the attached acknowledgment and certification.
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ACKNOWLEDGMENT AND CERTIFICATION
The undersigned does hereby acknowledge receipt of the Company’s Insider Trading Policy. The undersigned has read and understands (or has had explained) such Policy and agrees to be governed by such Policy at all times in connection with the purchase and sale of securities and the confidentiality of nonpublic information.
| (Signature) | ||
| (Please print name) | ||
| Date: ________________________ |
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EXHIBIT A
REQUEST FOR AUTHORITY TO TRADE
The undersigned requests authority to buy/sell ____________________shares of common stock of Elevai Labs, Inc., (the “Company”) under the Company’s Insider’s Trading Policy.
| Employee - Insider |
Authority is granted to act as above described provided the transaction is completed
within 5 business days from this date.
On this day of _____________________,20__.
| Chief Financial Officer of the Company |
Exhibit 23.1
Consent of Independent Registered Public Accounting Firm
We consent to the reference to our firm under the caption “Experts” and to the use of our report dated March 30, 2026, with respect to the consolidated financial statements of PMGC Holdings, Inc (formerly Elevai Labs, Inc.), for the year ended December 31, 2025, in this Registration Statement on Form 10-K, filed with the Securities and Exchange Commission. Our report dated March 30, 2026, contains an explanatory paragraph describing an uncertainty about the Company’s ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
/s/ HTL International, LLC
Houston, Texas
March 30, 2026
Exhibit 31.1
PMGC HOLDINGS INC.
CERTIFICATION PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Graydon Bensler, certify that:
| 1. | I have reviewed this Annual Report on Form 10-K (“Report”) of PMGC Holdings Inc. (the “Registrant”); |
| 2. | Based on my knowledge, this Report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this Report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this Report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this Report; |
| 4. | I, as the Principal Executive Officer, Principal Financial Officer, and Principal Accounting Officer of the Registrant, am responsible for establishing and maintaining disclosure controls and procedures (as defined in Securities Exchange Act of 1934, as amended (“Exchange Act”) Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have: |
| (a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this Report is being prepared; | |
| (b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | |
| (c) | Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this Report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this Report based on such evaluation; and | |
| (d) | Disclosed in this Report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and |
| 5. | I, as the Registrant’s Principal Executive Officer, Principal Financial Officer, and Principal Accounting Officer, have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions): |
| (a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and | |
| (b) | Any fraud, whether material or not, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting. |
| Date: March 30, 2026 | |
| /s/ Graydon Bensler | |
| Graydon Bensler | |
| Principal Executive Officer |
Exhibit 31.2
PMGC HOLDINGS INC.
CERTIFICATION PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Graydon Bensler, certify that:
| 1. | I have reviewed this Annual Report (this “Report”) on Form 10-K of PMGC Holdings Inc. (the “Registrant”); |
| 2. | Based on my knowledge, this Report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this Report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this Report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this Report; |
| 4. | I, as the Registrant’s Principal Executive Officer, Principal Financial Officer, and Principal Accounting Officer, am responsible for establishing and maintaining disclosure controls and procedures (as defined in the Securities Exchange Act of 1934, as amended (“Exchange Act”) Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have: |
| (a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this Report is being prepared; | |
| (b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | |
| (c) | Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this Report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this Report based on such evaluation; and | |
| (d) | Disclosed in this Report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and |
| 5. | As the Principal Executive Officer, Principal Financial Officer, and Principal Accounting of the Registrant, I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions): |
| (a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and | |
| (b) | Any fraud, whether material or not, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting. |
| Date: March 30, 2026 | |
| /s/ Graydon Bensler | |
| Graydon Bensler | |
| Principal Financial Officer and Principal Accounting Officer |
Exhibit 32.1
PMGC HOLDINGS INC.
CERTIFICATIONS PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
I, Graydon Bensler, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Annual Report of PMGC Holdings Inc. on Form 10-K for the fiscal year ended December 31, 2025, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, and that information contained in such Annual Report on Form 10-K fairly presents, in all material respects, the financial condition and results of operations of PMGC Holdings Inc.
| Date: March 30, 2026 | |
| /s/ Graydon Bensler | |
| Graydon Bensler | |
| Chief Executive Officer (Principal Executive Officer) |
This certification accompanies the Form 10-K to which it relates, is not deemed filed with the U.S. Securities and Exchange Commission and is not to be incorporated by reference into any filing of PMGC Holdings Inc. under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended (whether made before or after the date of the Form 10-K), irrespective of any general incorporation language contained in such filing.
Exhibit 32.2
PMGC HOLDINGS INC.
CERTIFICATIONS PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
I, Graydon Bensler, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Annual Report of PMGC Holdings Inc. on Form 10-K for the fiscal year ended December 31, 2025, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended and that information contained in such Annual Report on Form 10-K fairly presents, in all material respects, the financial condition and results of operations of PMGC Holdings Inc.
| Date: March 30, 2026 | ||
| By: | /s/ Graydon Bensler | |
| Name: | Graydon Bensler | |
| Title: | Chief Financial Officer (Principal Financial Officer) and Principal Accounting Officer | |
This certification accompanies the Form 10-K to which it relates, is not deemed filed with the U.S. Securities and Exchange Commission and is not to be incorporated by reference into any filing of PMGC Holdings Inc. under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended (whether made before or after the date of the Form 10-K), irrespective of any general incorporation language contained in such filing.
Exhibit 97.1
PMGC HOLDINGS INC.
EXECUTIVE COMPENSATION RECOVERY POLICY
This policy of PMGC Holdings Inc., a Nevada corporation (the “Company”) outlines the Company’s Covered Officers (as defined herein) and explains when the Company will be required or authorized, as applicable, to seek recovery of Incentive Compensation (as defined herein) awarded or paid to Covered Officers (the “Policy”). Please refer to Exhibit A attached hereto (the “Definitions Exhibit”) for the definitions of capitalized terms used throughout this Policy.
| 1. | Miscalculation of Financial Performance Measure Results. In the event of a Restatement, the Company will seek to recover, reasonably promptly, all Recoverable Incentive Compensation from a Covered Officer during the Applicable Period. Such recovery, in the case of a Restatement, will be made without regard to any individual knowledge or responsibility related to the Restatement or the Recoverable Incentive Compensation. Notwithstanding the foregoing, if the Company is required to undertake a Restatement, the Company will not be required to recover the Recoverable Incentive Compensation if the Compensation Committee determines it Impracticable to do so, after exercising a normal due process review of all the relevant facts and circumstances. The Company will seek to recover all Recoverable Incentive Compensation that was awarded or paid in accordance with the definition of “Recoverable Incentive Compensation” set forth on the Definitions Exhibit. If such Recoverable Incentive Compensation was not awarded or paid on a formulaic basis, the Company will seek to recover the amount that the Compensation Committee determines in good faith should be recouped. |
| 2. | Legal and Compliance Violations. Compliance with the law and the Company’s Standards of Business Conduct and other corporate policies is a pre-condition to earning Incentive Compensation. If the Company in its sole discretion concludes that a Covered Officer (1) committed a significant legal or compliance violation in connection with the Covered Officer’s employment, including a violation of the Company’s corporate policies or the Company’s Standards of Business Conduct (each, “Misconduct”), or (2) was aware of or willfully blind to Misconduct that occurred in an area over which the Covered Officer had supervisory authority, the Company may, at the direction of the Compensation Committee, seek recovery of all or a portion of the Recoverable Incentive Compensation awarded or paid to the Covered Officer for the Applicable Period in which the violation occurred. In addition, the Company may, at the direction of the Compensation Committee, conclude that any unpaid or unvested Incentive Compensation has not been earned and must be forfeited. |
In the event of Misconduct, the Company may seek recovery of Recoverable Incentive Compensation even if the Misconduct did not result in an award or payment greater than would have been awarded or paid absent the Misconduct.
In the event of Misconduct, in determining whether to seek recovery and the amount, if any, by which the payment or award should be reduced, the Compensation Committee may consider—among other things— the seriousness of the Misconduct, whether the Covered Officer was unjustly enriched, whether seeking the recovery would prejudice the Company’s interests in any way, including in a proceeding or investigation, and any other factors it deems relevant to the determination.
| 3. | Other Actions. The Compensation Committee may, subject to applicable law, seek recovery in the manner it chooses, including by seeking reimbursement from the Covered Officer of all or part of the compensation awarded or paid, by electing to withhold unpaid compensation, by set-off, or by rescinding or canceling unvested stock. |
In the reasonable exercise of its business judgment under this Policy, the Compensation Committee may in its sole discretion determine whether and to what extent additional action is appropriate to address the circumstances surrounding a Restatement or Misconduct to minimize the likelihood of any recurrence and to impose such other discipline as it deems appropriate.
| 4. | No Indemnification or Reimbursement. Notwithstanding the terms of any other policy, program, agreement or arrangement, in no event will the Company or any of its affiliates indemnify or reimburse a Covered Officer for any loss under this Policy and in no event will the Company or any of its affiliates pay premiums on any insurance policy that would cover a Covered Officer’s potential obligations with respect to Recoverable Incentive Compensation under this Policy. |
| 5. | Administration of Policy. The Compensation Committee will have full authority to administer this Policy. Actions of the Compensation Committee pursuant to this Policy will be taken by the vote of a majority of its members. The Compensation Committee will, subject to the provisions of this Policy and Rule 10D-1 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the Company’s applicable exchange listing standards, make such determinations and interpretations and take such actions in connection with this Policy as it deems necessary, appropriate or advisable. All determinations and interpretations made by the Compensation Committee will be final, binding and conclusive. |
| 6. | Other Claims and Rights. The remedies under this Policy are in addition to, and not in lieu of, any legal and equitable claims the Company or any of its affiliates may have or any actions that may be imposed by law enforcement agencies, regulators, administrative bodies, or other authorities. Further, the exercise by the Compensation Committee of any rights pursuant to this Policy will not impact any other rights that the Company or any of its affiliates may have with respect to any Covered Officer subject to this Policy. |
| 7. | Condition to Eligibility for Incentive Compensation. All Incentive Compensation subject to this Policy will not be earned, even if already paid, until the Policy ceases to apply to such Incentive Compensation and any other vesting conditions applicable to such Incentive Compensation are satisfied. |
| 8. | Amendment; Termination. The Board or the Compensation Committee may amend or terminate this Policy at any time. |
| 9. | Effectiveness. Except as otherwise determined in writing by the Compensation Committee, this Policy will apply to any Incentive Compensation that (a) in the case of any Restatement, is Received by Covered Officers prior to, on or following the Effective Date, and (b) in the case of Misconduct, is awarded or paid to a Covered Officer on or after the Effective Date. This Policy will survive and continue notwithstanding any termination of a Covered Officer’s employment with the Company and its affiliates. |
| 10. | Successors. This Policy shall be binding and enforceable against all Covered Officers and their successors, beneficiaries, heirs, executors, administrators, or other legal representatives. |
| 11. | Governing Law. To the extent not preempted by U.S. federal law, this Policy will be governed by and construed in accordance with the laws of the State of New York, without reference to principles of conflict of laws. |
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EXHIBIT A
Definitions Pertaining to
The Executive Compensation Recovery Policy
of PMGC Holdings Inc.
“Applicable Period” means (a) in the case of any Restatement, the three completed fiscal years of the Company immediately preceding the earlier of (i) the date the Board, a committee of the Board, or the officer or officers of the Company authorized to take such action if Board action is not required, concludes (or reasonably should have concluded) that a Restatement is required or (ii) the date a regulator, court or other legally authorized entity directs the Company to undertake a Restatement, and (b) in the case of any Misconduct, such period as the Compensation Committee or Board determines to be appropriate in light of the scope and nature of the Misconduct. The “Applicable Period” also includes any transition period (that results from a change in the Company’s fiscal year) within or immediately following the three completed fiscal years identified in the preceding sentence.
“Board” means the Board of Directors of the Company.
“Compensation Committee” means the Company’s committee of independent directors responsible for executive compensation decisions, or in the absence of such a committee, a majority of the independent directors serving on the Board.
“Covered Officer” means (a) in the case of any Restatement, any person who is, or was at any time, during the Applicable Period, an Executive Officer of the Company, and (b) in the case of any Misconduct, any person who was an Executive Officer at the time of the Misconduct. For the avoidance of doubt, a Covered Officer may include a former Executive Officer that left the Company, retired, or transitioned to an employee role (including after serving as an Executive Officer in an interim capacity) during the Applicable Period.
“Effective Date” means October 31, 2023 or December 1, 2023, whichever is earlier.
“Executive Officer” means the Company’s president, principal financial officer, principal accounting officer (or if there is no such accounting officer, the controller), any vice-president in charge of a principal business unit, division, or function (such as sales, administration, or finance), any other officer who performs a policy-making function, or any other person (including an officer of the Company’s parent(s) or subsidiaries) who performs similar policy-making functions for the Company.
“Financial Performance Measure” means a measure that is determined and presented in accordance with the accounting principles used in preparing the Company’s financial statements (including “non-GAAP” financial measures, such as those appearing in the Company’s earnings releases or Management Discussion and Analysis), and any measure that is derived wholly or in part from such measure. Stock price and total shareholder return (and any measures derived wholly or in part therefrom) shall be considered Financial Performance Measures.
“Impracticable.” The Compensation Committee may determine in good faith that recovery of Recoverable Incentive Compensation is “Impracticable” (a) in the case of any Restatement, if: (i) pursuing such recovery would violate the law of the jurisdiction of incorporation of the Company where that law was adopted prior to October 2, 2023 and the Company provides an opinion of counsel to that effect acceptable to the Company’s listing exchange; (ii) the direct expense paid to a third party to assist in enforcing this Policy would exceed the Recoverable Incentive Compensation and the Company has (A) made a reasonable attempt to recover such amounts and (B) provided documentation of such attempts to recover to the Company’s applicable listing exchange; or (iii) recovery would likely cause an otherwise tax-qualified retirement plan, under which benefits are broadly available to employees of the Company, to fail to meet the requirements of the Internal Revenue Code of 1986, as amended, and (b) in the case of any Misconduct, in its sole discretion, in light of the scope and nature of the Misconduct.
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“Incentive Compensation” means any compensation that is granted, earned, or vested based wholly or in part upon the attainment of a Financial Performance Measure. Incentive Compensation does not include any base salaries (except with respect to any salary increases earned wholly or in part based on the attainment of a Financial Performance Measure performance goal); bonuses paid solely at the discretion of the Compensation Committee or Board that are not paid from a “bonus pool” that is determined by satisfying a Financial Performance Measure performance goal; bonuses paid solely upon satisfying one or more subjective standards and/or completion of a specified employment period; non-equity incentive plan awards earned solely upon satisfying one or more strategic measures or operational measures; and equity awards that vest solely based on the passage of time and/or attaining one or more non-Financial Performance Measures. Notwithstanding the foregoing, in the case of any Misconduct, Incentive Compensation will include all forms of cash and equity incentive compensation, including, without limitation, cash bonuses and equity awards that are received or vest solely based on the passage of time and/or attaining one or more non-Financial Performance Measures.
“Received.” Incentive Compensation is deemed “Received” in the Company’s fiscal period during which the Financial Performance Measure specified in the Incentive Compensation award is attained, even if the payment or grant of the Incentive Compensation occurs after the end of that period.
“Recoverable Incentive Compensation” means (a) in the case of any Restatement, the amount of any Incentive Compensation (calculated on a pre-tax basis) Received by a Covered Officer during the Applicable Period that is in excess of the amount that otherwise would have been Received if the calculation were based on the Restatement, and (b) in the case of any Misconduct, the amount of any Incentive Compensation (calculated on a pre-tax basis) awarded or paid to a Covered Officer during the Applicable Period that the Compensation Committee determines, in its sole discretion, to be appropriate in light of the scope and nature of the Misconduct. For the avoidance of doubt, in the case of any Restatement, Recoverable Incentive Compensation does not include any Incentive Compensation Received by a person (i) before such person began service as a Covered Officer and (ii) who did not serve as a Covered Officer at any time during the performance period for that Incentive Compensation. For the avoidance of doubt, in the case of any Restatement, Recoverable Incentive Compensation may include Incentive Compensation Received by a person while serving as an employee if such person previously served as a Covered Officer and then transitioned to an employee role. For Incentive Compensation based on (or derived from) stock price or total shareholder return where the amount of Recoverable Incentive Compensation is not subject to mathematical recalculation directly from the information in the applicable Restatement, the amount will be determined by the Compensation Committee based on a reasonable estimate of the effect of the Restatement on the stock price or total shareholder return upon which the Incentive Compensation was Received (in which case, the Company will maintain documentation of such determination of that reasonable estimate and provide such documentation to the Company’s applicable listing exchange).
“Restatement” means an accounting restatement of any of the Company’s financial statements filed with the Securities and Exchange Commission under the Exchange Act, or the Securities Act of 1933, as amended, due to the Company’s material noncompliance with any financial reporting requirement under U.S. securities laws, regardless of whether the Company or Covered Officer misconduct was the cause for such restatement. “Restatement” includes any required accounting restatement to correct an error in previously issued financial statements that is material to the previously issued financial statements (commonly referred to as “Big R” restatements), or that would result in a material misstatement if the error were corrected in the current period or left uncorrected in the current period (commonly referred to as “little r” restatements).
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