PMGC Holdings Inc 10-Q for FY2025 Q3
PMGC Holdings Inc. (ELAB)
About this 10-Q
PMGC Holdings Inc filed this 10-Q on November 14, 2025, covering the quarter ended September 30, 2025 (FY2025 Q3).
Headline figures
Quarter ended September 30, 2025, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $285.95K
- Net loss
- $2.59M
- compared with a net loss of $1.5M a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
For The Quarterly Period
Ended
OR
Commission File Number:
| (Exact name of registrant as specified in its charter) |
| (State of incorporation) | (I.R.S. Employer Identification No.) |
(Address of principal executive office) (Zip code)
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended, during the preceding 12 months (or for such shorter period than the registrant was required to
file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate
by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405
of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant
was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☐ | Accelerated filer | ☐ |
| ☒ | Smaller reporting company | ||
| Emerging growth company |
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
As
of November 10, 2025, there were
PMGC Holdings Inc. Quarterly Report on Form 10-Q
TABLE OF CONTENTS
| PART I – FINANCIAL INFORMATION | 1 | |
| Item 1. | Financial Statements | 1 |
| Notes to Unaudited Condensed Consolidated Financial Statements | 7 | |
| Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 32 |
| Item 3. | Quantitative and Qualitative Disclosure About Market Risk | 42 |
| Item 4. | Controls and Procedures | 42 |
| PART II – OTHER INFORMATION | 43 | |
| Item 1. | Legal Proceedings | 43 |
| Item 1A. | Risk Factors | 43 |
| Item 2. | Recent Sales of Unregistered Securities; Use of Proceeds and Issuer Purchases of Equity Securities | 43 |
| Item 3. | Defaults Upon Senior Securities | 44 |
| Item 4. | Mine Safety Disclosures | 44 |
| Item 5. | Other Information | 44 |
| Item 6. | Exhibits | 44 |
| SIGNATURES | 45 | |
i
Forward-Looking Statements
This Quarterly Report on Form 10-Q (this “Quarterly Report”) of PMGC Holdings Inc. (“we,” “us,” “our,” “PMGC” and the “Company”) contains statements that constitute “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Any statements that are not statements of historical facts may be deemed to be forward-looking statements. These statements appear in several different places in this Quarterly Report and, in some cases, can be identified by words such as “anticipates,” “estimates,” “projects,” “expects,” “contemplates,” “intends,” “believes,” “plans,” “may,” “will” or their negatives or other comparable words, although not all forward-looking statements contain these identifying words. Forward-looking statements in this Quarterly Report may include, but are not limited to, statements and/or information related to: our financial performance and projections; our business prospects and opportunities; our business strategy and future operations; the projection of timing and delivery of products in the future; projected costs; expected production capacity; expectations regarding demand and acceptance of our products; estimated costs of research and development to develop new pipeline products; trends in the market in which we operate; the plans and objectives of management; our liquidity and capital requirements, including cash flows and uses of cash; trends relating to our industry; and plans relating to our current products.
We have based these forward-looking statements on our current expectations about future events on information that is available as of the date of this Quarterly Report, and any forward-looking statements made by us speak only as of the date on which they are made. While we believe these expectations are reasonable, such forward-looking statements are inherently subject to risks and uncertainties, many of which are beyond our control. Our actual future results may differ materially from those discussed or implied in our forward-looking statements for various reasons, including, our ability to change the direction of the Company; our ability to keep pace with new technology and changing market needs; our capital needs, and the competitive environment of our business. Additional Factors that could contribute to such differences include, but are not limited to:
| ● | general economic and business conditions, including changes in interest rates; |
| ● | prices of other competitive products, costs associated with research and development of our products and other economic conditions; |
| ● | the effect of an outbreak of disease or similar public health threat, such as any future outbreak of COVID-19 on our business (natural phenomena, including the lingering effects of the COVID-19 pandemic); |
| ● | the impact of political unrest, natural disasters or other crises, terrorist acts, acts of war and/or military operations, and our ability to maintain or broaden our business relationships and develop new relationships with strategic alliances, suppliers, customers, distributors or otherwise; |
| ● | breaches in data security, failure of information security systems, cyber-attacks or other security or privacy-related incidents affecting us or our suppliers; |
| ● | the ability of our information technology systems or information security systems to operate effectively; |
| ● | actions by government authorities, including changes in government regulation; |
| ● | uncertainties associated with legal proceedings; |
| ● | changes in the size of the medical aesthetics, cosmetics and biotechnology market; |
| ● | future decisions by management in response to changing conditions; |
ii
| ● | our ability to execute prospective business plans; |
| ● | misjudgments in the course of preparing forward-looking statements; |
| ● | our ability to raise sufficient funds to carry out our proposed business plan; |
| ● | inability to keep up with advances in medical aesthetics and biotechnology; |
| ● | inability to design, develop, market and sell new medical aesthetics and biotech products that address additional market opportunities to generate revenue and positive cash flows; |
| ● | dependency on certain key personnel and any inability to retain and attract qualified personnel; |
| ● | our expectations regarding our ability to obtain, maintain, protect, defend and enforce our intellectual property rights and operate without infringing, misappropriating, or otherwise violating the intellectual property rights of others; |
| ● | disruption of supply or shortage of raw materials; |
| ● | the unavailability, reduction or elimination of government and economic incentives; |
| ● | failure to manage future growth effectively; and |
| ● | the other risks and uncertainties detailed from time to time in our filings with the U.S. Securities and Exchange Commission (“SEC”), including, but not limited to, those described under “Risk Factors” in Part I, Item 1A of the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on March 28, 2025 (the “Form 10-K”). |
Although management has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended. There is no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such forward-looking statements. Accordingly, readers should not place undue reliance on forward-looking statements. These cautionary remarks expressly qualify, in their entirety, all forward-looking statements attributable to us or persons acting on our behalf. We do not undertake to update any forward-looking statements to reflect actual results, changes in assumptions or changes in other factors affecting such statements, except as, and to the extent required by, applicable securities laws.
iii
PART I - FINANCIAL INFORMATION
Item 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
Condensed Consolidated Financial Statements of
PMGC Holdings Inc. (formerly Elevai Labs Inc.)
For the quarterly periods ended September 30, 2025, and 2024
(Unaudited - Expressed in United States Dollars)
PMGC Holdings Inc. (formerly Elevai Labs Inc.)
Condensed Consolidated Balance Sheets
(Unaudited - Expressed in United States dollar)
| As of: | September 30, 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 | ||||||||
| Convertible debt | ||||||||
| Liabilities held for sale | ||||||||
| Total Current Liabilities | ||||||||
| Operating lease liability | ||||||||
| Consideration payable | ||||||||
| TOTAL LIABILIITES | $ | $ | ||||||
| Commitments and Contingencies | ||||||||
| EQUITY | ||||||||
| Preferred stock $ | ||||||||
| Series B 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 unaudited condensed consolidated financial statements
1
PMGC Holdings Inc. (formerly Elevai Labs Inc.)
Condensed Consolidated Statements of Operations and Comprehensive Loss
For the Three and Nine months ended September 30, 2025, and 2024
(Unaudited - Expressed in United States dollars)
| Three months ended September 30, 2025 | Three months ended September 30, 2024 | Nine months ended September 30, 2025 | Nine months ended September 30, 2024 | |||||||||||||
| Revenue | ||||||||||||||||
| Total revenue | ||||||||||||||||
| Cost of Goods Sold | ||||||||||||||||
| Gross margin | ||||||||||||||||
| Operating expenses | ||||||||||||||||
| 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 | $ | |||||||||||||||
| Net loss from continuing operations before other income (expense) | $ | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
| Other income (expense) | ||||||||||||||||
| Finance cost | ( | ) | ( | ) | ||||||||||||
| Change in fair value of derivative liabilities | ||||||||||||||||
| Gain on the termination of intangible assets | ||||||||||||||||
| Interest income | ||||||||||||||||
| Interest expense | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Dividend income | ||||||||||||||||
| Other Income | ||||||||||||||||
| Realized gain (loss) on investments | ( | ) | ( | ) | ||||||||||||
| Unrealized gain (loss) on investments | ( | ) | ||||||||||||||
| Net loss from continuing operations | $ | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
| Loss from discontinued operations (Note 4) | ( | ) | ( | ) | ||||||||||||
| 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 unaudited condensed consolidated financial statements
2
PMGC Holdings Inc. (formerly Elevai Labs Inc.)
Condensed Consolidated Statements of Changes in Stockholders’ Equity
For the Three and Nine months ended September 30, 2025, and 2024
(Unaudited - Expressed in United States dollars)
| Common Stock | Series B Preferred Stock | Additional | Accumulated other | |||||||||||||||||||||||||||||
| Number of shares # | Amount $ | Number of shares # | Amount $ | paid-in
capital $ | Accumulated
deficit $ | comprehensive
income $ | Total $ | |||||||||||||||||||||||||
| Balance, June 30, 2024(1) | ( | ) | ||||||||||||||||||||||||||||||
| Issued and issuable shares for acquisition of intangible assets | - | - | ||||||||||||||||||||||||||||||
| Issued pursuant to public offering | - | - | ||||||||||||||||||||||||||||||
| Issued pursuant to Securities Purchase Agreement | - | - | ||||||||||||||||||||||||||||||
| Share-based compensation | - | - | ||||||||||||||||||||||||||||||
| Net loss for the period | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||
| Currency translation adjustment | - | ( | ) | ( | ) | |||||||||||||||||||||||||||
| Balance, September 30, 2024(1) | ( | ) | ||||||||||||||||||||||||||||||
| Balance, June 30, 2025(1) | ( | ) | ( | ) | ||||||||||||||||||||||||||||
| Issuance of common stock under ATM program | - | |||||||||||||||||||||||||||||||
| Exercise of replacement warrants | - | |||||||||||||||||||||||||||||||
| Issuance of commitment shares of ELOC | - | |||||||||||||||||||||||||||||||
| Issuance of Pre-Delivery shares of ELOC | ||||||||||||||||||||||||||||||||
| Round-up shares due to the stock split | ||||||||||||||||||||||||||||||||
| Share-based compensation | - | - | ||||||||||||||||||||||||||||||
| Net loss for the period | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||
| Currency translation adjustment | - | - | ||||||||||||||||||||||||||||||
| Balance, September 30, 2025 | ( | ) | ( | ) | ||||||||||||||||||||||||||||
| (1) |
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements
3
PMGC Holdings Inc. (formerly Elevai Labs Inc.)
Condensed Consolidated Statements of Changes in Stockholders’ Equity
For the Three and Nine months ended September 30, 2025, and 2024
(Unaudited - Expressed in United States dollars)
| Common Stock | Series
B Preferred Stock | Additional | Accumulated other | |||||||||||||||||||||||||||||
| Number of shares # | Amount $ | Number of shares # | Amount $ | paid-in capital $ | Accumulated deficit $ | comprehensive income $ | Total $ | |||||||||||||||||||||||||
| 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 | - | |||||||||||||||||||||||||||||||
| Share-based compensation | - | - | ||||||||||||||||||||||||||||||
| Net loss for the period | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||
| Currency translation adjustment | - | - | ||||||||||||||||||||||||||||||
| Balance, September 30, 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 stock under ATM program | - | |||||||||||||||||||||||||||||||
| Exercise of replacement warrants | - | |||||||||||||||||||||||||||||||
| Issuance of commitment shares of ELOC | - | |||||||||||||||||||||||||||||||
| Issuance of Pre-Delivery shares of ELOC | - | |||||||||||||||||||||||||||||||
| Share-based compensation | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||
| Net loss for the period | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||
| Currency translation adjustment | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||
| Balance, September, 2025 | ( | ) | ( | ) | ||||||||||||||||||||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements
4
PMGC Holdings Inc. (formerly Elevai Labs Inc.)
Condensed Consolidated Statements of Cash Flows
For the nine months ended September 30, 2025, and 2024
(Unaudited - Expressed in United States dollars)
| September 30, 2025 | September 30, 2024 | |||||||
| Operating activities | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Depreciation and amortization | ||||||||
| Finance cost | ||||||||
| Share-based compensation | ( | ) | ||||||
Straight-line rent expense | ( | ) | ( | ) | ||||
| Change in fair value of derivative liabilities | ( | ) | ||||||
| Non-cash interest expense | ||||||||
| Research and development costs for intangible assets | ||||||||
| Gain on termination of intangible asset | ( | ) | ||||||
| Loss on the sale of Skincare | ||||||||
| Realized loss on sale of investments | ||||||||
| Unrealized gain on investments | ( | ) | ||||||
| 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 investments | ( | ) | ||||||
| Proceeds from sale of investments | ||||||||
| Issuance of promissory note | ( | ) | ||||||
| Purchase of intangible assets | ( | ) | ( | ) | ||||
| 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(decrease) in cash | ||||||||
| Cash, beginning of period | ||||||||
| Cash, ending of period | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements
5
PMGC Holdings Inc. (formerly Elevai Labs Inc.)
Condensed Consolidated Statements of Cash Flows
For the nine months ended September 30, 2025, and 2024
(Unaudited - Expressed in United States dollars)
| 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 |
| 1 |
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements
6
| 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 unaudited condensed consolidated financial statements as assets and liabilities held for sale and discontinued operations. The Company also retrospectively adjusted the unaudited condensed consolidated statement of operations and comprehensive loss for the three and nine months ended September 30, 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 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 (Note 5). |
| ● | On July 18, 2025, the Company acquired AGA Precision Systems LLC, a California-based CNC machining company (Note 5). |
7
PMGC currently manages and operates a diverse portfolio of five 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 is based in Canada and is currently dedicated to medical scientific research and development efforts, utilizing Canadian research grants and partnering with leading Canadian Universities to push the boundaries of innovation. |
| ● | 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. 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 unaudited condensed 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 September 30, 2025, and December
31, 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.
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.
8
| 3. | Summary of Significant Accounting Policies |
Basis of Presentation
These unaudited condensed consolidated financial statements 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”) for interim financial information and are expressed in United States dollars. Accordingly, the unaudited condensed consolidated financial statements do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, we have included all adjustments considered necessary for a fair presentation and such adjustments are of a normal recurring nature. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements for the years ended December 31, 2024, and 2023. The results of operations for the three and nine months ended September 30, 2025 are not necessarily indicative of the results to be expected for the full fiscal year ending December 31, 2025.
Principles of Consolidation
The unaudited condensed consolidated
financial statements include the accounts of PMGC and its
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 third fiscal quarter of 2025, the Company completed two acquisitions—Pacific Sun Packaging Inc. and AGA Precision Systems LLC—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.
Goodwill recognized from the 2025 acquisitions of Pacific Sun Packaging Inc. and AGA Precision Systems LLC primarily reflects expected synergies, operational efficiencies, workforce know-how, and future growth opportunities within the Company’s manufacturing segment.
9
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.
| Intangible asset | Estimated useful life | |
| Customer relationship | ||
| Brand | ||
| Backlog |
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, revenue from CNC machining and precision component manufacturing is recognized over time using an input method based on labor hours or materials consumed, as the Company’s performance creates an asset that has no alternative use and there is an enforceable right to payment for performance completed to date. The revenue recognition policies for PMGC’s other subsidiaries remain unchanged.
Inventory
Inventory entirely consists of IT packaging purchased and sold by Pacific Sun as finished goods. Inventory is stated at the lower of cost or net realizable value. Cost is determined using the Frist 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.
Use of Estimates
The preparation of the unaudited condensed 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 unaudited condensed consolidated financial statements in the period they are determined.
10
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).
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. All investments are classified as trading securities and are reported at fair value, with both realized and unrealized gains and losses recognized in earnings. Equity 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.
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 condensed consolidated balance sheet.
New Accounting Standards
Recently Adopted Accounting Standards
In June 2022, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2022-03, ASC Subtopic 820 “Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions” (“Topic 820”). 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.
ASU 2023-07 includes a requirement to disclose significant segment expenses that are regularly provided to the Company’s Chief Operating Decision Maker (“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 financial statement.
11
Recently Issued Accounting Standards
The Company assesses the adoption impacts of recently issued, but not yet effective, accounting standards by the FASB on the Company's unaudited condensed consolidated financial statements.
There are no recently issued accounting standards which may have effect on the Company’s unaudited condensed 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:
| Three months ended September 30, 2025 | Three months ended September 30, 2024 | Nine months ended September 30, 2025 | Nine months ended September 30, 2024 | |||||||||||||
| Revenue | $ | $ | $ | $ | ||||||||||||
| Cost of goods sold | ||||||||||||||||
| Gross profit | $ | $ | $ | $ | ||||||||||||
| Expenses | ||||||||||||||||
| Depreciation and amortization | ||||||||||||||||
| 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 (expense) | ||||||||||||||||
| Other income | ||||||||||||||||
| Interest expense | ( | ) | ( | ) | ||||||||||||
| Loss on the sale of Skincare | ( | ) | ||||||||||||||
| Net income (loss) from discontinued operations | $ | $ | ( | ) | $ | $ | ( | ) | ||||||||
12
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 nine months ended September 30, 2025 and 2024:
| September 30, 2025 | September 30, 2024 | |||||||
| Cash flows used in operating activities | $ | ( | ) | $ | ( | ) | ||
| Cash flows used in investing activities | ( | ) | ||||||
| 5. | Business combinations |
Pacific Sun Packaging Inc.
On July 7, 2025, the Company completed
the acquisition of
13
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
14
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. The allocation is summarized below:
| 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.
| 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 |
As of September 30, 2025, and December
31, 2024, receivables consisted of trade receivables of $
and $
| 8. | Prepaids and Deposits |
As of September 30, 2025, and December 31, 2024, prepaid and deposits consisted of the following:
| September 30, 2025 | December 31, 2024 | |||||||
| Prepaid expenses | $ | $ | ||||||
| Deposits | ||||||||
| $ | $ | |||||||
15
| 9. | Inventory |
As of September 30, 2025, and December 31, 2024, inventory consisted of the following:
| September 30, 2025 | December 31, 2024 | |||||||
| Finished goods | $ | $ | ||||||
| $ | $ | |||||||
Cost of inventory recognized as expense
in cost of sales for the nine ended September 30, 2025 and 2024, totaled $
| 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 nine months ended September 30, 2025 and year ended December 31, 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, September 30, 2025 | $ | |||||||||||||||
16
Fair Value Measurement
The following table presents the Company’s financial instruments measured at fair value on a recurring basis as of September 30, 2025, in accordance with the fair value hierarchy of ASC 820:
| Fair Value Measurement Using: | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
| Equity securities | $ | |||||||||||||||
| Warrants | ||||||||||||||||
| Total | $ | |||||||||||||||
| 11. | Property and equipment |
| Computers | Machinery & Equipment | Office equipment | Leasehold improvement | Total | ||||||||||||||||
| Cost | ||||||||||||||||||||
| Balance, December 31, 2023 | $ | - | - | - | ||||||||||||||||
| Foreign currency translation | ( | ) | ( | ) | ||||||||||||||||
| Balance, December 31, 2024 | $ | - | - | - | ||||||||||||||||
| Business combinations | ||||||||||||||||||||
| Additions | ||||||||||||||||||||
| Foreign currency translation | ||||||||||||||||||||
| Balance, September 30, 2025 | $ | |||||||||||||||||||
| Accumulated depreciation | ||||||||||||||||||||
| Balance, December 31, 2023 | $ | - | - | - | ||||||||||||||||
| Depreciation | ||||||||||||||||||||
| Foreign currency translation | ( | ) | ( | ) | ||||||||||||||||
| Balance, December 31, 2024 | $ | - | - | - | ||||||||||||||||
| Depreciation | ||||||||||||||||||||
| Foreign currency translation | ( | ) | ( | ) | ||||||||||||||||
| Balance, September 30, 2025 | $ | |||||||||||||||||||
| Net book value | ||||||||||||||||||||
| December 31, 2024 | $ | - | - | - | ||||||||||||||||
| September 30, 2025 | $ | |||||||||||||||||||
17
| 12. | Intangible assets and consideration payable |
| License # 1 | License # 2 (IPR&D asset) | Customer relationship | Brand | Backlog | Total | |||||||||||||||||||
| Cost: | ||||||||||||||||||||||||
| Balance, December 31, 2024 | $ | |||||||||||||||||||||||
| Additions | ||||||||||||||||||||||||
| Business combinations | ||||||||||||||||||||||||
| Termination of agreement | ( | ) | ( | ) | ||||||||||||||||||||
| Balance, September 30, 2025 | $ | |||||||||||||||||||||||
| Accumulated amortization: | ||||||||||||||||||||||||
| Balance, December 31, 2024 | $ | |||||||||||||||||||||||
| Additions | ||||||||||||||||||||||||
| Termination of agreement | ( | ) | ( | ) | ||||||||||||||||||||
| Balance, September 30, 2025 | $ | |||||||||||||||||||||||
| Net book value: | ||||||||||||||||||||||||
| December 31,2024 | $ | |||||||||||||||||||||||
| September 30, 2025 | ||||||||||||||||||||||||
On January 15, 2024, the Company
entered into a license agreement with a biotechnology company to use the biotechnology company’s proprietary technology and
process to assist in formulating stem cells (the license granted under this license agreement, “License # 1”). The term
of License # 1 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 $
| 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, September 30, 2025 | $ | |||
18
As a result of the termination, the
Company derecognized the associated intangible asset and the related consideration payable, recognizing a gain of $
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 intellectual property research and development (“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 | % | |||
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 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 $
19
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 |
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.
| 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 $
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 $
As
of September 30, 2025, and December 31, 2024, the Company recorded a security deposit of $
20
Future minimum lease payments under the Company’s operating leases that have an initial non-cancelable lease term in excess of one year at September 30, 2025, are as follows:
| As at September 30, 2025 | Lease payments ($) | |||
| 2025 (remaining three months) | $ | |||
| 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. | Equity Line of Credit (“ELOC”) and convertible debt |
On September 23, 2025, the Company entered
into a securities purchase agreement, establishing an equity line of credit of up to $
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).
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 | ||||
| Balance, September 30, 2025 | $ | |||
| (1) |
21
| 15. | Derivative liabilities |
Liability classified stock purchase warrants
On July 15, 2022, the Company issued
On November 21, 2023, the Company completed
its initial public offering and issued
We analyzed the common stock purchase warrants issued as partial settlement of the promissory notes payable and the IPO warrants against the requirements of ASC 480, Distinguishing Liabilities from Equity, and determined that the warrants should be classified as financial liabilities.
ASC 815, Derivatives and Hedging, requires that the warrants be accounted for as derivative liabilities with initial and subsequent measurement at fair value with changes in fair value recorded as other income (expense).
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, September 30, 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 $.
As of September 30, 2025, the following warrants were outstanding:
| Outstanding | Expiry date | Weighted average exercise price ($) | ||||||
As of September 30, 2025, and December
31, 2024, the weighted average life of derivative liability 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 $
22
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 September 30,
2025.
| Risk-free interest rate | % | |||
| Expected life | ||||
| Expected dividend rate | % | |||
| Expected volatility | % | |||
| Exercise price | ( | ) | ||
| Number of steps |
| 16. | Equity |
Common Stock
Authorized
As of September 30, 2025, and December
31, 2024, the Company had
Issued and outstanding
As of September 30, 2025, and December
31, 2024, the Company had
Transactions during the nine months ended September 30, 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
a total of
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 $
23
On September 23, 2025, in connection
with the ELOC Agreement, the Company issued
During the nine months ended September
30, 2025, the Company sold an aggregate of
Transactions during the nine months ended September 30, 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 September 30, 2025, and December
31, 2024, the Company had
Issued and outstanding
As at September 30, 2025, and December
31, 2024, the Company had
24
Transactions during the nine months ended September 30, 2025, and 2024
On March 26, 2025, at a special meeting
of the Company’s shareholders, the shareholders approved the issuance of
Equity Warrants
Transactions during the nine months ended September 30, 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 nine months ended September 30, 2024.
On September 24, 2024, with each of
the
25
On September 24, 2024, the Company issued
As of September 30, 2025, the following equity warrants were outstanding:
| Outstanding | Expiry date | Weighted average exercise price ($) | ||||||
As of September 30, 2025, and December 31, 2024, the weighted
average life of equity warrants outstanding was
Stock Options
The Company has a stock option plan
included in the Company’s 2020 Equity Incentive Plan (the “Plan”) where the Board of Directors or any of its committees
can grant Incentive Stock Options, Nonstatutory Stock Options, and Restricted Stock to employees, advisors and directors of the Company.
As of September 30, 2025 and December 31, 2024, the aggregate number of shares allocated and made available for issuance pursuant to stock
options granted under the Plan shall not exceed
Transactions during the nine months ended September 30, 2025
There was no stock option activity during the nine months ended September 30, 2025.
Transactions during the nine months ended September 30, 2024
In January 2024, the Company granted
On March 6, 2024, the Company granted
26
The continuity of stock options for the nine months ended September 30, 2025, and December 31, 2024, is summarized below:
| Number of stock options | Weighted average exercise price | |||||||
| Outstanding, December 31, 2023 | ||||||||
| Granted | ||||||||
| Forfeited | ( | ) | ||||||
| Outstanding, December 31, 2024 | ||||||||
| Granted | ||||||||
| Forfeited/Cancelled | ( | ) | ( | ) | ||||
| Exercised | ||||||||
| Outstanding, September 30, 2025 | ||||||||
As of September 30, 2025, the following options were outstanding, entitling the holders thereof the right to purchase one common stock for each option held as follows:
| Outstanding | Vested | Expiry date | Weighted average exercise price ($) | |||||||||
As of September 30, 2025, and December
31, 2024, the weighted average life of stock options outstanding was
With the sale of the Company’s
skincare business on January 16, 2025,
During the nine months ended September
30, 2025 and 2024, the Company recorded $(
Within discontinued operations for the
nine months ended September 30, 2025 and 2024, ($
| 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) |
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| ● | Juliana 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 |
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
Remuneration attributed to key management personnel are summarized as follows:
| Three months ended September 30, 2025 | Three months ended September 30, 2024 | Nine months ended September 30, 2025 | Nine months ended September 30, 2024 | |||||||||||||
| Consulting fees | $ | |||||||||||||||
| Management fees | ||||||||||||||||
| Director fees | ||||||||||||||||
| Salaries | ||||||||||||||||
| Share-based compensation | ( | ) | ||||||||||||||
| $ | ||||||||||||||||
During the nine months ended September 30, 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 $
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During the nine months ended September 30, 2025, and 2024, the company issued the following stock options to related parties:
On March 1, 2024, the Company granted
Details of the fair value, as calculated on the grant date, to each related party in the current and prior periods, and the related expense recorded for the nine months ended September 30, 2025, and 2024 is as follow:
| Nine Months Ended September 30, 2025 | Nine Months Ended September 30, 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 | ( | ) | ||||||||||
| Crystal Muilenburg, Former Director1 | ||||||||||||
| Julie Daley, Director | ( | ) | ||||||||||
| George Kovalyov, Director | ( | ) | ||||||||||
| Brenda Buechler, Former Chief Marketing Officer1 | ||||||||||||
| Christoph Kraneiss, Former Chief Commercial Officer1 | ||||||||||||
| $ | $ | ( | ) | $ | ||||||||
| 1 |
| 2 |
As of September 30, 2025, and December
31, 2024, the Company had $
As of September 30, 2025, the Company
had $
| 18. | Commitments and Contingencies |
There were commitments as of September 30, 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 September 30, 2025.
As of September 30, 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.
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| 19. | Concentrations |
Customers
For the nine months ended September
30, 2025, the Company had 5 key customers that represented approximately
| Nine Months Ended September 30, 2025 | ||||
| Customer 1 | % | |||
| Customer 2 | % | |||
| Customer 3 | % | |||
| Customer 4 | % | |||
| Customer 5 | % | |||
| % | ||||
Suppliers
During the nine months ended September
30, 2025, the Company had 2 key suppliers that represented approximately
| Nine Months Ended September 30, 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.
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| 21. | Reportable Segments and Geographic Areas |
The Company’s continuing operations
consist of
The following is a summary of the Company’s operations for the nine months ended September 30, 2025, and assets and liabilities as of September 30, 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, is located in Canada and provide limited operational support and research.
| 21. | Subsequent Events |
Management has evaluated events subsequent to the nine months ended September 30, 2025, up to November 14, 2025, for transactions and other events that may require adjustment of and/or disclosure in the consolidated financial statements.
On October 26, 2025, the Company’s
wholly owned subsidiary, AGA Precision Systems LLC, completed the acquisition of substantially all the assets of Indarg Engineering, Inc.,
a California corporation, pursuant to an asset purchase agreement. The total purchase price was $
The acquired assets include equipment and other tangible and intangible assets related to Indarg Engineering’s precision machining operations. The Company is in the process of evaluating the purchase price allocation and determining the fair value of identifiable assets acquired and liabilities assumed, which will be reflected in subsequent reporting periods in accordance with ASC 805, Business Combinations.
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
You should read the following discussion and analysis of our financial condition and results of operations together with our unaudited condensed consolidated financial statements and the notes to those statements included elsewhere in this Quarterly Report and the audited consolidated financial statements and the other information set forth in our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the U.S. Securities and Exchange Commission on March 28, 2025.
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. |
The Company currently manages and operates a diverse portfolio of five wholly owned subsidiaries:
| ● | 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. |
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| ● | PMGC Research Inc. – PMGC Research is based in Canada and is currently dedicated to medical scientific research and development efforts. This company utilizes Canadian research grants and partnering with leading Canadian Universities, with aims of pushing the boundaries of innovation. |
| ● | 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. AGA expands PMGC’s advanced manufacturing footprint and enhances its capacity to deliver vertically integrated engineering and production solutions across multiple sectors. |
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”). |
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Results of Operations
Comparison of the nine months ended September 30, 2025 to the nine months ended September 30, 2024.
In January 2025, the Company sold its skincare business, which had previously contributed to the financial results of the Company. The financial results of the disposed operations from January 1, 2025 until January 16, 2025 have been classified as discontinued operations. The following table provides certain selected financial information for continuing operations for the periods presented and does not include activity from the skincare business of the Company:
| Nine Months Ended September 30, 2025 |
Nine Months Ended September 30, 2024 |
Change | ||||||||||
| Revenue | $ | 285,948 | $ | - | $ | 285,948 | ||||||
| Cost of goods sold | $ | 207,918 | $ | - | $ | 207,918 | ||||||
| Gross profit | $ | 78,030 | $ | - | $ | 78,030 | ||||||
| Marketing and Promotion | $ | 182,407 | $ | 276,371 | $ | (93,964 | ) | |||||
| Consulting Fees | $ | 1,367,005 | $ | 784,420 | $ | 582,585 | ||||||
| Office and Administration | $ | 1,255,413 | $ | 447,874 | $ | 807,539 | ||||||
| Professional Fees | $ | 939,754 | $ | 266,433 | $ | 673,321 | ||||||
| Investor Relations | $ | 161,157 | $ | 134,427 | $ | 26,730 | ||||||
| Research and Development | $ | 114,108 | $ | 59,651 | $ | 54,457 | ||||||
| Repairs and maintenance | $ | 312,579 | $ | - | $ | 312,579 | ||||||
| Total operating expenses | $ | 4,492,173 | $ | 1,981,831 | $ | 2,510,342 | ||||||
| Other income (expense)1 | $ | (362,176 | ) | $ | (317,054 | ) | $ | (45,122 | ) | |||
| Net loss from continuing operation | $ | (4,776,319 | ) | $ | (2,298,885 | ) | $ | (2,477,434 | ) | |||
| Basic and dilutive loss per common share- continuing operations | $ | (13.731 | ) | $ | (589.609 | ) | $ | 575.878 | ||||
| Weighted average number of shares outstanding – basic and diluted | 347,847 | 3,899 | ||||||||||
| 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, gain on the termination of the intangible asset and fair value gain/loss on derivative liability. |
Revenue
Revenue for the nine months ended September 30, 2025, was $285,948 as compared to $nil for the nine months September 30, 2024, an increase of $285,948. Revenue was generated by the Company’s newly acquired subsidiaries.
Our revenue by category is as follows:
| Nine Months Ended September 30, 2025 | ||||
| Pacific Sun – Sale of IT packaging | $ | 179,292 | ||
| AGA – Machine work | 106,656 | |||
| Total Revenue | $ | 285,948 | ||
34
Cost of Revenue
Cost of revenue for the nine months ended September 30, 2025, was $207,918 as compared to $nil for the nine months ended September 30, 2024.
The increase in cost of revenue is directly attributed to the increase in sales during the nine months ended September 30, 2025, compared to 2024. The following is a breakdown of the components of the cost of revenue:
| For the nine months ended September 30, 2025 | Pacific Sun – Sale of IT packaging | AGA – Machine work | Total | |||||||||
| Cost of inventory | $ | 122,170 | $ | - | $ | 122,170 | ||||||
| Sales commission | 3,730 | - | 3,730 | |||||||||
| Assembly and manufacturing expense | 1,020 | 58,017 | 59,037 | |||||||||
| Shipping and handling cost | 19,456 | 3,230 | 22,686 | |||||||||
| Inventory write down and wastage | 295 | - | 295 | |||||||||
| Total Cost of Revenue | $ | 146,671 | $ | 61,247 | $ | 207,918 | ||||||
Gross Profit
Gross profit for the nine months ended September 30, 2025, was $78,030, as compared to $nil for the nine months ended September 30, 2024, an increase of $78,030. This represents an overall gross margin percentage of 27% for the nine months ended September 30, 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:
| Nine Months Ended September 30, 2025 | ||||
| Pacific Sun – Sale of IT packaging | 18 | % | ||
| AGA – Machine work | 43 | % | ||
| Overall Gross Profit Percentage | 27 | % | ||
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 45%.
Research and Development Expenses
Research and development expenses for the nine months ended September 30, 2025, were $114,108 compared to $ 59,651 for the nine months ended September 30, 2024, an increase of $54,457. 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 nine months ended September 30, 2025, were $182,407 compared to $276,371 for the nine months ended September 30, 2024, a decrease of $93,964. During the nine months ended September 30, 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 nine months ended September 30, 2025.
35
Office and Administrative Expenses
Office and administration expenses for the nine months ended September 30, 2025, were $1,255,413, compared to $447,874 for the nine months ended September 30, 2024, an increase of $807,539. 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 subsidiaries, AGA and Pacific Sun contributed $164,548 to office and administrative expenses since the acquisition.
Consulting Fees
Consulting fees for the nine months ended September 30, 2025, were $1,367,005, compared to $784,420 for the nine months ended September 30, 2024, an increase of $582,585. 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 $616,800 (2024 – $20,000), 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 nine months ended September 30, 2025, were $939,754, compared to $266,433 for the nine months ended September 30, 2024, an increase of $673,321. Professional fees comprise 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 nine months ended September 30, 2025 compared to the nine months ended September 30, 2024.
Investor Relations
Investor relations expenses for the nine months ended September 30, 2025, were $161,157, compared to $134,427 for the nine months ended September 30, 2024, an increase of $26,730. The increase is primarily attributable to an increase in public relations and media coverage expenses during the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024.
Repairs and Maintenance
Repairs and maintenance expenses for the nine months ended September 30, 2025, were $312,579, with no comparable expense in the nine months ended September 30, 2024. Following the acquisition of AGA, 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 nine months ended September 30, 2025, amounted to a net loss of $362,176, compared to net loss of $317,054 for the nine months ended September 30, 2024, representing an unfavorable variance of $45,122. The variance was primarily driven by a realized loss on investments of $397,365 in the nine months ended September 30, 2025, whereas no such losses were recognized in the prior period. Additionally, the comparative period included a $367,277 fair value gain on derivative liabilities, which did not recur in the period. Partially offsetting these declines, the Company recognized a $129,613 gain on the termination of an intangible asset, an unrealized gain of $8,438 on investments and interest income of $89,789, compared to only $245 in the prior year. Interest expense and finance cost also declined to $207,356 from $684,576, reflecting lower financing cost during the nine months ended September 30, 2025.
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Comparison of the three months ended September 30, 2025 to the three months ended September 30, 2024.
In January 2025, the Company sold its skincare business, which had previously contributed to the financial results of the Company. The following table provides certain selected financial information for continuing operations for the periods presented and does not include activity from the skincare business of the Company:
| Three Months Ended September 30, 2025 | Three Months Ended September 30, 2024 | Change | ||||||||||
| Revenue | $ | 285,948 | $ | - | $ | 285,948 | ||||||
| Cost of goods sold | $ | 207,918 | $ | - | $ | 207,918 | ||||||
| Gross profit | $ | 78,030 | $ | - | $ | 78,030 | ||||||
| Marketing and Promotion | $ | 64,484 | $ | 11,258 | $ | 53,226 | ||||||
| Consulting Fees | $ | 621,103 | $ | 226,104 | $ | 394,999 | ||||||
| Office and Administration | $ | 726,543 | $ | 167,074 | $ | 559,469 | ||||||
| Professional Fees | $ | 389,111 | $ | 174,437 | $ | 214,674 | ||||||
| Investor Relations | $ | 44,380 | $ | 36,862 | $ | 7,518 | ||||||
| Research and Development | $ | 15,000 | $ | 4,098 | $ | 10,902 | ||||||
| Repairs and maintenance | $ | 312,579 | $ | - | $ | 312,579 | ||||||
| Total operating expenses | $ | 2,276,931 | $ | 625,615 | $ | 1,651,316 | ||||||
| Other income (expense)1 | $ | (417,117 | ) | $ | (576,238 | ) | $ | 159,121 | ||||
| Net loss from continuing operation | $ | (2,616,018 | ) | $ | (1,201,853 | ) | $ | (1,414,165 | ) | |||
| Basic and dilutive loss per common share- continuing operations | $ | (4.950 | ) | $ | (265.779 | ) | $ | 260.829 | ||||
| Weighted average number of shares outstanding – basic and diluted | 528,472 | 4,522 | ||||||||||
| 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, gain on the termination of the intangible asset and fair value gain/loss on derivative liability. |
Revenue, Cost of Revenue and Gross Margin
Refer to the analysis under the nine months ended September 30, 2025 above.
Research and Development Expenses
Research and development expenses for the three months ended September 30, 2025, were $15,000 compared to $4,098 for the three months ended September 30, 2024, an increase of $10,902. Research and development related to the Company’s spending on clinical validation studies. The increase in research and development is 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 three months ended September 30, 2025, were $64,484 compared to $11,258 for the three months ended September 30, 2024, an increase of $53,226, which is primarily attributable to increased marketing efforts to drive sales at the newly acquired businesses. AGA and Pacific Sun contributed $38,894 to marketing and promotion expenses since the acquisition.
Office and Administrative Expenses
Office and Administration expenses for the three months ended September 30, 2025, were $726,543, compared to $167,074 for the three months ended September 30, 2024, an increase of $559,469. 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 subsidiaries, AGA and Pacific Sun contributed $164,548 to office and administrative expenses since the acquisition.
37
Consulting Fees
Consulting fees for the three months ended September 30, 2025, were $621,103, compared to $226,104 for the three months ended September 30, 2024, an increase of $394,999. 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 $316,800 (2024 – $nil), representing contractual bonuses approved by the Board of Directors and the Compensation Committee. The remaining increase was driven by higher fees under the GB Capital and Northstrive agreements, as well as an increase in external consulting services to support due diligence and post-acquisition integration.
Professional Fees
Professional fees for the three months ended September 30, 2025, totaled $389,111, an increase of $214,674 compared to $174,437 for the same period in 2024. Professional fees comprise of legal, audit and accounting services. The increase during 2025, is primarily due to an increase in audit, legal and accounting services given the corporate restructuring, business acquisition due diligence, and financing efforts conducted compared to 2024.
Investor Relations
Investor relations expenses for the three months ended September 30, 2025, were $44,380, compared to $36,862 for the three months ended September 30, 2024, representing an increase of $7,518. The increase is primarily attributable to an increase in public relations and media coverage expenses during the current quarter.
Other income (expense)
Other income (expense) for the three months ended September 30, 2025, resulted in net loss of $417,117, compared to the net loss of $576,238 for the same period in 2024, representing a favorable variance of $159,121. The improvement was primarily driven by a decrease in interest expense and finance cost from $641,807 during the three months ended September 30, 2024, to $196,880 during the same period in 2025, an improvement of $444,927. This was partly offset by realized and unrealized losses on investments recorded during the three months ended September 30, 2025 of $256,332.
Liquidity and Capital Resources
The accompanying condensed 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 September 30, 2025, we had cash of $7,700,562 and as of December 31, 2024, we had cash of $3,984,453. The increase between December 31, 2024 and September 30, 2025 was attributable to cash provided by financing activities exceeding cash used in operating and investing activities. As of September 30, 2025 and December 31, 2024, the Company had a net working capital of $4,310,939 and $4,251,867, respectively, and has an accumulated deficit of $18,034,757 and $13,269,627, respectively. Furthermore, for the nine months ended September 30, 2025, and 2024, the Company incurred a net loss of $4,765,130 and $4,310,998, respectively and used $4,183,881 and $3,486,435, respectively of cash flows for operating activities. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern. The accompanying condensed 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. The Company believes it has sufficient funds to continue current operations for at least the next 12 months from the issuance date of the unaudited condensed consolidated financial statements. The Company may seek to raise additional capital to accelerate the execution of management’s plans as disclosed above.
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.
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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.
The following table provides selected financial data as of September 30, 2025, and December 31, 2024, respectively (excluding assets and liabilities held for sale).
| September 30, 2025 | December 31, 2024 | Change | ||||||||||
| Current assets | $ | 9,772,631 | $ | 4,858,193 | $ | 4,914,438 | ||||||
| Current liabilities | $ | 5,461,692 | $ | 1,250,218 | $ | 4,211,474 | ||||||
| Working capital | $ | 4,310,939 | $ | 3,607,975 | $ | 702,964 | ||||||
The following table summarizes our cash flows from operating, investing and financing activities from continuing operations:
| Nine Months Ended September 30, 2025 | Nine Months Ended September 30, 2024 | Change | ||||||||||
| Cash used in operating activities | $ | (4,030,812 | ) | $ | (1,244,723 | ) | $ | (2,786,089 | ) | |||
| Cash used in investing activities | $ | (2,216,512 | ) | $ | (162,320 | ) | $ | (2,054,192 | ) | |||
| Cash provided by financing activities | $ | 10,116,739 | $ | 6,757,501 | $ | 3,359,238 | ||||||
Cash Flow from Operating Activities (continuing operations)
For the nine months ended September 30, 2025, net cash flows used in operating activities was $4,030,812 compared to $1,244,723 used during the nine months ended September 30, 2024, primarily due to net loss from continuing operations and timing of settlement of assets and liabilities.
Cash Flows from Investing Activities (continuing operations)
During the nine months ended September 30, 2025, the Company used $2,216,512 in investing activities, compared to $162,320 during the same period in 2024. The increase primarily reflects strategic investments and acquisition activity undertaken in 2025. The Company invested $1,564,059 in publicly traded securities, advanced $127,300 under a short-term promissory note, and completed the acquisitions of AGA and Pacific Sun for net cash of $1,669,787. These outflows were partially offset by $1,246,228 in proceeds from the sale of investments. The Company also paid $6,000 for intangible assets and $95,594 for capital asset purchases, compared to $162,320 and $nil, respectively, during the nine months ended September 30, 2024.
Cash Flows from Financing Activities
During the nine months ended September 30, 2025, we had cash flow provided by financing activities of $10,116,739 compared to $6,757,501 in the nine months ended September 30, 2024. During the nine months ended September 30, 2025, the Company raised $1,245,306 through the issuance of common stock and prefunded warrants, $1,698,058 through the exercise of Series A warrants, $1,672,104 through the sale of shares of common stock pursuant to that certain At-the-Market Sales Issuance Agreement, $1,511,443 through the exercise of replacement warrants issued on January 27, 2025 and $3,990,007 through the initial pre-paid purchase under the Company’s equity purchase facility with a certain investor.
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Critical Accounting Policies and Significant Judgments and Estimates
This discussion and analysis of our financial condition and results of operations is based on our condensed 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 condensed 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.
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 nine months ended September 30, 2025, the Company completed two acquisitions—Pacific Sun Packaging Inc. and AGA Precision Systems LLC—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, revenue from CNC machining and precision component manufacturing is recognized over time using an input method based on labor hours or materials consumed, as the Company’s performance creates an asset that has no alternative use and there is an enforceable right to payment for performance completed to date.
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 nine months ended September 30, 2025 and 2024, the Company recorded $(29,817) and $57,521, respectively, in share-based compensation expense, of which $49,785 and ($79,600), and $67,942 and $(10,421), respectively is included in office and administration and discontinued operations, respectively. Within discontinued operations for the nine months ended September 30, 2025 and 2024, ($73,768) and ($5,832), and $(13,964) and $3,543, 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 nine months ended September 30, 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.
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.
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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 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Pursuant to Item 305(e) of Regulation S-K (§ 229.305(e)), the Company is not required to provide the information required by this Item as it is a “smaller reporting company,” as defined by Rule 229.10(f)(1).
ITEM 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act at the end of the period covered by this Quarterly Report.
Based on this evaluation, the Chief Executive Officer and Chief Financial Officer concluded that, as of end of the period covered by this Quarterly Report, our disclosure controls and procedures (as defined in § 240.13a-15(e) or 240.15d-15(e) of Regulation S-K) were effective to provide reasonable assurance that the information required to be disclosed by us in the reports we file or submit 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 (i) is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosures and (2) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.
We recognize that any controls system, no matter how well designed and operated, can provide only reasonable assurance of achieving its objectives, and our management necessarily applies its judgment in evaluating the benefits of possible controls and procedures relative to their costs.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting during the period covered by this Quarterly Report that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act).
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PART II – OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
We are not currently a party to any pending legal proceedings that we believe will have a material adverse effect on our business or financial conditions. We may, however, be subject to various claims and legal actions arising in the ordinary course of business from time to time.
ITEM 1A. RISK FACTORS
As a smaller reporting company, we are not required to make disclosures under this item.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
(a) There have been no sales of unregistered equity securities which took place in the fiscal quarter beginning on July 1, 2025 to September 30, 2025 that we have not previously disclosed in a Current Report on Form 8-K filed with the U.S. Securities and Exchange Commission.
(b) Not applicable.
(c) There were no repurchases of our Common Stock in the fiscal quarter ended September 30, 2025.
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ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
ITEM 5.
(a) Not applicable.
(b) Not applicable.
(c) Not applicable.
Item 6. Exhibits
The following exhibits are filed as part of, or incorporated by reference into, this Quarterly Report.
EXHIBIT INDEX
| # | Management contract or compensatory plan. |
| * | The schedules, exhibits or similar attachments have been omitted from this filing pursuant to Item 601(b)(2) of Regulation S-K. The Company will furnish copies of any schedules, exhibits, or similar attachments to the SEC upon request. Certain portions of this exhibit have been redacted. |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| PMGC Holdings Inc. | ||
| Date: November 14, 2025 | By: | /s/ Graydon Bensler |
| Name: | Graydon Bensler | |
| Title: | Chief Executive Officer and Chief Financial Officer | |
| (Principal Executive, Accounting and Financial Officer) | ||
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Exhibit 10.2
PORTIONS OF THIS EXHIBIT HAVE BEEN REDACTED BECAUSE IT IS NOT MATERIAL AND OF A TYPE THAT PMGC HOLDINGS INC. TREATS AS PRIVATE OR CONFIDENTIAL. SUCH REDACTED PORTIONS ARE INDICATED WITH “[***].”
STOCK PURCHASE AGREEMENT
between
[***]
and
PMGC Holdings Inc.
dated as of
July 3, 2025
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (this “Agreement”), dated as of July 3, 2025, is entered into by and among Pacific Sun Packaging, Inc., a California corporation (the “Company”), [***], the sole owner of the Company (“Seller”), and PMGC Holdings Inc., a Nevada corporation (“Buyer”). Capitalized terms used in this Agreement have the meanings given to such terms herein.
RECITALS
WHEREAS, Seller previously owned all the issued and outstanding 100 shares of common stock, $1,000 par value (the “Company Shares”), of the Company; and
WHEREAS, pursuant to a Stock Purchase Agreement dated as of May 30, 2025 (the “First SPA”) entered into by and among the Company, Seller and Evan Croner (the “Initial Purchaser”), the Initial Purchaser acquired 10 shares of the issued and outstanding Company Shares of the Company owned by the Seller, representing 10% of the issued and outstanding Company Shares; and
WHEREAS, the First SPA granted Initial Purchaser an option to purchase from the Seller the remaining 90 Company Shares owned by the Seller (the “Shares”), representing 90% of the issued and outstanding Company Shares (the “Option”), which Option has been exercised by the Buyer; and
WHEREAS, the Initial Purchaser assigned his rights to the Option to Buyer in accordance with the terms of the First SPA; and
WHEREAS, Seller wishes to sell to Buyer, and Buyer wishes to purchase from Seller, the Shares, subject to the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants and agreements hereinafter set forth and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
Purchase and sale
Section 1.01 Purchase and Sale. Subject to the terms and conditions set forth herein, at the Closing, Seller shall sell to Buyer, and Buyer shall purchase from Seller, the Shares, free and clear of any mortgage, pledge, lien, charge, security interest, claim, community property interest, option, equitable interest, restriction of any kind (including any restriction on use, voting, transfer, receipt of income, or exercise of any other ownership attribute), or other encumbrance) (each, an “Encumbrance”).
Section 1.02 Purchase Price. The aggregate purchase price for the Shares (the “Purchase Price”) is (a) $1,020,700 in cash payable at Closing (the “Closing Purchase Price”) plus (b) an earnout payment of up to $250,000 (the “Earnout Payment”) payable as set forth in Section 1.03 below. Buyer shall pay the Closing Purchase Price to Seller at the Closing in cash, by wire transfer of immediately available funds in accordance with the wire transfer instructions set forth in Section 1.02 of the Disclosure Schedules. The term “Disclosure Schedules” means the disclosure schedules, attached hereto and made a part of this Agreement, delivered by Seller concurrently with the execution, closing, and delivery of this Agreement.
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Section 1.03 Earnout. In the event that (i) the Company achieves gross revenue of at least $1,145,915 (the “Target Amount”) during the 12-month period following the Closing (the “Earnout Period”), and (ii) the Company is able to fund its normal and customary operating expenses during the Earnout Period without incurring any debt in order to fund its operations, then the Buyer shall pay the Seller (or any designee of Seller) the Earnout Payment in cash, payable within 45 days after the end of the Earnout Period. In the event that the Company has not achieved either or both of the conditions set forth in (i) and (ii) above, then the Buyer shall notify the Seller of such failure in writing within 45 days of the end of the Earnout Period, and provide the Seller with reasonable documentation with respect thereto. To the extent that the Company’s gross revenues are less than the Target Amount but greater than $458,366 during the Earnout Period, the Earnout Payment shall be reduced in proportion to the gross revenues actually achieved; provided, however, that if the Company’s gross revenues during the Earnout Period are $458,366 or less, no Earnout Payment shall be due. Absent manifest error, the Buyer’s determination of the Earnout Payment shall be binding.
Section 1.04 Withholding Taxes. Buyer is entitled to deduct and withhold from the Purchase Price all Taxes that Buyer may be required to deduct and withhold under any provision of Tax Law. All such withheld amounts shall be treated as delivered to Seller hereunder.
ARTICLE II
CLOSING
Section 2.01 Closing. The closing of the transactions contemplated by this Agreement (the “Closing”) shall take place simultaneously with the execution of this Agreement on the date of this Agreement (the “Closing Date”) at the offices of Sichenzia Ross Ference Carmel LLP, 1185 Avenue of the Americas, 31st Floor, New York, NY 10036, or remotely by exchange of documents and signatures (or their electronic counterparts).
Section 2.02 Seller Closing Deliverables. At the Closing, Seller shall deliver to Buyer the following:
(a) Share certificates evidencing the Shares, free and clear of all Encumbrances, duly endorsed in blank or accompanied by stock powers or other instruments of transfer duly executed in blank;
(b) A certificate of the Secretary (or other officer acting in such capacity) of the Company certifying: (i) that attached thereto are true and complete copies of all resolutions of the board of directors of the Company and its stockholders authorizing the execution, delivery, and performance of this Agreement, and any other agreement, document or instrument entered into or delivered in connection with the transactions contemplated in this Agreement (collectively, the “Transaction Documents”) to which the Company is a party and the Closing, and that such resolutions are in full force and effect; (ii) the names, titles, and signatures of the officers of the Company authorized to all of the Transaction Documents; and (iii) that attached thereto are true and complete copies of the governing documents of the Company, including any amendments or restatements thereof, and that such governing documents are in full force and effect;
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(c) Resignations of the directors and officers of the Company, effective as of the Closing Date; and
(d) A good standing certificate (or its equivalent) for the Company from the secretary of state or similar Governmental Authority of the jurisdiction in which the Company is organized and each jurisdiction where the Company is required to be qualified, registered, or authorized to do business. The term “Governmental Authority” means any federal, state, local, or foreign government or political subdivision thereof, or any agency or instrumentality of such government or political subdivision, or any arbitrator, court, or tribunal of competent jurisdiction.
Section 2.03 Buyer’s Deliveries. At the Closing, Buyer shall deliver the following to Seller:
(a) The Closing Purchase Price; and
(b) A certificate of the Secretary (or other officer) of Buyer certifying: (i) that attached thereto are true and complete copies of all resolutions of the board of directors of Buyer authorizing the execution, delivery, and performance of this Agreement and the Transaction Documents to which it is a party and the consummation of the transactions contemplated hereby and thereby, and that such resolutions are in full force and effect; and (ii) the names, titles, and signatures of the officers of Buyer authorized to sign this Agreement and the other Transaction Documents to which it is a party.
Section 2.04 Additional Closing Deliveries/Conditions to Closing. As a condition to Closing, the following additional documents shall be delivered to the Buyer:
(a) An offer letter to be executed between [***] and the Buyer in the form attached hereto as Exhibit B.
ARTICLE III
Representations and warranties of THE SELLER AND THE COMPANY
The Company and the Seller, jointly and severally, represent and warrant to Buyer that the statements contained in this ARTICLE III are true and correct as of the date hereof. For purposes of this ARTICLE III, “Seller’s knowledge,” “knowledge of Seller,” and any similar phrases shall mean the actual knowledge of any director or officer of the Company, after due inquiry.
Section 3.01 Organization and Authority of the Company. The Company is a corporation duly organized, validly existing, and in good standing under the Laws (as defined in Section 4.04) of California. The Company and the Seller each has full power and authority to enter into this Agreement and the other Transaction Documents to which Company and the Seller is a party, to carry out its obligations hereunder and thereunder, and to consummate the transactions contemplated hereby and thereby. The execution and delivery by the Company and by Seller of this Agreement and any other Transaction Document to which the Company and Seller is a party, the performance by the Company and Seller of its respective obligations hereunder and thereunder, and the consummation by the Company and Seller of the transactions contemplated hereby and thereby have been duly authorized by all requisite corporate action on the part of the Company and Seller. This Agreement and each Transaction Document to which Company and Seller is a party constitute legal, valid, and binding obligations of the Company and Seller enforceable against Company and Seller, respectively, in accordance with their respective terms, except as may be limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally.
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Section 3.02 Shares. All of the Shares are owned of record and beneficially by Seller, free and clear of all Encumbrances. Upon the transfer, assignment, and delivery of the Shares and payment therefor in accordance with the terms of this Agreement, Buyer shall own all of the Shares, free and clear of all Encumbrances.
Section 3.03 Capitalization.
(a) The authorized shares of the Company consist of 5,000 shares of common stock, $1,000 par value per share, of which 5,000 shares are issued and outstanding and constitute the Shares. All of the Shares have been duly authorized, are validly issued, fully paid, and nonassessable.
(b) All of the Shares were issued in compliance with applicable Laws. None of the Shares were issued in violation of any agreement or commitment to which Seller or the Company is a party or is subject to or in violation of any preemptive or similar rights of any individual, corporation, partnership, joint venture, limited liability company, Governmental Authority, unincorporated organization, trust, association, or other entity (each, a “Person”).
(c) There are no outstanding or authorized options, warrants, convertible securities, stock appreciation, phantom stock, profit participation, or other rights, agreements, or commitments relating to the shares of the Company or obligating Seller or the Company to issue or sell any shares of, or any other interest in, the Company. There are no voting trusts, stockholder agreements, proxies, or other agreements in effect with respect to the voting or transfer of any of the Shares.
Section 3.04 No Subsidiaries. The Company does not have, or have the right to acquire, an ownership interest in any other Person.
Section 3.05 No Conflicts or Consents. The execution, delivery, and performance by the Company and Seller of this Agreement and the other Transaction Documents to which it is a party, and the consummation of the transactions contemplated hereby and thereby, do not and will not: (a) violate or conflict with any provision of the certificate of incorporation, by-laws, or other governing documents of Seller or the Company; (b) violate or conflict with any provision of any statute, law, ordinance, regulation, rule, code, treaty, or other requirement of any Governmental Authority (collectively, “Law”) or any order, writ, judgment, injunction, decree, determination, penalty, or award entered by or with any Governmental Authority (“Governmental Order”) applicable to Seller or the Company; (c) require the consent, notice, or filing with or other action by any Person or require any Permit, license, or Governmental Order; (d) violate or conflict with, result in the acceleration of, or create in any party the right to accelerate, terminate, or modify any contract, lease, deed, mortgage, license, instrument, note, indenture, joint venture, or any other agreement, commitment, or legally binding arrangement, whether written or oral (collectively, “Contracts”), to which Seller or the Company is a party or by which Seller or the Company is bound or to which any of their respective properties and assets are subject; or (e) result in the creation or imposition of any Encumbrance on any properties or assets of the Company.
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Section 3.06 Financial Statements. Complete copies of: (i) the Company’s audited financial statements consisting of the balance sheet of the Company as at December 31, 2024 and December 31, 2023, and the related statements of income and retained earnings, stockholders’ equity, and cash flow for the years then ended; and (ii) unaudited financial statements for each fiscal quarter of 2025 of the Company prior to the Closing Date (the financial statements in clauses (i) and (ii) of this Section 3.06, collectively, the “Financial Statements”) have been or will be delivered to Buyer prior to the Closing Date. The Financial Statements have been prepared in accordance with generally accepted accounting principles in effect in the United States from time to time (“GAAP”), applied on a consistent basis throughout the period involved. The Financial Statements are based on the books and records of the Company and fairly present the financial condition of the Company as of the respective dates they were prepared and the results of the operations of the Company for the periods indicated. The balance sheet of the Company as of December 31, 2024 is referred to herein as the “Balance Sheet” and the date thereof as the “Balance Sheet Date.” The Company maintains a standard system of accounting established and administered in accordance with GAAP.
Section 3.07 Undisclosed Liabilities. The Company has no liabilities, obligations, or commitments of any nature whatsoever, whether asserted, known, absolute, accrued, matured, or otherwise (collectively, “Liabilities”), except: (a) those which are adequately reflected or reserved against in the Balance Sheet as of the Balance Sheet Date; and (b) those which have been incurred in the ordinary course of business consistent with past practice since the Balance Sheet Date and which are not, individually or in the aggregate, material in amount.
Section 3.08 Absence of Certain Changes, Events, and Conditions. Since the Balance Sheet Date, the Company has been operating in the ordinary course of business consistent with past practice and there has not been, with respect to the Company, any change, event, condition, or development that is, or could reasonably be expected to be, individually or in the aggregate, to have a material adverse effect on the business, results of operations, condition (financial or otherwise), or assets of the Company.
Section 3.09 Material Contracts.
(a) Section 3.09(a) of the Disclosure Schedules lists each Contract that is material to the Company (such Contracts, together with all Contracts concerning the occupancy, management, or operation of any Real Property (as defined in Section 3.10(a)), being “Material Contracts”), including the following:
(i) each Contract of the Company involving aggregate consideration in excess of $50,000 and which, in each case, cannot be cancelled by the Company without penalty or without more than 60 days’ notice;
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(ii) all Contracts that provide for the indemnification by the Company of any Person or the assumption of any Tax (as defined in Section 3.19(a)), environmental, or other Liability of any Person;
(iii) all Contracts relating to Intellectual Property (as defined in Section Section 3.11(a)), including all licenses, sublicenses, settlements, coexistence agreements, covenants not to sue, and permissions;
(iv) except for Contracts relating to trade payables, all Contracts relating to indebtedness (including, without limitation, guarantees) of the Company; and
(v) all Contracts that limit or purport to limit the ability of the Company to compete in any line of business or with any Person or in any geographic area or during any period of time.
(b) Each Material Contract is valid and binding on the Company in accordance with its terms and is in full force and effect. None of the Company or, to Seller’s knowledge, any other party thereto is in breach of or default under (or is alleged to be in breach of or default under), or has provided or received any notice of any intention to terminate, any Material Contract. Complete and correct copies of each Material Contract (including all modifications, amendments, and supplements thereto and waivers thereunder) have been made available to Buyer.
Section 3.10 Real Property; Title to Assets.
(a) Section 3.10(a) of the Disclosure Schedules lists all real property in which the Company has an ownership or leasehold (or subleasehold) interest (together with all buildings, structures, and improvements located thereon, the “Real Property”), including: (i) the street address of each parcel of Real Property; (ii) for Real Property that is leased or subleased by the Company, the landlord under the lease, the rental amount currently being paid, and the expiration of the term of such lease or sublease, and any termination or renewal rights of any party to the lease; and (iii) the current use of each parcel of Real Property. Seller has delivered or made available to Buyer true, correct, and complete copies of all Contracts, title insurance policies, and surveys relating to the Real Property.
(b) The Company has good and valid (and, in the case of owned Real Property, good and indefeasible fee simple) title to, or a valid leasehold interest in, all Real Property and personal property and other assets reflected in the Financial Statements or acquired after the Balance Sheet Date (other than properties and assets sold or otherwise disposed of in the ordinary course of business consistent with past practice since the Balance Sheet Date). All Real Property and such personal property and other assets (including leasehold interests) are free and clear of Encumbrances except for those items set forth in Section 4.09(b) of the Disclosure Schedules.
(c) The Company is not a sublessor or grantor under any sublease or other instrument granting to any other Person any right to possess, lease, occupy, or use any leased Real Property. The use of the Real Property in the conduct of the Company’s business does not violate in any material respect any Law, covenant, condition, restriction, easement, license, permit, or Contract and no material improvements constituting a part of the Real Property encroach on real property owned or leased by a Person other than the Company.
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Section 3.11 Intellectual Property.
(a) The term “Intellectual Property” means any and all of the following in any jurisdiction throughout the world: (i) issued patents and patent applications; (ii) trademarks, service marks, trade names, and other similar indicia of source or origin, together with the goodwill connected with the use of and symbolized by, and all registrations, applications for registration, and renewals of, any of the foregoing; (iii) copyrights, including all applications and registrations; (iv) trade secrets, know-how, inventions (whether or not patentable), technology, and other confidential and proprietary information and all rights therein; (v) internet domain names and social media accounts and pages; and (vi) other intellectual or industrial property and related proprietary rights, interests, and protections.
(b) Section 3.11(b) of the Disclosure Schedules lists all issued patents, registered trademarks, domain names and copyrights, and pending applications for any of the foregoing and all material unregistered Intellectual Property that are owned by the Company (the “Company IP Registrations”). The Company owns or has the valid and enforceable right to use all Intellectual Property used in or necessary for the conduct of the Company’s business as currently conducted (the “Company Intellectual Property”), free and clear of all Encumbrances. All of the Company Intellectual Property is valid and enforceable, and all Company IP Registrations are subsisting and in full force and effect. The Company has taken all necessary steps to maintain and enforce the Company Intellectual Property.
(c) The conduct of the Company’s business, as currently and formerly conducted, has not infringed, misappropriated, or otherwise violated the Intellectual Property or other rights of any Person. No Person has infringed, misappropriated, or otherwise violated any Company Intellectual Property.
Section 3.12 Material Customers and Suppliers.
(a) Section 3.12(a) of the Disclosure Schedules sets forth each customer who has paid aggregate consideration to the Company for goods or services rendered in an amount greater than or equal to $75,000 for each of the two (2) most recent fiscal years (collectively, the “Material Customers”). The Company has not received any notice, and has no reason to believe, that any of its Material Customers has ceased, or intends to cease after the Closing, to purchase or use its goods or services or to otherwise terminate or materially reduce its relationship with the Company.
(b) Section 3.12(b) of the Disclosure Schedules sets forth each supplier to whom the Company has paid consideration for goods or services rendered in an amount greater than or equal to $40,000 for each of the two (2) most recent fiscal years (collectively, the “Material Suppliers”). The Company has not received any notice, and has no reason to believe, that any of its Material Suppliers has ceased, or intends to cease, to supply goods or services to the Company or to otherwise terminate or materially reduce its relationship with the Company.
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Section 3.13 Insurance. Section 3.13 of the Disclosure Schedules sets forth a true and complete list of all current policies or binders of insurance maintained by Seller or its Affiliates (including the Company) and relating to the assets, business, operations, employees, officers, and directors of the Company (collectively, the “Insurance Policies”). Such Insurance Policies: (a) are in full force and effect; (b) are valid and binding in accordance with their terms; (c) to Seller’s knowledge, are provided by carriers who are financially solvent; and (d) have not been subject to any lapse in coverage. Neither Seller nor any of its Affiliates (including the Company) has received any written notice of cancellation of, premium increase with respect to, or alteration of coverage under, any of such Insurance Policies. All premiums due on such Insurance Policies have been paid. None of Seller or any of its Affiliates (including the Company) is in default under, or has otherwise failed to comply with, in any material respect, any provision contained in any Insurance Policy. The Insurance Policies are of the type and in the amounts customarily carried by Persons conducting a business similar to the Company and are sufficient for compliance with all applicable Laws and Contracts to which the Company is a party or by which it is bound. For purposes of this Agreement: (x) “Affiliate” of a Person means any other Person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, such Person; and (y) the term “control” (including the terms “controlled by” and “under common control with”) means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities or other ownership interests, by contract, or otherwise.
Section 3.14 Legal Proceedings; Governmental Orders.
(a) There are no claims, actions, causes of action, demands, lawsuits, arbitrations, inquiries, audits, notices of violation, proceedings, litigation, citations, summons, subpoenas, or investigations of any nature, whether at law or in equity (collectively, “Actions”) pending or, to Seller’s knowledge, threatened against or by the Company, Seller, or any Affiliate of Seller: (i) relating to or affecting the Company or any of the Company’s properties or assets; or (ii) that challenge or seek to prevent, enjoin, or otherwise delay the transactions contemplated by this Agreement. To Seller’s knowledge, no event has occurred or circumstances exist that may give rise to, or serve as a basis for, any such Action.
(b) There are no outstanding, and the Company is in compliance with all, Governmental Orders against, relating to, or affecting the Company or any of its properties or assets.
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Section 3.15 Compliance with Laws; Permits.
(a) The Company has complied, and is now complying, with all Laws applicable to it or its business, properties, or assets.
(b) All permits, licenses, franchises, approvals, registrations, certificates, variances, and similar rights obtained, or required to be obtained, from Governmental Authorities (collectively, “Permits”) in order for the Company to conduct its business, including, without limitation, owning or operating any of the Real Property, have been obtained and are valid and in full force and effect. Section 3.15(b) of the Disclosure Schedules lists all current Permits issued to the Company and no event has occurred that would reasonably be expected to result in the revocation or lapse of any such Permit.
Section 3.16 Environmental Matters.
(a) The terms: (i) “Environmental Laws” means all Laws, now or hereafter in effect, in each case as amended or supplemented from time to time, relating to the regulation and protection of human health, safety, the environment, and natural resources, including any federal, state, or local transfer of ownership notification or approval statutes; and (ii) “Hazardous Substances” means: (A) “hazardous materials,” “hazardous wastes,” “hazardous substances,” “industrial wastes,” or “toxic pollutants,” as such terms are defined under any Environmental Laws; (B) any other hazardous or radioactive substance, contaminant, or waste; and (C) any other substance with respect to which any Environmental Law or Governmental Authority requires environmental investigation, regulation, monitoring, or remediation.
(b) The Company has complied, and is now complying, with all Environmental Laws. Neither the Company nor Seller has received notice from any Person that the Company, its business or assets, or any real property currently or formerly owned, leased, or used by the Company is or may be in violation of any Environmental Law or any applicable Law regarding Hazardous Substances.
(c) To Seller’s knowledge, there has not been any spill, leak, discharge, injection, escape, leaching, dumping, disposal, or release of any kind of any Hazardous Substances in violation of any Environmental Law: (i) with respect to the business or assets of the Company; or (ii) at, from, in, adjacent to, or on any real property currently or formerly owned, leased, or used by the Company. There are no Hazardous Substances in, on, about, or migrating to any real property currently or formerly owned, leased, or used by the Company, and such real property is not affected in any way by any Hazardous Substances.
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Section 3.17 Employee Benefit Matters.
Section 3.17(a) of the Disclosure Schedules contains a true and complete list of each “employee benefit plan” as defined in Section 3(3) of the Employee Retirement Income Security Act of 1974 (as amended, and including the regulations thereunder, “ERISA”), whether or not written and whether or not subject to ERISA, and each supplemental retirement, compensation, employment, consulting, profit-sharing, deferred compensation, incentive, bonus, equity, change in control, retention, severance, salary continuation, and other similar agreement, plan, policy, program, practice, or arrangement which is or has been established, maintained, sponsored, or contributed to by the Company or under which the Company has or may have any Liability (each, a “Benefit Plan”).
(a) For each Benefit Plan, Seller has made available to Buyer accurate, current, and complete copies of each of the following: (i) the plan document with all amendments, or if not reduced to writing, a written summary of all material plan terms; (ii) any written contracts and arrangements related to such Benefit Plan, including trust agreements or other funding arrangements, and insurance policies, certificates, and contracts; (iii) in the case of a Benefit Plan intended to be qualified under Section 401(a) of the Code, the most recent favorable determination or national office approval letter issued by the Internal Revenue Service and any legal opinions issued thereafter with respect to the Benefit Plan’s continued qualification; (iv) the most recent Form 5500 filed with respect to such Benefit Plan; and (v) any material notices, audits, inquiries, or other correspondence from, or filings with, any Governmental Authority relating to the Benefit Plan.
(b) Each Benefit Plan and related trust has been established, administered, and maintained in accordance with its terms and in compliance with all applicable Laws (including ERISA and the Code). Nothing has occurred with respect to any Benefit Plan that has subjected or could reasonably be expected to subject the Company or, with respect to any period on or after the Closing Date, Buyer or any of its Affiliates, to a civil action, penalty, surcharge, or Tax under applicable Law or which would jeopardize the previously-determined qualified status of any Benefit Plan. All benefits, contributions, and premiums relating to each Benefit Plan have been timely paid in accordance with the terms of such Benefit Plan and all applicable Laws and accounting principles. Benefits accrued under any unfunded Benefit Plan have been paid, accrued, or adequately reserved for to the extent required by GAAP.
(c) The Company has not incurred and does not reasonably expect to incur: (i) any Liability under Title I or Title IV of ERISA, any related provisions of the Code, or applicable Law relating to any Benefit Plan; or (ii) any Liability to the Pension Benefit Guaranty Corporation. No complete or partial termination of any Benefit Plan has occurred or is expected to occur.
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(d) The Company has not now or at any time since its inception contributed to, sponsored, or maintained: (i) any “multiemployer plan” as defined in Section 3(37) of ERISA; (ii) any “single-employer plan” as defined in Section 4001(a)(15) of ERISA; (iii) any “multiple employer plan” as defined in Section 413(c) of the Code; (iv) any “multiple employer welfare arrangement” as defined in Section 3(40) of ERISA; (v) a leveraged employee stock ownership plan described in Section 4975(e)(7) of the Code; or (vi) any other Benefit Plan subject to required minimum funding requirements.
(e) Other than as required under Sections 601 to 608 of ERISA or other applicable Law, no Benefit Plan provides post-termination or retiree welfare benefits to any individual for any reason.
(f) Neither the execution of this Agreement nor any of the transactions contemplated by this Agreement will, either alone or in combination with any other event: (i) entitle any current or former director, officer, employee, independent contractor, or consultant of the Company to any severance pay, increase in severance pay, or other payment; (ii) accelerate the time of payment, funding, or vesting, or increase the amount of compensation (including stock-based compensation) due to any such individual; (iii) limit or restrict the right of the Company to amend or terminate any Benefit Plan; (iv) increase the amount payable under any Benefit Plan; (v) result in any “excess parachute payments” within the meaning of Section 280G(b) of the Code; or (vi) require a “gross-up” or other payment to any “disqualified individual” within the meaning of Section 280G(c) of the Code.
Section 3.18 Employment Matters.
(a) Section 3.18(a) of the Disclosure Schedules lists: (i) all employees, independent contractors, and consultants of the Company; and (ii) for each individual described in clause (i), (A) the individual’s title or position, hire date, and compensation, (B) any Contracts entered into between the Company and such individual, and (C) the fringe benefits provided to each such individual. All compensation payable to all employees, independent contractors, or consultants of the Company for services performed on or prior to the Closing Date have been paid in full.
(b) The Company is not, and has not been, a party to or bound by any collective bargaining agreement or other Contract with a union or similar labor organization (collectively, “Union”), and no Union has represented or purported to represent any employee of the Company. There has never been, nor has there been any threat of, any strike, work stoppage, slowdown, picketing, or other similar labor disruption or dispute affecting the Company or any of its employees.
(c) The Company is and has been in compliance with: (i) all applicable employment Laws and agreements regarding hiring, employment, termination of employment, plant closings and mass layoffs, employment discrimination, harassment, retaliation, and reasonable accommodation, leaves of absence, terms and conditions of employment, wages and hours of work, employee classification, employee health and safety, engagement and classification of independent contractors, payroll taxes, and immigration with respect to all employees, independent contractors, and contingent workers; and (ii) all applicable Laws relating to the relations between it and any labor organization, trade union, work council, or other body representing employees of the Company.
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(d) Section 3.18(d) of the Disclosure Schedules lists all employee handbooks, employee manuals, and other policies of the Company applicable to their employees including, without limitation, vacation policies, leaves of absence, codes of conduct, expense reimbursement, etc.
Section 3.19 Taxes.
(a) All returns, declarations, reports, information returns and statements, and other documents relating to Taxes (including amended returns and claims for refund) (collectively, “Tax Returns”) required to be filed by the Company on or before the Closing Date have been timely filed. Such Tax Returns are true, correct, and complete. All Taxes due and owing by the Company (whether or not shown on any Tax Return) have been timely paid. No extensions or waivers of statutes of limitations have been given or requested with respect to any Taxes of the Company. Seller has delivered to Buyer copies of all Tax Returns and examination reports of the Company and statements of deficiencies assessed against, or agreed to by, the Company, for all Tax periods ending after December 31, 2021. The term “Taxes” means all federal, state, local, foreign, and other income, gross receipts, sales, use, production, ad valorem, transfer, franchise, registration, profits, license, lease, service, service use, withholding, payroll, employment, unemployment, estimated, excise, severance, environmental, stamp, occupation, premium, property (real or personal), real property gains, windfall profits, customs, duties, or other taxes, fees, assessments, or charges of any kind whatsoever, together with any interest, additions, or penalties with respect thereto.
(b) The Company has not been a member of an affiliated, combined, consolidated, or unitary Tax group for Tax purposes. The Company has no Liability for Taxes of any Person (other than the Company) under Treasury Regulations Section 1.1502-6 (or any corresponding provision of state, local, or foreign Law), as transferee or successor, by contract, or otherwise.
(c) There are no liens for Taxes (other than for current Taxes not yet due and payable) upon the assets of the Company.
(d) Seller is not a “foreign person” as that term is used in Treasury Regulations Section 1.1445-2. The Company is not, nor has it been, a United States real property holding corporation (as defined in Section 897(c)(2) of the Code) during the applicable period in Section 897(c)(1)(a) of the Code.
Section 3.20 Books and Records. The minute books and share record and transfer books of the Company, all of which are in the possession of the Company and have been made available to Buyer, are complete and correct.
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Section 3.21 Related Party Transactions. Except as set forth on Section 3.20 of the Disclosure Schedules, there are no Contracts or other arrangements involving the Company in which Seller, its Affiliates, or any of its or their respective directors, officers, or employees (or any immediate family members thereof) is a party, has a financial interest, or otherwise owns or leases any material asset, property, or right which is used by the Company.
Section 3.22 Brokers. Except as set forth on Section 3.22 of the Disclosure Schedules, no broker, finder, or investment banker is entitled to any brokerage, finder’s, or other fee or commission in connection with the transactions contemplated by this Agreement or any other Transaction Document based upon arrangements made by or on behalf of Seller.
Section 3.23 Full Disclosure. No representation or warranty by Seller in this Agreement and no statement contained in the Disclosure Schedules to this Agreement or any certificate or other document furnished or to be furnished to Buyer pursuant to this Agreement contains any untrue statement of a material fact, or omits to state a material fact necessary to make the statements contained therein, in light of the circumstances in which they are made, not misleading.
ARTICLE IV
Representations and warranties of buyer
Buyer represents and warrants to Seller that the statements contained in this Article V are true and correct as of the date hereof. For purposes of this Article IV, “Buyer’s knowledge,” “knowledge of Buyer,” and any similar phrases shall mean the actual or constructive knowledge of any director or officer of Buyer, after due inquiry.
Section 4.01 Organization and Authority of Buyer. Buyer is a corporation duly organized, validly existing, and in good standing under the Laws of the state of Nevada. Buyer has full corporate power and authority to enter into this Agreement and the other Transaction Documents to which Buyer is a party, to carry out its obligations hereunder and thereunder, and to consummate the transactions contemplated hereby and thereby. The execution and delivery by Buyer of this Agreement and any other Transaction Document to which Buyer is a party, the performance by Buyer of its obligations hereunder and thereunder, and the consummation by Buyer of the transactions contemplated hereby and thereby have been duly authorized by all requisite corporate action on the part of Buyer. This Agreement and each Transaction Document constitute legal, valid, and binding obligations of Buyer enforceable against Buyer in accordance with their respective terms.
Section 4.02 No Conflicts; Consents. The execution, delivery, and performance by Buyer of this Agreement and the other Transaction Documents to which it is a party, and the consummation of the transactions contemplated hereby and thereby, do not and will not: (a) violate or conflict with any provision of the Articles of Incorporation, by-laws, or other governing documents of Buyer; (b) violate or conflict with any provision of any Law or Governmental Order applicable to Buyer; or (c) require the consent, notice, declaration, or filing with or other action by any Person or require any Permit, license, or Governmental Order.
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Section 4.03 Investment Purpose. Buyer is acquiring the Shares solely for its own account for investment purposes and not with a view to, or for offer or sale in connection with, any distribution thereof or any other security related thereto within the meaning of the Securities Act of 1933, as amended (the “Securities Act”). Buyer acknowledges that Seller has not registered the offer and sale of the Shares under the Securities Act or any state securities laws, and that the Shares may not be pledged, transferred, sold, offered for sale, hypothecated, or otherwise disposed of except pursuant to the registration provisions of the Securities Act or pursuant to an applicable exemption therefrom and subject to state securities laws and regulations, as applicable.
Section 4.04 Brokers. Except for Ryan Roques, no broker, finder, or investment banker is entitled to any brokerage, finder’s, or other fee or commission in connection with the transactions contemplated by this Agreement or any other Transaction Document based upon arrangements made by or on behalf of Buyer.
ARTICLE V
Covenants
Section 5.01 Confidentiality. From and after the Closing, the Seller shall, and shall cause its Affiliates and its and their respective directors, officers, employees, consultants, counsel, accountants, and other agents (collectively, “Representatives”) to, hold in confidence any and all information, in any form, concerning the Company, except to the extent that the Seller can show that such information: (a) is generally available to and known by the public through no fault of the Seller, any of its Affiliates, or their respective Representatives; or (b) is lawfully acquired by Seller, any of its Affiliates, or their respective Representatives from and after the Closing from sources which are not prohibited from disclosing such information by any obligation. If Seller or any of its Affiliates or their respective Representatives are compelled to disclose any information by Governmental Order or Law, Seller shall promptly notify Buyer in writing and shall disclose only that portion of such information which is legally required to be disclosed; provided, however, Seller shall use reasonable best efforts to obtain as promptly as possible an appropriate protective order or other reasonable assurance that confidential treatment will be accorded such information.
Section 5.02 Non-Competition; Non-Solicitation.
(a) For a period of five (5) years commencing on the Closing Date (the “Restricted Period”), Seller will not, and will not permit any of its Affiliates to, directly or indirectly: (i) engage in or assist others in engaging in the information technology packaging business (the “Restricted Business”) anywhere in the world (the “Territory”); (ii) have an interest in any Person that engages, directly or indirectly, in the Restricted Business in the Territory in any capacity, including as a partner, stockholder, director, officer, member, manager, employee, contractor, principal, agent, volunteer, intern, advisor, or consultant; or (iii) intentionally interfere in any material respect with the business relationships (whether formed prior to or after the date of this Agreement) between the Company and customers or suppliers of the Company. Notwithstanding the foregoing, Seller may own, directly or indirectly, solely as an investment, securities of any Person traded on any national securities exchange if Seller is not a controlling Person of, or a member of a group which controls, such Person and does not, directly or indirectly, own two percent (2)% or more of any class of securities of such Person.
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(b) During the Restricted Period, Seller will not, and will not permit any of its Affiliates to, directly or indirectly, hire or solicit any current or former employee of the Company or encourage any employee to leave the Company’s employment, except pursuant to a general solicitation which is not directed specifically to any such employees; provided, however, nothing in this Section 5.02(b) shall prevent Seller or any of its Affiliates from hiring: (i) any employee terminated by the Company; or (ii) after one hundred eighty (180) days from the date of resignation, any employee that has resigned from the Company.
(c) Seller acknowledges that a breach or threatened breach of this Section 5.02 would give rise to irreparable harm to Buyer, for which monetary damages would not be an adequate remedy, and hereby agrees that in the event of a breach or a threatened breach by Seller of any such obligations, Buyer shall, in addition to any and all other rights and remedies that may be available to it in respect of such breach, be entitled to equitable relief, including a temporary restraining order, an injunction, or specific performance (without any requirement to post bond).
(d) Seller acknowledges that the restrictions contained in this Section 5.02 are reasonable and necessary to protect the legitimate interests of Buyer and constitute a material inducement to Buyer to enter into this Agreement and consummate the transactions contemplated by this Agreement. In the event that any covenant contained in this Section 5.02 should ever be adjudicated to exceed the time, geographic, product or service, or other limitations permitted by applicable Law in any jurisdiction or any Governmental Order, then any court is expressly empowered to reform such covenant, and such covenant shall be deemed reformed, in such jurisdiction to the maximum time, geographic, product or service, or other limitations permitted by applicable Law or such Governmental Order. The covenants contained in this Section 5.02 and each provision hereof are severable and distinct covenants and provisions. The invalidity or unenforceability of any such covenant or provision as written will not invalidate or render unenforceable the remaining covenants or provisions hereof, and any such invalidity or unenforceability in any jurisdiction will not invalidate or render unenforceable such covenant or provision in any other jurisdiction.
Section 5.03 Further Assurances. Following the Closing, each of the parties hereto shall, and shall cause their respective Affiliates to, execute and deliver such additional documents and instruments and take such further actions as may be reasonably required to carry out the provisions hereof and give effect to the transactions contemplated by this Agreement and the other Transaction Documents.
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ARTICLE VI
Tax matters
Section 6.01 Tax Covenants.
(a) Without the prior written consent of Buyer, which shall not be unreasonably withheld or delayed, Seller will not, to the extent it may affect or relate to the Company: (i) make, change, or rescind any Tax election; (ii) amend any Tax Return; (iii) take any position on any Tax Return; or (iv) take any action, omit to take any action, or enter into any other transaction that would have the effect of increasing the Tax liability or reducing any Tax asset of Buyer or the Company, in respect of any taxable period that begins after the Closing Date or, in respect of any taxable period that begins before and ends after the Closing Date (each such period, a “Straddle Period”), the portion of any Straddle Period beginning after the Closing Date.
(b) All transfer, documentary, sales, use, stamp, registration, value added, and other such Taxes and fees (including any penalties and interest) incurred in connection with this Agreement and the other Transaction Documents shall be borne and paid by Seller when due. Seller shall, at its own expense, timely file any Tax Return or other document with respect to such Taxes or fees (and Buyer shall cooperate with respect thereto as necessary).
(c) Buyer shall prepare, or cause to be prepared, all Tax Returns required to be filed by the Company after the Closing Date with respect to any taxable period or portion thereof ending on or before the Closing Date and all Straddle Period Tax Returns. Any such Tax Return shall be prepared in a manner consistent with past practice (unless otherwise required by Law) and without a change of any election or any accounting method.
Section 6.02 Straddle Period. In the case of Taxes that are payable with respect to a Straddle Period, the portion of any such Taxes that are allocated to Pre-Closing Tax Periods (as defined in Section 6.04) for purposes of this Agreement is: (a) in the case of Taxes: (i) based upon, or related to, income, receipts, profits, wages, capital, or net worth; (ii) imposed in connection with the sale, transfer, or assignment of property; or (iii) required to be withheld, the amount of Taxes which would be payable if the taxable year ended with the Closing Date; and (b) in the case of other Taxes, the amount of such Taxes for the entire period multiplied by a fraction, the numerator of which is the number of days in the period ending on the Closing Date and the denominator of which is the number of days in the entire period.
Section 6.03 Termination of Existing Tax Sharing Agreements. Any and all existing Tax sharing agreements (whether written or not) binding upon the Company shall be terminated as of the Closing Date. After such date neither the Company, Seller, nor any of Seller’s Affiliates and their respective Representatives shall have any further rights or liabilities thereunder.
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Section 6.04 Tax Indemnification. The Company shall indemnify the Buyer and each Buyer Indemnitee (as defined in Section 7.01) and hold them harmless from and against (a) any loss, damage, liability, deficiency, Action, judgment, interest, award, penalty, fine, cost or expense of whatever kind (collectively, including reasonable and documented attorneys’ fees and the cost of enforcing any right to indemnification under this Agreement, “Losses”) attributable to any breach of or inaccuracy in any representation or warranty made in Section 3.19; (b) any Loss attributable to any breach or violation of, or failure to fully perform, any covenant, agreement, undertaking, or obligation in ARTICLE VI; (c) all Taxes of the Company relating to the business of the Company for all Pre-Closing Tax Periods (as defined below); (d) all Taxes of any member of an affiliated, consolidated, combined, or unitary group of which the Company (or any predecessor of the Company) is or was a member on or prior to the Closing Date by reason of a liability under Treasury Regulation Section 1.1502-6 or any comparable provisions of foreign, state, or local Law; and (e) any and all Taxes of any Person imposed on the Company arising under the principles of transferee or successor liability or by contract, relating to an event or transaction occurring before the Closing Date. In each of the above cases, together with any out-of-pocket fees and expenses (including reasonable and documented attorneys’ and accountants’ fees) incurred in connection therewith, the Company shall reimburse Buyer for any Taxes of the Company that are the responsibility of Seller pursuant to this Section 6.04 within ten business days after payment of such Taxes by Buyer or the Company. The term “Pre-Closing Tax Period” means any taxable period ending on or before the Closing Date and, with respect to any taxable period beginning before and ending after the Closing Date, the portion of such taxable period ending on and including the Closing Date.
Section 6.05 Cooperation and Exchange of Information. The Company and Buyer shall provide each other with such cooperation and information as either of them reasonably may request of the other in filing any Tax Return pursuant to this ARTICLE VI or in connection with any proceeding in respect of Taxes of the Company, including providing copies of relevant Tax Returns and accompanying documents. Each of Seller and Buyer shall retain all Tax Returns and other documents in its possession relating to Tax matters of the Company for any Pre-Closing Tax Period (collectively, “Tax Records”) until the expiration of the statute of limitations of the taxable periods to which such Tax Records relate.
Section 6.06 Survival. Notwithstanding anything in this Agreement to the contrary, the provisions of Section 3.19 and this ARTICLE VI shall survive for the full period of all applicable statutes of limitations (giving effect to any waiver, mitigation, or extension thereof) plus sixty (60) days.
ARTICLE VII
Indemnification
Section 7.01 Indemnification by Seller. Subject to the other terms and conditions of this ARTICLE VII, Seller shall indemnify and defend each of Buyer and its Affiliates (including the Company) and their respective Representatives (collectively, the “Buyer Indemnitees”) against, and shall hold each of them harmless from and against, and shall pay and reimburse each of them for, any and all Losses incurred or sustained by, or imposed upon, the Buyer Indemnitees based upon, arising out of, with respect to, or by reason of:
(a) any inaccuracy in or breach of any of the representations or warranties of Seller or the Company contained in this Agreement or the other Transaction Documents;
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(b) any breach or non-fulfillment of any covenant, agreement, or obligation to be performed by the Company (prior to the Closing) or the Seller pursuant to this Agreement or the other Transaction Documents; or
(c) any and all liabilities relating to the operation of the business of the Company prior to the Closing (other than for liabilities arising after the closing date with respect to any Contracts of the Company or any liabilities reflected in the Financial Statements), including, without limitation, liabilities for any Actions, product claims, employee matters, etc.
Section 7.02 Indemnification by Buyer. Subject to the other terms and conditions of this ARTICLE VII, Buyer shall indemnify and defend each of the Company and its Affiliates and their respective Representatives (collectively, the “Seller Indemnitees”) against, and shall hold each of them harmless from and against, and shall pay and reimburse each of them for, any and all Losses incurred or sustained by, or imposed upon, the Seller Indemnitees based upon, arising out of, with respect to, or by reason of:
(a) any inaccuracy in or breach of any of the representations or warranties of Buyer contained in this Agreement or the other Transaction Documents; or
(b) any breach or non-fulfillment of any covenant, agreement, or obligation to be performed by Buyer pursuant to this Agreement.
Section 7.03 Indemnification Procedures. Whenever any claim shall arise for indemnification under this Agreement, the indemnified party (“Indemnified Party”) shall promptly provide written notice of such claim to the Indemnifying Party. Such notice by the Indemnified Party shall: (a) describe the claim in reasonable detail; (b) include copies of all material written evidence thereof; and (c) indicate the estimated amount, if reasonably practicable, of the Loss that has been or may be sustained by the Indemnified Party. In connection with any claim giving rise to indemnity hereunder resulting from or arising out of any Action by a Person who is not a party to this Agreement, the Indemnifying Party, at its sole cost and expense and upon written notice to the Indemnified Party, may assume the defense of any such Action with counsel reasonably satisfactory to the Indemnified Party. The Indemnified Party shall be entitled to participate in the defense of any such Action, with its counsel and at its own cost and expense, subject to the Indemnifying Party’s right to control the defense thereof. If the Indemnifying Party does not assume the defense of any such Action, the Indemnified Party may, but shall not be obligated to, defend against such Action in such manner as it may deem appropriate, including settling such Action, after giving notice of it to the Indemnifying Party, on such terms as the Indemnified Party may deem appropriate, and no action taken by the Indemnified Party in accordance with such defense and settlement shall relieve the Indemnifying Party of its indemnification obligations herein provided with respect to any damages resulting therefrom. Seller and Buyer shall cooperate with each other in all reasonable respects in connection with the defense of any claim, including: (i) making available records relating to such claim; and (ii) furnishing, without expense (other than reimbursement of actual out-of-pocket expenses) to the defending party, management employees of the Indemnified Party as may be reasonably necessary for the preparation of the defense of such claim. Notwithstanding the foregoing, an Indemnifying Party shall not settle any Action without the Indemnified Party’s prior written consent (which consent shall not be unreasonably withheld, conditioned or delayed).
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Section 7.04 Limitations. Notwithstanding anything herein to the contrary, no Indemnifying Party shall be liable under this Agreement for any punitive, consequential, special, incidental or indirect damages, including, without limitation, lost profits, lost revenues, lost opportunity or loss of business; provided, however, that this limitation shall not apply to (a) damages arising from third-party claims for which indemnification is sought, or (b) damages resulting from the Indemnifying Party’s gross negligence or willful misconduct. In the event of any losses or damages, or alleged losses or damages, giving rise to indemnification or a claim for indemnification under this Agreement, the Indemnified Party hereby covenants and agrees to use commercially reasonable efforts (not requiring material expense, litigation, or diversion of significant internal resources) to mitigate such loss or damages, and the resulting indemnified losses or damages. The amount of an Indemnified Party’s indemnification obligations hereunder will be offset by the amount of any insurance proceeds actually recovered from insurers with respect to such losses or damages (net of any deductibles, co-payments or out-of-pocket costs of collection and any increase in insurance premiums attributable to such recovery). The Indemnifying Party shall not be liable to the Indemnified Party for indemnification under Section 7.01(a) or Section 7.02(a), as the case may be, until the aggregate amount of all Losses in respect of indemnification under such applicable section exceeds $12,730 (the “Deductible”), in which event the Indemnifying Party shall only be required to pay or be liable for Losses in excess of the Deductible.
Section 7.05 Survival. Subject to the limitations and other provisions of this Agreement, the representations and warranties contained herein and all related rights to indemnification shall survive the Closing for a period of 24 months; provided, however, the representations and warranties in Section 3.01, Section 3.02, Section 3.03, Section 3.10(b), Section 3.19, Section 3.22, and Section 4.04 shall survive indefinitely. Subject to ARTICLE VI, all covenants and agreements of the parties hereto contained herein shall survive the Closing indefinitely unless another period is explicitly specified herein. Notwithstanding the foregoing, any claims which are timely asserted in writing by notice from the non-breaching party to the breaching party prior to the expiration date of the applicable survival period will not thereafter be barred by the expiration of the relevant representation or warranty and such claims shall survive until finally resolved.
Section 7.06 Tax Claims. Notwithstanding any other provision of this Agreement, the control of any claim, assertion, event, or proceeding in respect of Taxes of the Company (including, but not limited to, any such claim in respect of a breach of the representations and warranties in Section 3.19 hereof or any breach or violation of or failure to fully perform any covenant, agreement, undertaking, or obligation in ARTICLE VI) shall be governed exclusively by Article VI hereof.
Section 7.07 Cumulative Remedies. The rights and remedies provided for in this ARTICLE VII (and in Article VI) are cumulative and are in addition to and not in substitution for any other rights and remedies available at Law or in equity or otherwise.
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ARTICLE VIII
Miscellaneous
Section 8.01 Expenses. All costs and expenses incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the party incurring such costs and expenses.
Section 8.02 Notices. All notices, claims, demands, and other communications hereunder shall be in writing and shall be deemed to have been given: (a) when delivered by hand (with written confirmation of receipt); (b) when received by the addressee if sent by a nationally recognized overnight courier (receipt requested); (c) on the date sent by email of a PDF document (with confirmation of transmission) if sent during normal business hours of the recipient, and on the next business day if sent after normal business hours of the recipient; or (d) on the [third/[NUMBER]] day after the date mailed, by certified or registered mail, return receipt requested, postage prepaid, if sent to the respective parties at the following addresses (or at such other address for a party as shall be specified in a notice given in accordance with this Section 8.02):
| If to Seller: | [***] [***] |
| with a copy (which will not constitute notice) to: | Louis A. Brilleman,
Esq. 1140 Avenue of the Americas, 9th Floor New York, NY 10036 Email: lbrilleman@lbcounsel.com |
| If to Buyer: | PMGC Holdings Inc. c/o Newport Center Drive, Suite 249 Email: [***]; [***] |
| with a copy (which will not constitute notice) to: | Sichenzia Ross Ference
Carmel LLP 1185 Avenue of the Americas, 31st Floor New York, NY 10036 Email: ckleidman@srfc.law Attention: Carl Kleidman, Esq. |
Section 8.03 Interpretation; Headings. This Agreement shall be construed without regard to any presumption or rule requiring construction or interpretation against the party drafting an instrument or causing any instrument to be drafted. The headings in this Agreement are for reference only and will not affect the interpretation of this Agreement.
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Section 8.04 Severability. If any term or provision of this Agreement is invalid, illegal, or unenforceable in any jurisdiction, such invalidity, illegality, or unenforceability will not affect any other term or provision of this Agreement.
Section 8.05 Entire Agreement. This Agreement and the other Transaction Documents constitute the sole and entire agreement of the parties to this Agreement with respect to the subject matter contained herein and therein, and supersede all prior and contemporaneous understandings and agreements, both written and oral, with respect to such subject matter. In the event of any inconsistency between the statements in the body of this Agreement and those in the other Transaction Documents, and the Disclosure Schedules (other than an exception expressly set forth as such in the Disclosure Schedules), the statements in the body of this Agreement will control.
Section 8.06 Successors and Assigns. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and permitted assigns. Neither party may assign its rights or obligations hereunder without the prior written consent of the other party, which consent will not be unreasonably withheld or delayed. No assignment shall relieve the assigning party of any of its obligations hereunder.
Section 8.07 Amendment and Modification; Waiver. This Agreement may only be amended, modified, or supplemented by an agreement in writing signed by each party hereto. No waiver by any party of any of the provisions hereof shall be effective unless explicitly set forth in writing and signed by the party so waiving. No failure to exercise, or delay in exercising, any right or remedy arising from this Agreement shall operate or be construed as a waiver thereof. No single or partial exercise of any right or remedy hereunder shall preclude any other or further exercise thereof or the exercise of any other right or remedy.
Section 8.08 Governing Law; Submission to Jurisdiction.
This Agreement shall be governed by and construed in accordance with the internal laws of the State of Nevada, without giving effect to any choice or conflict of law provision or rule (whether of the State of Nevada or any other jurisdiction). Any legal suit, action, proceeding, or dispute arising out of or related to this Agreement, the other Transaction Documents, or the transactions contemplated hereby or thereby may be instituted in the federal courts of the United States of America or the courts of the State of California, Orange County, in each case located in the city of New York and county of New York, and each party hereto irrevocably submits to the exclusive jurisdiction of such courts in any such suit, action, proceeding, or dispute.
Section 8.09 Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together shall be deemed to be one and the same agreement. A signed copy of this Agreement delivered by email or other means of electronic transmission shall be deemed to have the same legal effect as delivery of an original signed copy of this Agreement.
[signature page follows]
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IN WITNESS WHEREOF, the parties hereto have caused this Stock Purchase Agreement to be executed as of the date first written above.
| [***], individually | ||
| PMGC Holdings Inc. | ||
| By: | /s/ Graydon Bensler | |
| Graydon Bensler | ||
| Chief Executive Officer | ||
EXHIBIT A
DEFINITIONS CROSS-REFERENCE TABLE
The following terms have the meanings set forth in the location in this Agreement referenced below:
| Term | Section |
| Actions | Section 3.14(a) |
| Affiliate | Section 3.13 |
| Agreement | Preamble |
| Balance Sheet | Section 3.06 |
| Balance Sheet Date | Section 3.06 |
| Benefit Plans | Section 3.17(a) |
| Buyer | Preamble |
| Buyer Indemnitees | Section 7.01 |
| Closing | Section 2.01 |
| Closing Date | Section 2.01 |
| Code | Section 2.02(e) |
| Company | Recitals |
| Company Intellectual Property | Section 3.11(b) |
| Company IP Registrations | Section 3.11(b) |
| Contracts | Section 3.05 |
| Disclosure Schedules | Section 1.02 |
| Earnout Payment | Section 5.03 |
| Earnout Period | Section 5.03 |
| Encumbrance | Section 1.01 |
| Environmental Laws | Section 3.16(a) |
| ERISA | Section 3.17(a) |
| Financial Statements | Section 3.06 |
| GAAP | Section 3.06 |
| Governmental Authority | Section 2.02(d) |
| Governmental Order | Section 3.05 |
| Hazardous Substances | Section 3.16(a) |
| Indemnified Party | Section 7.03 |
| Indemnifying Party | Section 7.03 |
| Insurance Policies | Section 3.13 |
| Intellectual Property | Section 3.11(a) |
| Law | Section 3.05 |
| Liabilities | Section 3.07 |
| Losses | Section 6.04 |
| Material Contracts | Section 3.09(a) |
| Material Customers | Section 3.12(a) |
| Material Suppliers | Section 3.12(b) |
| Permits | Section 3.15(b) |
| Person | Section 3.03(b) |
| Pre-Closing Tax Period | Section 6.04 |
| Purchase Price | Section 1.02 |
| Real Property | Section 3.10(a) |
| Representatives | Section 5.01 |
| Restricted Business | Section 5.02(a) |
| Restricted Period | Section 5.02(a) |
| Securities Act | Section 4.03 |
| Seller | Preamble |
| Seller Indemnitees | Section 7.02 |
| Shares | Recitals |
| Straddle Period | Section 6.01(a) |
| Taxes | Section 3.19(a) |
| Tax Records | Section 6.05 |
| Tax Returns | Section 3.19(a) |
| Territory | Section 5.02(a) |
| Union | Section 3.18(b) |
Exhibit 31.1
CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER
PURSUANT TO RULE 13a-14(a)/15d-14(a), AS ADOPTED
PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Graydon Bensler, certify that:
| 1. | I have reviewed this Quarterly Report on Form 10-Q (“Report”) of PMGC Holdings Inc. (the “Company”); |
| 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 Company as of, and for, the periods presented in this Report; |
| 4. | As the Company’s Principal Executive Officer and Principal Financial and Accounting Officer, I am responsible for establishing and maintaining disclosure controls and procedures (as defined in 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 Company 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 Company, 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 Company’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 Company’s internal control over financial reporting that occurred during the Company’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting; and |
| 5. | As the Company’s Principal Executive Officer and Principal Financial and Accounting Officer, I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company’s auditors and the audit committee of the Company’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 Company’s ability to record, process, summarize and Report financial information; and |
| (b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financial reporting. |
Date: November 14, 2025
| /s/ Graydon Bensler | ||
| Name: | Graydon Bensler | |
| Title: | Chief Executive Officer | |
| (Principal Executive Officer) |
Exhibit 31.2
CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER
PURSUANT TO RULE 13a-14(a)/15d-14(a), AS ADOPTED
PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Graydon Bensler, certify that:
| 1. | I have reviewed this Quarterly Report on Form 10-Q (“Report”) of PMGC Holdings Inc. (the “Company”): |
| 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 Company as of, and for, the periods presented in this Report; |
| 4. | As the Company’s Principal Financial and Accounting Officer and Principal Executive Officer, I am responsible for establishing and maintaining disclosure controls and procedures (as defined in 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 Company 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 Company, 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 Company’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 Company’s internal control over financial reporting that occurred during the Company’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting; and |
| 5. | As the Company’s Principal Financial and Accounting Officer and Principal Executive Officer, I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company’s auditors and the audit committee of the Company’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 Company’s ability to record, process, summarize and report financial information; and |
| (b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financial reporting. |
Date: November 14, 2025
| /s/ Graydon Bensler | ||
| Name: | Graydon Bensler | |
| Title: | Chief Financial Officer | |
| (Principal Financial and Accounting Officer) |
Exhibit 32.1
CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER
PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, I, Graydon Bensler, the Chief Executive Officer of PMGC Holdings Inc. (the “Company”), hereby certify, that, to my knowledge:
| 1. | The Quarterly Report on Form 10-Q for the period ended September 30, 2025 (the “Report”) of the Company fully complies with the requirements of Section 13(a) and 15(d) of the Securities Exchange Act of 1934, as amended; and |
| 2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Dated: November 14, 2025
| /s/ Graydon Bensler | ||
| Name: | Graydon Bensler | |
| Title: | Chief Executive Officer | |
| (Principal Executive Officer) |
Exhibit 32.2
CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER
PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, I, Graydon Bensler, the Chief Financial Officer of PMGC Holdings Inc. (the “Company”), hereby certify, that, to my knowledge:
| 1. | The Quarterly Report on Form 10-Q for the period ended September 30, 2025 (the “Report”) of the Company fully complies with the requirements of Section 13(a)/15(d) of the Securities Exchange Act of 1934, as amended; and |
| 2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Dated: November 14, 2025
| /s/ Graydon Bensler | ||
| Name: | Graydon Bensler | |
| Title: | Chief Financial Officer | |
| (Principal Financial and Accounting Officer) |