PART I [ITEM 1. Business](index=6&type=section&id=ITEM%201.%20Business) Elevai Labs is a physician-dispensed skincare company using proprietary stem cell-derived exosomes in its products - Elevai Labs Inc. is a physician-dispensed skincare company focused on modernizing aesthetic skincare with proprietary stem cell-derived Elevai Exosomes, which are nano-sized extracellular vesicles packed with growth factors that support skin health[19](index=19&type=chunk)[25](index=25&type=chunk) - The company primarily uses a business-to-business (B2B) model, selling its E-Series™ products (Empower™ and Enfinity™) to dermatologists, plastic surgeons, and medical spas, with a growing direct-to-consumer channel[31](index=31&type=chunk)[33](index=33&type=chunk)[46](index=46&type=chunk) - Elevai's manufacturing process, 'Precision Regenerative Exosome Technology™' (PREx™), utilizes ethically sourced human umbilical mesenchymal stem cells (hUMSCs) cultured under cGMP conditions to produce stable, topically applied exosomes[21](index=21&type=chunk)[26](index=26&type=chunk)[29](index=29&type=chunk) - The company is actively expanding its product pipeline, including early-stage evaluation for hair growth applications, and has entered into collaboration agreements for new cosmetic product development[24](index=24&type=chunk)[67](index=67&type=chunk)[81](index=81&type=chunk) - Elevai faces a regulatory challenge in Canada, where Health Canada determined its products do not meet conditions for sale as cosmetics, leading to a **voluntary halt in sales** in that region[33](index=33&type=chunk)[74](index=74&type=chunk)[101](index=101&type=chunk) Key Intellectual Property Holdings | IP Type | Count | | :----------------------- | :---- | | Registered Trademarks | 15 | | Trademark Applications | 15 | | Registered Domain Names | 2 | | Patents | 1 | | Pending US Patent Apps | 2 | | Pending PCT Patents | 3 | Employee Count by Functional Area (as of report date) | Functional Area | Number of Employees | | :------------------- | :------------------ | | Operating | 2 | | Research and Development | 3 | | Financial Department | 0 | | Sales | 9 | | Branding/Marketing | 4 | | **Total** | **18** | [Overview](index=6&type=section&id=Overview) The company specializes in science-driven topical skincare using proprietary stem cell-derived exosomes - Elevai Labs Inc. was founded in 2020 and focuses on physician-dispensed skincare, developing innovative topical products with proprietary stem cell-derived Elevai Exosomes[19](index=19&type=chunk) - The company's PREx™ process utilizes advanced patent-pending stem cell processing technology to produce stem cell-derived factors for topical exosome products, which are cosmetics, not drug products or regenerative medicine[21](index=21&type=chunk) - Elevai's E-Series™ line, including Empower™ and Enfinity™, is marketed for post-procedure care to reduce the appearance of skin conditions like oxidative stress, photodamage, hyperpigmentation, and fine lines/wrinkles[21](index=21&type=chunk) [Corporate Overview and History](index=9&type=section&id=Corporate%20Overview%20and%20History) The company was incorporated in 2020 and acquired its primary research subsidiary in 2021 - Elevai Labs Inc. was incorporated in Delaware on June 9, 2020, initially named Reactive Medical Labs Inc., and rebranded to Elevai Labs, Inc. on December 3, 2021[39](index=39&type=chunk) - The company acquired Reactive Medical Inc. (now Elevai Research Inc.) as a wholly-owned subsidiary in June 2021 through a stock transfer agreement[38](index=38&type=chunk)[40](index=40&type=chunk) [Our Industry](index=10&type=section&id=Our%20Industry) Elevai operates in the medical aesthetics industry, focusing on the physician-dispensed B2B channel - Elevai distributes its cosmetic products through three channels: B2B to physicians and medically directed businesses, direct-to-consumer via its website, and international distribution agreements[43](index=43&type=chunk)[47](index=47&type=chunk) - The 'physician-dispensed' channel, where products are sold exclusively in clinics or medically directed businesses, is a **fast-growing segment** of the personal care market, with consumers seeking professional advice for cosmetic product selection[45](index=45&type=chunk)[46](index=46&type=chunk) - The medical aesthetics industry focuses on cosmetic treatments like microneedling, Botox, and laser therapies, which Elevai's products complement[48](index=48&type=chunk) [Our Products](index=11&type=section&id=Our%20Products) The company's core products are post-procedure serums containing proprietary Elevai Exosomes - Elevai's current products, Empower™ and Enfinity™ serums, are post-skincare procedure care products targeting the face, neck, and upper chest, sold through B2B and distribution channels[51](index=51&type=chunk)[59](index=59&type=chunk) - These products utilize Elevai Exosomes, derived from ethically sourced hUMSCs, which are nano-sized extracellular vesicles containing growth factors, cytokines, and peptides to support skin health and mimic natural healing processes[25](index=25&type=chunk)[26](index=26&type=chunk)[54](index=54&type=chunk) - Empower™ is a concentrated serum for immediate post-ablative procedure application, while Enfinity™ is a daily serum for at-home use, designed to promote healthy skin texture and reduce the appearance of age-related pigment and fine lines[62](index=62&type=chunk)[64](index=64&type=chunk) - The company is evaluating adjunctive use of exosomes for promoting healthy hair growth cycles and improving hair appearance, fullness, and thickness[24](index=24&type=chunk)[67](index=67&type=chunk) - Clinical dermal safety evaluations in 2021 showed Empower™ and Enfinity™ serums were **topically well-tolerated**, with no irritation, sensitization, or adverse events reported[68](index=68&type=chunk) Product Pricing (Retail & Wholesale) | Product | Retail Price (per unit) | Wholesale Price (per pack) | | :------ | :---------------------- | :------------------------- | | Empower™ | $149 | $596 (8-product pack) | | Enfinity™ | $299 | $149 (per bottle) | [Our Product Development and Manufacturing Process](index=18&type=section&id=Our%20Product%20Development%20and%20Manufacturing%20Process) Elevai uses a proprietary in-house process for exosome production and a third-party for final formulation - Elevai's proprietary PREx™ manufacturing process for exosomes is conducted in-house at a leased lab facility operating under Good Laboratory Practices (GLP) and cGMP compliance[76](index=76&type=chunk)[78](index=78&type=chunk)[82](index=82&type=chunk) - The process involves culturing ethically sourced hUMSCs from umbilical cord Wharton's Jelly to secrete exosomes, which are then filtered, purified, and stabilized[26](index=26&type=chunk)[83](index=83&type=chunk)[88](index=88&type=chunk) - Final product formulation and bottling are performed by an FDA-inspected, cGMP-compliant third-party formulator according to Elevai's specifications[78](index=78&type=chunk)[89](index=89&type=chunk) - In July 2023, the company expanded its laboratory space by 721 square feet, **increasing batch size by approximately 50%** and enhancing production efficiency[79](index=79&type=chunk) - Elevai collaborates with third parties, such as Yuva BioSciences, for joint research, development, and commercialization of new cosmetic products, including those where exosomes serve as carriers[67](index=67&type=chunk)[81](index=81&type=chunk) [Sales and Marketing](index=22&type=section&id=Sales%20and%20Marketing) The company's strategy centers on a B2B sales model in the U.S. and international distribution agreements - In the U.S., Elevai primarily uses a B2B model, selling to dermatologists, plastic surgeons, and medical spas via a direct sales force and independent aesthetic account managers (AAMs)[92](index=92&type=chunk)[93](index=93&type=chunk) - The 2024 growth strategy includes expanding into a direct-to-consumer sales channel alongside the core B2B strategy, aiming for additional revenue[96](index=96&type=chunk) - Marketing imperatives for 2024 are to accelerate brand and product awareness, focus on differentiation and unique value propositions, and build clinical evidence with KOL advocacy among dermatologists and plastic surgeons[96](index=96&type=chunk)[99](index=99&type=chunk)[100](index=100&type=chunk) - International sales are conducted through authorized wholesale distributors in regions like Vietnam, the Philippines, the Balkans, and Kuwait, though sales in Canada are currently halted due to regulatory issues[101](index=101&type=chunk)[114](index=114&type=chunk) [Our Growth Strategy](index=24&type=section&id=Our%20Growth%20Strategy) Elevai's growth strategy focuses on market disruption, product innovation, and production capacity expansion - Elevai's growth strategy focuses on disrupting the physician-dispensed cosmetics market by attracting more consumers, expanding product availability, and offering innovative products, with the U.S. being the largest source of anticipated growth[103](index=103&type=chunk) - The company leverages its hUMSC-derived exosome technology, supported by early imaging data using Canfield Scientific's VISIA system, to enhance post-procedure recovery and skin appearance[104](index=104&type=chunk)[105](index=105&type=chunk) - Elevai plans to expand its brand through events, scientific conferences, clinical validation studies, and strategic partnerships, aiming for a speed-to-market advantage due to its bioprocessing aptitude[107](index=107&type=chunk) - The company intends to expand production capacity by 2025, estimating a cost of **$1.5 million to $2.0 million to double capacity**, which is expected to lower manufacturing costs through economies of scale[110](index=110&type=chunk) - New pipeline product development, such as a topical haircare product, is estimated to require approximately **$250,000 for initial equipment** and an additional **$100,000 for testing and launch**, with a development timeline of 6-12 months[111](index=111&type=chunk)[332](index=332&type=chunk) [Intellectual Property](index=28&type=section&id=Intellectual%20Property) The company protects its innovations through patents, trademarks, and by maintaining key processes as trade secrets - Elevai protects its intellectual property through a combination of patent, copyright, trademark, and trade secret laws, along with confidentiality agreements with employees and third parties[117](index=117&type=chunk)[118](index=118&type=chunk) - The company's Precision Regenerative Exosome Technology™ (PREx™) process is maintained as a trade secret, with a strategic decision not to pursue a patent for it[119](index=119&type=chunk) Intellectual Property Portfolio | IP Type | Count | | :----------------------- | :---- | | Registered Trademarks | 15 | | Trademark Applications | 15 | | Registered Domain Names | 2 | | Patents | 1 | | Pending US Patent Apps | 2 | | Pending PCT Patents | 3 | [Our Employees](index=28&type=section&id=Our%20Employees) As of the report date, the company has 18 full-time employees and utilizes independent sales managers - In addition to **18 full-time employees**, Elevai also utilizes approximately **8 independently contracted** aesthetic account managers[121](index=121&type=chunk) - The company provides employee benefits, focuses on training and retention, and maintains a good working relationship with its employees, without any employee unions[122](index=122&type=chunk)[123](index=123&type=chunk) Employee Count by Functional Area (as of report date) | Functional Area | Number of Employees | | :------------------- | :------------------ | | Operating | 2 | | Research and Development | 3 | | Financial Department | 0 | | Sales | 9 | | Branding/Marketing | 4 | | **Total** | **18** | [ITEM 1A. Risk Factors.](index=29&type=section&id=ITEM%201A.%20Risk%20Factors.) The company faces significant risks in product dependency, competition, financial stability, and regulations - Elevai's business is **highly dependent on sales of its Elevai Post Treatment E-Series™**, which accounted for a substantial majority of net sales in 2023 and 2022, making the company vulnerable to factors affecting demand for these products[125](index=125&type=chunk) - The company faces intense competition from large, well-established pharmaceutical, medical device, cosmetics, and healthcare companies, including SkinCeuticals, SkinMedica, ZO Skin Health, PCA Skin, EltaMD, Dermalogica, Murad, and Eminence[129](index=129&type=chunk) - Elevai has a history of net losses, with **$4,301,517 in 2023** and **$1,800,268 in 2022**, and its auditors have raised substantial doubt about its ability to continue as a going concern without additional funding[205](index=205&type=chunk)[207](index=207&type=chunk) - The company relies heavily on third-party suppliers, formulators, packagers, and shippers for raw materials and finished products, posing risks related to supply chain disruptions, quality control, and regulatory compliance[222](index=222&type=chunk)[224](index=224&type=chunk) - Elevai's cosmetic products are subject to extensive and evolving government regulations, with a risk of reclassification as drugs (as experienced in Canada), which could lead to additional regulatory requirements, fines, or sales restrictions[252](index=252&type=chunk)[257](index=257&type=chunk)[258](index=258&type=chunk)[260](index=260&type=chunk) - The company's novel exosome technology and stem cell-derived cosmetics are at an early stage, inherently expensive, and may not be fully understood or accepted in the marketplace, posing risks to commercial viability[202](index=202&type=chunk)[203](index=203&type=chunk) - Cybersecurity threats, including attacks on information technology systems and sensitive data, pose risks of operational disruption, regulatory investigations, litigation, and reputational harm[240](index=240&type=chunk)[242](index=242&type=chunk)[291](index=291&type=chunk) [ITEM 1B. Unresolved Staff Comments.](index=56&type=section&id=ITEM%201B.%20Unresolved%20Staff%20Comments.) As a smaller reporting company, Elevai is not required to provide this information - Elevai Labs Inc. is a smaller reporting company and is not required to provide information on unresolved staff comments[316](index=316&type=chunk) [ITEM 1C. Cybersecurity.](index=56&type=section&id=ITEM%201C.%20Cybersecurity.) The company considers cybersecurity a critical part of its risk strategy, overseen by the Board - Elevai views cybersecurity risk management as an important part of its overall risk management efforts, with a policy of transparency regarding data collection, use, retention, and sharing practices[317](index=317&type=chunk) - The company maintains an information security program with technical, physical, and organizational measures, including periodic testing and employee training, to mitigate cybersecurity threats[318](index=318&type=chunk)[319](index=319&type=chunk) - The Board, in coordination with the Audit Committee, is responsible for overseeing cybersecurity risk and is informed of potentially serious incidents[326](index=326&type=chunk) - As of the report date, Elevai is **not aware of any material cybersecurity threats** that have materially affected or are reasonably likely to materially affect the company's business strategy, results of operations, or financial condition[327](index=327&type=chunk) [ITEM 2. Properties.](index=57&type=section&id=ITEM%202.%20Properties.) Elevai leases its executive office and production laboratories, which are sufficient for current needs - Elevai's principal executive office is located at 120 Newport Center Drive, Newport Beach, CA, with a lease running from March 2024 to February 2025[329](index=329&type=chunk) - The company operates two medical-grade production laboratories in Folsom, CA (1743 Lab and 1739 Lab), with leases from June 2022 to May 2025[330](index=330&type=chunk) - Current facilities are expected to satisfy manufacturing and R&D needs for the next 24 months, but expanding for new products like topical haircare would require **$250,000-$300,000 in capital** for equipment and testing[332](index=332&type=chunk) Leased Facilities Overview | Address | Space (sq ft) | Lease Term | Average Monthly Rent | | :--------------------------------------- | :------------ | :------------------------ | :------------------- | | 120 Newport Center Drive, Newport Beach, CA | 500 | March 2024 to February 2025 | $1,725 | | 1739 Creekside Dr., Ste. 110 Folsom, CA | 1,388 | June 2022 to May 2025 | $13,476.75 | | 1743 Creekside Dr. Folsom, CA | 1,600 | June 2022 to May 2025 | (included above) | [ITEM 3. Legal Proceedings.](index=57&type=section&id=ITEM%203.%20Legal%20Proceedings.) The company has no active legal proceedings pending or threatened against it - As of the date of this Annual Report, there are **no active legal proceedings** pending or threatened against Elevai Labs Inc[334](index=334&type=chunk) - The company may be subject to various legal claims in the normal course of business, including third-party intellectual property infringement claims, which could lead to substantial costs and reputational harm[334](index=334&type=chunk) [ITEM 4. Mine Safety Disclosures.](index=57&type=section&id=ITEM%204.%20Mine%20Safety%20Disclosures.) This item is not applicable to the company PART II [ITEM 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.](index=69&type=section&id=ITEM%205.%20Market%20for%20Registrant's%20Common%20Equity,%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities.) The company's stock trades on Nasdaq, with no dividend history and a recent non-compliance notice - Elevai's Common Stock is quoted on the Nasdaq Capital Market under the symbol **'ELAB'**[337](index=337&type=chunk) - The company has **never declared or paid cash dividends** on its Common Stock and does not anticipate doing so in the foreseeable future, planning to retain all available funds for business development and growth[343](index=343&type=chunk) - On March 6, 2024, Elevai received a notice from Nasdaq for **non-compliance with the minimum bid price requirement** ($1.00 per share) for continued listing, which could result in delisting if not remedied[304](index=304&type=chunk)[345](index=345&type=chunk) Common Stock Data (as of Dec 31, 2023) | Metric | Value | | :--------------------- | :------------ | | Shares Outstanding | 17,329,615 | | Number of Holders | 62 | | Options Granted (2021 Plan) | 1,557,251 | | Shares Issued (2021 Plan) | 104,167 | Common Stock Price Fluctuations (Q4 2023) | Quarter | High Price ($) | Low Price ($) | | :----------- | :------------- | :------------ | | Fourth Quarter | 4.04 | 1.73 | [ITEM 6. Reserved](index=70&type=section&id=ITEM%206.%20Reserved) As a smaller reporting company, Elevai is not required to provide this information - Elevai Labs Inc. is a smaller reporting company and is not required to provide information for Item 6, which is reserved[348](index=348&type=chunk) [ITEM 7. Management's Discussion and Analysis of Financial Condition and Results of Operation.](index=70&type=section&id=ITEM%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operation.) Management discusses significant revenue growth offset by increased operating expenses and net losses in 2023 - Elevai Labs Inc. is a topical skincare company specializing in aesthetic biotechnology, developing and commercializing proprietary stem cell-derived Elevai Exosomes, primarily through the physician-dispensed channel[355](index=355&type=chunk)[356](index=356&type=chunk) - Management's plans for the next twelve months include growing revenue with existing infrastructure, utilizing clinical validation studies, R&D for new products, expanding international distribution, and identifying strategic acquisitions[357](index=357&type=chunk) [Results of Operations](index=72&type=section&id=Results%20of%20Operations) Revenue grew 123.5% in 2023, but net loss widened due to higher operating and IPO-related expenses - Revenue increased by **$946,318 (123.5%)** from $766,277 in 2022 to $1,712,595 in 2023, primarily due to enhanced market acceptance, growth in US accounts, and onboarding of international distributors[360](index=360&type=chunk)[361](index=361&type=chunk) - Gross profit percentage improved from **58% in 2022 to 66% in 2023**, mainly due to a higher ratio of Enfinity and Empower sales (higher margin products) compared to white label distributor sales (lower margin), and operational efficiencies[364](index=364&type=chunk)[365](index=365&type=chunk) Consolidated Statements of Operations Summary (2023 vs. 2022) | Metric | 2023 ($) | 2022 ($) | Change ($) | Change (%) | | :------------------------- | :----------- | :----------- | :----------- | :--------- | | Revenue | 1,712,595 | 766,277 | 946,318 | 123.5% | | Cost of revenue | 578,015 | 318,968 | 259,047 | 81.2% | | Gross profit | 1,134,580 | 447,309 | 687,271 | 153.6% | | Gross profit percentage | 66% | 58% | 8% | 13.8% | | Total operating expenses | 4,900,791 | 2,238,350 | 2,662,441 | 119.0% | | Loss from operations | (3,766,211) | (1,791,041) | (1,975,170) | 110.3% | | Net loss | (4,301,517) | (1,800,268) | (2,501,249) | 138.9% | | Basic and dilutive loss per common share | (0.400) | (0.189) | (0.211) | 111.6% | Revenue by Product Category (2023 vs. 2022) | Product Category | 2023 Revenue ($) | 2022 Revenue ($) | Change ($) | Change (%) | | :-------------------- | :--------------- | :--------------- | :--------- | :--------- | | Enfinity | 857,796 | 265,411 | 592,385 | 223.2% | | Empower | 619,999 | 156,848 | 463,151 | 295.3% | | White label distributor | 234,800 | 344,018 | (109,218) | (31.7%) | | Scalp & Hair Cleanser | 200 | - | 200 | N/A | | **Total Revenue** | **1,712,595** | **766,277** | **946,318**| **123.5%** | Key Expense Changes (2023 vs. 2022) | Expense Category | 2023 ($) | 2022 ($) | Change ($) | Change (%) | | :------------------------ | :----------- | :----------- | :----------- | :--------- | | Research and Development | 426,243 | 228,747 | 197,496 | 86.3% | | Marketing and Promotion | 660,291 | 192,863 | 467,428 | 242.4% | | Office and Administration | 2,329,067 | 1,019,708 | 1,309,359 | 128.4% | | Professional Fees | 579,111 | 192,409 | 386,702 | 200.9% | | Travel and Entertainment | 339,147 | 198,442 | 140,705 | 70.9% | [Liquidity and Capital Resources](index=75&type=section&id=Liquidity%20and%20Capital%20Resources) The company's ability to continue as a going concern is in substantial doubt due to recurring losses - Elevai's continuation as a going concern is dependent on continued financial support and obtaining necessary equity financing, as it has **recurring losses and an accumulated deficit**[373](index=373&type=chunk)[374](index=374&type=chunk) - Cash flow from financing activities increased significantly in 2023 due to **$6,000,000 gross proceeds from an IPO** and $1,463,585 from common stock and warrant issuances, partially offset by share issuance costs[379](index=379&type=chunk) Key Financial Position Data (as of Dec 31) | Metric | 2023 ($) | 2022 ($) | Change ($) | | :---------------- | :----------- | :----------- | :----------- | | Net Working Capital | 3,622,091 | 963,050 | 2,659,041 | | Accumulated Deficit | (7,023,890) | (2,722,373) | (4,301,517) | | Cash | 3,326,851 | 1,154,901 | 2,171,950 | Cash Flow Summary (Years Ended Dec 31) | Activity | 2023 ($) | 2022 ($) | Change ($) | | :------------------------ | :------------- | :------------- | :------------- | | Operating Activities | (4,556,811) | (1,585,876) | (2,970,935) | | Investing Activities | (11,191) | (32,027) | 20,836 | | Financing Activities | 6,738,890 | 2,362,259 | 4,376,631 | [Critical Accounting Policies and Significant Judgments and Estimates](index=76&type=section&id=Critical%20Accounting%20Policies%20and%20Significant%20Judgments%20and%20Estimates) Management makes significant estimates for revenue recognition, inventory valuation, and share-based compensation - The preparation of financial statements requires management to make estimates and assumptions, including those related to revenue recognition, collectability of receivables, inventory valuation, fair value of derivative liabilities and stock options, and recoverability of long-lived assets[380](index=380&type=chunk)[521](index=521&type=chunk) - Revenue is recognized when performance obligations are satisfied by transferring control of a product to a customer, typically upon delivery, with **no significant returns or refunds** in 2023 and 2022[384](index=384&type=chunk)[385](index=385&type=chunk)[387](index=387&type=chunk)[529](index=529&type=chunk)[530](index=530&type=chunk)[532](index=532&type=chunk) - Inventory, consisting of raw materials, work-in-progress, and finished goods (Elevai Exosomes products), is valued at the **lower of cost (weighted average) or net realizable value**[390](index=390&type=chunk)[549](index=549&type=chunk) - Share-based compensation for employees and non-employees is accounted for using the fair value method, calculated based on the grant date fair value and recognized over the requisite service period, utilizing the **Black-Scholes option-pricing model**[391](index=391&type=chunk)[392](index=392&type=chunk)[395](index=395&type=chunk)[565](index=565&type=chunk)[566](index=566&type=chunk)[568](index=568&type=chunk) [Concentrations](index=78&type=section&id=Concentrations) The company has significant customer and supplier concentration, though it expects this to decrease - In 2023, Elevai's three largest customers accounted for **34% of its revenue**, with the largest customer (a wholesaler) contributing $234,800[397](index=397&type=chunk)[652](index=652&type=chunk) - In 2022, the two largest customers represented **54% of revenue**, with the largest (a white label distributor) contributing $344,018[397](index=397&type=chunk)[652](index=652&type=chunk) - Elevai relies on three key suppliers for approximately **73% of its inventory purchase and production costs** in 2023 (vs. 64% in 2022)[399](index=399&type=chunk)[654](index=654&type=chunk) - The company expects customer dependence to decrease with additional distributor agreements and sales team expansion, and believes alternative suppliers are available to mitigate supply chain disruptions[398](index=398&type=chunk)[653](index=653&type=chunk)[654](index=654&type=chunk) [Off-Balance Sheet Arrangements](index=78&type=section&id=Off-Balance%20Sheet%20Arrangements) The company does not have any material off-balance sheet arrangements - Elevai Labs Inc. does not have any material off-balance sheet arrangements[400](index=400&type=chunk) [JOBS Act](index=79&type=section&id=JOBS%20Act) As an emerging growth company, Elevai has elected to use an extended transition period for accounting standards - Elevai qualifies as an **'emerging growth company'** under the JOBS Act[402](index=402&type=chunk) - The company has elected to use the extended transition period for complying with new or revised accounting pronouncements, which may result in financial statements not comparable to non-emerging growth companies[402](index=402&type=chunk) [Future Related Party Transactions](index=79&type=section&id=Future%20Related%20Party%20Transactions) Post-IPO, all related party transactions will be approved by the Corporate Governance Committee - After the IPO, Elevai's Corporate Governance Committee (comprised of independent directors) will approve all related party transactions[403](index=403&type=chunk) - All related party transactions must be on terms no less favorable than those available from unaffiliated third parties[403](index=403&type=chunk) [Impact of Inflation](index=79&type=section&id=Impact%20of%20Inflation) Inflation has not had a material impact to date, but future high rates pose a risk - Elevai does not believe inflation has had a material impact on its financial position or results of operations to date[404](index=404&type=chunk)[405](index=405&type=chunk) - The company is exposed to inflation risk, and high future inflation rates, especially in labor costs, could adversely affect gross margin and operating expenses[405](index=405&type=chunk) [Market Risk](index=79&type=section&id=Market%20Risk) The company's market risk exposure is limited to normal business operations - Elevai's market risk exposure is limited to normal business risks, as it avoids speculative, non-operating transactions and does not use financial or derivative instruments for trading[406](index=406&type=chunk) [ITEM 7A. Quantitative and Qualitative Disclosures about Market Risk.](index=79&type=section&id=ITEM%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk.) As a smaller reporting company, Elevai is not required to provide this information - Elevai Labs Inc. is a smaller reporting company and is not required to provide quantitative and qualitative disclosures about market risk[407](index=407&type=chunk) [ITEM 8. Financial Statements and Supplementary Data](index=80&type=section&id=ITEM%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section includes the company's audited consolidated financial statements for 2023 and 2022 - Item 8 includes Elevai's audited consolidated financial statements for December 31, 2023 and 2022, and the report of independent auditors[409](index=409&type=chunk)[485](index=485&type=chunk) Financial Statements Included | Document | Page | | :-------------------------------------------------- | :--- | | Report of Independent Registered Accounting Firm | F-3 | | Consolidated Balance Sheets | F-4 | | Consolidated Statements of Income and Comprehensive Income | F-5 | | Consolidated Statements of Stockholders' Equity | F-6 | | Consolidated Statements of Cash Flows | F-7 | | Notes to Consolidated Financial Statements | F-8 | [ITEM 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.](index=80&type=section&id=ITEM%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure.) The company has had no disagreements with its accountants or auditors - Elevai Labs Inc. has not had any disagreements with its accountants or auditors requiring disclosure[411](index=411&type=chunk) [ITEM 9A. Controls and Procedures.](index=80&type=section&id=ITEM%209A.%20Controls%20and%20Procedures.) Disclosure controls were deemed effective, but a material weakness in internal control was identified - As of December 31, 2023, Elevai's CEO concluded that the company's disclosure controls and procedures were **effective**[412](index=412&type=chunk) - Management identified a **material weakness in internal control over financial reporting** due to limited accounting personnel and insufficient accounting policies and controls, which could result in material misstatements[416](index=416&type=chunk)[417](index=417&type=chunk) - Despite the material weakness, management believes the consolidated financial statements fairly present the company's financial position, results of operations, and cash flows[417](index=417&type=chunk) - **No changes in internal control** over financial reporting occurred during 2023 that materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[418](index=418&type=chunk) [ITEM 9B. Other Information.](index=81&type=section&id=ITEM%209B.%20Other%20Information.) No director or officer adopted or terminated a Rule 10b5-1 trading arrangement in 2023 - **No director or officer adopted or terminated a Rule 10b5-1** or non-Rule 10b5-1 trading arrangement during the year ended December 31, 2023[419](index=419&type=chunk) - Elevai has an insider trading policy to promote compliance with insider trading laws, rules, and Nasdaq's listing standards[420](index=420&type=chunk) [ITEM 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](index=81&type=section&id=ITEM%209C.%20Disclosure%20Regarding%20Foreign%20Jurisdictions%20that%20Prevent%20Inspections) The company has no disclosures regarding foreign jurisdictions that prevent inspections - Elevai Labs Inc. has no disclosures regarding foreign jurisdictions that prevent inspections[421](index=421&type=chunk) PART III [ITEM 10. Directors, Executive Officers and Corporate Governance.](index=82&type=section&id=ITEM%2010.%20Directors,%20Executive%20Officers%20and%20Corporate%20Governance.) The company details its leadership team, board committees, and governance policies like its Code of Ethics - The Board of Directors has established three committees: an Audit Committee (chaired by Juliana Daley), a Compensation Committee (chaired by George Kovalyov), and a Nomination Committee (chaired by Jeffrey Parry), all composed of independent directors[443](index=443&type=chunk)[445](index=445&type=chunk)[446](index=446&type=chunk)[447](index=447&type=chunk) - Elevai has adopted a Code of Ethics applicable to its directors, officers, and employees, and a Compensation Recovery Policy (Clawback Policy) in 2023, allowing recoupment of erroneously awarded incentive-based compensation[450](index=450&type=chunk)[452](index=452&type=chunk) Executive Officers and Directors | Name | Age | Position | | :-------------------- | :-- | :---------------------------------------- | | Jordan R. Plews, PhD | 41 | Chief Executive Officer, President and Director | | Graydon Bensler | 32 | Chief Financial Officer and Director | | Hatem Abou-Sayed, MD | 53 | Chief Medical Officer and Director | | Brenda Buechler | 54 | Chief Marketing Officer | | Christoph Kraneiss | 52 | Chief Commercial Officer | | Jeffrey Parry | 64 | Independent Director | | George Kovalyov | 39 | Independent Director | | Juliana Daley | 36 | Independent Director | [ITEM 11. Executive Compensation.](index=87&type=section&id=ITEM%2011.%20Executive%20Compensation.) Executive compensation consists of annual salaries and equity incentive awards - Elevai is an 'emerging growth company' and is exempt from certain executive compensation disclosure requirements, such as nonbinding advisory votes on executive compensation[453](index=453&type=chunk) - Executive officers receive annual salaries and equity compensation in the form of stock options under the 2020 Equity Incentive Plan, with options typically vesting 25% on the first anniversary and the remainder evenly over 36 months[461](index=461&type=chunk)[464](index=464&type=chunk)[466](index=466&type=chunk)[468](index=468&type=chunk) - In 2023, a cash bonus of **$25,000 was awarded to the Chief Financial Officer**, but no other bonuses were awarded or accrued for other executive officers[467](index=467&type=chunk) Named Executive Officer Compensation (2023 vs. 2022) | Name and Principal Position | Year | Salary ($) | Bonus ($) | Option Awards ($) | Total ($) | | :-------------------------- | :--- | :--------- | :-------- | :---------------- | :-------- | | Jordan R. Plews (CEO) | 2023 | 200,000 | - | - | 200,000 | | | 2022 | 200,000 | 10,000 | - | 210,000 | | Brenda Buechler (CMO) | 2023 | 190,000 | - | - | 190,000 | | | 2022 | 79,167 | 5,000 | 143,679 | 227,846 | | Christoph Kraneiss (CCO) | 2023 | 180,000 | - | - | 180,000 | | | 2022 | 75,000 | - | 121,227 | 196,227 | [ITEM 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.](index=90&type=section&id=ITEM%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters.) Executive officers and directors collectively own approximately 36.37% of outstanding Common Stock - As of March 25, 2024, there were **17,329,615 shares of Common Stock outstanding**[471](index=471&type=chunk) - Braeden Lichti, a founder, controls approximately **20.56% of the voting power** of Common Stock, including shares held by BWL Investments Ltd. and other entities, giving him significant influence over corporate matters[309](index=309&type=chunk)[474](index=474&type=chunk) - Dr. Jordan R. Plews, CEO, beneficially owned approximately 16.45% of outstanding Common Stock as of March 15, 2023, and **17.25% as of March 25, 2024**, allowing him significant influence over shareholder approval matters[310](index=310&type=chunk)[311](index=311&type=chunk)[472](index=472&type=chunk) Beneficial Ownership of Common Stock (as of March 25, 2024) | Name | Amount of Beneficial Ownership | Percentage of Beneficial Ownership | | :-------------------------------------------- | :----------------------------- | :--------------------------------- | | **5% or Greater Shareholders:** | | | | BWL Investments Ltd. | 1,967,965 | 11.32% | | JP JP Bio Consulting LLC | 2,851,454 | 16.45% | | Hatem Abou-Sayed MD MBA FACS, a Professional Medical Corporation | 1,371,905 | 7.9% | | Hongyu Wang | 1,708,406 | 9.82% | | **Directors, Named Executive Officers and Other Executive Officers:** | | | | Jordan R. Plews (CEO, President, Director) | 3,018,120 | 17.25% | | Graydon Bensler (CFO, Director) | 1,008,120 | 5.76% | | All executive officers and directors as a group (8 persons) | 5,757,237 | 36.37% | [ITEM 13. Certain Relationships and Related Transactions, and Director Independence.](index=92&type=section&id=ITEM%2013.%20Certain%20Relationships%20and%20Related%20Transactions,%20and%20Director%20Independence.) The audit committee reviews related party transactions, including consulting agreements with a founder - Elevai's audit committee reviews and approves related party transactions to ensure they are on terms no less favorable than those with unaffiliated third parties[476](index=476&type=chunk) - A consulting agreement with NorthStrive Companies Inc. (controlled by Braeden Lichti) involves monthly compensation of **$10,000 for investor outreach** and public company advisement, with deferred payment terms[478](index=478&type=chunk) - An advisory agreement with Braeden Lichti ensures his previously granted stock options continue to vest, maintaining his valuable advisory role after his resignation from the Board[479](index=479&type=chunk) - Nonstatutory stock options to purchase **240,000 shares** were granted to independent director nominees and related parties (Jeffery Parry, Crystal Muilenburg, and Julianna Daley) in June 2023, with a **$5.00 exercise price** and a 4-year vesting schedule[480](index=480&type=chunk) [ITEM 14. Principal Accounting Fees and Services.](index=92&type=section&id=ITEM%2014.%20Principal%20Accounting%20Fees%20and%20Services.) The company incurred $29,000 in audit fees for both 2023 and 2022 - Audit fees were incurred for the audit of annual consolidated financial statements and the review of interim consolidated financial statements, with all engagements approved by the Directors[483](index=483&type=chunk) Principal Accounting Fees and Services | SERVICES | 2023 ($) | 2022 ($) | | :---------------- | :------- | :------- | | Audit fees | 29,000 | 29,000 | | Audit-related fees | - | - | | Tax fees | - | - | | All other fees | - | - | | **Total fees** | **29,000** | **29,000** | PART IV [ITEM 15. Exhibits and Financial Statement Schedules.](index=94&type=section&id=ITEM%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules.) This section lists all financial statements and exhibits filed as part of the annual report - The report includes audited financial statements for December 31, 2023, and related statements, along with the independent auditors' report[485](index=485&type=chunk) - Financial statement schedules have been omitted as they are either not applicable or the required information is included in the financial statements or notes[485](index=485&type=chunk) - Exhibits include corporate governance documents, equity incentive plans, distributor agreements, collaboration agreements, employment agreements, and various certifications[489](index=489&type=chunk) - Representations and warranties in the filed agreements are solely for the benefit of the parties involved and may not reflect the actual state of affairs or standards of materiality for investors[485](index=485&type=chunk)[488](index=488&type=chunk) [ITEM 16. Form 10-K Summary](index=81&type=section&id=ITEM%2016.%20Form%2010-K%20Summary) The company has elected not to provide a summary of this annual report - Elevai Labs Inc. has elected not to provide a summary of the information in this annual report on Form 10-K[490](index=490&type=chunk) [SIGNATURES](index=96&type=section&id=SIGNATURES) The report is duly signed by the company's principal executive and accounting officers and directors - The report is signed by Jordan R. Plews (CEO, President, and Director) and Graydon Bensler (CFO and Director) as principal executive and accounting officers, respectively, along with other directors[493](index=493&type=chunk)[495](index=495&type=chunk) - Signatures confirm compliance with the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934[492](index=492&type=chunk)[494](index=494&type=chunk)

NEWPORT BEACH, Calif., March 18, 2024 (GLOBE NEWSWIRE) -- ELEVAI LABS, INC., (NASDAQ:ELAB) a medical aesthetic company specializing in physician-dispensed skin care, is proud to announce the launch of its online E-commerce portal. The new E-commerce portal serves as a business-to-business (B2B) extension of the Company's existing B2B relationship with physician dispensed providers currently offering ELEVAI products in the $19.7 billion global industry1. Through the Company's online platform, retail customer ...

Elevai Labs (NASDAQ:ELAB) stock is rocketing higher on Thursday as the skincare development company’s shares experience heavy trading this morning.That has more than 9.4 million shares of ELAB stock changing hands of this writing. To put that in perspective, the daily average trading volume for Elevai Labs’ shares is closer to 1.2 million units.Investors will note that this extreme stock movement comes without any recent news concerning Elevai Labs. The company has put out any new preleases or filings that ...

[PART I – FINANCIAL INFORMATION](index=3&type=section&id=PART%20I%20%E2%80%93%20FINANCIAL%20INFORMATION) Presents Elevai Labs Inc.'s unaudited condensed consolidated financial statements and related disclosures [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) Presents Elevai Labs Inc.'s unaudited condensed consolidated financial statements and notes for periods ended September 30, 2023, and December 31, 2022 [Condensed Balance Sheets](index=3&type=section&id=Condensed%20Balance%20Sheets) Summarizes Elevai Labs Inc.'s financial position, detailing assets, liabilities, and equity at specific reporting dates Table: Condensed Balance Sheets Summary | Metric | Sep 30, 2023 (USD) | Dec 31, 2022 (USD) | Change (USD) | % Change | | :-------------------------------- | :------------------- | :------------------- | :----------- | :------- | | **ASSETS** | | | | | | Total Current Assets | 1,276,604 | 1,551,322 | (274,718) | -17.71% | | TOTAL ASSETS | 1,582,989 | 1,892,183 | (309,194) | -16.35% | | **LIABILITIES** | | | | | | Total Current Liabilities | 1,643,575 | 588,272 | 1,055,303 | 179.38% | | TOTAL LIABILITIES | 1,746,884 | 760,873 | 986,011 | 129.59% | | **EQUITY (DEFICIT)** | | | | | | TOTAL EQUITY (DEFICIT) | (163,895) | 1,131,310 | (1,295,205) | -114.49% | | TOTAL LIABILITIES AND EQUITY | 1,582,989 | 1,892,183 | (309,194) | -16.35% | - The company's total current assets decreased by **$274,718**, or **17.71%**, from **$1,551,322** as of December 31, 2022, to **$1,276,604** as of September 30, 2023, primarily driven by a significant decrease in cash[8](index=8&type=chunk) - Total current liabilities surged by **$1,055,303**, or **179.38%**, reaching **$1,643,575** as of September 30, 2023, from **$588,272** at December 31, 2022, mainly due to increases in accounts payable, customer deposits, amounts due to related parties, and derivative liabilities[8](index=8&type=chunk) - The company's total equity shifted from a positive balance of **$1,131,310** at December 31, 2022, to a deficit of **$(163,895)** at September 30, 2023, reflecting a substantial accumulated deficit[8](index=8&type=chunk) [Unaudited Condensed Statements of Operations and Comprehensive Loss](index=4&type=section&id=Unaudited%20Condensed%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) Details Elevai Labs Inc.'s financial performance, including revenue, expenses, and net loss for the reported periods Table: Unaudited Condensed Statements of Operations and Comprehensive Loss Summary | Metric | 3 Months Ended Sep 30, 2023 (USD) | 3 Months Ended Sep 30, 2022 (USD) | 9 Months Ended Sep 30, 2023 (USD) | 9 Months Ended Sep 30, 2022 (USD) | | :--------------------------------- | :-------------------------------- | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Revenue | 554,654 | 432,122 | 1,014,004 | 627,379 | | Cost of sales | 188,509 | 194,428 | 341,122 | 273,480 | | Gross profit | 366,145 | 237,694 | 672,882 | 353,899 | | Total Expenses | 1,151,696 | 709,531 | 3,358,152 | 1,470,820 | | Net loss | (783,047) | (499,085) | (3,143,601) | (1,147,611) | | Basic and diluted loss per share | (0.078) | (0.052) | (0.318) | (0.120) | - For the nine months ended September 30, 2023, revenue increased by **61.6%** to **$1,014,004** from **$627,379** in the prior year, while gross profit more than doubled to **$672,882** from **$353,899**[9](index=9&type=chunk) - Despite revenue growth, total expenses for the nine months ended September 30, 2023, significantly increased by **128.3%** to **$3,358,152**, leading to a net loss of **$(3,143,601)**, a **174%** increase from **$(1,147,611)** in the same period last year[9](index=9&type=chunk) - Basic and diluted loss per share for the nine months ended September 30, 2023, was **$(0.318)**, compared to **$(0.120)** in the prior year, indicating a larger loss per share[9](index=9&type=chunk) [Unaudited Condensed Statements of Changes in Equity](index=5&type=section&id=Unaudited%20Condensed%20Statements%20of%20Changes%20in%20Equity) Outlines changes in Elevai Labs Inc.'s shareholders' equity, reflecting net loss, stock issuances, and share-based compensation - The company's total equity shifted from **$1,131,310** at January 1, 2023, to a deficit of **$(163,895)** by September 30, 2023, primarily due to a net loss of **$(3,143,601)** during the period[11](index=11&type=chunk)[12](index=12&type=chunk) - Additional paid-in capital increased significantly from **$3,852,044** at January 1, 2023, to **$5,699,623** by September 30, 2023, driven by private placements (**$1,463,537**), exercise of stock options (**$37,494**), and share-based compensation (**$346,548**)[11](index=11&type=chunk)[12](index=12&type=chunk) - The accumulated deficit more than doubled, from **$(2,722,373)** at January 1, 2023, to **$(5,865,974)** by September 30, 2023, reflecting the substantial net losses incurred[11](index=11&type=chunk)[12](index=12&type=chunk) [Unaudited Condensed Statements of Cash Flows](index=7&type=section&id=Unaudited%20Condensed%20Statements%20of%20Cash%20Flows) Presents Elevai Labs Inc.'s cash inflows and outflows from operating, investing, and financing activities for the reported periods Table: Unaudited Condensed Statements of Cash Flows Summary | Activity | 9 Months Ended Sep 30, 2023 (USD) | 9 Months Ended Sep 30, 2022 (USD) | Change (USD) | | :-------------------------------- | :-------------------------------- | :-------------------------------- | :----------- | | Cash flows used in operating activities | (2,168,661) | (1,079,472) | (1,089,189) | | Cash flows used in investing activities | (11,191) | (33,427) | 22,236 | | Cash flows provided by financing activities | 1,501,085 | 2,275,161 | (774,076) | | Change in cash | (678,046) | 1,161,158 | (1,839,204) | | Cash, ending of period | 476,855 | 1,573,016 | (1,096,161) | - Net cash used in operating activities significantly increased by **$1,089,189**, from **$(1,079,472)** in the nine months ended September 30, 2022, to **$(2,168,661)** in the same period of 2023, primarily due to a larger net loss[14](index=14&type=chunk) - Cash provided by financing activities decreased by **$774,076**, from **$2,275,161** in 2022 to **$1,501,085** in 2023, mainly due to lower proceeds from the issuance of common stock and warrants compared to the prior year[14](index=14&type=chunk) - The company experienced a substantial decrease in cash, with the ending cash balance falling from **$1,573,016** at September 30, 2022, to **$476,855** at September 30, 2023[14](index=14&type=chunk) [Notes to Unaudited Condensed Financial Statements](index=8&type=section&id=Notes%20to%20Unaudited%20Condensed%20Financial%20Statements) Provides detailed explanations of Elevai Labs Inc.'s accounting policies, financial position, and significant transactions [1. Organization and nature of operations](index=8&type=section&id=1.%20Organization%20and%20nature%20of%20operations) Describes Elevai Labs Inc.'s corporate structure, business focus on skincare development, and recent Initial Public Offering - Elevai Labs Inc. (incorporated June 9, 2020) and its subsidiary Elevai Research Inc. are a skincare development company focused on designing, manufacturing, and marketing skincare products, particularly proprietary stem cell-derived Elevai Exosomes[15](index=15&type=chunk)[16](index=16&type=chunk) - The company successfully completed its Initial Public Offering (IPO) on November 21, 2023, with **1,500,000** shares of common stock priced at **$4.00** per share, generating **$6,000,000** in gross proceeds, and commenced trading on Nasdaq under 'ELAB'[17](index=17&type=chunk)[109](index=109&type=chunk) [2. Going Concern](index=8&type=section&id=2.%20Going%20Concern) Assesses Elevai Labs Inc.'s ability to continue operations, highlighting financial challenges and management's plans to secure funding - The company's ability to continue as a going concern is in substantial doubt due to a net working capital deficit of **$366,971** (compared to a positive **$963,050** in 2022), an accumulated deficit of **$5,865,974**, a total equity deficit of **$163,895**, and significant net losses and cash used in operations for the nine months ended September 30, 2023[19](index=19&type=chunk)[150](index=150&type=chunk) - Management plans to alleviate going concern doubts by raising additional debt or equity financing, including funds from its recently completed IPO, to accelerate new product development, inventory production, sales force expansion, and market entry[21](index=21&type=chunk) [3. Summary of Significant Accounting Policies](index=9&type=section&id=3.%20Summary%20of%20Significant%20Accounting%20Policies) Outlines the key accounting principles and methods used in preparing Elevai Labs Inc.'s financial statements [Basis of Presentation](index=9&type=section&id=Basis%20of%20Presentation) Explains the framework for preparing Elevai Labs Inc.'s unaudited condensed consolidated financial statements in accordance with U.S. GAAP - The unaudited condensed consolidated financial statements are prepared in accordance with SEC rules and U.S. GAAP for interim financial information, expressed in U.S. dollars, and include all necessary recurring adjustments for fair presentation[24](index=24&type=chunk) [Principles of Consolidation](index=9&type=section&id=Principles%20of%20Consolidation) Details the consolidation of Elevai Labs Inc. and its subsidiary, ensuring elimination of intercompany transactions - The consolidated financial statements include Elevai Labs Inc. and its **100%** owned subsidiary, Elevai Research Inc., with all intercompany accounts, transactions, and profits eliminated[25](index=25&type=chunk) [Use of Estimates](index=9&type=section&id=Use%20of%20Estimates) Highlights management's reliance on estimates and assumptions in financial reporting, particularly for complex accounting areas - Management makes estimates and assumptions for financial reporting, particularly for revenue recognition, receivables, inventory valuation, derivative liabilities, stock options, long-lived assets, and deferred income tax allowances, based on current facts and historical experience[26](index=26&type=chunk) [Foreign Currency Translation](index=9&type=section&id=Foreign%20Currency%20Translation) Describes the accounting treatment for foreign currency transactions and translation of financial statements for Elevai Labs Inc.'s Canadian subsidiary - The company's functional and reporting currency is the U.S. dollar, while its Canadian subsidiary, Elevai Research, uses the Canadian dollar; foreign currency assets and liabilities are translated at period-end rates, and revenues/expenses at average rates, with translation gains/losses recorded in accumulated other comprehensive income (loss)[27](index=27&type=chunk)[28](index=28&type=chunk) [New Accounting Standards](index=10&type=section&id=New%20Accounting%20Standards) Discusses the impact and expected impact of recently adopted and issued accounting standards on Elevai Labs Inc.'s financial statements - The adoption of ASU 2020-06 (Debt with Conversion and Other Options) and ASU 2022-02 (Credit Losses) did not have a significant impact on the company's financial statements[30](index=30&type=chunk)[31](index=31&type=chunk) - The company does not expect ASU 2022-03 (Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions), effective for public business entities after December 15, 2023, to have a significant impact on its consolidated financial statements[33](index=33&type=chunk)[35](index=35&type=chunk)[36](index=36&type=chunk) [4. Receivables](index=11&type=section&id=4.%20Receivables) Details the composition and changes in Elevai Labs Inc.'s trade and sales taxes receivables over the reporting periods Table: Receivables Summary | Receivable Type | Sep 30, 2023 (USD) | Dec 31, 2022 (USD) | | :---------------- | :----------------- | :----------------- | | Trade receivable | 5,692 | 4,180 | | Sales taxes receivable | 2,690 | 8,674 | | Total Receivables | 8,382 | 12,854 | - Total receivables decreased from **$12,854** at December 31, 2022, to **$8,382** at September 30, 2023, primarily due to a reduction in sales taxes receivable[38](index=38&type=chunk) [5. Prepaids and Deposits](index=11&type=section&id=5.%20Prepaids%20and%20Deposits) Summarizes Elevai Labs Inc.'s prepaid expenses, deposits, and deferred share issuance costs for the reported periods Table: Prepaids and Deposits Summary | Item | Sep 30, 2023 (USD) | Dec 31, 2022 (USD) | | :-------------------------------- | :----------------- | :----------------- | | Prepaid expenses | 44,278 | 89,819 | | Deposits | 21,613 | 24,376 | | Deferred share issuance and listing expense | 236,940 | 50,000 | | Total Prepaids and Deposits | 302,831 | 164,195 | | Prepaids and deposits - current | 292,058 | 153,422 | | Deposits - non-current | 10,773 | 10,773 | - Total prepaids and deposits increased significantly from **$164,195** at December 31, 2022, to **$302,831** at September 30, 2023, mainly driven by a substantial increase in deferred share issuance and listing expenses[39](index=39&type=chunk) [6. Inventory](index=11&type=section&id=6.%20Inventory) Provides a breakdown of Elevai Labs Inc.'s inventory, including raw materials, work in progress, and finished goods, and related costs Table: Inventory Summary | Inventory Category | Sep 30, 2023 (USD) | Dec 31, 2022 (USD) | | :----------------- | :----------------- | :----------------- | | Raw materials | 257,243 | 81,133 | | Work in progress | 143,166 | 116,984 | | Finished goods | 98,900 | 32,028 | | Total Inventory | 499,309 | 230,145 | - Total inventory more than doubled from **$230,145** at December 31, 2022, to **$499,309** at September 30, 2023, with significant increases across raw materials, work in progress, and finished goods[40](index=40&type=chunk) - Cost of inventory recognized as expense in cost of sales decreased to **$193,805** for the nine months ended September 30, 2023, from **$233,728** in the prior year, while inventory related to samples expensed in marketing and promotion increased to **$96,184** from **$29,437**[40](index=40&type=chunk) [7. Property and equipment](index=12&type=section&id=7.%20Property%20and%20equipment) Details Elevai Labs Inc.'s property and equipment, including cost, accumulated depreciation, and net book value Table: Property and Equipment Summary | Category | Dec 31, 2022 (USD) | Sep 30, 2023 (USD) | | :-------------------- | :----------------- | :----------------- | | Total Cost | 61,640 | 72,895 | | Total Accumulated Depreciation | 8,105 | 16,836 | | Net Book Value | 53,535 | 55,989 | - Net book value of property and equipment increased slightly from **$53,535** at December 31, 2022, to **$55,989** at September 30, 2023, reflecting additions of **$11,191** during the period[42](index=42&type=chunk) - Depreciation expense for the nine months ended September 30, 2023, was **$8,737**, with **$914** capitalized as part of inventory production[42](index=42&type=chunk) [8. Operating lease](index=12&type=section&id=8.%20Operating%20lease) Describes Elevai Labs Inc.'s operating lease arrangements, including amendments, lease costs, and future payment obligations - The company amended its operating lease on July 3, 2023, to include additional office space, increasing monthly rent from **$10,773** to **$13,477** and resulting in a **$47,986** increase in lease liability and right-of-use asset[44](index=44&type=chunk) - Total lease cost for the nine months ended September 30, 2023, was **$103,000**, allocated to office and administration (**$74,641**), research and development (**$23,705**), and capitalized to inventory production (**$4,655**)[45](index=45&type=chunk)[46](index=46&type=chunk) Table: Future Minimum Lease Payments | Year | Total Future Minimum Lease Payments (USD) | | :--- | :-------------------------------------- | | 2023 | 40,430 | | 2024 | 161,721 | | 2025 | 67,374 | | Thereafter | - | | **Total** | **269,535** | | Less: Imputed interest | (25,316) | | Operating lease liability | 244,219 | | Operating lease liability – current | 140,910 | | Operating lease liability – non-current | 103,309 | [9. Accounts payable and accrued liabilities](index=13&type=section&id=9.%20Accounts%20payable%20and%20accrued%20liabilities) Summarizes Elevai Labs Inc.'s accounts payable and accrued liabilities, reflecting changes in operational obligations Table: Accounts Payable and Accrued Liabilities Summary | Category | Sep 30, 2023 (USD) | Dec 31, 2022 (USD) | | :--------------- | :----------------- | :----------------- | | Accounts payable | 573,054 | 222,461 | | Accrued liabilities | 132,574 | 33,864 | | Total | 705,628 | 256,325 | - Accounts payable and accrued liabilities significantly increased from **$256,325** at December 31, 2022, to **$705,628** at September 30, 2023, reflecting growth in both accounts payable and accrued liabilities[48](index=48&type=chunk) [10. Notes payable](index=13&type=section&id=10.%20Notes%20payable) Details Elevai Labs Inc.'s promissory notes, their conversion into preferred shares and warrants, and related terms - In April and May 2022, the company issued **$183,970** in promissory notes at **8%** interest, which converted into **231,828** Series A preferred shares and **231,828** common stock purchase warrants on July 15, 2022, at a conversion price of **$0.80** per share[49](index=49&type=chunk) [11. Derivative liabilities](index=13&type=section&id=11.%20Derivative%20liabilities) Explains the nature and valuation of Elevai Labs Inc.'s derivative liabilities, primarily from common stock purchase warrants - Derivative liabilities, primarily from common stock purchase warrants, increased from **$68,455** at December 31, 2022, to **$519,509** at September 30, 2023, due to a significant change in fair value of **$451,054**[52](index=52&type=chunk) - The fair value of derivative liabilities is measured using the Black-Scholes Option Pricing Model, with key assumptions including a risk-free interest rate of **4.80%** and an expected volatility of **100%** as of September 30, 2023[52](index=52&type=chunk)[53](index=53&type=chunk) - On April 28, 2023, warrant agreements were amended, removing the automatic IPO conversion clause and setting an expiry date of April 27, 2027, which increased the expected life input in the Black-Scholes model[54](index=54&type=chunk) [12. Equity](index=15&type=section&id=12.%20Equity) Details Elevai Labs Inc.'s common stock, preferred stock, equity warrants, and stock options, including changes and outstanding balances [Common Stock](index=15&type=section&id=Common%20Stock) Summarizes Elevai Labs Inc.'s common stock activity, including authorized, issued, and outstanding shares, and recent issuances - Authorized common stock increased from **19,000,000** to **300,000,000** shares, and issued and outstanding shares increased from **9,568,475** to **10,118,834** as of September 30, 2023[55](index=55&type=chunk)[56](index=56&type=chunk) - During the nine months ended September 30, 2023, the company issued **62,500** common shares from stock option exercises, **250,000** common shares with warrants for **$750,000**, and additional common shares through private placements[57](index=57&type=chunk)[58](index=58&type=chunk)[59](index=59&type=chunk)[60](index=60&type=chunk) [Preferred Stock](index=15&type=section&id=Preferred%20Stock) Details Elevai Labs Inc.'s preferred stock, including Series Seed and Series A shares, and prior year financing activities - As of September 30, 2023, the company had **213,730** Series Seed 1, **3,635,252** Series Seed 2, and **1,861,799** Series A preferred shares issued and outstanding, with no preferred stock transactions during the nine months ended September 30, 2023[63](index=63&type=chunk)[64](index=64&type=chunk)[66](index=66&type=chunk)[67](index=67&type=chunk)[68](index=68&type=chunk)[70](index=70&type=chunk) - In 2022, the company closed multiple tranches of Series A Financing, issuing **1,090,029** Series A preferred shares for **$1,462,146**, and converting promissory notes into **231,828** Series A preferred shares and common stock purchase warrants[71](index=71&type=chunk)[72](index=72&type=chunk)[73](index=73&type=chunk) [Equity Warrants](index=16&type=section&id=Equity%20Warrants) Describes Elevai Labs Inc.'s outstanding equity warrants, their exercise prices, and recent issuance and amendment details - As of September 30, 2023, **349,998** equity warrants were outstanding with a weighted average exercise price of **$3.00** and a weighted average life of **3.07** years, compared to none outstanding at December 31, 2022[79](index=79&type=chunk) - New equity warrants were issued in March and September 2023, including **250,000** warrants exercisable at **$3.00** per share with specific IPO-related exercisability clauses, and **99,998** warrants with a three-year and 180-day expiration following issuance[74](index=74&type=chunk)[76](index=76&type=chunk) [Stock Options](index=17&type=section&id=Stock%20Options) Outlines Elevai Labs Inc.'s stock option plan, outstanding options, recent grants, and share-based compensation expense - The company's 2020 Equity Incentive Plan authorizes up to **1,734,188** shares for stock options. As of September 30, 2023, **1,537,667** stock options were outstanding with a weighted average exercise price of **$1.70** and a weighted average life of **8.09** years[80](index=80&type=chunk)[90](index=90&type=chunk) - During the nine months ended September 30, 2023, **234,000** stock options were granted with exercise prices of **$5.00** per share, including **160,000** to newly appointed independent directors, valued using the Black-Scholes model[82](index=82&type=chunk)[83](index=83&type=chunk)[85](index=85&type=chunk) - Share-based compensation expense for the nine months ended September 30, 2023, was **$346,549**, significantly higher than **$94,099** in the prior year, primarily included in office and administration and research and development[91](index=91&type=chunk) [13. Related Party Transactions](index=20&type=section&id=13.%20Related%20Party%20Transactions) Details financial transactions and remuneration involving Elevai Labs Inc.'s directors, key management, and related entities Table: Related Party Remuneration | Category | 9 Months Ended Sep 30, 2023 (USD) | 9 Months Ended Sep 30, 2022 (USD) | | :---------------------- | :-------------------------------- | :-------------------------------- | | Consulting fees | 153,750 | 147,998 | | Salaries | 476,126 | 252,879 | | Share-based compensation | 247,348 | 80,259 | | **Total Remuneration** | **877,224** | **481,136** | - Total remuneration for directors and key management personnel increased from **$481,136** in the nine months ended September 30, 2022, to **$877,224** in the same period of 2023, driven by higher salaries and share-based compensation[92](index=92&type=chunk) - As of September 30, 2023, **$222,675** was due to companies controlled by Braeden Lichti, with **$210,000** deferred for consulting services, payable in cash or Series A preferred stock[100](index=100&type=chunk) [14. Commitments and Contingencies](index=23&type=section&id=14.%20Commitments%20and%20Contingencies) Addresses Elevai Labs Inc.'s contractual commitments and potential contingent liabilities, including vendor disputes - The company had no commitments as of September 30, 2023, or December 31, 2022. An ongoing dispute with a vendor over unpaid invoices was settled in May 2023 for **Cnd$12,500** (approximately **$9,225**)[103](index=103&type=chunk)[104](index=104&type=chunk) [15. Concentrations](index=23&type=section&id=15.%20Concentrations) Analyzes Elevai Labs Inc.'s customer and supplier concentrations, assessing potential risks and mitigation strategies [Customers](index=23&type=section&id=Customers) Examines Elevai Labs Inc.'s customer concentration, noting reduced dependence on its largest customer and expansion plans - The company's largest customer accounted for **14%** of revenue for the nine months ended September 30, 2023, a significant decrease from **55%** in the prior year, indicating reduced customer concentration[105](index=105&type=chunk)[176](index=176&type=chunk) - Dependence on major customers is expected to decrease as the company expands distributor agreements and builds its sales team[106](index=106&type=chunk)[177](index=177&type=chunk) [Suppliers](index=23&type=section&id=Suppliers) Evaluates Elevai Labs Inc.'s supplier concentration, identifying key suppliers and management's view on supply disruption risks Table: Supplier Concentration | Supplier | 9 Months Ended Sep 30, 2023 (%) | 9 Months Ended Sep 30, 2022 (%) | | :--------- | :------------------------------ | :------------------------------ | | Supplier 1 | 26% | 46% | | Supplier 2 | 23% | 14% | | Supplier 3 | 17% | 12% | | **Total** | **66%** | **72%** | - Three key suppliers represented **66%** of inventory purchase and production costs for the nine months ended September 30, 2023, a decrease from **72%** in the prior year, indicating a slight reduction in supplier concentration[107](index=107&type=chunk)[179](index=179&type=chunk) - Management believes that potential supply disruptions from key suppliers could be overcome quickly due to the availability of alternatives[107](index=107&type=chunk)[179](index=179&type=chunk) [16. Subsequent Events](index=23&type=section&id=16.%20Subsequent%20Events) Reports significant events occurring after the reporting period, including Elevai Labs Inc.'s successful Initial Public Offering - On November 21, 2023, the company successfully completed its Initial Public Offering (IPO), with **1,500,000** shares of common stock trading on NASDAQ under 'ELAB' at **$4.00** per share, generating **$6,000,000** in gross proceeds[109](index=109&type=chunk)[196](index=196&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=24&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on Elevai Labs Inc.'s financial performance, condition, and future outlook, detailing revenue, expenses, gross profit, and liquidity for the three and nine months ended September 30, 2023 and 2022. It also covers critical accounting policies, market risks, and related party transactions [Forward-Looking Statements](index=24&type=section&id=Forward-Looking%20Statements) Highlights the presence of forward-looking statements in the report, subject to risks and uncertainties - The report contains forward-looking statements regarding future events and performance, based on management's current beliefs, which involve risks and uncertainties that could cause actual results to differ materially[111](index=111&type=chunk) [Organization and Overview of Operations](index=24&type=section&id=Organization%20and%20Overview%20of%20Operations) Describes Elevai Labs Inc.'s business as a topical skincare company specializing in aesthetic biotechnology - Elevai Labs Inc., incorporated in June 2020, is a topical skincare company specializing in aesthetic biotechnology, developing and commercializing products containing proprietary stem cell-derived Elevai Exosomes[112](index=112&type=chunk) - The company has a fully-commercialized process from exosome secretion to product bottling, selling specialty topical products primarily through the physician-dispensed channel to address various skin conditions[114](index=114&type=chunk) [Outlook](index=24&type=section&id=Outlook) Outlines Elevai Labs Inc.'s strategic focus for the next twelve months, including sales expansion and R&D - Over the next twelve months, management plans to focus on expanding its internal sales force, utilizing clinical validation studies, conducting R&D for new product formulations, and expanding international distribution partnerships[115](index=115&type=chunk) [Results of Operations](index=25&type=section&id=Results%20of%20Operations) Analyzes Elevai Labs Inc.'s financial performance, detailing revenue, expenses, and profitability trends [Comparison of the nine months ended September 30, 2023 and 2022](index=25&type=section&id=Comparison%20of%20the%20nine%20months%20ended%20September%2030%2C%202023%20and%202022) Compares Elevai Labs Inc.'s financial results for the nine-month periods, highlighting key performance drivers Table: Financial Performance Summary (9 Months) | Metric | 9 Months Ended Sep 30, 2023 (USD) | 9 Months Ended Sep 30, 2022 (USD) | Change (USD) | % Change | | :-------------------------- | :-------------------------------- | :-------------------------------- | :----------- | :------- | | Revenue | 1,014,004 | 627,379 | 386,625 | 61.63% | | Cost of revenue | 341,122 | 273,480 | 67,642 | 24.73% | | Gross profit | 672,882 | 353,899 | 318,983 | 90.13% | | Gross profit percentage | 66% | 56% | 10% | 17.86% | | Total operating expenses | 3,358,152 | 1,470,820 | 1,887,332 | 128.32% | | Net loss | (3,143,601) | (1,147,611) | (1,995,990) | 173.93% | | Basic and dilutive loss per share | (0.318) | (0.120) | (0.198) | 165.00% | [Revenue](index=25&type=section&id=Revenue_9M) Analyzes Elevai Labs Inc.'s revenue growth for the nine months, driven by product sales increases - Revenue increased by **$386,625** (**61.6%**) to **$1,014,004** for the nine months ended September 30, 2023, compared to **$627,379** in the prior year, driven by significant growth in Enfinity and Empower product sales[117](index=117&type=chunk)[118](index=118&type=chunk) Table: Revenue by Product Category (9 Months) | Product Category | 9 Months Ended Sep 30, 2023 (USD) | 9 Months Ended Sep 30, 2022 (USD) | Change (USD) | % Change | | :----------------- | :-------------------------------- | :-------------------------------- | :----------- | :------- | | Enfinity | 509,089 | 232,187 | 276,902 | 119.26% | | Empower | 408,166 | 51,174 | 356,992 | 697.60% | | White label distributor | 96,750 | 344,018 | (247,268) | -71.88% | | **Total Revenue** | **1,014,004** | **627,379** | **386,625** | **61.63%** | [Cost of Revenue](index=26&type=section&id=Cost%20of%20Revenue_9M) Examines Elevai Labs Inc.'s cost of revenue for the nine months, directly linked to sales volume - Cost of revenue increased by **$67,642** to **$341,122** for the nine months ended September 30, 2023, compared to **$273,480** in the prior year, directly attributed to the increase in sales[120](index=120&type=chunk)[121](index=121&type=chunk) Table: Cost of Revenue Components (9 Months) | Cost Component | 9 Months Ended Sep 30, 2023 (USD) | 9 Months Ended Sep 30, 2022 (USD) | | :------------------------ | :-------------------------------- | :-------------------------------- | | Cost of inventory | 187,135 | 225,908 | | Sales commission | 86,567 | 32,574 | | Shipping cost | 60,750 | 7,178 | | Inventory write down and wastage | 6,670 | 7,820 | | **Total Cost of Revenue** | **341,122** | **273,480** | [Gross Profit](index=26&type=section&id=Gross%20Profit_9M) Details Elevai Labs Inc.'s gross profit and margin improvements for the nine months, influenced by product mix - Gross profit increased by **$318,983** to **$672,882** for the nine months ended September 30, 2023, with the overall gross margin percentage rising to **66%** from **56%** in the prior year[122](index=122&type=chunk) Table: Gross Profit Percentage by Product Category (9 Months) | Product Category | 9 Months Ended Sep 30, 2023 (%) | 9 Months Ended Sep 30, 2022 (%) | | :----------------- | :------------------------------ | :------------------------------ | | Enfinity | 62% | 67% | | Empower | 73% | 57% | | White label distributor | 61% | 49% | | **Overall Gross Profit Percentage** | **66%** | **56%** | - The increase in overall gross margin was primarily due to a higher gross margin on Empower products (**73%** vs. **57%**) and a higher ratio of Enfinity and Empower sales compared to lower-margin white label distributor sales[122](index=122&type=chunk)[124](index=124&type=chunk) [Research and Development Expenses ("R&D")](index=27&type=section&id=Research%20and%20Development%20Expenses%20%28%22R%26D%22%29_9M) Reviews Elevai Labs Inc.'s R&D expenses for the nine months, driven by increased personnel and facility costs - R&D expenses increased by **$135,881** to **$303,769** for the nine months ended September 30, 2023, mainly due to an increase in lab employees and higher rent and utilities at the new, larger lab facility[125](index=125&type=chunk) [Marketing and Promotion](index=27&type=section&id=Marketing%20and%20Promotion_9M) Analyzes Elevai Labs Inc.'s marketing and promotion expenses for the nine months, reflecting increased sales efforts - Marketing and promotion expenses increased by **$181,674** to **$316,436** for the nine months ended September 30, 2023, reflecting increased efforts to drive sales, including a rise in product samples given out (costing **$96,184** vs. **$29,437**)[126](index=126&type=chunk) [Office and Administrative Expenses](index=27&type=section&id=Office%20and%20Administrative%20Expenses_9M) Examines Elevai Labs Inc.'s office and administrative expenses for the nine months, significantly impacted by salaries and share-based compensation - Office and administrative expenses surged by **$989,217** to **$1,628,931** for the nine months ended September 30, 2023, primarily due to increased salaries and wages (**$1,000,313** vs. **$384,322**), higher office rent, and a **$247,280** increase in share-based compensation[127](index=127&type=chunk) [Consulting Fees](index=27&type=section&id=Consulting%20Fees_9M) Details Elevai Labs Inc.'s consulting fees for the nine months, consistent with overall operational growth - Consulting fees increased by **$68,305** to **$316,468** for the nine months ended September 30, 2023, consistent with the overall increase in operations and services received from various parties[128](index=128&type=chunk) [Professional Fees](index=27&type=section&id=Professional%20Fees_9M) Reviews Elevai Labs Inc.'s professional fees for the nine months, primarily due to IPO-related audit and legal services - Professional fees increased significantly by **$355,519** to **$450,384** for the nine months ended September 30, 2023, mainly due to increased audit, legal, and accounting services related to the company's IPO preparations[129](index=129&type=chunk) [Travel and Entertainment](index=28&type=section&id=Travel%20and%20Entertainment_9M) Analyzes Elevai Labs Inc.'s travel and entertainment expenses for the nine months, reflecting increased industry presence - Travel and entertainment expenses increased by **$101,505** to **$250,000** for the nine months ended September 30, 2023, as the company increased its presence at industry trade shows and conferences to raise awareness and drive business development[131](index=131&type=chunk) [Investor Relations](index=28&type=section&id=Investor%20Relations_9M) Examines Elevai Labs Inc.'s investor relations expenses for the nine months, aligned with growth strategy - Investor relations expenses increased by **$52,604** to **$84,820** for the nine months ended September 30, 2023, consistent with the company's growth strategy[132](index=132&type=chunk) [Comparison of the three months ended September 30, 2023 and 2022](index=28&type=section&id=Comparison%20of%20the%20three%20months%20ended%20September%2030%2C%202023%20and%202022) Compares Elevai Labs Inc.'s financial results for the three-month periods, highlighting key performance drivers Table: Financial Performance Summary (3 Months) | Metric | 3 Months Ended Sep 30, 2023 (USD) | 3 Months Ended Sep 30, 2022 (USD) | Change (USD) | % Change | | :-------------------------- | :-------------------------------- | :-------------------------------- | :----------- | :------- | | Revenue | 554,654 | 432,122 | 122,532 | 28.36% | | Cost of revenue | 188,509 | 194,428 | (5,919) | -3.04% | | Gross profit | 366,145 | 237,694 | 128,451 | 54.04% | | Gross profit percentage | 66% | 55% | 11% | 20.00% | | Total operating expenses | 1,151,696 | 709,531 | 442,165 | 62.32% | | Net loss | (783,047) | (499,085) | (283,962) | 56.90% | | Basic and dilutive loss per share | (0.078) | (0.052) | (0.026) | 50.00% | [Revenue](index=29&type=section&id=Revenue_3M) Analyzes Elevai Labs Inc.'s revenue growth for the three months, driven by strong product sales - Revenue increased by **$122,532** (**28.4%**) to **$554,654** for the three months ended September 30, 2023, compared to **$432,122** in the prior year, driven by strong sales growth in Enfinity and Empower products[135](index=135&type=chunk)[136](index=136&type=chunk) Table: Revenue by Product Category (3 Months) | Product Category | 3 Months Ended Sep 30, 2023 (USD) | 3 Months Ended Sep 30, 2022 (USD) | Change (USD) | % Change | | :----------------- | :-------------------------------- | :-------------------------------- | :----------- | :------- | | Enfinity | 252,035 | 153,262 | 98,773 | 64.45% | | Empower | 205,869 | 30,892 | 174,977 | 566.30% | | White label distributor | 96,750 | 247,968 | (151,218) | -60.98% | | **Total Revenue** | **554,654** | **432,122** | **122,532** | **28.36%** | [Cost of Revenue](index=29&type=section&id=Cost%20of%20Revenue_3M) Examines Elevai Labs Inc.'s cost of revenue for the three months, showing a decrease despite sales growth due to improved margins - Cost of revenue decreased by **$5,919** to **$188,509** for the three months ended September 30, 2023, despite an increase in sales, primarily due to an improved overall gross margin[137](index=137&type=chunk)[138](index=138&type=chunk) Table: Cost of Revenue Components (3 Months) | Cost Component | 3 Months Ended Sep 30, 2023 (USD) | 3 Months Ended Sep 30, 2022 (USD) | | :---------------- | :-------------------------------- | :-------------------------------- | | Cost of inventory | 113,239 | 169,286 | | Sales commission | 39,150 | 19,952 | | Shipping cost | 32,372 | 5,190 | | Inventory write down | 3,748 | - | | **Total Cost of Revenue** | **188,509** | **194,428** | [Gross Profit](index=30&type=section&id=Gross%20Profit_3M) Details Elevai Labs Inc.'s gross profit and margin improvements for the three months, influenced by product mix - Gross profit increased by **$128,451** to **$366,145** for the three months ended September 30, 2023, with the overall gross margin percentage rising to **66%** from **55%** in the prior year[139](index=139&type=chunk) Table: Gross Profit Percentage by Product Category (3 Months) | Product Category | 3 Months Ended Sep 30, 2023 (%) | 3 Months Ended Sep 30, 2022 (%) | | :----------------- | :------------------------------ | :------------------------------ | | Enfinity | 63% | 69% | | Empower | 72% | 69% | | White label distributor | 61% | 45% | | **Overall Gross Profit Percentage** | **66%** | **55%** | - The increase in overall gross margin was primarily due to improved gross margin on Empower products (**72%** vs. **69%**) and white label distributor sales (**61%** vs. **45%**), along with a higher proportion of Enfinity and Empower sales[139](index=139&type=chunk)[140](index=140&type=chunk) [Research and Development Expenses ("R&D")](index=30&type=section&id=Research%20and%20Development%20Expenses%20%28%22R%26D%22%29_3M) Reviews Elevai Labs Inc.'s R&D expenses for the three months, showing a decrease due to reduced consulting - R&D expenses decreased by **$2,951** to **$86,374** for the three months ended September 30, 2023, mainly due to reduced spending on consulting firms for R&D[141](index=141&type=chunk) [Marketing and Promotion](index=30&type=section&id=Marketing%20and%20Promotion_3M) Analyzes Elevai Labs Inc.'s marketing and promotion expenses for the three months, reflecting increased sales efforts - Marketing and promotion expenses increased by **$26,436** to **$99,709** for the three months ended September 30, 2023, reflecting increased efforts to drive sales, including a rise in product samples given out (costing **$31,466** vs. **$17,030**)[142](index=142&type=chunk) [Office and Administrative Expenses](index=30&type=section&id=Office%20and%20Administrative%20Expenses_3M) Examines Elevai Labs Inc.'s office and administrative expenses for the three months, significantly impacted by salaries and share-based compensation - Office and administrative expenses increased by **$352,625** to **$664,922** for the three months ended September 30, 2023, primarily due to higher salaries and wages, increased office rent, and a **$124,949** increase in share-based compensation[143](index=143&type=chunk) [Consulting Fees](index=31&type=section&id=Consulting%20Fees_3M) Details Elevai Labs Inc.'s consulting fees for the three months, showing a decrease compared to the prior year - Consulting fees decreased by **$26,662** to **$82,781** for the three months ended September 30, 2023, compared to the prior year[145](index=145&type=chunk) [Professional Fees](index=31&type=section&id=Professional%20Fees_3M) Reviews Elevai Labs Inc.'s professional fees for the three months, primarily due to IPO-related audit and legal services - Professional fees increased by **$93,948** to **$143,654** for the three months ended September 30, 2023, mainly due to increased audit, legal, and accounting services related to the company's IPO preparations[146](index=146&type=chunk) [Travel and Entertainment](index=31&type=section&id=Travel%20and%20Entertainment_3M) Analyzes Elevai Labs Inc.'s travel and entertainment expenses for the three months, reflecting increased industry presence - Travel and entertainment expenses increased by **$9,938** to **$65,830** for the three months ended September 30, 2023, due to increased presence at industry trade shows and conferences[147](index=147&type=chunk) [Investor Relations](index=31&type=section&id=Investor%20Relations_3M) Examines Elevai Labs Inc.'s investor relations expenses for the three months, showing a decrease due to contract conclusion - Investor relations expenses decreased by **$9,330** to **$9,100** for the three months ended September 30, 2023, attributed to the conclusion of an annual contract with an investor relations firm[148](index=148&type=chunk) [Liquidity and Capital Resources](index=31&type=section&id=Liquidity%20and%20Capital%20Resources) Assesses Elevai Labs Inc.'s financial liquidity and capital management, including cash flows and working capital - The company's ability to continue as a going concern is dependent on continued financial support and obtaining necessary equity financing, as evidenced by a net working capital deficit of **$366,971** and an accumulated deficit of **$5,865,974** as of September 30, 2023[149](index=149&type=chunk)[150](index=150&type=chunk) - Cash on hand decreased significantly from **$1,154,901** at December 31, 2022, to **$476,855** at September 30, 2023[151](index=151&type=chunk) Table: Working Capital Summary | Metric | Sep 30, 2023 (USD) | Dec 31, 2022 (USD) | Change (USD) | | :---------------- | :----------------- | :----------------- | :----------- | | Current assets | 1,276,604 | 1,551,322 | (274,718) | | Current liabilities | 1,643,575 | 588,272 | 1,055,303 | | Working capital | (366,971) | 963,050 | (1,330,021) | [Cash Used in Operating Activities](index=32&type=section&id=Cash%20Used%20in%20Operating%20Activities) Analyzes Elevai Labs Inc.'s cash outflows from operating activities, primarily driven by net loss - Net cash used in operating activities increased to **$2,168,661** for the nine months ended September 30, 2023, from **$1,079,472** in the prior year, primarily due to a larger net loss and timing of asset and liability settlements[155](index=155&type=chunk) [Cash Used in Investing Activities](index=32&type=section&id=Cash%20Used%20in%20Investing%20Activities) Details Elevai Labs Inc.'s cash outflows from investing activities, mainly for equipment purchases - Cash used in investing activities decreased to **$11,191** for the nine months ended September 30, 2023, from **$33,427** in the prior year, mainly for equipment purchases for lab space and trade shows[156](index=156&type=chunk) [Cash Flows from Financing Activities](index=32&type=section&id=Cash%20Flows%20from%20Financing%20Activities) Examines Elevai Labs Inc.'s cash inflows from financing activities, primarily from stock and warrant issuances - Cash flows provided by financing activities decreased to **$1,501,085** for the nine months ended September 30, 2023, from **$2,275,161** in the prior year, primarily from **$1,463,585** raised through common stock and warrant issuance and **$37,500** from stock option exercises[157](index=157&type=chunk) [Critical Accounting Policies and Significant Judgments and Estimates](index=32&type=section&id=Critical%20Accounting%20Policies%20and%20Significant%20Judgments%20and%20Estimates) Highlights key accounting policies and management's significant judgments and estimates in financial reporting - The preparation of financial statements requires management to make significant estimates and assumptions, including those related to revenue recognition, receivables, inventory valuation, fair value of derivative liabilities and stock options, and long-lived assets[158](index=158&type=chunk) [Revenue Recognition](index=33&type=section&id=Revenue%20Recognition) Explains Elevai Labs Inc.'s policy for recognizing revenue upon transfer of product control to customers - Revenue is recognized when performance obligations are satisfied by transferring control of a product to a customer, measured by the expected consideration, typically upon product delivery[163](index=163&type=chunk)[164](index=164&type=chunk) - The company acts as the principal in providing products, and contracts do not have a significant financing component as payment is collected at the time of order[166](index=166&type=chunk) [Foreign Currency Translation](index=33&type=section&id=Foreign%20Currency%20Translation_MD%26A) Describes Elevai Labs Inc.'s foreign currency translation policies for its Canadian subsidiary - The company's functional and reporting currency is the U.S. dollar, while its Canadian subsidiary uses the Canadian dollar; assets and liabilities are translated at period-end rates, and revenues/expenses at average rates, with gains/losses in accumulated other comprehensive income (loss)[167](index=167&type=chunk)[168](index=168&type=chunk) [Inventory](index=34&type=section&id=Inventory_MD%26A) Details Elevai Labs Inc.'s inventory valuation methods, including raw materials, work-in-progress, and finished goods - Inventory, including raw materials, work-in-progress, and finished goods (proprietary stem cell-derived Elevai Exosomes products), is valued at the lower of cost (weighted average) or net realizable value[170](index=170&type=chunk) [Stock-Based Compensation](index=34&type=section&id=Stock-Based%20Compensation_MD%26A) Explains Elevai Labs Inc.'s accounting for share-based compensation using the fair value method and Black-Scholes model - Share-based compensation for employees and non-employees is accounted for under the fair value method, calculated using the Black-Scholes option-pricing model at the grant date and recognized over the service period[171](index=171&type=chunk)[172](index=172&type=chunk)[174](index=174&type=chunk) - Key assumptions for the Black-Scholes model include historical volatility of comparable companies, contractual life for expected term, risk-free interest rate based on treasury instruments, and a zero expected dividend yield[175](index=175&type=chunk) [Concentrations](index=34&type=section&id=Concentrations_MD%26A) Analyzes Elevai Labs Inc.'s customer and supplier concentrations, assessing potential risks and mitigation strategies [Customers](index=34&type=section&id=Customers_MD%26A) Examines Elevai Labs Inc.'s customer concentration, noting reduced dependence on its largest customer and expansion plans - The largest customer accounted for **14%** of revenue for the nine months ended September 30, 2023, a decrease from **55%** in the prior year, with dependence expected to decrease further through expanded distributor agreements[176](index=176&type=chunk)[177](index=177&type=chunk) [Suppliers](index=35&type=section&id=Suppliers_MD%26A) Evaluates Elevai Labs Inc.'s supplier concentration, identifying key suppliers and management's view on supply disruption risks Table: Supplier Concentration (MD&A) | Supplier | 9 Months Ended Sep 30, 2023 (%) | 9 Months Ended Sep 30, 2022 (%) | | :--------- | :------------------------------ | :------------------------------ | | Supplier 1 | 26% | 46% | | Supplier 2 | 23% | 14% | | Supplier 3 | 17% | 12% | | **Total** | **66%** | **72%** | - Three key suppliers accounted for **66%** of inventory purchase and production costs for the nine months ended September 30, 2023, down from **72%** in the prior year, with alternatives available to mitigate supply disruptions[179](index=179&type=chunk) [Off-Balance Sheet Arrangements](index=35&type=section&id=Off-Balance%20Sheet%20Arrangements) Confirms Elevai Labs Inc. has no material off-balance sheet arrangements impacting its financial condition - The company does not have any material off-balance sheet arrangements that would significantly impact its financial condition or results of operations[180](index=180&type=chunk) [JOBS Act](index=35&type=section&id=JOBS%20Act) Explains Elevai Labs Inc.'s status as an 'emerging growth company' and its election to delay adoption of new accounting standards - As an 'emerging growth company' under the JOBS Act, Elevai Labs Inc. has elected to delay the adoption of new or revised accounting standards, which may result in financial statements not being comparable to non-emerging growth companies[181](index=181&type=chunk) [Related Party Transactions](index=35&type=section&id=Related%20Party%20Transactions_MD%26A) Details Elevai Labs Inc.'s policy for disclosing transactions with related parties, including management and principal owners - The company discloses all related party transactions, defining related parties as those who control, are controlled by, or are under common control with the company, including principal owners, management, and their immediate families[182](index=182&type=chunk) [Impact of Inflation](index=35&type=section&id=Impact%20of%20Inflation) States management's assessment that inflation's impact on Elevai Labs Inc.'s operations is not material - The company does not believe the impact of inflation on its operations is material[183](index=183&type=chunk) [Inflation Risk](index=35&type=section&id=Inflation%20Risk) Identifies Elevai Labs Inc.'s exposure to inflation risk, potentially affecting gross margin and operating expenses - The company is exposed to inflation risk, where inflationary factors like increased labor costs could impair operating results, potentially affecting gross margin and operating expenses in the future[184](index=184&type=chunk) [Market Risk](index=35&type=section&id=Market%20Risk) Describes Elevai Labs Inc.'s limited market risk exposure, confined to normal business operations without speculative instruments - The company's market risk exposure is limited to normal business operations, as it does not engage in speculative transactions or use financial/derivative instruments for trading[185](index=185&type=chunk) [Item 3. Quantitative and Qualitative Disclosure About Market Risk](index=36&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosure%20About%20Market%20Risk) As a smaller reporting company, Elevai Labs Inc. is not required to provide quantitative and qualitative disclosures about market risk - The company is exempt from providing quantitative and qualitative disclosures about market risk as it qualifies as a 'smaller reporting company' under Regulation S-K[186](index=186&type=chunk) [Item 4. Controls and Procedures](index=36&type=section&id=Item%204.%20Controls%20and%20Procedures) This section details management's evaluation of the effectiveness of the company's disclosure controls and procedures and reports on any changes in internal control over financial reporting [Evaluation of Disclosure Controls and Procedures](index=36&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) Evaluates the effectiveness of Elevai Labs Inc.'s disclosure controls and procedures as of the reporting period end - Management, with CEO and CFO participation, concluded that disclosure controls and procedures were effective as of the end of the reporting period, providing reasonable assurance that required information is recorded, processed, summarized, and reported timely[187](index=187&type=chunk)[188](index=188&type=chunk) [Changes in Internal Control over Financial Reporting](index=36&type=section&id=Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) Reports any material changes in Elevai Labs Inc.'s internal control over financial reporting during the period - There were no changes in internal control over financial reporting during the period that materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[190](index=190&type=chunk) [PART II – OTHER INFORMATION](index=37&type=section&id=PART%20II%20%E2%80%93%20OTHER%20INFORMATION) Presents additional information not included in the financial statements, covering legal, equity, and other disclosures [Item 1. Legal Proceedings](index=37&type=section&id=Item%201.%20Legal%20Proceedings) States Elevai Labs Inc.'s current involvement in legal proceedings and their expected impact on business - The company is not currently a party to any pending legal proceedings that are expected to have a material adverse effect on its business or financial conditions, though it may face various claims in the ordinary course of business[193](index=193&type=chunk) [Item 1A. Risk Factors](index=37&type=section&id=Item%201A.%20Risk%20Factors) Notes Elevai Labs Inc.'s exemption from providing detailed risk factor disclosures as a smaller reporting company - As a smaller reporting company, Elevai Labs Inc. is not required to provide disclosures under the Risk Factors item[194](index=194&type=chunk) [Item 2. Recent Sales of Unregistered Securities; Use of Proceeds and Issuer Purchases of Equity Securities](index=37&type=section&id=Item%202.%20Recent%20Sales%20of%20Unregistered%20Securities%3B%20Use%20of%20Proceeds%20and%20Issuer%20Purchases%20of%20Equity%20Securities) Details Elevai Labs Inc.'s recent IPO, gross proceeds, and the intended use of funds for operational expansion - The company completed its IPO on November 20, 2023, issuing **1,500,000** shares of common stock at **$4.00** per share, generating gross proceeds of **$6,000,000**[196](index=196&type=chunk) - Net proceeds from the IPO are intended for general and administrative expenses, marketing and market expansion, research and development, and general working capital purposes, with no material change from the Registration Statement[197](index=197&type=chunk) [Item 3. Defaults Upon Senior Securities](index=37&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) Confirms that this item is not applicable to Elevai Labs Inc - This item is not applicable to the company[198](index=198&type=chunk) [Item 4. Mine Safety Disclosures](index=37&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) Confirms that this item is not applicable to Elevai Labs Inc - This item is not applicable to the company[199](index=199&type=chunk) [Item 5. Other Information](index=37&type=section&id=Item%205.%20Other%20Information) Confirms that this item is not applicable to Elevai Labs Inc - This item is not applicable to the company[200](index=200&type=chunk) [Item 6. Exhibits](index=37&type=section&id=Item%206.%20Exhibits) Lists the supplementary documents and certifications filed with Elevai Labs Inc.'s Quarterly Report - The report includes various exhibits such as certifications from the Principal Executive Officer and Principal Financial Officer, and Inline XBRL documents[202](index=202&type=chunk) [SIGNATURES](index=38&type=section&id=SIGNATURES) Contains the official certifications and signatures for Elevai Labs Inc.'s financial report [SIGNATURES](index=38&type=section&id=SIGNATURES_Details) Presents the official signatures of Elevai Labs Inc.'s Chief Executive Officer and Chief Financial Officer - The report is duly signed by Jordan R. Plews, Chief Executive Officer, and Graydon Bensler, Chief Financial Officer, on December 11, 2023[207](index=207&type=chunk)

As filed with the U.S. Securities and Exchange Commission on November 9, 2023 Registration No. 333-274755 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Amendment No. 2 to FORM S-1 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 Elevai Labs, Inc. (Exact name of registrant as specified in its charter) Not Applicable (Translation of Registrant's Name into English) (State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer incorporation or organization) Class ...

As filed with the U.S. Securities and Exchange Commission on November 3, 2023 Registration No. 333-274755 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Amendment No. 1 to FORM S-1 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 Elevai Labs, Inc. (Exact name of registrant as specified in its charter) Not Applicable (Translation of Registrant's Name into English) Delaware 5912 85-1399981 (State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer incorporati ...

As filed with the Securities and Exchange Commission on September 28, 2023 Registration No. 333-______________ UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM S-1 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 Elevai Labs, Inc. (Exact name of registrant as specified in its charter) Not Applicable (Translation of Registrant's Name into English) (State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer incorporation or organization) Classification Code ...