· ® NEXTGENERATION SKIN&SCALPREJUVENATION: STEM CELL EXOSOMES + MITOCHONDRIAL BIOGENESIS TECHNOLOGY DISCOVERED USING AI 2 Jordan R. Plews, PhD Biochemical Engineer & Stem Cell Scientist. Academic research completed at University College London, University of Sheffield, and Stanford University. AGSTANT CONTINUES COLLEGE 3 Cofounder of ELEVAI Labs Inc. (Nasdaq: ELAB) CEO of ELEVAI Skincare Inc. Experience with human stem cells, molecular biology, single cell genomics, proteomics, RNA analysis, as well as cell ...

Elevai's hair and scalp solutions combine the power of Exosomes with advanced Mitochondrial Technology. The Elevai S-series Root Renewal System™ and the technology behind it will be presented at The Aesthetic Show on June 28th, 2024, held at the Wynn Las Vegas, NV. The Y100 mitochondrial technology was identified using Yuva's advanced artificial intelligence ("AI") platform, "MitoGPT" which was co-developed by Yuva Biosciences's Chief Scientific Officer, Keshav K. Singh, PhD and key advisor for AI, Jeb Lint ...

Elevai Biosciences Inc., an Elevai Labs company, is a biopharmaceutical company focusing on the development and acquisition of cutting-edge aesthetic medicines. Our lead asset, EL-22, is leveraging a first-in-class engineered probiotic approach to address obesity's pressing issue of preserving muscle while on weight loss treatments, including GLP-1 receptor agonists. For more information, please visit www.elevaibio.com. Forward-Looking Statements Statements contained in this press release regarding matters ...

NEWPORT BEACH, Calif., May 29, 2024 (GLOBE NEWSWIRE) -- Elevai Labs Inc. (NASDAQ:ELAB) ("Elevai" or the "Company"), a pioneering force in medical aesthetics, announced that Chief Executive Officer Jordan R. Plews, PhD has been invited back and will be presenting at the Beauty Through Science conference in Stockholm, Sweden on Thursday May 30, 2024. Beauty Through Science (BTS) is an annual event that gathers the greatest minds in aesthetic medicine to share the most up-to-date, innovative techniques and tec ...

FORM 10-Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For The Quarterly Period Ended March 31, 2024 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number: 001-41875 | ELEVAI LABS INC. | | --- | (Exact name of registrant as specified in its charter) | Delaware | | 85-1399981 | | --- | --- | --- | | (State of incorporati ...

Preclinical results of EL-22 from a 2022 study demonstrated physiological (serum creatine kinase level), physical (body weight change), and functional (rotarod test) improvements in the dystrophic features of mdx mice, a mouse model of Duchenne muscular dystrophy (DMD)1.Elevai believes that EL-22 has the potential to treat obesity in combination with popular weight loss therapeutics, including GLP-1 receptor agonists, by preserving muscle mass while decreasing fat mass.Elevai plans to submit an Investigatio ...

Elevai Labs established two subsidiaries: Elevai Biosciences, Inc., and Elevai Skincare, Inc.Elevai Biosciences will focus on acquiring and developing biopharmaceutical technologies with initial focus on the development of EL-22 and EL-32, the lead assets targeting indications associated with obesity.Elevai Skincare will continue commercializing exosome skincare technologies for the medical dispensed skincare market. NEWPORT BEACH, Calif., May 01, 2024 (GLOBE NEWSWIRE) -- Elevai Labs, Inc. (NASDAQ:ELAB) ("E ...

Five international distribution agreements signed to dateCumulative contracted minimum purchase requirements of $4.9M in the first five yearsUp to five additional international distribution agreements in discussion NEWPORT BEACH, Calif., April 29, 2024 (GLOBE NEWSWIRE) -- ELEVAI Labs Inc. (NASDAQ:ELAB) ("Elevai" or the "Company"), a medical aesthetic company specializing in physician-dispensed skincare, announces significant strides in global distribution and highlights an overview of current agreements. El ...

Taiwan is ELEVAI's third Asian contract for exosomes distribution after adding the Philippines in August of 2023 and Vietnam in May 2023 Asia-Pacific represents a combined $13 Billion prestige skincare and luxury haircare market4,5Immediate access to 40 specialty hair treatment clinics and four (4) high-end medical aesthetic clinics NEWPORT BEACH, Calif., April 22, 2024 (GLOBE NEWSWIRE) -- ELEVAI LABS, INC. (NASDAQ:ELAB) ("Elevai" or the "Company"), a medical aesthetic company specializing in physician-disp ...

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)