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)