Elevai Labs(ELAB) - 2025 Q2 - Quarterly Report

Forward-Looking Statements This report contains forward-looking statements based on current expectations that are inherently subject to risks and uncertainties - The report contains forward-looking statements regarding financial performance, business strategy, product timing, costs, market trends, liquidity, and capital requirements[8] - Actual future results may differ materially due to risks such as economic conditions, competitive product prices, disease outbreaks (e.g., COVID-19), political unrest, data security breaches, government actions, and changes in the medical aesthetics, cosmetics, and biotechnology market[9] - Readers are cautioned not to place undue reliance on forward-looking statements, and the Company does not undertake to update them except as required by law[10] PART I – FINANCIAL INFORMATION Item 1. Condensed Consolidated Financial Statements (Unaudited) The unaudited condensed consolidated financial statements detail the company's financial position, performance, and cash flows for the periods ended June 30, 2025, and 2024 Condensed Consolidated Balance Sheets The balance sheets show the company's financial position as of June 30, 2025, and December 31, 2024, reflecting a significant increase in cash and total equity Balance Sheet Summary | Metric | June 30, 2025 ($) | December 31, 2024 ($) | Change ($) | Change (%) | | :--------------------------------- | :-------------- | :---------------- | :----- | :--------- | | Cash | 5,682,628 | 3,984,453 | 1,698,175 | 42.62% | | Total Current Assets | 7,302,844 | 6,051,001 | 1,251,843 | 20.69% | | Total Assets | 9,375,476 | 8,993,165 | 382,311 | 4.25% | | Total Current Liabilities | 326,301 | 1,799,134 | (1,472,833) | -81.86% | | Total Liabilities | 326,301 | 2,333,601 | (2,007,300) | -86.02% | | Total Equity | 9,049,175 | 6,659,564 | 2,389,611 | 35.88% | Condensed Consolidated Statements of Operations and Comprehensive Loss The statements of operations detail financial performance for the three and six months ended June 30, 2025, and 2024, showing a reduced total net loss year-over-year Statement of Operations Summary | Metric | 3 Months Ended June 30, 2025 ($) | 3 Months Ended June 30, 2024 ($) | 6 Months Ended June 30, 2025 ($) | 6 Months Ended June 30, 2024 ($) | | :----------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Total operating expenses | 1,013,518 | 556,242 | 2,215,242 | 1,356,216 | | Net loss from continuing operations | (579,490) | (552,911) | (2,160,301) | (1,097,032) | | Loss from discontinued operations | 17,135 | (859,580) | (10,509) | (1,712,709) | | Total net loss | (562,355) | (1,412,491) | (2,170,810) | (2,809,741) | | Basic and diluted loss per share (Continuing operations) | (0.466) | (42.303) | (2.411) | (86.215) | | Weighted average shares outstanding | 1,243,720 | 13,070 | 896,149 | 12,724 | Condensed Consolidated Statements of Changes in Stockholders' Equity These statements illustrate changes in stockholders' equity, highlighting increases in common stock, Series B preferred stock, and additional paid-in capital Stockholders' Equity Summary | Metric | June 30, 2025 | June 30, 2024 | | :--------------------------------- | :-------------- | :-------------- | | Common Stock (shares) | 1,477,575 | 13,501 | | Common Stock (amount in $) | 148 | 2 | | Series B Preferred Stock (shares) | 6,372,874 | - | | Series B Preferred Stock (amount in $) | 637 | - | | Additional paid-in capital ($) | 24,490,049 | 12,472,023 | | Accumulated deficit ($) | (15,440,437) | (9,833,631) | | Total Equity ($) | 9,049,175 | 2,639,636 | - Significant increases in common stock and additional paid-in capital were driven by issuance of shares for acquisition, exercise of warrants, and ATM program sales[16][17] - Series B preferred stock was issued to settle accrued bonus liability in 2025[17] Condensed Consolidated Statements of Cash Flows The statements of cash flows show cash generation and usage, indicating a substantial increase in cash from financing activities in 2025 Cash Flow Summary | Metric | 6 Months Ended June 30, 2025 ($) | 6 Months Ended June 30, 2024 ($) | | :----------------------------------- | :--------------------------- | :--------------------------- | | Cash flows used in operating activities | (2,693,714) | (3,104,757) | | Cash flows used in investing activities | (18,479) | (121,480) | | Cash flows provided by financing activities | 4,410,768 | - | | Increase (decrease) in cash | 1,698,175 | (3,226,817) | | Cash, ending of period | 5,682,628 | 100,034 | - Non-cash investing and financing transactions in 2025 included common stock issued for intangible assets ($43,535), shares received for the sale of Skincare ($728,550), Series B preferred shares issued to settle bonus liability ($150,000), and consideration payable settled through agreement termination ($894,151)[19] Notes to Unaudited Condensed Consolidated Financial Statements These notes provide detailed explanations for the financial statements, covering organization, accounting policies, discontinued operations, and specific accounts Note 1. Organization and nature of operations PMGC transitioned into a diversified holding company managing subsidiaries in biopharmaceuticals, research, and investments after selling its skincare business - PMGC Holdings Inc. (formerly Elevai Labs Inc.) completed a reorganization in 2024, including a name change and redomiciling from Delaware to Nevada[21] - The Company completed two reverse stock splits: 1-for-200 on November 27, 2024, and 1-for-7 on March 10, 2025, resulting in a combined 1-for-1,400 reverse split[22] - On January 16, 2025, PMGC sold its skincare business, leading to a change in its principal business from skincare development to a diversified holding company[23][24] - PMGC now manages three wholly-owned subsidiaries: Northstrive BioSciences Inc, PMGC Research Inc, and PMGC Capital LLC[25] Note 2. Going Concern The company's ability to continue as a going concern is in substantial doubt due to significant accumulated deficit and net losses - As of June 30, 2025, the Company had an accumulated deficit of $15,440,437 and used $2,693,714 in cash for operating activities, raising substantial doubt about its ability to continue as a going concern[27] - Management's plans to address going concern issues include raising additional debt or equity financing and acquiring cash flow generating assets or businesses[29] Note 3. Summary of Significant Accounting Policies This note outlines significant accounting policies for financial statement preparation, including basis of presentation, consolidation, and use of estimates Basis of Presentation The financial statements are prepared in accordance with SEC rules and U.S. GAAP for interim financial information and are expressed in U.S. dollars - Unaudited condensed consolidated financial statements are prepared in accordance with SEC rules and U.S. GAAP for interim financial information, expressed in United States dollars[30] Principles of Consolidation The consolidated financial statements include PMGC and its 100% owned subsidiaries, with all intercompany accounts and transactions eliminated - The consolidated financial statements include PMGC and its 100% owned subsidiaries (PMGC Research, Skincare, BioSciences, and PMGC Capital), with all intercompany accounts and transactions eliminated[31] Use of Estimates Financial statement preparation requires management to make estimates and assumptions that are regularly evaluated, though actual results may differ - Management makes estimates and assumptions affecting reported amounts of assets, liabilities, revenues, and expenses, including revenue recognition, collectability of receivables, valuation of investments, and useful lives of assets[32] Foreign Currency Translation The company's functional currency is the U.S. dollar, while its Canadian subsidiary uses the Canadian dollar, with transactions translated at prevailing rates - The Company's functional and reporting currency is the U.S. dollar; PMGC Research's functional currency is the Canadian dollar[33] - Assets and liabilities of PMGC Research are translated at period-end exchange rates, while revenues and expenses are translated at average rates, with exchange gains/losses included in accumulated other comprehensive income (loss)[34] Investments in securities Investments in securities are classified as trading securities and reported at fair value, with realized and unrealized gains/losses recognized in earnings - Investments in securities, including publicly traded equity securities and a convertible debenture, are classified as trading securities and reported at fair value[35] - Both realized and unrealized gains and losses on these investments are recognized in earnings[35] New Accounting Standards The company adopted ASU 2022-03 and ASU 2023-07, neither of which had a significant or material impact on its financial statements - The Company adopted ASU 2022-03 (Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions) for fiscal years beginning after December 15, 2023, with no significant impact[37][39] - ASU 2023-07 (Segment Reporting) was adopted for fiscal years beginning after December 15, 2023, and interim periods beginning January 1, 2025, with no material impact[40][41] Note 4. Assets and liabilities held for sale and discontinued operations This note details the sale of the skincare business in January 2025, with its financial results presented as discontinued operations - The Company sold its skincare business on January 16, 2025, for 1,267,040 shares of buyer common stock ($728,550 market value), assumption of certain liabilities, and $56,525 cash[42] - Additional earn-out consideration includes 5% of sales from existing products for five years and a one-time payment of $500,000 if specific revenue targets are met for hair and scalp products[43] - The Company recorded a loss on sale of discontinued operations of $39,676, with proceeds of $728,550 against net assets of $768,226[45] Discontinued Operations Financial Summary | Metric | 3 Months Ended June 30, 2025 ($) | 3 Months Ended June 30, 2024 ($) | 6 Months Ended June 30, 2025 ($) | 6 Months Ended June 30, 2024 ($) | | :----------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Revenue | - | 605,530 | 152,381 | 1,220,093 | | Gross profit | - | 439,256 | 121,851 | 884,908 | | Total expenses | 7,661 | 1,291,627 | 142,298 | 2,620,766 | | Net income (loss) from discontinued operations | 17,135 | (859,580) | (10,509) | (1,712,709) | Discontinued Operations Cash Flow | Cash Flows (Discontinued Operations) | 6 Months Ended June 30, 2025 ($) | 6 Months Ended June 30, 2024 ($) | | :----------------------------------- | :--------------------------- | :--------------------------- | | Cash flows used in operating activities | (174,767) | (1,912,907) | | Cash flows used in investing activities | - | (9,160) | Note 5. Short Term Loan Receivable The company held a short-term loan receivable of $128,111 as of June 30, 2025, which was subsequently settled in July 2025 Loan Receivable Summary | Receivable Type | June 30, 2025 ($) | December 31, 2024 ($) | | :---------------------- | :-------------- | :---------------- | | Promissory note receivable | 127,300 | - | | Interest receivable | 811 | - | | Total | 128,111 | - | - The promissory note bears interest at the U.S. prime rate (7.5%) and was due by September 30, 2025[47] - Subsequent to June 30, 2025, the note was fully settled through the transfer of a 10% equity interest in Pacific Sun Packaging Inc. as part of an acquisition[49] Note 6. Prepaids and Deposits Prepaid expenses and deposits totaled $791,055 as of June 30, 2025, a decrease from $868,464 at year-end 2024 Prepaids and Deposits Summary | Item | June 30, 2025 ($) | December 31, 2024 ($) | | :--------------- | :-------------- | :---------------- | | Prepaid expenses | 753,735 | 867,420 | | Deposits | 37,320 | 1,044 | | Total | 791,055 | 868,464 | Note 7. Investment in securities The company's investments, classified as trading securities, totaled $624,838 as of June 30, 2025, resulting in a net loss for the period - Investments include publicly traded equity securities and a convertible debenture, classified as trading securities and measured at fair value[51] - Fair value measurement as of June 30, 2025: Equity securities ($312,624) are Level 1, and the convertible debenture ($312,214) is Level 2[54] Investment Securities Activity | Metric | December 31, 2024 ($) | June 30, 2025 ($) | | :-------------------------- | :---------------- | :-------------- | | Balance, Investments | 139,084 | 624,838 | | Purchases (6 months 2025) | - | 995,100 | | Acquired in Skincare sale | - | 728,550 | | Proceeds on sale | - | (1,109,921) | | Realized loss (6 months 2025) | - | (371,494) | | Unrealized gain (6 months 2025) | - | 238,899 | Note 8. Equipment The net book value of equipment decreased to $0 as of June 30, 2025, from $1,087 at year-end 2024 due to depreciation Equipment Summary | Metric | December 31, 2024 ($) | June 30, 2025 ($) | | :-------------------- | :---------------- | :-------------- | | Cost | 2,601 | 2,604 | | Accumulated depreciation | 1,514 | 2,604 | | Net book value | 1,087 | - | Note 9. Intangible assets and consideration payable The company terminated License 1, recognizing a gain, and increased the value of License 2 (an IPR&D asset) by expanding its rights Intangible Assets Summary | Metric | December 31, 2024 ($) | June 30, 2025 ($) | | :--------------------------------- | :---------------- | :-------------- | | Intangibles, net | 2,801,993 | 2,072,632 | | License 1 Cost | 861,452 | - | | License 2 Cost (IPR&D asset) | 2,023,097 | 2,072,632 | | Accumulated amortization | 82,556 | - | | Consideration payable | 884,467 | - | - License 1 was mutually terminated on February 27, 2025, releasing the Company from a $950,000 obligation and resulting in a gain of $129,613[56][58] - License 2, an IPR&D asset, was acquired on April 30, 2024, for $2,023,097, including cash and common stock, with fair value adjustments for trading restrictions[59][60][63] - On March 21, 2025, License 2 was amended to expand into animal health, costing $6,000 cash and 12,000 shares of common stock, with a fair value discount adjustment of $15,624[64][65] - A second amendment to License 2 on May 12, 2025, clarified scope and terms for animal health, with no associated cost[69] Note 10. Derivative liabilities Derivative liabilities from warrants were measured at fair value, which was deemed $nil as of June 30, 2025, due to the exercise price - Common stock purchase warrants and IPO warrants are classified as financial liabilities and accounted for as derivative liabilities, measured at fair value[71] - As of June 30, 2025, 221 derivative liability warrants were outstanding with a weighted average exercise price of $3,497 and a weighted average life of 2.21 years[73] Derivative Liabilities Summary | Metric | December 31, 2023 ($) | December 31, 2024 ($) | June 30, 2025 ($) | | :--------------------------------- | :---------------- | :---------------- | :-------------- | | Outstanding, Derivative liabilities | 369,158 | - | - | | Change in fair value of derivative liabilities | (369,158) | - | - | Note 11. Equity This note details the company's equity structure, highlighting significant increases in common and preferred stock outstanding in 2025 Common Stock The number of common shares outstanding increased significantly to 1,477,575 at June 30, 2025, driven by warrant exercises and equity offerings - As of June 30, 2025, 1,477,575 shares of common stock were issued and outstanding, compared to 438,987 shares at December 31, 2024[75] - In January 2025, the Company issued 138,485 common shares from Series A warrant exercises, generating $1,938,772 gross proceeds[76] - In March 2025, a registered direct offering resulted in the sale of 129,145 common shares and 165,305 prefunded warrants for $1,484,028 gross proceeds[79] - During the six months ended June 30, 2025, 593,194 common shares were sold under an ATM program, generating $1,519,437 gross proceeds[80] Preferred Stock As of June 30, 2025, the company had 6,372,874 shares of Series B Preferred Stock outstanding, primarily for settling accrued bonus liabilities - As of June 30, 2025, 6,372,874 shares of Series B Preferred Stock were issued and outstanding, compared to nil at December 31, 2024[84] - These shares were issued in March 2025 to GB Capital Ltd and Northstrive Companies Inc. as signing bonuses, totaling $150,000, to settle accrued bonus liabilities[85] Equity Warrants Equity warrants outstanding as of June 30, 2025, totaled 829,136, with a weighted average exercise price of $4.88 - In January 2025, 138,485 replacement warrants were issued with an initial exercise price of $19.25, later reset to $3.22 per share, resulting in 827,900 replacement warrants outstanding[86] - In March 2025, 165,305 pre-funded warrants were issued in a registered direct offering, immediately exercisable at $0.0001 per share, and fully exercised by April 14, 2025[88][89] Outstanding Warrants Summary | Outstanding Warrants | Number | Weighted Average Exercise Price ($) | | :------------------- | :----- | :-------------------------------- | | August 28, 2026 | 179 | 4,200.00 | | March 12, 2027 | 36 | 4,200.00 | | March 24, 2028 | 1,021 | 470.40 | | January 28, 2030 | 827,900 | 3.22 | | Total | 829,136 | 4.88 | Stock Options As of June 30, 2025, 524 stock options were outstanding, with no new options granted and 223 options forfeited or cancelled during the period - No stock option activity (grants or exercises) occurred during the six months ended June 30, 2025[93][96] - 180 vested stock options with a weighted average exercise price of $1,696 were cancelled on April 16, 2025, following the sale of the skincare business[97] - Share-based compensation expense for the six months ended June 30, 2025, was $(42,996), compared to $10,484 in 2024[98] Stock Option Summary | Metric | December 31, 2024 | June 30, 2025 | | :--------------------------------- | :---------------- | :-------------- | | Outstanding stock options | 747 | 524 | | Weighted average exercise price ($) | 2,347.25 | 2,268.18 | | Weighted average life (years) | 6.88 | 6.41 | Note 12. Related Party Transactions Related party transactions primarily involve fees and compensation paid to key management personnel and their controlled entities - Consulting fees to GB Capital Ltd (controlled by CEO/CFO Graydon Bensler) were $281,000 in 2025 (vs. $100,833 in 2024)[107] - Consulting fees to Northstrive Companies Inc. (controlled by Chairman Braeden Lichti) were $314,400 in 2025 (vs. $60,000 in 2024)[107] - As of June 30, 2025, $53,355 was due to companies controlled by Braeden Lichti, and $127 was due to Graydon Bensler[108][109] Key Management Remuneration | Remuneration Type | 6 Months Ended June 30, 2025 ($) | 6 Months Ended June 30, 2024 ($) | | :----------------------- | :--------------------------- | :--------------------------- | | Consulting fees | 595,400 | 160,833 | | Director fees | 83,290 | - | | Salaries | 26,228 | 377,656 | | Share-based compensation | 36,616 | (32,583) | | Total | 741,534 | 505,906 | Note 13. Commitments and Contingencies As of June 30, 2025, there were no new commitments, and a prior ongoing dispute was settled and paid in full - No new commitments as of June 30, 2025, or during the periods then ended[110] - An ongoing dispute as of December 31, 2024, was settled in February 2025, with all associated payments made by June 30, 2025[111] Note 14. Subsequent Events Subsequent to June 30, 2025, the company completed two acquisitions in July 2025 for a total of $1,798,000 in cash - On July 7, 2025, the Company acquired 100% of Pacific Sun Packaging Inc. for $1,148,000 cash and a potential earnout of up to $250,000[113] - The acquisition of Pacific Sun Packaging Inc. included settling a $127,300 secured promissory note for a 10% minority interest[113] - On July 18, 2025, the Company acquired all membership interests of AGA Precision Systems LLC for $650,000 cash, enhancing precision manufacturing capabilities[113] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management provides its perspective on the company's financial condition, results of operations, new business strategy, and future outlook Organization and Overview of Operations Following the sale of its skincare business, PMGC transformed into a diversified holding company with three wholly-owned subsidiaries - After selling its skincare business on January 16, 2025, PMGC Holdings Inc. became a diversified holding company[116][117] - The Company operates three wholly-owned subsidiaries: NorthStrive BioSciences Inc, PMGC Research Inc, and PMGC Capital LLC[117] Outlook (Management's Plans) Management plans to increase revenue through investments, establish new subsidiaries, advance clinical development, and pursue acquisitions of profitable B2B companies - Management intends to increase revenue through PMGC Capital LLC by acquiring and managing undervalued assets, public and private investments, and structured financing[119] - Plans include establishing new wholly-owned subsidiaries for acquired/licensed assets, utilizing clinical validation studies, and advancing NorthStrive BioSciences' clinical assets towards IND applications[119] - The Company will pursue additional acquisitions of operating business-to-business companies with positive EBITDA and evaluate potential out-licensing, spin-offs, and creation of new publicly traded companies[119] Results of Operations This analysis of financial performance, excluding discontinued operations, highlights significant increases in consulting, professional, and administrative expenses Comparison of the six months ended June 30, 2025 to the six months ended June 30, 2024 For the six months ended June 30, 2025, total operating expenses increased by $859,026, and net loss from continuing operations increased by $1,063,269 Operating Expenses (Six Months) | Expense Category | 6 Months Ended June 30, 2025 ($) | 6 Months Ended June 30, 2024 ($) | Change ($) | Change (%) | | :----------------------- | :--------------------------- | :--------------------------- | :----- | :--------- | | Marketing and Promotion | 117,923 | 265,113 | (147,190) | -55.52% | | Consulting Fees | 745,902 | 558,316 | 187,586 | 33.60% | | Office and Administration | 528,870 | 280,800 | 248,070 | 88.35% | | Professional Fees | 550,643 | 91,996 | 458,647 | 498.55% | | Investor Relations | 116,777 | 97,565 | 19,212 | 19.69% | | Research and Development | 99,108 | 55,553 | 43,555 | 78.40% | | Total operating expenses | 2,215,242 | 1,356,216 | 859,026 | 63.34% | | Net loss from continuing operation | (2,160,301) | (1,097,032) | (1,063,269) | 96.92% | - Research and development expenses increased by $43,555, driven by work on EL-22 and pre-IND meeting costs[120] - Consulting fees increased by $187,586, primarily due to $300,000 in bonus-related consulting expenses[123] - Professional fees increased by $458,647 due to corporate restructuring, business acquisition due diligence, and financing efforts[124] - Other income (expense) had an unfavorable variance of $204,243, mainly due to a $371,494 realized loss on investments and the absence of a prior-period gain, partially offset by a $129,613 gain on intangible asset termination and $238,899 unrealized gain on investments[126] Comparison of the three months ended June 30, 2025 to the three months ended June 30, 2024 For the three months ended June 30, 2025, total operating expenses increased by $457,276, while net loss from continuing operations increased slightly Operating Expenses (Three Months) | Expense Category | 3 Months Ended June 30, 2025 ($) | 3 Months Ended June 30, 2024 ($) | Change ($) | Change (%) | | :----------------------- | :--------------------------- | :--------------------------- | :----- | :--------- | | Marketing and Promotion | 82,329 | 133,597 | (51,268) | -38.38% | | Consulting Fees | 198,345 | 179,843 | 18,502 | 10.29% | | Office and Administration | 319,839 | 148,341 | 171,498 | 115.61% | | Professional Fees | 284,175 | 48,706 | 235,469 | 483.46% | | Investor Relations | 46,827 | 5,987 | 40,840 | 682.16% | | Research and Development | 66,675 | 34,824 | 31,851 | 91.46% | | Total operating expenses | 1,013,518 | 556,242 | 457,276 | 82.21% | | Net loss from continuing operation | (579,490) | (552,911) | (26,579) | 4.81% | - Other income (expense) showed a favorable variance of $430,697, primarily due to a $95,184 realized gain on investments, a $299,303 unrealized gain on investments, and $36,527 interest income in 2025[134] Liquidity and Capital Resources Liquidity improved due to financing activities, but an accumulated deficit and operating cash usage still raise substantial doubt about its going concern ability - Cash increased to $5,682,628 at June 30, 2025, from $3,984,453 at December 31, 2024, driven by financing activities[136] - Net working capital increased to $6,976,543 at June 30, 2025, from $4,251,867 at December 31, 2024[136] - The Company incurred a net loss of $2,170,810 and used $2,693,714 in cash for operating activities for the six months ended June 30, 2025, raising substantial doubt about its going concern ability[136] - Financing activities in 2025 included $1,245,306 from common stock/warrants, $1,698,058 from Series A warrant exercises, and $1,467,583 from ATM program sales[143] Cash Flow Activity (Continuing Operations) | Cash Flow Activity (Continuing Operations) | 6 Months Ended June 30, 2025 ($) | 6 Months Ended June 30, 2024 ($) | Change ($) | | :--------------------------------------- | :--------------------------- | :--------------------------- | :----- | | Cash used in operating activities | (2,518,947) | (1,191,850) | (1,327,097) | | Cash used in investing activities | (18,479) | (112,320) | 93,841 | | Cash provided by financing activities | 4,410,768 | - | 4,410,768 | Critical Accounting Policies and Significant Judgments and Estimates This section reiterates the importance of management's estimates and assumptions in financial reporting, particularly for asset valuation and going concern assessment - Preparation of financial statements requires management to make estimates and assumptions, which are regularly evaluated, but actual results may differ materially[145] - Key estimates relate to revenue recognition, collectability of receivables, valuation of inventory and investments, derivative liabilities, stock options, useful lives and recoverability of long-lived assets, and deferred income tax valuation allowances[145] - The Company's policy for intangible assets requires judgment in determining if future economic benefits exceed capitalized costs and continuous monitoring for impairment indicators[146] - The assessment of going concern requires management to consider all available information for at least 12 months from the financial statement issuance date[147] Off-Balance Sheet Arrangements The company does not have any off-balance sheet arrangements that are material to its financial condition or results of operations - The Company does not have any material off-balance sheet arrangements[155] JOBS Act As an 'emerging growth company,' PMGC has elected to delay adopting new accounting standards, which may affect financial statement comparability - As an 'emerging growth company' under the JOBS Act, PMGC has elected to delay the adoption of new or revised accounting standards[156] - This election may result in financial statements that are not comparable to companies complying with new standards as of public company effective dates[156] Future Related Party Transactions All future related party transactions will be approved by the Corporate Governance Committee and conducted on arm's-length terms - All related party transactions require approval from the Corporate Governance Committee of the Board of Directors[157] - Transactions must be on terms no less favorable than those from unaffiliated third parties[157] Impact of Inflation / Inflation Risk The company does not believe inflation has had a material impact to date but acknowledges future high inflation could adversely affect results - The Company does not believe inflation has had a material impact on its financial position or results of operations to date[158][159] - Future high inflation, particularly in labor costs, could adversely affect gross margin and operating expenses[159] Item 3. Quantitative and Qualitative Disclosure About Market Risk As a smaller reporting company, PMGC is not required to provide detailed disclosures about market risk - As a 'smaller reporting company,' PMGC is not required to provide detailed market risk disclosures[161] - The Company's market risk exposure is generally limited to normal business operations, as it does not engage in speculative transactions or use derivative instruments for trading[160] Item 4. Controls and Procedures Management concluded that the company's disclosure controls and procedures were effective as of June 30, 2025, with no material changes in internal control Evaluation of Disclosure Controls and Procedures The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of June 30, 2025 - Management, including the CEO and CFO, concluded that disclosure controls and procedures were effective as of June 30, 2025[162][163] - These controls provide reasonable assurance that required information is recorded, processed, summarized, and reported within SEC specified time periods[163] Changes in Internal Control over Financial Reporting No changes in internal control over financial reporting occurred during the period that materially affected, or are likely to affect, such controls - No material changes in internal control over financial reporting occurred during the period[165] PART II – OTHER INFORMATION Item 1. Legal Proceedings The company is not currently a party to any pending legal proceedings expected to have a material adverse effect on its business - The Company is not currently a party to any pending legal proceedings expected to have a material adverse effect on its business or financial conditions[167] Item 1A. Risk Factors As a smaller reporting company, PMGC is not required to make disclosures under this item - As a smaller reporting company, PMGC is not required to make disclosures under Item 1A. Risk Factors[168] Item 2. Recent Sales of Unregistered Securities; Use of Proceeds and Issuer Purchases of Equity Securities No issuer purchases of common stock were made during the quarter, and any unregistered sales were deemed exempt from registration - No issuer purchases of common stock were made during the quarter ended June 30, 2025[173] - Any unregistered sales of equity securities not previously disclosed were exempt from registration under Section 4(a)(2) of the Securities Act of 1933[170] Item 3. Defaults Upon Senior Securities The company reported no defaults upon senior securities - There were no defaults upon senior securities[174] Item 4. Mine Safety Disclosures This item is not applicable to the company - This item is not applicable[175] Item 5. Other Information This section discloses several equity issuances in February and March 2025 to a consultant and entities owned by executive management - In February 2025, 438 common shares were issued to a consultant for License 2 acquisition[177] - In March 2025, 12,000 common shares were issued to a consultant for expanding rights under License 2[177] - In March 2025, 3,036,437 Series B Preferred Stock shares were issued to an entity owned by the CEO/CFO/Director, and 3,336,437 Series B Preferred Stock shares were issued to an entity owned by the Chairman of the Board[177] Item 6. Exhibits This section lists all exhibits filed as part of the Quarterly Report, including various agreements and required certifications - Exhibits include amendments to consulting agreements, an At-the-Market Issuance Sales Agreement, a Secondment Agreement, and a Second Amendment to License Agreement[183] - Certifications from the Principal Executive Officer and Principal Financial Officer pursuant to Section 302 and 906 of the Sarbanes-Oxley Act of 2002 are also filed[183] SIGNATURES The report is duly signed on behalf of the company by its Chief Executive Officer and Chief Financial Officer on August 13, 2025 - The report was signed by Graydon Bensler, Chief Executive Officer and Chief Financial Officer, on August 13, 2025[189]