Elevai Labs(ELAB) - 2025 Q3 - Quarterly Report

Revenue and Profit - Revenue for the nine months ended September 30, 2025, was $285,948, compared to $nil for the same period in 2024, representing an increase of $285,948[170] - Gross profit for the nine months ended September 30, 2025, was $78,030, with a gross margin percentage of 27%, compared to $nil in 2024[173] - Revenue for the three months ended September 30, 2025, was $285,948, compared to $0 for the same period in 2024, indicating a significant increase[183] - Gross profit for the same period was $78,030, with total operating expenses rising to $2,276,931, an increase of $1,651,316 compared to the previous year[183] Expenses - Research and development expenses increased to $114,108 for the nine months ended September 30, 2025, from $59,651 in 2024, an increase of $54,457[175] - Marketing and promotion expenses decreased to $182,407 for the nine months ended September 30, 2025, from $276,371 in 2024, a decrease of $93,964[176] - Office and administration expenses rose to $1,255,413 for the nine months ended September 30, 2025, compared to $447,874 in 2024, an increase of $807,539[177] - Consulting fees increased to $1,367,005 for the nine months ended September 30, 2025, from $784,420 in 2024, an increase of $582,585[178] - Professional fees increased to $939,754 for the nine months ended September 30, 2025, compared to $266,433 in 2024, an increase of $673,321[179] - Repairs and maintenance expenses for the nine months ended September 30, 2025, were $312,579, with no comparable expense in 2024[181] - Research and development expenses increased to $15,000 from $4,098, reflecting a rise of $10,902 driven by ongoing clinical validation studies[185] - Marketing and promotion expenses surged to $64,484 from $11,258, an increase of $53,226 primarily due to heightened marketing efforts for newly acquired businesses[186] - Office and administration expenses rose to $726,543 from $167,074, an increase of $559,469 attributed to higher business activity and costs from newly acquired subsidiaries[187] - Consulting fees increased significantly to $621,103 from $226,104, a rise of $394,999 mainly due to bonus-related consulting expenses[188] Net Loss and Financial Position - The net loss from continuing operations was $2,616,018, compared to a loss of $1,201,853 in the prior year, representing a deterioration of $1,414,165[183] - Other income (expense) resulted in a net loss of $362,176 for the nine months ended September 30, 2025, compared to a net loss of $317,054 in 2024, an unfavorable variance of $45,122[182] Cash and Financing Activities - Cash provided by financing activities for the nine months ended September 30, 2025, was $10,116,739, an increase of $3,359,238 compared to $6,757,501 in 2024[200] - As of September 30, 2025, the company had cash of $7,700,562, up from $3,984,453 as of December 31, 2024, reflecting improved liquidity[193] Acquisitions and Business Strategy - The company completed two acquisitions, Pacific Sun Packaging Inc. and AGA Precision Systems LLC, during the nine months ended September 30, 2025[204] - The company plans to focus on advancing clinical development and pursuing additional acquisitions of operating business-to-business companies with positive EBITDA over the next twelve months[168] Share-Based Compensation and Accounting - For the nine months ended September 30, 2025, the company recorded a share-based compensation expense of $(29,817), compared to $57,521 for the same period in 2024[213] - The fair value of each option grant was estimated using a Black-Scholes option-pricing model during the nine months ended September 30, 2025, and the year ended 2024[214] - The company accounts for share-based compensation to employees and non-employees under the fair value method, recognizing it over the requisite service period[211][212] Financial Reporting and Risks - The company does not have any off-balance sheet arrangements that could materially affect its financial condition or results of operations[216] - The company is classified as an "emerging growth company" under the JOBS Act, allowing it to delay the adoption of new or revised accounting standards[217] - The company does not believe the impact of inflation on its financial position is material, although it is exposed to inflation risk from increases in labor costs[220] - Market risk exposure is limited to risks arising in the normal course of business, as the company does not engage in speculative transactions[221] - The expected dividend yield for the company's common stock is assumed to be zero, as it has not paid and does not anticipate paying cash dividends[215] - The company has an enforceable right to payment for performance completed to date in its revenue recognition for AGA Precision Systems LLC[208] - Convertible debt and embedded derivative liabilities are accounted for separately, with the embedded derivative liability measured at fair value[209]