Filed 2026-03-30 · Period ending 2025-12-31 · 92,907 words · SEC EDGAR
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# PMGC Holdings Inc. (ELAB) — 10-K **Filed:** 2026-03-30 **Period ending:** 2025-12-31 **Accession:** 0001213900-26-035937 **Source:** [SEC EDGAR](https://www.sec.gov/Archives/edgar/data/1840563/000121390026035937/) **Origin leaf:** 16ca89a91b4f484781149532d035de6e30698fd3836c420c1be60c9a1ad6210d **Words:** 92,907 --- ** UNITED STATES** **SECURITIES AND EXCHANGE COMMISSION** **Washington, D.C. 20549** **FORM 10-K** **ANNUAL REPORT PURUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934** For the fiscal year ended December 31, 2025 **TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934** For the transition period from __________ to __________ Commission File Number: **001-41875** **PMGC HOLDINGS INC.** (Exact name of registrant as specified in its charter) | Nevada | | 33-2382547 | | | (State or other jurisdiction of incorporation or organization) | | (I.R.S. Employer Identification No.) | | **120 Newport Center Drive** **Newport Beach, CA 92660** *(Address of principal executive office)* (Zip code) **(888) 445-4886** *(Registrants telephone number, including area code)* Securities registered pursuant to Section 12(b) of the Act: | Title of each class: | | Trading Symbol(s) | | Name of each exchange on which registered: | | | Common Stock, par value $0.0001 per share | | ELAB | | The Nasdaq Stock Market LLC | | Securities registered pursuant to Section 12(g) of the Act: **None** (Title of class) Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes No Indicate by check mark if the registrant is not required to file reports pursuant Section 13 or 15(d) of the Exchange Act. Yes No **Note**- Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Exchange Act from their obligations under those Sections. Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T ( 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes No Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of large accelerated filer, accelerated filer, smaller reporting company, and emerging growth company in Rule 12b-2 of the Exchange Act. | Large accelerated filer | | Accelerated filer | | | | Non-accelerated filer | | Smaller reporting company | | | | | | Emerging growth company | | | If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. Indicate by check mark whether the registrant has filed a report on and attestation to its managements assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrants executive officers during the relevant recovery period pursuant to 240.10D-1(b). Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes No The aggregate market value of the voting and non-voting shares of the Companys common stock held by non-affiliates as of June 30, 2025 was approximately $100,998,123.54 based on the closing price reported for such date on the Nasdaq Capital Market. As of March 30, 2026, there were 1,159,112 of the registrants common stock, par value $0.0001 per share, issued and outstanding. **** **PMGC HOLDINGS INC.** **ANNUAL REPORT ON FORM 10-K** **FOR THE FISCAL YEAR ENDED** **DECEMBER 31, 2025** | | | Page | | | PART I | | 1 | | | | | | | | ITEM 1. | Business | 1 | | | ITEM 1A. | Risk Factors | 25 | | | ITEM 1B. | Unresolved Staff Comments | 46 | | | ITEM 1C. | Cybersecurity | 46 | | | ITEM 2. | Properties | 47 | | | ITEM 3. | Legal Proceedings | 47 | | | ITEM 4. | Mine Safety Disclosures | 47 | | | | | | | | PART II | | 48 | | | | | | | | ITEM 5. | Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities | 48 | | | ITEM 6. | Reserved | 48 | | | ITEM 7. | Managements Discussion and Analysis of Financial Condition and Results of Operations | 48 | | | ITEM 7A. | Quantitative and Qualitative Disclosures about Market Risk | 57 | | | ITEM 8. | Financial Statements and Supplementary Data | 57 | | | ITEM 9. | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure | 57 | | | ITEM 9A. | Controls and Procedures | 58 | | | ITEM 9B. | Other Information | 58 | | | ITEM 9C. | Disclosure Regarding Foreign Jurisdictions that Prevent Inspections | 58 | | | | | | | | PART III | | 59 | | | | | | | | ITEM 10. | Directors, Executive Officers and Corporate Governance | 59 | | | ITEM 11. | Executive Compensation | 65 | | | ITEM 12. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters | 79 | | | ITEM 13. | Certain Relationships and Related Transactions, and Director Independence | 80 | | | ITEM 14. | Principal Accounting Fees and Services | 89 | | | | | | | | PART IV | | 90 | | | | | | | | ITEM 15. | Exhibits and Financial Statement Schedules | 90 | | | ITEM 16. | Form 10-K Summary | 92 | | | SIGNATURES | | 93 | | i **CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS** This Annual Report on Form 10-K (this Annual Report) contains forward-looking statements regarding our business, financial condition, results of operations, and prospects. Words such as expects, anticipates, intends, plans, believes, seeks, estimates, and similar expressions or variations of such words are intended to identify forward-looking statements but are not deemed to represent an all-inclusive means of identifying forward-looking statements as denoted in this Annual Report. Additionally, statements concerning future matters are forward-looking statements. Although forward-looking statements in this Annual Report reflect the good faith judgment of our management, such statements can only be based on facts and factors currently known by us. Consequently, forward-looking statements are inherently subject to risks and uncertainties, and actual results and outcomes may differ materially from the results and outcomes discussed in or anticipated by the forward-looking statements. Factors that could cause or contribute to such differences in results and outcomes include, without limitation, those specifically addressed under the headings Risks Factors and Managements Discussion and Analysis of Financial Condition and Results of Operations. You are urged not to place undue reliance on these forward-looking statements, which speak only as of the date of this Annual Report. We file reports with the SEC. The SEC maintains a website (www.sec.gov) that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC, including us. We undertake no obligation to revise or update any forward-looking statements in order to reflect any event or circumstance that may arise after the date of this Annual Report, except as required by law. Readers are urged to carefully review and consider the various disclosures made throughout the entirety of this Annual Report, which are designed to advise interested parties of the risks and factors that may affect our business, financial condition, results of operations and prospects. **DEFINITIONS OF FREQUENTLY USED TERMS** Except where the context otherwise requires and for purposes of this Annual Report only, references to: | | Board or Board of Directors refers to the Board of Directors of the Company. | | | | cGMP are to current good manufacturing practices. | | | | Common Stock are to our Common Stock with a par value of $0.0001 per share. | | | | Exchange Act are to the United States Securities Exchange Act of 1934, as amended; | | | | FDA are the U.S. Food and Drug Administration. | | | | SEC or Securities and Exchange Commission are to United States Securities and Exchange Commission; | | | | Securities Act are to the U.S. Securities Act of 1933, as amended; and | | | | PMGC, our business, our Company, Company, we, us, our and Group are to PMGC Holdings Inc., a Nevada corporation, and, unless the context requires otherwise, its subsidiaries. | | ii **SUMMARY OF MATERIAL RISKS RELATED TO OUR COMPANY** **Risks Related to our Financial Condition and Capital Structure** **** | | Our financial statements have been prepared on a going-concern basis and our continued operations are in doubt. | | | | We have a history of net losses, and we may not be able to achieve or maintain profitability in the future. | | | | Our operating cash consumption significantly exceeds our revenue, and we may not be able to fund our operations without continued access to the capital markets. | | | | We will need additional capital to conduct our operations and develop our products and businesses, and our ability to obtain the necessary funding is uncertain. | | | | We have conducted multiple reverse stock splits in a short period of time, which may adversely affect the market price of our Common Stock and investor confidence. | | **Risks Related to our Holding Company Structure and Acquisition Strategy** | | We may not achieve expected operational, strategic, or financial benefits from managing multiple subsidiaries under a single corporate structure. Our subsidiaries may operate independently with limited synergies, and the costs associated with maintaining a diversified platformincluding corporate overhead, compliance costs, management attention and reporting requirementsmay outweigh the benefits. If the anticipated advantages of our holding company structure do not materialize, our financial condition and results of operations could be adversely affected. | | | | Our growth strategy depends on acquisitions, which involve significant risks and uncertainties. | | | | Potential business combinations could require significant management attention, prove difficult to integrate, and adversely affect our operating results. | | | | The purchase price allocations for our acquisitions may be preliminary and subject to adjustment, which could materially affect our reported financial results. | | **Risks Related to our Operating Subsidiaries** | | Our biotechnology subsidiary, Northstrive Biosciences, is at an early stage of product development, and we may not develop products that can be successfully commercialized. | | | | Pacific Sun Packagings revenue depends on the IT hardware industry, which is subject to cyclical and secular changes. | | | | AGA Precision Systems operates in industries subject to stringent regulatory requirements, including International Traffic in Arms Regulations. | | **** | | AGA Precision Systems has historically operated without a formal sales and marketing function, which may limit its growth. | | **Risks Related to our Investment Activities (PMGC Capital)** | | PMGC Capital LLC may be deemed an investment company under the Investment Company Act of 1940, which could impose significant regulatory burdens. | | | | PMGC Capitals investment activities subject us to market risk, and we may incur losses on our investment portfolio. | | iii **Risks Related to Regulatory, Legal and Intellectual Property Matters** | | We may become subject to litigation, regulatory proceedings, or governmental investigations that could be costly and time-consuming. | | | | Changes in U.S. trade policy, tariffs, and international relations could adversely affect our supply chain and cost structure. | | | | If we fail to protect or enforce our intellectual property, others could compete against us more directly and we may not be able to compete effectively in our market. | | **** | | Certain of our technology may not be subject to protection through patents, which leaves us vulnerable to theft of our technology. | | **Risks Related to our Management and Governance** | | Our corporate governance documents and Nevada law may have anti-takeover effects that could discourage, delay, or prevent a change in control. | | | | If we lose key personnel or are unable to attract and retain qualified personnel, we may be unable to execute our business plan. | | | | Graydon Bensler serves as both our Chief Executive Officer and Chief Financial Officer, which presents governance risks and limitations. | | **** | | Significant related-party transactions with entities controlled by our executive officers and directors may present conflicts of interest. | | | | We have previously identified a material weakness in our internal control over financial reporting, and there can be no assurance that additional material weaknesses will not be identified in the future. | | **Risks Related to the Ownership of our Securities** **** | | Our Common Stock may be affected by limited trading volume and price fluctuations, which could adversely impact the value of our Common Stock. | | | | We have a significant number of shares of Series B Preferred Stock outstanding with voting rights that may dilute the voting power of Common Stock holders. | | | | We may not be able to continue to satisfy listing requirements of Nasdaq to maintain a listing of our Common Stock. | | | | We currently do not intend to declare dividends on our Common Stock in the foreseeable future and, as a result, your returns on your investment may depend solely on the appreciation of our common stock. | | iv **PART I** **Item 1. Business** **Overview** **** As of December 31, 2025, we manage and operate a diverse portfolio of four (4) wholly owned subsidiaries across the medical aesthetics and biopharmaceutical sectors: | | Northstrive Biosciences Inc. (Northstrive Biosciences) is a biopharmaceutical company focusing on the development and acquisition of cutting-edge aesthetic medicines and therapeutic products. Our lead asset, EL-22, is leveraging a first-in-class engineered probiotic approach to address obesitys pressing issue of preserving muscle while on weight loss treatments, including GLP-1 receptor agonists. | | | | PMGC Capital LLC (PMGC Capital) is a multi-strategy investment firm focused on direct investments, strategic lending, and acquiring undervalued companies and assets across diverse markets. Our mission is to identify and seize high-potential opportunities, delivering sustainable growth and maximizing returns on capital. | | | | | Pacific Sun Packaging, Inc. (Pacific Sun Packaging or Pacific Sun) is a specialty packaging provider focused on high-precision, component-level packaging solutions for the electronics and information technology (IT) hardware industries.The company designs and supplies custom-engineered protective packaging for delicate components such as central processing units (CPUs), memory modules (Dual In-line Memory Modules (DIMMs) and Small Outline Dual Inline Memory Modules (SO-DIMMs), solid state drives (SSDs), hard disk drives (HDDs), and fiber-optic transceivers, serving customers across the semiconductor, data center, and networking equipment supply chains. | | | | | AGA Precision Systems LLC (AGA Precision Systems or AGA) is a specialized computer numerical control (CNC) machine shop focused on high-tolerance milling, turning, mold manufacturing, and machining of complex metals including titanium and Inconel. The company serves customers across the aerospace, defense, and industrial sectors, delivering precision components to demanding technical specifications. | | We are dedicated to enhancing our portfolio through the acquisition of operating companies and innovative biotechnology assets that align with our growth mission, while actively pursuing the acquisition of operating companies. On January 16, 2025, we completed the divestiture of the assets relating to our prior Elevai Skincare Inc. business. Elevai Skincare Inc., previously specializing in developing and commercializing physician-dispensed skincare products, is no longer part of our operations. The Skincare asset divestiture enabled us to dedicate more resources and time to advancing our initiatives and assets in larger markets with unmet needs, creating greater growth opportunities for the Company and its shareholders. Our efforts are now focused on the clinical development of biotechnology assets through NorthStrive Biosciences. Moreover, this strategic shift has positioned us to actively explore and execute potential business acquisitions and high-value biotechnology assets, further strengthening our portfolio and driving long-term growth. **** **Business Strategy** PMGC Holdings Inc. is a diversified holding company focused on acquiring and growing valuable assets and operating businesses across various industries. Our strategy is to identify and invest in compelling opportunitiesregardless of sectorwith strong fundamentals, growth potential, and scalable operations. We actively seek acquisitions that complement our existing portfolio and align with our long-term value creation objectives. Northstrive Biosciences Inc. Northstrive Biosciences Inc., a wholly owned subsidiary of PMGC Holdings Inc., is a biopharmaceutical company focusing on the development and acquisition of cutting-edge aesthetic medicines and therapeutic products. Currently, more than 40% of adults in the United States live with obesity - a figure predicted to rise to approximately 50% by 2030. Obesity is a leading risk factor for the development of serious health conditions, including Type 2 diabetes and heart failure. Goldman Sachs predicts that this epidemic will create a $100 billion market for anti-obesity players. 1 Our lead asset, EL-22, is leveraging a first-in-class engineered probiotic approach to address obesitys pressing issue of preserving muscle while on weight loss treatments, including GLP-1 receptor agonists. EL-22 has completed a Phase 1 clinical trial in South Korea, demonstrating it was generally well tolerated and safe in healthy volunteers. No subjects dropped out due to adverse events and no statistically significant difference was found between the intervention groups in the incidence of treatment emergent adverse events. The Company intends to evaluate EL-22 for efficacy and safety in combination with popular weight-loss therapeutics currently on the market, with the goal of decreasing fat mass while preventing the muscle wasting that commonly occurs with weight-loss drugs. We are working towards either submitting an Investigational New Drug application (IND) with the FDA to test EL-22 in human subjects, assuming we have sufficient working capital, or collaborating with another company in order to facilitate completing and submitting an IND more quickly. Our second asset, EL-32, is a preclinical engineered probiotic expressing dual myostatin & activin-A and also being positioned for the muscle preservation space as a combination to weight loss treatments, including GLP-1 receptor agonists. In a preclinical healthy mouse model, EL-32 demonstrated a statistically significant increase in Activin-A and myostatin antibodies, confirming the efficacy using the ELISA test. Northstrive Biosciences Products Northstrive Biosciences leverages a first-in-class engineered probiotic approach to address obesitys pressing issue of preserving muscle while on weight loss treatments, including GLP-1 receptor agonists. Our lead asset, EL-22, has completed a Phase 1 clinical trial in South Korea, demonstrating it was generally well tolerated and safe in healthy volunteers. No subjects dropped out due to adverse events and no statistically significant difference was found between the intervention groups in the incidence of treatment emergent adverse events. Preclinical results of EL-22 from a 2022 study demonstrated physiological (serum creatine kinase level), physical (body weight change), and functional (rotarod test) improvements in the dystrophic features of mdx mice, a mouse model of Duchenne muscular dystrophy (DMD)1. Elevai believes that EL-22 has the potential to treat obesity in combination with popular weight loss therapeutics, including GLP-1 receptor agonists, by preserving muscle mass while decreasing fat mass. We hope to either submit or partner with another biopharmaceutical company in 2026 to submit an IND application in 2025 that utilizes the licensed asset EL-22 for efficacy and safety in combination with popular weight-loss therapeutics currently on the market, with the goal of decreasing fat mass while preventing the muscle wasting that commonly occurs with weight-loss drugs. Regulatory bodies might require us to conduct preclinical bridge studies in order to pivot EL-22 from DMD to obesity indications. Our second asset, EL-32, is a preclinical engineered probiotic expressing dual myostatin & activin-A and also positioned for the muscle preservation space as a combination to weight loss treatments, including GLP-1 receptor agonists. Several key companies are actively developing GLP-1 drugs for obesity and complementary treatments to address associated conditions such as muscle wasting. These companies include: | 1. | Novo Nordisk: Known for its GLP-1 drugs, Ozempic and Wegovy, Novo Nordisk remains a dominant player in the obesity drug market. They have shown significant efficacy in weight loss and improving cardiovascular health. | | | 2. | Eli Lilly: Another major player with its GLP-1 drug, Mounjaro (tirzepatide), which has shown promising results in weight loss. Eli Lilly also acquired Versanis Bio, which is developing bimagrumab, a drug that helps increase lean muscle mass while reducing fat. | | | 3. | Pfizer: Developing danuglipron, an oral GLP-1 analog, aimed at carving out a niche in the obesity market with a more convenient dosing regimen. | | | 4. | Biohaven: Biohavent taldefgrobep is an investigational fusion protein targeting myostatin to impact skeletal muscle growth relevant to individuals living with overweight and obesity. | | | 5. | Scholar Rock: Scholar Rocks apitegromab is an inhibitor of the activation of latent myostatin, with the aim of improving patients motor function. Scholar Rock is assessing apitegromabs ability to preserve lean muscle mass in individuals on GLP-1 receptor agonist therapy for obesity. | | | 6. | Veru: Verus enobosarm is an androgen receptor modulator, also known as a SARM, to address the loss of muscle in patients undergoing weight loss therapy with GLP-1 drugs. | | | 1. | Reference: Sung DK, Kim H, Park SE, Lee J, Kim JA, Park YC, Jeon HB, Chang JW, Lee J. A New Method of Myostatin Inhibition in Mice via Oral Administration of Lactobacillus casei Expressing Modified Myostatin Protein, BLS-M22, Int. J. Mol. Sci. 2022, 23, 9059. https://doi.org/10.3390/ijms23169059 | | 2 These companies are at the forefront of developing both GLP-1 drugs and complementary treatments to address the growing need for effective obesity management and the prevention of muscle wasting associated with weight loss. PMGC Capital LLC PMGC Capital LLC, a wholly owned subsidiary of PMGC Holdings Inc., is a multi-strategy investment vehicle engaged in investing, lending and pursuing diversified investment opportunities. PMGC Capital LLC actively supports the growth and expansion of PMGC Holdings Inc.s portfolio companies. The subsidiarys dynamic investment approach is designed to capitalize on high yield returns on capital and investing into and acquiring assets and companies that are undervalued. Pacific Sun Packaging, Inc. Pacific Sun Packaging is a specialty provider of high-precision, component-level packaging solutions serving the electronics and IT hardware industries. Headquartered in San Clemente, California, Pacific Sun Packaging designs and supplies custom-engineered protective packaging for sensitive IT hardware components, including CPUs, memory modules (DIMMs and SO-DIMMs), SSDs, HDDs, and fiber-optic transceivers. Pacific Sun Packagings packaging solutions are engineered to meet demanding standards of durability, electrostatic discharge (ESD) protection, and dimensional precision. Pacific Sun Packaging serves customers across the semiconductor, data center, and networking equipment supply chains, ensuring the secure transport, handling, and storage of delicate, high-value electronic components. Products Pacific Sun Packaging offers a portfolio of custom and standard packaging solutions designed for component-level IT hardware applications. Its product offerings include: | | CPU Packaging precision trays and protective carriers designed to protect processors during handling and shipment. | | | | Memory Module Packaging custom trays for DIMMs and SO-DIMMs used in servers, workstations, and PCs. | | | | Storage Device Packaging protective packaging for solid state drives (SSDs) and hard disk drives (HDDs). | | | | Optical and Networking Packaging solutions for fiber-optic transceivers and related networking hardware components. | | | | Custom Packaging Solutions tailored designs engineered to meet specific customer and component requirements. | | Each solution is engineered to deliver protection against electrostatic discharge vibration, and mechanical damage, while enabling ease of handling, automated processing, and efficient integration into customer supply chains. Customers **** Pacific Sun Packaging serves a diverse base of over 300 commercial customers across North America. Its customers include: | | Original equipment manufacturers (OEMs); | | | | Contract manufacturers; | | | | Global technology distributors; | | | | Data center operators; and | | | | IT asset disposition (ITAD) and lifecycle management firms. | | 3 These customers rely on Pacific Sun Packagings specialized solutions to protect valuable IT hardware during manufacturing, distribution, and resale. Sales and Marketing **** Pacific Sun Packaging markets its products primarily through a direct sales force. Pacific Sun Packaging maintains long-standing relationships with customers by focusing on reliability, speed of delivery, and the ability to provide tailored solutions. Sales efforts emphasize: | | Technical collaboration with customers during design and production stages; | | | | Responsiveness and speed to market for new product requirements; and | | | | Consistent product quality that reduces returns and integration issues. | | Pacific Sun Packaging also participates in trade shows and industry events to strengthen brand visibility. Competition **** The packaging industry is highly competitive and includes large multinational packaging companies as well as smaller specialized providers. Pacific Sun Packaging differentiates itself through its: | | Focus on component-level IT hardware packaging; | | | | Custom engineering capabilities tailored to customer needs; | | | | Technical expertise in ESD protection and precision molding; and | | | | Established reputation for reliability among IT hardware supply chain participants. | | Competitive Strengths **** Pacific Sun Packagings competitive position is supported by the following key strengths: | 1. | Specialization in High-Value IT Hardware Packaging Unlike general packaging providers, Pacific Sun Packaging focuses exclusively on component-level electronics, enabling deep technical expertise and customer trust. | | | 2. | Custom Engineering Capabilities Pacific Sun Packagings ability to collaborate directly with OEMs and IT service providers on tailored solutions creates high switching costs and long-term customer relationships. | | | 3. | U.S.-Based Operations Domestic manufacturing and fulfillment provide shorter lead times, reduced logistics risk, and alignment with industry trends favoring onshoring of critical supply chains. | | | 4. | Established Customer Base With over 300 commercial customers, Pacific Sun Packaging benefits from a diversified client network across OEMs, distributors, and ITAD firms. | | | 5. | Lean and Scalable Operations Pacific Sun Packagings disciplined cost structure and quality-focused processes provide a foundation for profitable growth and operational scalability. | | 4 Growth Strategy Pacific Sun Packaging intends to expand its market position by: | 1. | Broadening its Customer Base targeting new OEMs, distributors, and ITAD firms in growing sectors such as cloud computing and AI infrastructure. | | | 2. | Expanding Product Offerings developing additional packaging solutions for next-generation IT hardware components. | | | 3. | Leveraging Industry Trends capitalizing on increased demand for IT lifecycle management, resale, and refurbishment, where packaging plays a critical role in maintaining product value. | | | 4. | Operational Scaling investing in expanded production capacity and efficiency improvements to meet growing demand. | | AGA Precision Systems LLC AGA Precision Systems is a specialized computer numerical code CNC machine shop focused on high-tolerance milling, turning, mold manufacturing, and machining of complex metals including titanium and Inconel. Headquartered in California, AGA Precision Systems serves customers across the aerospace, defense, and industrial sectors, delivering precision components to demanding technical specifications. AGA Precision Systems has built its business over more than a decade, growing primarily via referrals and repeat orders without a formal sales or marketing function. Its operations emphasize quality, precision, and reliability. Precision Machining Industry Overview **** The precision machining industry is a critical part of the advanced manufacturing supply chain, supporting sectors such as aerospace, defense, medical devices, energy, and industrial equipment. The market is characterized by: | | Increasing Demand for High-Precision Components Aerospace and defense programs, particularly those involving next-generation aircraft, spacecraft, and defense systems, require components manufactured to extremely tight tolerances. | | | | Specialized Metals Usage Growth in the use of exotic materials such as titanium, Inconel, and other high-performance alloys reflects the need for strength, heat resistance, and lightweight performance in mission-critical applications. | | | | Reshoring and Supply Chain Security U.S. government initiatives and defense priorities emphasize domestic production of critical parts to reduce reliance on foreign suppliers, creating opportunity for U.S.-based CNC machine shops. | | | | Industrial and Commercial Applications Beyond aerospace and defense, precision machining is essential for industries such as energy infrastructure, automotive performance, and heavy machinery, all of which rely on exacting quality and reliability. | | Within this context, AGA Precision Systems is positioned as a niche provider specializing in high-tolerance machining of complex metals, enabling it to serve programs and customers with stringent technical requirements. 5 Products & Services **** AGA Precision Systems offers a suite of high-precision manufacturing services, including: | | High-Tolerance Milling & Turning machining of complex parts to tight tolerances from hard or exotic metals. | | | | Mold Manufacturing design and fabrication of molds used in industrial and aerospace processes. | | | | Specialty Metals Machining handling of difficult materials (e.g., titanium, Inconel) that require specialized tooling, processes, and quality oversight. | | Components produced by AGA Precision Systems are often used in mission-critical applications where dimensional accuracy, material properties, and surface finish are essential. Customers AGA Precision Systems serves a diversified group of clients primarily in: | | Aerospace manufacturers and suppliers; | | | | Defense contractors and programs; and | | | | Industrial equipment producers. | | These customers require precision machining of components with high standards for performance, durability, and regulatory compliance. Long-standing relationships and repeat business are characteristic of AGA Precision Systems customer base. Sales & Marketing AGA Precision Systems has historically grown via referrals and repeat orders. The company has not maintained a formalized sales or marketing department but relies on: | | Reputation for precision, quality, and reliability; | | | | Word-of-mouth, referrals, and customer networks; and | | | | Technical credibility and capability to meet or exceed customer specifications. | | Going forward, we believe there is opportunity to augment growth via more proactive business development, targeted outreach in aerospace/defense programs, and participation in trade or industry events. Manufacturing & Operations AGA Precision Systems operates from its manufacturing facility in California. Key operational and technical features include: | | Capabilities to machine exotic and high-performance metals such as titanium and Inconel, which require specialized processes and tooling; | | | | High-precision tolerances, strict quality assurance, and inspection processes; | | | | Mold manufacturing capabilities that complement standard CNC machining; and | | | | Experienced management and technical staff with machine shop expertise. | | 6 Competition **** The precision machining and specialty metals CNC market is competitive and includes both small niche shops and larger, vertically integrated manufacturers. AGA Precision Systems differentiates itself via: | | Specialized machining of hard and exotic metals to high tolerances; | | | | Reputation and proven reliability in aerospace, defense, and industrial segments; | | | | Existing customer relationships and repeat business without reliance on large marketing expenditures; | | | | Flexibility in managing small to medium-sized, highly technical orders. | | Competitive Strengths **** AGA Precision Systems competitive advantages include: | 1. | Technical Specialization in Exotic Metals & Tight Tolerances its expertise in machining titanium, Inconel, and other challenging metals required for aerospace and defense applications. | | | 2. | Recognized Industry Certifications & Compliance AGA is International Traffic in Arms Regulations (ITAR) registered and maintains AS9100 certification, reinforcing its credibility as a qualified manufacturing partner for aerospace and defense customers with strict quality and regulatory requirements. | | | 3. | Mold Manufacturing Capability its ability to design and fabricate molds provides value beyond standard machining services. | | | 4. | Long-Standing Customer Relationships its repeat business and referrals from established aerospace, defense, and industrial customers reflect trust and reliability. | | | 5. | U.S.-Based Operations domestic manufacturing reduces logistics risks, ensures regulatory compliance, and aligns with defense and aerospace reshoring priorities. | | Growth Strategy AGA Precision Systems intends to expand its market presence by: | 1. | Business Development & Marketing Enhancements formalizing efforts to reach new customers in aerospace, defense, and industrial sectors. | | | 2. | Expanding Capacity & Efficiency investing in machinery, tooling, process improvements, and quality systems to improve throughput and reduce cost. | | | 3. | Leveraging Strategic Support using financial and operational resources provided under its parent company to scale operations and compete for larger contracts. | | | | 4. | Diversification of Customer & Program Exposure pursuing opportunities in government defense programs, industrial supply chains, and emerging sectors beyond its core niches. | | 7 **Operational and Competitive Strengths** We face competition from both commercialized obesity medications, as well as clinical candidates that are still in the development stage. We believe the primary competitive factors in our favor for EL-22 & EL-32 are the following: | | Our First-in-Class Approach and Early Results | | Northstrive Biosciences is developing EL-22, an engineered probiotic with myostatin antigens, to elicit an immune response that could help people achieve substantial fat loss while preserving muscle mass. Based on the generated preclinical data and the mechanism of the myostatin-activin signaling pathway effect on muscle wasting, we believe that EL-22 has the potential to treat obesity in combination with GLP-1 receptor agonists by preserving muscle mass while decreasing fat mass. In the preclinical studies1: | | EL-22 showed a statistically significant increase in anti-myostatin IgG antibody concentration, where myostatin is a key negative regulator of muscle growth. | | | | EL-22 showed a statistically significant decrease in creatine kinase levels, which indicates a decrease of muscle destruction. | | | | EL-22 administered to mdx mice, a mouse model of Duchenne muscular dystrophy, had improved physical activity and gross motor function, as demonstrated by a longer duration during rotarod tests. | | Based on the generated preclinical data and the mechanism of the myostatin-activin signaling pathway effect on muscle wasting, we believe that EL-22 has the potential to treat obesity in combination with GLP-1 by preserving muscle mass while decreasing fat mass. The Company aspires to either complete an IND submission in 2026, assuming it has sufficient working capital, or to enter into a collaboration with another company to do so. Our ability to proceed with human trials in the U.S. to evaluate the myostatin approach in combination with one or more GLP-1 receptor agonists in obesity is contingent upon the FDA clearing the IND submission. | | Our Candidates Ease of Use and Convenient Oral Administration | | We believe our product candidates EL-22 and EL-32 would be the only oral myostatin formulations to date, making Northstrive Bioscience an early mover in the emerging GLP-1 combination space for muscle preservation. Existing approaches targeting obesity with combinations to preserve muscle mass while on weight loss therapies are administered through injectable forms; either subcutaneously or intravenously. Although effective, many patients in general prefer orally administered medications over injections due to factors like convenience, ease of administration, and fear of needles. Our product candidates have been designed to be oral capsules to provide benefits without any needling. **Strategy** Northstrive Biosciences strategy focuses primarily on the clinical development and commercialization of novel medicines for the treatment of metabolic diseases, including obesity. We will need substantial capital to support our drug development and any related commercialization efforts for our drug candidates. The key elements of our strategy are: | | Develop EL-22 & EL-32 for obesity. | | **Reference:** | 1 | Sung DK, Kim H, Park SE, Lee J, Kim JA, Park YC, Jeon HB, Chang JW, Lee J. A New Method of Myostatin Inhibition in Mice via Oral Administration of Lactobacillus casei Expressing Modified Myostatin Protein, BLS-M22, Int. J. Mol. Sci. 2022, 23, 9059. https://doi.org/10.3390/ijms23169059 | | Our metabolic drug pipeline is focused on the clinical development of EL-22, a first-in-class engineered probiotic approach to address obesitys pressing issue of preserving muscle while on weight loss treatments, including GLP-1 receptor agonists. Currently, more than 40% of adults in the United States live with obesity - a figure predicted to rise to approximately 50% by 2030.1 Obesity is a leading risk factor for the development of serious health conditions, including Type 2 diabetes and heart failure. Goldman Sachs predicts that this epidemic will create a $100 billion market for anti-obesity players.2 8 Approved GLP-1 drugs used in weight loss, such as Novo Nordisks Ozempic (semaglutide) & Wegovy(semaglutide) and Eli Lillys Zepbound (tirzepatide), and Mounjaro (tirzepatide) have transformed the obesity treatment landscape. However, past studies of these highly effective drugs show that up to 20-50% of the weight loss is due to loss of lean muscle.3 Muscle is necessary for metabolism, strength, and physical function. As a result, we believe that one of the key unmet needs in the current obesity landscape is the avoidance of muscle loss while on weight loss treatments. Northstrive Biosciences is developing EL-22, an engineered probiotic with myostatin antigens, to elicit an immune response that could help people achieve substantial fat loss while preserving muscle mass. Our second asset, EL-32, is a preclinical engineered probiotic expressing dual myostatin & activin-A and also positioned for the muscle preservation space as a combination to weight loss treatments, including GLP-1 receptor agonists. We believe this urgent unmet medical need could be addressed by both EL-22 and EL-32, that may effectively prevent the loss of muscle mass and increase the fat loss experienced by older patients receiving GLP-1 drugs for the treatment of obesity. **References:** | 1 | Ward ZJ, BleichSN, Cradock AL, Barrett JL, Giles CM, Flax CN, Long MW, GortmakerSL. Projected U.S. State-Level Prevalence of Adult Obesity and Severe Obesity. N Engl J Med 2019;381:2440-2450. https://www.nejm.org/doi/full/10.1056/NEJMsa1909301. | | | 2 | Why the anti-obesity drug market could grow to $100 billion by 2030. https://www.goldmansachs.com/insights/articles/anti-obesity-drug-market.html. | | | 3 | Sargeant JA, Henson J, King JA, Yates T, Khunti K, Davies MJ. A Review of the Effects of Glucagon-Like Peptide-1 Receptor Agonists and Sodium-Glucose Cotransporter 2 Inhibitors on Lean Body Mass in Humans. Endocrinol Metab (Seoul). 2019 Sep;34(3):247-262. doi: 10.3803/EnM.2019.34.3.247. PMID: 31565876; PMCID: PMC6769337. | | **Corporate History and Structure** As of December 31, 2025, PMGC Holdings Inc. has four (4) wholly owned subsidiaries, Northstrive Biosciences Inc., PMGC Capital LLC, Pacific Sun Packaging, Inc., and AGA Precision Systems LLC. Our predecessor company, Elevai Labs, Inc., was incorporated in Delaware in June 2020, and completed its initial public offering of Common Stock on November 24, 2023. On December 20, 2024, the Company re-domesticated to Nevada and changed its name to PMGC Holdings Inc. In January 2025, the Company completed its divestiture of the Elevai Skincare business and another operating subsidiary, Elevai Biosciences, Inc., changed its name to Northstrive Biosciences. In July 2025, the Company acquired both AGA Precision Systems and Pacific Sun Packaging, respectively. **Market, Industry and Other Research-Based Data** *Our Market and Industry* We have transitioned to a diversified holding company focused on acquiring and growing valuable assets and operating businesses across various industries. Our strategy is to identify and invest in compelling opportunitiesregardless of sectorwith strong fundamentals, growth potential, and scalable operations. We actively seek acquisitions that complement our existing portfolio and align with our long-term value creation objectives.Our business model consists of four (4) primary components: | 1. | PMGC Capital LLC, our multi-strategy investment vehicle, which seeks to generate revenue through capital deployment in undervalued assets, structured financings, and public and private market investments. | | | 2. | NorthStrive Biosciences Inc., our biotechnology subsidiary focused on advancing clinical-stage assets toward regulatory approval and commercialization. | | 9 | | 3. | Pacific Sun Packaging, Inc., our specialty packaging subsidiary focused on high-precision, component-level packaging solutions for the electronics and IT hardware industries, including custom-engineered protective packaging for central processing units, memory modules, solid-state drives, hard disk drives, and fiber-optic transceivers across semiconductor, data center, and networking supply chains. | | | | | | | | | 4. | AGA Precision Systems LLC, our precision manufacturing subsidiary focused on high-tolerance CNC milling and turning, mold manufacturing, and machining of complex metals such as titanium and Inconel, serving aerospace, defense, and industrial customers, and operating with ITAR registration and AS9100 certification to meet stringent regulatory and quality requirements. | | As part of this strategic shift, we no longer operate in the physician-dispensed cosmetics or medical aesthetics markets. The Company has transitioned to a diversified holding company structure, operating through wholly owned subsidiaries across the biotechnology, advanced manufacturing, specialty packaging, and investment sectors. We believe this diversified structure provides the Company with the ability to pursue growth opportunities across multiple industries and reduces the risks associated with concentration in a single market or product line. *Industry Data* The following industry data is derived from third-party sources that we believe to be reliable but that we have not independently verified. Investors should not place undue reliance on these estimates, and there can be no assurance that our business will grow at rates comparable to the industry projections described below. See Risk Factors Certain market opportunity data and forecasts in this Annual Report were obtained from third-party sources and were not independently verified by us. **Biotechnology and Anti-Obesity Therapeutics** The global biotechnology market continues to grow, driven by advancements in gene therapies, regenerative medicine, and biologics. According to Grand View Research, the global biotechnology industry was valued at approximately $1.37 trillion in 2022 and is expected to grow at a compound annual growth rate (CAGR) of 12.8% from 2023 to 2030. This expansion is fueled by rising research and development investments, regulatory approvals, and the increasing adoption of biotechnology-based therapies. The weight-loss drug market has emerged as a high-growth sector, with GLP-1 receptor agonists such as Novo Nordisks Ozempic and Eli Lillys Mounjaro driving significant demand. Goldman Sachs projects the anti-obesity drug market could reach $100 billion by 2030. Currently, more than 40% of adults in the United States live with obesity, a figure predicted to rise to approximately 50% by 2030. Obesity is a leading risk factor for the development of serious health conditions, including Type 2 diabetes and heart failure. However, research indicates that up to 40% of weight loss from GLP-1 drugs comes from loss of lean muscle mass, creating an unmet need for therapies that preserve muscle mass during treatment. We believe this represents a significant market opportunity for our lead asset, EL-22. **Precision Manufacturing and Aerospace & Defense** The precision machining industry is a critical component of the advanced manufacturing supply chain, supporting sectors such as aerospace, defense, medical devices, energy, and industrial equipment. According to Grand View Research, the global precision machining market was valued at approximately $123 billion in 2025 and is expected to grow at a CAGR of approximately 8.1% from 2026 to 2033, driven by rising demand for high-precision components across advanced industries and accelerated adoption of CNC automation and smart manufacturing. The aerospace and defense sector in particular requires components manufactured to extremely tight tolerances from specialized materials such as titanium, Inconel, and other high-performance alloys. U.S. government initiatives and defense priorities continue to emphasize domestic production of critical parts to reduce reliance on foreign suppliers, creating opportunity for U.S.-based precision manufacturers. The global aerospace parts manufacturing market was valued at approximately $913 billion in 2023 and is expected to grow at a CAGR of approximately 4.2% from 2024 to 2030. 10 **Specialty IT Hardware Packaging** The global electronic packaging market serves the semiconductor, data center, and networking equipment supply chains and is driven by increasing demand for IT infrastructure, cloud computing, and artificial intelligence applications. According to Grand View Research, the market was valued at approximately $62.5 billion in 2024 and is expected to reach $89.7 billion by 2030, growing at a CAGR of about 6.2%, supported by expanding data center construction, growth in semiconductor production, and increasing demand for IT asset lifecycle management, resale, and refurbishment, where packaging plays a critical role in maintaining product value. The trend toward onshoring critical supply chains in the United States, combined with increasing data center capital expenditure, creates favorable demand dynamics for domestic specialty packaging providers focused on component-level IT hardware protection. **Northstrive Biosciences Products** Northstrive Biosciences leverages a first-in-class engineered probiotic approach to address the pressing issue of preserving muscle mass while on weight loss treatments, including GLP-1 receptor agonists. *EL-22* Our lead asset, EL-22, is an engineered probiotic expressing myostatin antigens, designed to elicit an immune response that helps preserve muscle mass while promoting fat loss. EL-22 has completed a Phase 1 clinical trial in South Korea, demonstrating it was generally well tolerated and safe in healthy volunteers. No subjects dropped out due to adverse events and no statistically significant difference was found between the intervention groups in the incidence of treatment-emergent adverse events. Preclinical results of EL-22 from a 2022 study demonstrated physiological (serum creatine kinase level), physical (body weight change), and functional (rotarod test) improvements in the dystrophic features of *mdx* mice, a mouse model of Duchenne muscular dystrophy (DMD). Based on the generated preclinical data and the mechanism of the myostatin-activin signaling pathway effect on muscle wasting, we believe that EL-22 has the potential to treat obesity in combination with GLP-1 receptor agonists by preserving muscle mass while decreasing fat mass. In the preclinical studies: | | EL-22 showed a statistically significant increase in anti-myostatin IgG antibody concentration, where myostatin is a key negative regulator of muscle growth. | | | | EL-22 showed a statistically significant decrease in creatine kinase levels, which indicates a decrease of muscle destruction. | | | | EL-22 administered to mdx mice had improved physical activity and gross motor function, as demonstrated by a longer duration during rotarod tests. | | The Company intends to complete an IND submission in 2025 and to initiate clinical trials in the U.S. to evaluate the myostatin approach in combination with one or more GLP-1 receptor agonists in obesity. Our ability to proceed with human trials is contingent upon the FDA clearing the IND submission. **** 11 **** Regulatory bodies might require us to conduct preclinical bridge studies in order to pivot EL-22 from DMD to obesity indications. *EL-32* Our second asset, EL-32, is a preclinical engineered probiotic expressing dual myostatin & activin-A antigens and is also positioned for the muscle preservation space as a combination to weight loss treatments, including GLP-1 receptor agonists. In a preclinical healthy mouse model, EL-32 demonstrated a statistically significant increase in activin-A and myostatin antibodies, confirming the efficacy using the ELISA test. **Pacific Sun Packaging Products and Services** Pacific Sun Packaging offers a portfolio of custom and standard packaging solutions designed for component-level IT hardware applications, including CPU packaging, memory module packaging (DIMMs and SO-DIMMs), storage device packaging (SSDs and HDDs), optical and networking packaging (fiber-optic transceivers and related networking hardware), and custom packaging solutions tailored to specific customer and component requirements. Each solution is engineered to deliver protection against electrostatic discharge (ESD), vibration, and mechanical damage, while enabling ease of handling, automated processing, and efficient integration into customer supply chains. **AGA Precision Systems Products and Services** AGA Precision Systems offers a suite of high-precision manufacturing services, including high-tolerance milling and turning of complex parts from hard or exotic metals, mold manufacturing for industrial and aerospace applications, and specialty metals machining of difficult materials such as titanium and Inconel that require specialized tooling, processes, and quality oversight. Components produced by AGA Precision Systems are often used in mission-critical applications where dimensional accuracy, material properties, and surface finish are essential. **** **Competition** We face competition across each of our operating segments. *Northstrive Biosciences Biotechnology* The obesity and muscle preservation therapeutic market is highly competitive. Several key companies are actively developing GLP-1 drugs for obesity and complementary treatments to address associated conditions such as muscle wasting. These companies include: | 1. | Novo Nordisk a leader in the GLP-1 drug market with its products Ozempic (semaglutide) and Wegovy (semaglutide), which have shown substantial efficacy in weight loss and improving cardiovascular health. | | | 2. | Eli Lilly developer of Mounjaro (tirzepatide) and Zepbound (tirzepatide) for obesity treatment. Eli Lilly also acquired Versanis Bio, which is developing bimagrumab, a drug designed to increase lean muscle mass while reducing fat. | | | 3. | Pfizer developing danuglipron, an oral GLP-1 analog aimed at offering a more convenient dosing regimen for obesity treatment. | | | 4. | Biohaven developing taldefgrobep, an investigational fusion protein targeting myostatin to impact skeletal muscle growth in individuals living with overweight and obesity. | | 12 | 5. | Scholar Rock developing apitegromab, an inhibitor of latent myostatin activation, and assessing its ability to preserve lean muscle mass in individuals on GLP-1 receptor agonist therapy for obesity. | | | 6. | Veru developing enobosarm, an androgen receptor modulator to address the loss of muscle in patients undergoing weight loss therapy with GLP-1 drugs. | | | 7. | Altimmune developing pemvidutide, a GLP-1 drug that has shown potential in weight loss and reduction of dyslipidemia. | | | 8. | AstraZeneca, Bristol Myers Squibb, Novartis, and Amgen in the early stages of developing obesity treatments, including various GLP-1 receptor agonists and other pharmacological approaches. | | These companies have significantly greater financial, technical, manufacturing, marketing, and human resources than we do. There can be no assurance that we will be able to compete effectively against these or other competitors. *Pacific Sun Packaging Specialty Packaging* The packaging industry is highly competitive and includes large multinational packaging companies as well as smaller specialized providers. Pacific Sun Packaging differentiates itself through its focus on component-level IT hardware packaging, custom engineering capabilities tailored to customer specifications, technical expertise in ESD protection and precision molding, and established reputation for reliability among IT hardware supply chain participants. We compete with both domestic and international packaging providers, some of which have substantially greater resources than we do. *AGA Precision Systems Precision Manufacturing* The precision machining and specialty metals CNC market is competitive and includes both small niche machine shops and larger, vertically integrated manufacturers. AGA Precision Systems differentiates itself through specialized machining of hard and exotic metals to high tolerances, reputation and proven reliability in aerospace, defense, and industrial segments, existing customer relationships and repeat business, ITAR registration and AS9100 certification, mold manufacturing capabilities, and flexibility in managing small to medium-sized highly technical orders. We compete with other domestic CNC machine shops and larger manufacturers, some of which have substantially greater resources, broader capabilities, and more established customer relationships. **Operational and Competitive Strengths** We believe our competitive position is supported by the following key strengths across our operating segments: | | Diversified Holdings Across Multiple Industries. We operate wholly owned subsidiaries across the biotechnology, advanced manufacturing, specialty packaging, and investment sectors. This diversified structure provides the Company with exposure to multiple end markets and reduces the risks associated with concentration in a single industry. | | | | Strategic Capital Deployment. Through PMGC Capital LLC, we seek to deploy capital into undervalued assets and investment opportunities, with the objective of generating returns on capital while expanding our portfolio of operating businesses and investments. | | | | Advancement of High-Potential Biotechnology Assets. Our subsidiary, Northstrive Biosciences Inc., is advancing EL-22 and EL-32, product candidates targeting muscle preservation in combination with weight loss treatments, addressing what we believe to be a significant unmet medical need in the obesity treatment landscape. | | | | First-in-Class Oral Myostatin Approach. We believe our product candidates EL-22 and EL-32 would represent the only oral myostatin formulations currently in development, providing a potential competitive advantage over existing injectable approaches to muscle preservation. Existing approaches targeting muscle preservation in combination with weight loss therapies are administered through injectable forms, whereas our product candidates have been designed as oral capsules. | | 13 | | Specialized Precision Manufacturing Capabilities. AGA Precision Systems provides high-tolerance machining of complex and exotic metals, including titanium and Inconel, for aerospace, defense, and industrial customers. AGAs ITAR registration and AS9100 certification position it to serve customers with stringent regulatory and quality requirements, and its U.S.-based operations align with industry trends favoring domestic production of critical components. | | | | Niche IT Hardware Packaging Expertise. Pacific Sun Packaging focuses exclusively on component-level electronics packaging, providing deep technical expertise, custom engineering capabilities, and high switching costs that support long-term customer relationships. Pacific Sun serves a diversified base of commercial customers across OEMs, distributors, and ITAD firms. | | | | U.S.-Based Operations. Both Pacific Sun Packaging and AGA Precision Systems operate from facilities in California, providing shorter lead times, reduced logistics risk, and alignment with industry trends favoring onshoring of critical supply chains and domestic manufacturing. | | | | Flexible M&A and Licensing Model. Our holding company structure allows for strategic acquisitions, licensing arrangements, and potential spin-offs of wholly owned subsidiaries or specific assets, providing flexibility to pursue value creation opportunities across multiple sectors. | | **References** | 1. | Biotechnology Market Size Report, 2023-2030. (Grand View Research). | | | 2. | Why the Anti-Obesity Drug Market Could Grow to $100 Billion by 2030. (Goldman Sachs). | | | 3. | Ward ZJ, Bleich SN, Cradock AL, Barrett JL, Giles CM, Flax CN, Long MW, Gortmaker SL. Projected U.S. State-Level Prevalence of Adult Obesity and Severe Obesity. N Engl J Med 2019;381:2440-2450. | | | 4. | Sargeant JA, Henson J, King JA, Yates T, Khunti K, Davies MJ. A Review of the Effects of Glucagon-Like Peptide-1 Receptor Agonists and Sodium-Glucose Cotransporter 2 Inhibitors on Lean Body Mass in Humans. Endocrinol Metab (Seoul). 2019 Sep;34(3):247-262. | | | 5. | Precision Machining Market (2026 - 2033) (Grand View Research). | | | 6. | U.S. Department of Defense, Securing Defense-Critical Supply Chains (Feb. 2022) | | | 7. | Aerospace Parts Manufacturing Market Report (Grand View Research) | | | 8. | Electronic Packaging Market (2025 - 2030) (Grand View Research) | | | 9. | Sung DK, Kim H, Park SE, Lee J, Kim JA, Park YC, Jeon HB, Chang JW, Lee J. A New Method of Myostatin Inhibition in Mice via Oral Administration of Lactobacillus casei Expressing Modified Myostatin Protein, BLS-M22. Int. J. Mol. Sci. 2022, 23, 9059. https://doi.org/10.3390/ijms23169059. | | **** 14 **Intellectual Property** **** We have developed a comprehensive portfolio of intellectual property, consisting of patents, patent applications, domain names, know-how and trade secrets. As of the date of this Annual Report, we have two registered domain names, six non-provisional patent applications filed, and four provisional patent applications filed. We believe our intellectual property adequately protects our products and technology and may prevent others from commercializing products or methods substantially similar to ours. **PMGC Holdings Inc.** ** *Patents* Below is a table, with footnotes, that includes our United States patent applications with the referenced property number(s) that are material to our business, as well as our two anticipated patent applications: | PropertyNo. | | Patent Title | | Application Number and Filing Date | | Application Type | | Jurisdiction | | | | 1. | | Fusion Protein of Myo-2 for Use in Treating Muscle Loss in Obese Patients | | 63/639,722, 04/29/2024 | | Provisional | | USA | | | | 2. | | Combination Therapy of a Fusion Protein of Myo-2 with a GLP-1 Receptor Agonist for Use in Treating Muscle Loss in Obese Patients | | 63/639,723, 04/29/2024 | | Provisional | | USA | | | | 3. | | Pharmaceutical Composition for Treatment of Muscle Loss Due to Obesity | | 63/639,727, 04/29/2024 | | Provisional | | USA | | | | 4. | | Combination Therapy for Treatment of Muscle Loss Due to Obesity | | 63/639,728, 04/29/2024 | | Provisional | | USA | | | Below is a table that includes our United States patent applications as of December 31, 2025: | Patent Title | | Filing Date | | Application Type | | Jurisdiction | | | Fusion Protein of Myo-2 for Use in Treating Muscle Loss in Obese Patients(1) | | 9/25/2024 | | Non-provisional | | USA | | | Combination Therapy of a Fusion Protein of Myo-2 with a GLP-1 Receptor Agonist for Use in Treating Muscle Loss in Obese Patients(2) | | 9/25/2024 | | Non-Provisional | | USA | | | Pharmaceutical Composition for Treatment of Muscle Loss Due to Obesity(3) | | 4/28/2025 | | Non-provisional | | USA | | | Combination Therapy for Treatment of Muscle Loss Due to Obesity(4) | | 4/28/2025 | | Non-provisional | | USA | | | Fusion Protein of Myo-2 for Use in Encouraging Muscle Growth in Animals(5) | | 4/28/2025 | | Non-provisional | | USA | | | Animal Feed Additive to Encourage Muscle Growth(6) | | 4/28/2025 | | Non-provisional | | USA | | | (1) | Non-provisional patent application based on Property. | | | (2) | Non-provisional patent application based on Property. | | | (3) | Non-provisional patent application based on Property. | | | (4) | Non-provisional patent application based on Property. | | | (5) | Non-provisional patent application based on Property. | | | (6) | Non-provisional patent application based on Property. | | 15 *Domain Names* We have the right to use the following domain registration issued in the United States, as noted below: | Number | | Issue Date | | Expiration Date | | Registration Agency | | Domain Name | | Owner | | | 1. | | July 31, 2024 | | July 31, 2027 | | GoDaddy | | www.pmgcholdings.com | | PMGC Holdings Inc. | | | 2. | | April 10, 2024 | | April 10, 2025 | | GoDaddy | | www.northstrivebio.com | | PMGC Holdings Inc. | | *NorthStrive Biosciences Inc.* ** *Patents* ** | PropertyNo. | | Licensed Product/ Nation | | Registration Number | | Registration Date | | Title | | | 1. | | EL-22 Korea | | 10-0857861-0000 | | 2008.09.03 | | Surface Expression Vector for Fusion Protein of Myo-2 Peptide Multimer and Myostatin, and Microorganism Transformed by Therof | | | 2. | | EL-22 Korea | | 10-0872042-0000 | | 2008.11.28 | | Cell Surface Expression Vector of Myostatin and Microorganisms Transformed Thereby | | | 3. | | EL-22 USA | | 8470551 | | 2013.06.25 | | Surface Expression Vector for Fusion Protein of Myo-2 Peptide Multimer and Myostatin, and Microorganism Transformed by Therof | | | 4. | | EL-22 Japan | | 05634867 | | 2014.10.24 | | Surface Expression Vector for Fusion Protein of Myo-2 Peptide Multimer and Myostatin, and Microorganism Transformed by Therof | | | 5. | | EL-22 China | | ZL200780101116.2 | | 2013.06.19 | | Surface Expression Vector for Fusion Protein of Myo-2 Peptide Multimer and Myostatin, and Microorganism Transformed by Therof | | *Patent Applications* | PropertyNo. | | Licensed Product/ Nation | | Patent Application Serial No | | Filing Date | | Title | | | 1. | | EL-32 USA | | 18/627,462 | | 2024.04.05 | | Pharmaceutical composition for alleviation, treatment, and prevention of sarcopenia containing microorganism transformed with cell surface display vector operably linked with gene encoding myostatin and activin A proteins as active ingredient | | | 2. | | EL-32 Korea | | 10-2022-0136606 | | 2022.10.21 | | A pharmaceutical composition for alleviation, treatment and prevention of sarcopenia containing a microorganism transformed with a vector expressing myostatin and activin A on the cell surface as an active ingredient | | | 3. | | EL-22 USA | | 19/541,209 | | 2026.02.16 | | Fusion Protein of Myo-2 for Use in Encouraging Muscle Growth in Animals | | | 4. | | EL-32 USA | | 19/540,888 | | 2026.02.16 | | Animal Feed Additive to Encourage Muscle Growth | | | 5. | | EL-22 USA | | 19/540,893 | | 2026.02.16 | | Fusion Protein of Myo-2 for Use in Reducing Animal Gas Emissions | | | 6. | | EL-32 USA | | 19/540,895 | | 2026.02.16 | | Animal Supplement for Use in Reducing Animal Gas Emissions | | | 7. | | EL-22 USA | | 19/540,898 | | 2026.02.16 | | Fusion Protein of Myo-2 for Use in Encouraging Muscle Growth in Aquatic Animals | | | 8. | | EL-32 USA | | 19/540,900 | | 2026.02.16 | | Aquatic Animal Supplement for Use in Encouraging Muscle Growth | | | 9. | | EL-22 USA | | 19/540,905 | | 2026.02.16 | | Fusion Protein of Myo-2 for Use in Reducing Emissions in Aquatic Animals | | | 10. | | EL-32 USA | | 19/540,908 | | 2026.02.16 | | Aquatic Animal Supplement for Use in Reducing Emissions | | | 11. | | EL-22 USA | | 19/540,913 | | 2026.02.16 | | Fusion Protein of Myo-2 for Use in Encouraging Muscle Growth in Poultry | | | 12. | | EL-32 USA | | 19/540,918 | | 2026.02.16 | | Poultry Supplement for Use in Encouraging Muscle Growth | | **** 16 **Operational and Competitive Strengths** We operate in a highly competitive biotechnology and investment landscape, facing competition from pharmaceutical companies, biotechnology firms, and investment funds. Our key competitive advantages include: | | | Strategic Capital Deployment: Through PMGC Capital LLC, we seek to acquire undervalued assets, optimizing capital returns while expanding our portfolio. | | | | | Diversified Holdings: We establish and acquire wholly owned subsidiaries across biotechnology, advanced manufacturing, and specialty industrial sectors, including clinical-stage and preclinical therapeutic assets, precision engineering businesses, and high-value component and packaging solutions. | | | | | Advancement of High-Potential Biotechnology Assets: Our subsidiary, NorthStrive Biosciences Inc., is progressing EL-22, a lead asset targeting muscle preservation in obesity treatment. | | | | | Flexible M&A and Licensing Model: Our structure allows for strategic acquisitions, licensing deals, and potential spin-offs, creating value for shareholders. | | **Sales and Marketing** As a diversified holding company, our sales and marketing activities are conducted both at the parent level and through our wholly owned subsidiaries, with strategies tailored to the specific industries in which each subsidiary operates. Our approach is designed to drive revenue growth, enhance asset value, and support strategic partnerships, licensing arrangements, and capital deployment initiatives across our biotechnology, advanced manufacturing, specialty packaging, and investment operations. At the parent level, we focus on communicating our overall platform strategy, capital allocation approach, and subsidiary performance to investors, strategic partners, and other stakeholders. | | | We engage with institutional investors, strategic acquirers, and industry participants to enhance awareness of our diversified business model and growth strategy. | | | | | We support our subsidiaries business development efforts through targeted marketing, industry engagement, and strategic introductions. | | | | | We participate in industry conferences, trade events, and investor presentations across our operating sectors to facilitate relationship development, generate opportunities, and support long-term value creation. | | This diversified platform allows us to allocate capital across multiple sectors, pursue complementary growth opportunities, and enhance long-term shareholder value. **** 17 **Strategy** We aim to position PMGC Holdings Inc. as a leading diversified investment and holding company, leveraging strategic acquisitions, capital deployment, and asset optimization to drive long-term growth. Our strategy is built on three key pillars: | 1. | Capital Deployment for Stronger Returns Through PMGC Capital, we focus on achieving high returns on capital by investing in undervalued assets, deploying treasury funds into public and private investments, and leveraging structured financings to maximize value. | | | 2. | Acquiring and Scaling Biotechnology and High-Growth Operating Companies We actively seek acquisitions in the biotechnology sector and other high-growth industries, financing their expansion through equity, debt, and available grants. By integrating synergistic businesses under our portfolio, we enhance operational efficiencies, accelerate commercialization, and unlock market opportunities. | | | 3. | Spin-Offs and Strategic Portfolio Optimization We continuously evaluate spin-off opportunities for wholly owned subsidiaries or specific assets, allowing us to unlock shareholder value and create independent, specialized companies. This approach enables us to capitalize on advanced scientific research and address significant unmet medical needs while maintaining a diversified and scalable business model. | | **** **Commercialization and Growth Strategy** Our commercialization and growth strategy varies by business segment: | | | NorthStrive Biosciences Inc. focused on advancing our preclinical and clinical-stage assets and seek to create value through strategic partnerships, licensing agreements, and collaborative arrangements with biotechnology, pharmaceutical, and healthcare companies to support continued development and progression of our programs. | | | | | | | | | | PMGC Capital LLC focused on identifying and executing investment opportunities across public and private markets, including structured financings and investments in undervalued assets, with an emphasis on capital deployment and value creation. | | | | | | | | | | Pacific Sun Packaging, Inc. generates revenue through direct customer relationships, providing custom packaging solutions to customers in the semiconductor, data center, and information technology hardware industries, with a focus on customer retention and long-term supply relationships. | | | | | | | | | | AGA Precision Systems LLC generates revenue through contract manufacturing and precision machining services for customers in the aerospace, defense, and industrial sectors. Competitive positioning in this company is supported by technical capabilities, high-tolerance manufacturing expertise, and compliance with industry standards, including ITAR registration and AS9100 certification. | | 18 **Our Facilities** Our principal executive office is located at 120 Newport Center Drive, Newport Beach, CA 92660. The office has 1,650 square feet, and the lease is on a month-to-month basis. The monthly rent is $9,273.50. The following table sets forth the leases term and monthly rent: | Lease Term | | Address | | Space (square feet) | | | Average Monthly Rent | | | | Month to Month | | 120 Newport Center Drive, Newport Beach, CA 92660 | | | 1,650 | | | $ | 9,273.50 | | | Some members of our management work outside of these premises in office space that we do not rent. **Employees** As of the date of this Annual Report, we have 32 full-time employees and 2 part-time employee. We provide employee benefits for each employee which include medical, unemployment, and work injury compensation. Our employees have not formed any employee union or association. We have developed various methods to train our employees adequately for the functions they perform and are aware of the laws and regulations affecting our industry. Our success depends on our ability to attract, retain and motivate qualified employees. We endeavor to offer employees competitive compensation packages and a positive, dynamic and creative work environment. We believe that we maintain a good working relationship with our employees and have not experienced any difficulty in recruiting staff for our operations. **Regulations** **** **Government Regulation and Biologic Drug Approval** ** Government authorities in the United States, at the federal, state and local level, and other countries, extensively regulate, among other things, the research, development, testing, manufacture, quality control, approval, labeling, packaging, storage, recordkeeping, promotion, advertising, distribution, marketing and export and import of products such as those we are selling and developing. Because we are developing product candidates that are unique biological entities, the regulatory requirements that we will be subject to are not entirely clear and may change. Regulatory requirements governing our product candidates have changed frequently and will likely continue to change in the future. We believe that the FDA will regulate part of our product candidates as a biologic drug (i.e., a biologic) through the Biologics License Application (BLA) process under the jurisdiction of the Office of Therapeutic Products within the Center for Biologics Evaluation and Research (CBER). We will work with FDA to confirm that a BLA is the most appropriate pathway and that CBER will be the FDA center responsible for review and licensure (i.e., approval). For future product candidates, we will also confirm the appropriate approval pathway (i.e., BLA or new drug application (NDA)) and the appropriate FDA center with regulatory oversight (i.e., CBER or the Center for Drug Evaluation and Research (CDER)). 19 **U.S. Biologic Drug Development Process** In the United States, biologic drugs (biologics) are regulated under two statutes: The Public Health Service Act PHS Act and the Federal Food, Drug, and Cosmetic Act and their implementing regulations. However, submission and approval of only one applicationtypically either a BLA or an NDAis required prior to marketing. The FDA has also issued numerous Guidance Documents and other materials that address specific aspects of biologic development for particular types of product candidates (e.g., cells, tissues, etc.). Substantial time and financial resources are required to obtain regulatory approvals and subsequently comply with appropriate federal, state, and local statutes and regulations. Failure to comply with the applicable U.S. requirements at any time during the biologic development, approval, or post-approval processes may subject an applicant to administrative or judicial sanctions. These sanctions could include the FDAs refusal to approve pending applications, withdrawal of an approval, imposition of a clinical hold on ongoing clinical trials, issuance of warning or untitled letters, product recalls, product seizures, total or partial suspension of production or distribution, injunctions, fines, refusals of government contracts, restitution, disgorgement or civil or criminal penalties. Any agency or judicial enforcement action could have a material adverse effect on us. The process required by the FDA before a biologic may be marketed in the United States generally involves the following steps: | | | completion of preclinical laboratory tests, animal studies and formulation studies in accordance with FDAs current good laboratory practice requirements and other applicable regulations; | | | | | submission to the FDA of an IND, which must become effective before human clinical trials may begin; | | | | | approval by an independent institutional review board (IRB) at each clinical site (or by one commercial IRB) before each trial may be initiated; | | | | | performance of adequate and well-controlled human clinical trials in accordance with current Good Clinical Practices (cGCPs) requirements to establish the safety, purity, and potency (i.e., efficacy) of the proposed biologic for its intended use; | | | | | submission to the FDA of a BLA after completion of all clinical trials; | | | | | satisfactory outcome of an FDA advisory committee review, if applicable; | | | | | satisfactory completion of an FDA inspection of the manufacturing facility or facilities at which the biologic is produced to assess compliance with cGMP requirements to assure that the facilities, methods and controls are adequate to preserve the biologics identity, strength, quality and purity, and FDA inspection of selected clinical investigation sites to assess compliance with cGCPs; and | | | | | FDA review and approval of the BLA to permit commercial marketing of the product for particular indications for use in the United States. | | The specific preclinical studies and clinical testing that is required for a BLA varies widely depending upon the specific type of product candidate under development. Prior to beginning a human clinical trial with either a biologic or drug product candidate in the United States, we must submit an IND to the FDA and that IND must become effective. The focus of an IND submission is the general investigational plan and protocol for the proposed clinical study. The IND also includes results of animal and in vitro studies assessing the toxicology, pharmacokinetics, pharmacology, and pharmacodynamic characteristics of the product; Chemistry Manufacturing and Controls (CMC) information; and any available human data or literature to support the use of the investigational product. An IND must become effective before human clinical trials may begin. The IND automatically becomes effective 30 days after receipt by the FDA, unless the FDA, within the 30-day time period, raises safety concerns or questions about the proposed clinical trial. In such a case, the IND may be placed on clinical hold, and the IND sponsor and the FDA must resolve any outstanding concerns or questions before the clinical hold is lifted and the clinical trial can begin. Submission of an IND therefore may or may not result in FDA authorization to begin a clinical trial. 20 Clinical trials involve the administration of the investigational product to human subjects under the supervision of qualified investigators in accordance with cGCPs, which include the requirement that all research subjects provide their informed consent for their participation in any clinical trial. Clinical trials are conducted under protocols detailing, among other things, the objectives of the study, the parameters for monitoring safety and the effectiveness criteria to be evaluated. A separate submission to the existing IND must be made for each successive clinical trial conducted during product development. Other submissions to an IND include protocol amendments, information amendments, IND safety reports and annual reports. Furthermore, an independent IRB for each clinical trial site (or a commercial IRB that acts as the IRB at one or more of the clinical trial sites) must review and approve the protocol and informed consent form before the clinical trial may begin. The IRB also monitors the clinical trial until completed. Regulatory authorities, the IRB or the sponsor may suspend a clinical trial at any time on various grounds, including a finding that the subjects are being exposed to an unacceptable health risk or that the trial is unlikely to meet its stated objectives. Some clinical trials also include oversight by an independent group of qualified experts organized by the clinical trial sponsor, known as a data safety monitoring board (DSMB). A DSMB authorizes whether or not a study may move forward at designated check points based on access to certain data from the trial. The DSMB may halt the clinical trial if it determines there is an unacceptable safety risk for subjects or on other grounds, such as no demonstration of efficacy. Related reporting requirements for the sponsor, clinical investigator, and/or IRB also include IND safety reports and updating clinical trial results in public registries (e.g., ClinicalTrials.gov). Human clinical trials are typically conducted in three sequential phases that may overlap or be combined: | | Phase 1: The product candidate is initially introduced into healthy human subjects. These clinical trials are designed to test the safety, dosage tolerance, absorption, metabolism, distribution, excretion, side effects, and, if possible, early evidence of effectiveness. In the case of some products for severe or life-threatening diseases when the product may be too inherently toxic to ethically administer it to healthy volunteers, the initial human testing is often conducted in individuals who have the targeted disease or condition instead of healthy subjects; | | | | Phase 2: The product candidate is administered to a limited population of individuals who have the specified disease or condition to continue to evaluate safety, as well as preliminary efficacy, optimal dosages and dosing schedule, possible adverse side effects and safety risks. Multiple Phase 2 clinical trials may be conducted to obtain information prior to beginning larger and more expensive Phase 3 (i.e., pivotal) clinical trials; and | | | | Phase 3: Generally, the largest in size, Phase 3 clinical trials are generally conducted at multiple geographically dispersed clinical trial sites. The product candidate is administered to an expanded population of individuals who have the specified disease or condition to further evaluate dosage, provide statistically significant evidence of clinical efficacy and gain additional safety data. These clinical trials are intended to establish the overall risk/benefit ratio of the investigational product and to provide an adequate basis for product approval. | | Concurrent with clinical trials, sponsors usually complete additional animal studies. Sponsors must also develop information about the chemical and physical characteristics of the biologic and finalize a process for manufacturing the product in commercial quantities in accordance with cGMP requirements. The manufacturing process must be capable of consistently producing quality batches of the product candidate, and, among other things, the manufacturer must develop methods for testing the identity, strength, quality, and purity of the final biologic. In addition, the sponsor must develop and test appropriate packaging, and must conduct stability studies to demonstrate that the product candidate does not undergo unacceptable deterioration over its shelf life. Before approval of a BLA, FDA evaluates the establishment by an on-site inspection to ensure the facilities and controls used for the manufacture, processing, packaging, and testing of the drug are adequate to ensure and preserve its identity, strength, quality, and purity. During the development of a new biologic, sponsors are given opportunities to meet with the FDA. These meetings typically occur before the submission of an IND (i.e., pre-IND meeting), at the end of Phase 2 (i.e., EOP2 meeting), and before a BLA is submitted (i.e., pre-BLA meeting). Meetings at other times may be requested. These meetings provide an opportunity for the sponsor to share information about the data gathered to date, for the FDA to provide advice, and for the sponsor and the FDA to reach agreement on the next phase of development. Sponsors typically use EOP2 meetings to discuss Phase 2 clinical results and present plans for the pivotal Phase 3 clinical trials that they believe will support approval of the new biologic. 21 **U.S. Review and Approval Process for Biologic Drugs** Assuming successful completion of all required testing in accordance with the applicable statutory and regulatory requirements, the sponsor submits a BLA to the FDA. A BLA contains the results of product development, preclinical and other non-clinical studies and clinical trials, descriptions of the manufacturing process, analytical testing, proposed labeling and other relevant information. The submission of a BLA is subject to the payment of a substantial application fee under the Prescription Drug User Fee Amendments (PDUFA). PDUFA fees apply to both drugs and biologics. Sponsors may seek a waiver of these fees in certain limited circumstances, including a waiver of the application fee for the first BLA or NDA submitted by a small business. Product candidates with an Orphan Drug Designation (ODD) are not subject to the BLA application fee unless the product application also includes a non-orphan indication. The FDA reviews a BLA to determine, among other things, whether a biologic is safe, pure, and potent (i.e., effective) for its intended use and whether its manufacturing is GMP-compliant to assure the products identity, strength, quality and purity. Under PDUFA, the FDA has a goal date of ten months from the date of filing to review and act on the submission. However, the time between submission and filing can add an additional two months as FDA conducts a preliminary review to ensure that the BLA is sufficiently complete to permit substantive review. Formal FDA review of the BLA does not begin until FDA has accepted it for filing. The FDA may refer an application in some cases to an advisory committee for its independent review. An advisory committee is a panel of independent experts, including clinicians and other scientific experts, that reviews, evaluates and provides a recommendation to FDA as to whether the application should be approved and under what conditions. The FDA is not bound by the recommendations of an advisory committee, but it considers such recommendations carefully when making decisions. Before approving a BLA, the FDA will typically inspect the locations where the product is manufactured. The FDA will not approve an application unless it determines that the manufacturing processes and facilities are in compliance with cGMPs, and are adequate to assure consistent production of the product within required specifications. An important part of a BLA is a lot release protocol that the sponsor will use to test each lot of product made after BLA approval, as well as the FDAs own test plan that will be used for confirmatory testing of each post-approval product lot that is made before it is released to the public. If the FDA determines that the data and information in the application, including about the manufacturing process or manufacturing facilities, are not acceptable, then the FDA will outline the deficiencies and often will request additional testing or information. Notwithstanding the submission of any requested additional information, the FDA ultimately may decide that the application does not satisfy the regulatory criteria for approval. After the FDA evaluates a BLA, it will either issue an approval letter or a Complete Response Letter (CRL). The approval letter authorizes commercial marketing of the biologic with approved prescribing information for specific approved indications. On the other hand, a CRL indicates that the review cycle of the application is complete but the BLA cannot be approved in its present form. A CRL usually describes the specific deficiencies identified by the FDA and describes the actions the sponsor must take to correct those deficiencies. A sponsor that receives a CRL must resubmit the BLA after addressing the deficiencies or withdraw the application. Even if such additional data and information are submitted to address the deficiencies, the FDA may decide that the data and information in the resubmitted BLA do not satisfy the approval criteria. Following marketing approval, a sponsor may need to fulfill certain post-marketing requirements (PMRs) or post-marketing commitments (PMCs). For example, post-approval trials, sometimes referred to as Phase 4 studies, may be conducted after initial marketing approval. These trials are used to gain additional experience from the treatment of patients for the intended therapeutic indication. The trials may be agreed upon prior to approval, or the FDA may require them if new safety issues emerge. Following approval, a sponsor may also need to conduct a pediatric study that was temporarily deferred during the initial product development process. Under the Pediatric Research Equity Act (PREA), a sponsor must conduct pediatric clinical trials for most new drugs or biologics, for a new active ingredient, new indication, new dosage form, new dosing regimen or new route of administration. The required assessment must evaluate the safety and effectiveness of the product for the claimed indications in all relevant pediatric subpopulations and support dosing and administration for each pediatric subpopulation for which the product is safe and effective. PREA studies must be included in the application unless the sponsor has received a deferral or waiver. A risk evaluation and mitigation strategy (REMS) may also be an important component of a BLA approval that requires sponsor post-marketing regulatory efforts. A REMS is a safety strategy to manage a known or potential serious risk associated with a drug or biologic and to enable patients to have continued access to such medicines by managing their safe use. A REMS may include medication guides, physician communication plans, or elements to assure safe use (ETASU) such as restricted distribution methods, patient registries, and other risk minimization tools. Once approved, the FDA may withdraw the product approval if compliance with PMRs, PMCs, or a REMS program is not maintained or if problems occur after the product reaches the marketplace. The FDA may also request that a product be recalled for an identified safety issue. In addition, new government requirements, including those resulting from new legislation, may be established, or the FDAs policies may change, which could impact the timeline for regulatory approval or otherwise impact ongoing development programs. 22 *Regulations Applicable to Our Precision Manufacturing Operations* Our precision manufacturing operations serve customers in the aerospace, defense, and industrial sectors and are subject to a range of federal and state regulatory requirements. International Traffic in Arms Regulations (ITAR) Certain of our precision manufacturing operations are registered with the U.S. Department of States Directorate of Defense Trade Controls under the ITAR, 22 C.F.R. Parts 120130. ITAR controls the export, temporary import, and brokering of defense articles, defense services, and related technical data listed on the United States Munitions List (USML). As an ITAR-registered entity, our applicable subsidiaries are authorized to manufacture defense articles and provide defense services, and are required to comply with all applicable ITAR requirements, including restrictions on the transfer of controlled technical data and defense articles to foreign persons, whether inside or outside the United States. ITAR registration must be renewed annually, and we are required to maintain records, implement security protocols, and ensure that all employees with access to ITAR-controlled information are U.S. persons as defined under the regulations. Failure to comply with ITAR requirements could result in civil penalties, criminal penalties, debarment from government contracting, loss of export privileges, and reputational harm. Export Administration Regulations In addition to ITAR, certain of the products and technical data produced by our precision manufacturing operations may be subject to the Export Administration Regulations (EAR), administered by the Bureau of Industry and Security within the U.S. Department of Commerce. The EAR controls the export, reexport, and transfer of dual-use items goods, software, and technology that have both commercial and military or proliferation applications that are listed on the Commerce Control List or that are subject to EAR jurisdiction. We are required to determine the applicable export classification of our products and technical data and to comply with all applicable licensing requirements, end-use restrictions, and screening obligations under the EAR. Violations of the EAR may result in civil and criminal penalties, denial of export privileges, and other sanctions. AS9100 Quality Management System Certification Certain of our precision manufacturing operations maintain certification under AS9100, the internationally recognized quality management system standard for the aerospace, defense, and space industries, published by the Society of Automotive Engineers International. AS9100 incorporates the requirements of ISO 9001 and adds additional requirements specific to the aerospace and defense industries, including requirements related to configuration management, risk management, product safety, counterfeit parts prevention, and first article inspection. AS9100 certification is required or strongly preferred by many aerospace and defense prime contractors and government agencies as a condition to qualifying as an approved supplier. Our certified facilities are subject to periodic surveillance audits and recertification audits conducted by accredited third-party certification bodies, and must maintain ongoing compliance with the standards requirements to retain certification. Loss of AS9100 certification could result in the loss of existing customer qualifications, disqualification from bidding on new contracts, and reputational harm. Occupational Safety and Health Regulations Our precision manufacturing operations are subject to federal and state occupational safety and health laws and regulations, including those administered by the Occupational Safety and Health Administration (OSHA) under the Occupational Safety and Health Act of 1970. These regulations establish requirements for workplace safety, including standards related to machine guarding, hazard communication, personal protective equipment, lockout/tagout procedures, noise exposure, and other hazards associated with CNC machining and metalworking operations. Our operations in California are also subject to California Occupational Safety and Health Administration regulations, which in certain respects impose requirements that are more stringent than federal OSHA standards. Failure to comply with applicable occupational safety and health requirements could result in citations, fines, work stoppages, employee injury claims, and increased workers compensation costs. Environmental Regulations Our precision manufacturing operations involve the use, storage, handling, and disposal of materials that may be subject to federal, state, and local environmental laws and regulations, including the Resource Conservation and Recovery Act (RCRA), the Clean Air Act, the Clean Water Act, the Toxic Substances Control Act, and their state-law equivalents. The machining of metals, including specialty and exotic alloys, involves the use of cutting fluids, coolants, lubricants, and other substances that may constitute hazardous materials or generate hazardous waste. We are required to comply with applicable requirements for the storage, handling, labeling, transportation, and disposal of such materials. Failure to comply with applicable environmental laws and regulations could result in fines, penalties, remediation costs, and restrictions on operations. Government Contracting Regulations To the extent our precision manufacturing operations provide products or services directly or indirectly to the U.S. government, such operations may be subject to federal government contracting regulations, including the Federal Acquisition Regulation and the Defense Federal Acquisition Regulation Supplement. These regulations impose requirements relating to cost accounting, pricing, procurement integrity, subcontracting, and compliance with socioeconomic policies. Non-compliance with government contracting regulations could result in contract termination, suspension or debarment from future government contracts, civil and criminal penalties, and reputational harm. 23 *Regulations Applicable to Our Specialty Packaging Operations* Our specialty packaging operations provide custom-engineered protective packaging solutions for electronic and IT hardware components and are subject to a range of federal, state, and local regulatory requirements. Electrostatic Discharge (ESD) Protection Standards Our packaging solutions are engineered to comply with industry standards for electrostatic discharge protection, including standards published by the ESD Association, such as ANSI/ESD S20.20 and ANSI/ESD S541. These standards establish requirements for the handling, packaging, and transportation of ESD-sensitive electronic components. While compliance with ESD standards is generally voluntary, many of our customers in the semiconductor, data center, and networking equipment supply chains require their suppliers to demonstrate compliance with applicable ESD standards as a condition of doing business. Failure to meet customer-required ESD standards could result in product returns, customer claims, loss of business, and reputational harm. Occupational Safety and Health Regulations Our specialty packaging operations are subject to federal and state occupational safety and health laws and regulations, including those administered by OSHA and, for operations located in California, Cal/OSHA. These regulations establish requirements for workplace safety applicable to our manufacturing and warehouse operations, including standards related to material handling, hazard communication, personal protective equipment, and ergonomic safety. Failure to comply with applicable occupational safety and health requirements could result in citations, fines, work stoppages, and employee injury claims. Environmental Regulations Our specialty packaging manufacturing operations may involve the use of materials and processes that are subject to federal, state, and local environmental laws and regulations, including requirements related to air emissions, waste disposal, and the handling and storage of chemicals used in the packaging manufacturing process. We are required to comply with applicable environmental regulations, including those administered under the Clean Air Act, the Clean Water Act, RCRA, and their state-law equivalents. Failure to comply with applicable environmental laws and regulations could result in fines, penalties, and remediation costs. California Proposition 65 Our operations and products may be subject to the requirements of Californias Safe Drinking Water and Toxic Enforcement Act of 1986, commonly known as Proposition 65. Proposition 65 requires businesses operating in California to provide warnings to consumers when their products contain chemicals known to the State of California to cause cancer, birth defects, or other reproductive harm. The list of chemicals subject to Proposition 65 is maintained and periodically updated by the California Office of Environmental Health Hazard Assessment (OEHHA). Non-compliance with Proposition 65 can result in significant civil penalties and private enforcement actions. Packaging and Labeling Regulations Our packaging products may be subject to federal and state packaging and labeling requirements, including requirements imposed by the Federal Trade Commission and state consumer protection agencies. To the extent we make environmental claims about our packaging products (e.g., recyclability, sustainability), such claims are subject to the Federal Trade Commission (FTC)s Guides for the Use of Environmental Marketing Claims and analogous state regulations. We are also required to comply with any applicable product marking, labeling, or material disclosure requirements imposed by our customers or required by industry standards. Trade and Customs Regulations To the extent our specialty packaging operations source materials or components from international suppliers or ship products internationally, such operations may be subject to U.S. customs laws and regulations administered by U.S. Customs and Border Protection, including requirements related to import classification, valuation, country of origin marking, and applicable tariffs and duties. Changes in U.S. trade policy, including the imposition or escalation of tariffs on imported materials, could increase our cost of goods and adversely affect our margins and competitive position. *General Regulatory Matters Applicable to All Subsidiaries* In addition to the industry-specific regulations described above, all of the Companys subsidiaries are subject to a broad range of federal, state, and local laws and regulations of general applicability, including laws and regulations relating to employment and labor (including wage and hour, anti-discrimination, and workplace accommodation requirements), employee benefits, data privacy and security, tax, anti-corruption, anti-money laundering, and securities laws. Our operations in California subject us to California-specific regulatory requirements that may, in certain respects, be more stringent than federal requirements, including those related to employment, environmental protection, and consumer protection. As we grow and expand our operations, including through acquisitions, we may become subject to additional regulatory requirements in new jurisdictions. Compliance with existing and evolving regulatory requirements may increase our costs, require changes to our business practices, and divert management resources. 24 **Item 1A. Risk Factors.** An investment in our securities involves a high degree of risk. You should carefully consider the risks and uncertainties described below, together with all of the other information contained in this Annual Report, including our consolidated financial statements and the related notes thereto, before deciding to invest in our securities. The risks and uncertainties described below are not the only ones we face. Additional risks and uncertainties that we are unaware of, or that we currently believe are not material, may also become important factors that adversely affect our business. If any of the following risks actually occur, our business, financial condition, results of operations and prospects could be materially and adversely affected. In that event, the market price of our Common Stock could decline, and you could lose part or all of your investment. **RISKS RELATED TO OUR FINANCIAL CONDITION AND CAPITAL STRUCTURE** **** **Our financial statements have been prepared on a going-concern basis and our continued operations are in doubt.** The uncertainty about our ability to continue in operation is based on our continuing losses from operation, limited revenue and limited working capital, among other things which existed as of year-end December 31, 2025 and December 31, 2025. As of December 31, 2025 and December 31, 2024, the Company had net working capital of $2,928,959 and $4,251,867, respectively, and has an accumulated deficit of $21,017,440 and $13,269,627, respectively. Included in the accumulated deficit are net losses of $7,747,813 for the year ended December 31, 2025 and $6,245,737 for the year ended December 31, 2024. Given all of these facts, we are dependent on obtaining funding from operations and the sale of debt or equity to continue as a going concern. The financial statements do not include any adjustments relating to the recoverability of assets and classification of liabilities that might be necessary should we be unable to continue as a going concern. Our ability to continue as a going concern depends on the success of any future offering and receipt of additional funds through debt or equity financing and our operations. In the event we are unable to obtain such funding, we may have to delay, reduce or eliminate certain of our planned operations, including some of our research and development and/or clinical validation studies to demonstrate aesthetic improvement, reduce overall overhead expense, or divest assets. This in turn may have an adverse effect on our ability to realize the value of our assets. If we are unable to continue as a going concern, you may lose all or part of your investment. **** **We have a history of net losses, and we may not be able to achieve or maintain profitability in the future.** We have incurred net losses each year since our inception, and we may not be able to achieve or maintain profitability in the future. We incurred net losses of $7,747,813 and $6,245,737 for the years ended December 31, 2025 and 2024, respectively. Our expenses will likely increase in the future and may be more costly than we expect and may not result in increased revenue or growth in our business. These offerings may require significant capital investments and recurring costs, maintenance, depreciation, asset life and asset replacement costs, and if we are not able to maintain sufficient levels of utilization of such assets or such offerings are otherwise not successful, our investments may not generate sufficient returns and our financial condition may be adversely affected. Any failure to increase our revenue sufficiently to keep pace with our investments and other expenses could prevent us from achieving or maintaining profitability or positive cash flow on a consistent basis. If we are unable to successfully address these risks and challenges as we encounter them, our business, financial condition, results of operations and prospects could be adversely affected. If we are unable to generate adequate revenue growth and manage our expenses, we may continue to incur significant losses in the future and may not be able to achieve or maintain profitability. **** **Our operating cash consumption significantly exceeds our revenue, and we may not be able to fund our operations without continued access to the capital markets.** Our current level of operating cash consumption materially exceeds our revenue and is not sustainable without continued infusions of external capital. If we are unable to substantially increase revenue from our operating subsidiaries, achieve returns on capital through PMGC Capital, or continue to access debt and equity financing, we may be unable to fund our operations. There can be no assurance that we will be able to reduce our operating cash burn to a level that can be sustained by our operating revenue within any particular timeframe, if at all. 25 **We will need additional capital to conduct our operations and develop our products and businesses, and our ability to obtain the necessary funding is uncertain.** We have used, and expect to continue to use, a significant amount of cash to finance our operations, and we need to obtain significant additional capital resources in order to develop our businesses and products going forward. We may not be successful in maintaining our normal operating cash flow and the timing of our capital expenditures may not result in cash flows sufficient to sustain our operations through the next twelve months. If financing is not sufficient and additional financing is not available or available only on terms that are detrimental to our long-term survival, it could have a major adverse effect on our ability to pursue our business strategy, clinical research and product development programs, and could ultimately affect our ability to continue to function. The timing and degree of any future capital requirements and our ability to meet such capital requirements in a timely manner, on favorable terms or at all will depend on many factors, including: | | | the accuracy of the assumptions underlying our estimates for capital needs; | | | | | | | | | | the success and growth of our acquired operating subsidiaries; | | | | | | | | | | scientific progress in our research and development programs at Northstrive Biosciences; | | | | | | | | | | the magnitude and scope of our acquisition strategy and our ability to identify, negotiate, finance and integrate target companies; | | | | | | | | | | the costs involved in preparing, filing, prosecuting, maintaining, defending and enforcing patent claims; | | | | | | | | | | the performance of PMGC Capitals investment portfolio; | | | | | | | | | | the number and type of pipeline products that we pursue; and | | | | | | | | | | the development of major widespread events, including the possibility of a recession in the U.S. and globally, market volatility, geopolitical conflict, tariffs, trade restrictions and other events which could impact us and third parties on which we depend. | | Additional financing through strategic collaborations, public or private equity or debt financings or other financing sources may not be available on acceptable terms, or at all. Additional equity financing could result in significant dilution to our stockholders, and any debt financings will likely involve covenants restricting our business activities. Further, if we obtain additional funds through arrangements with collaborative partners, these arrangements may require us to relinquish rights to some of our technologies, products or pipeline assets that we might otherwise seek to develop and commercialize on our own. If sufficient capital is not available, we may be required to delay, reduce the scope of or eliminate one or more of our business initiatives, research or product development programs, or planned acquisitions, any of which could have a material adverse effect on our financial condition or business prospects. **Our existing equity purchase facility may result in substantial dilution to our existing stockholders and may place downward pressure on the price of our Common Stock.** We have entered into an equity purchase facility with Streeterville Capital, LLC (Streeterville), as disclosed in previous SEC filings, pursuant to which we may consummate one or more secured pre-paid purchases of our Common Stock, and we have consummated multiple pre-paid purchases thereunder. Under these arrangements, the outstanding principal and accrued interest is convertible at the option of the investor at a price that reflects a discount to the volume-weighted average price of our Common Stock during a specified look-back period, subject to a floor price. We have issued, and expect to continue to issue, significant numbers of shares of Common Stock in settlement of amounts outstanding under these arrangements. The conversion mechanics for the pre-paid purchases under the equity purchase facility, which allow conversion at a discount to market price, may create significant downward pressure on the trading price of our Common Stock. As the stock price declines, additional shares may be required to settle the same dollar amount of debt, potentially creating a cycle of increasing dilution and declining stock price. These dynamics could materially and adversely affect the market price of our Common Stock, the ability of existing stockholders to sell their shares at favorable prices, and our ability to raise additional capital on acceptable terms. The settlement and potential conversion of outstanding and future instruments under the equity line of credit into shares of Common Stock will result in further dilution to our existing stockholders, and the magnitude of such dilution will depend on market conditions at the time of conversion. **Our equity interests in our key subsidiaries and the assets of those subsidiaries are pledged as collateral under our equity purchase facility with Streeterville, and a default on our obligations pursuant to such facility could result in the loss of our operating businesses.** In connection with our equity purchase facility with Streeterville, we entered into a Security Agreement and a Pledge Agreement, pursuant to which we pledged, as collateral, (i) 100% of the equity interests (membership interests and stock, respectively) in our wholly-owned subsidiaries, AGA Precision Systems and Pacific Sun Packaging, and (ii) substantially all of the assets of these subsidiaries. Streeterville holds a first-position security interest in this collateral (subordinate only to certain permitted liens). If we default on our obligations under such agreements, Streeterville is entitled to seize the pledged equity interests or the assets of the subsidiaries. This may result in the loss of one or more of our primary operating businesses, which would have a material adverse effect on our financial condition and ability to continue operations. 26 **We have conducted multiple reverse stock splits in a short period of time, which may adversely affect the market price of our Common Stock and investor confidence.** Since November 2024, we have completed multiple reverse stock splits of our Common Stock. Reverse stock splits may be viewed negatively by investors and analysts as an indication of financial difficulty or poor stock performance. There can be no assurance that the market price of our Common Stock following any reverse stock split will remain at a level proportional to the prices prior to the reverse stock split. The repeated use of reverse stock splits may diminish investor confidence, reduce trading liquidity, and adversely affect our ability to attract and retain investors. If we are unable to maintain compliance with the Nasdaq listing requirements, including the minimum bid price rule, we may be required to undertake further reverse stock splits in the future, which could result in additional negative market perception and further dilution on a per-share basis for investors who acquired shares prior to such splits. **If we fail to generate sufficient cash flow from our operations, we will be unable to continue to develop and commercialize our products and grow our businesses.** We expect capital outlays and operating expenditures to increase over the next several years as we expand our operations, pursue acquisitions, and conduct research and development and manufacturing activities. However, our present and future funding requirements will depend on many factors, including, among other things: | | | the level of research and development investment required to maintain and improve our competitive position; | | | | | | | | | | the success of product sales and service revenue at our operating subsidiaries and related collections; | | | | | | | | | | the returns on capital deployed by PMGC Capital; | | | | | | | | | | our need or decision to acquire or license complementary businesses, products or technologies; | | | | | | | | | | costs relating to the expansion of our workforce, management and operational support across multiple subsidiaries; | | | | | | | | | | competing technological and market developments; and | | | | | | | | | | costs relating to changes in regulatory policies or laws that affect our operations. | | As a result of these factors, we may need to raise additional funds, and we cannot be certain that such funds will be available to us on acceptable terms when needed, if at all. If we cannot raise funds on acceptable terms, we may not be able to expand our operations, develop new products, take advantage of future opportunities or respond to competitive pressures or unanticipated business requirements. **We may need, but be unable, to obtain additional funding on satisfactory terms, which could dilute our stockholders or impose burdensome financial restrictions on our business.** We have relied upon cash from financing activities. In the future, we hope to rely on revenues generated from operations to fund the cash requirements of our activities. However, there can be no assurance that we will be able to generate any significant cash from our operating activities in the future. Future financing may not be available on a timely basis, in sufficient amounts or on terms acceptable to us, if at all. Any debt financing or other financing of securities senior to the Common Stock will likely include financial and other covenants that will restrict our flexibility. Any failure to comply with these covenants would have a material adverse effect on our business, prospects, financial condition and results of operations because we could lose our existing sources of funding and impair our ability to secure new sources of funding. **We may be unable to realize the expected value from the divestiture of our Elevai Skincare business, including earn-out payments.** In connection with the divestiture of our Elevai Skincare business, the purchase consideration included potential earn-out payments contingent upon the buyer achieving certain revenue milestones over specified periods following the closing. There can be no assurance that the buyer will achieve these milestones or that we will receive any earn-out payments. If the buyers business underperforms, experiences operational difficulties, or ceases operations, we may receive little or no additional consideration beyond the amounts received at closing. Additionally, shares of the buyers common stock received as consideration may have limited liquidity and their value may decline. **Changes in tax laws or regulations could adversely affect our business and financial results.** We are subject to U.S. federal, state and local tax laws, which are complex and subject to change. Changes in tax laws, regulations, or interpretations thereof, including changes resulting from new legislation, could increase our tax obligations, reduce the value of our deferred tax assets, or otherwise adversely affect our financial condition and results of operations. In addition, tax authorities may disagree with our tax positions or the manner in which we allocate income and deductions among our subsidiaries, which could result in additional tax liabilities, interest and penalties. 27 **RISKS RELATED TO OUR HOLDING COMPANY STRUCTURE AND ACQUISITION STRATEGY** **Our diversified holding company structure may make our business more complex and difficult to manage.** We operate as a diversified holding company with subsidiaries across multiple industries, including biotechnology, precision manufacturing, specialty packaging, and investment activities. This structure increases the complexity of our operations, financial reporting, internal controls, and management oversight. Each of our subsidiaries operates in distinct markets with unique regulatory requirements, competitive dynamics, and capital needs. Managing multiple disparate businesses requires broad management expertise, robust financial and operational reporting systems, and the ability to allocate capital and personnel effectively across unrelated industries. Our management team is small, and the breadth of our operations may strain our resources. If we are unable to effectively manage this complexity, our business, financial condition, and results of operations could be adversely affected. **Our results depend on our ability to allocate capital effectively across our subsidiaries and investments.** Our business model relies on deploying capital across multiple subsidiaries and investment opportunities. Our ability to generate returns depends on managements judgment in allocating capital among competing opportunities, including acquisitions, internal investments, strategic initiatives, and investments through PMGC Capital. There can be no assurance that our capital allocation decisions will achieve desired returns. Capital deployed into underperforming subsidiaries or unsuccessful investments represents an opportunity cost and may result in impairment charges. Misallocation of capital could materially adversely affect our financial condition and long-term shareholder value. **We may not realize anticipated benefits from operating as a platform of multiple businesses.** We may not achieve expected operational, strategic, or financial benefits from managing multiple subsidiaries under a single corporate structure. Our subsidiaries may operate independently with limited synergies, and the costs associated with maintaining a diversified platformincluding corporate overhead, compliance costs, management attention and reporting requirementsmay outweigh the benefits. If the anticipated advantages of our holding company structure do not materialize, our financial condition and results of operations could be adversely affected. 28 **Our growth strategy depends on acquisitions, which involve significant risks and uncertainties.** A core element of our business strategy is to grow through the acquisition of operating companies and assets. We have completed multiple acquisitions and intend to continue pursuing additional acquisitions. These transactions involve numerous risks, including: | | | difficulties in identifying suitable targets at reasonable valuations; | | | | | | | | | | failure to accurately assess the value, prospects, strengths and weaknesses of acquisition candidates; | | | | | | | | | | inability to negotiate favorable terms or obtain financing for acquisitions; | | | | | | | | | | failure to complete transactions after expending significant time and resources on due diligence; | | | | | | | | | | difficulties in integrating acquired businesses, operations, technologies, systems and personnel; | | | | | | | | | | assumption of unknown or undisclosed liabilities, including potential legal, regulatory, tax, environmental or contractual obligations; | | | | | | | | | | disruption to our existing business and diversion of management attention; | | | | | | | | | | loss of key employees, customers or suppliers of acquired businesses; | | | | | | | | | | potential impairment of acquired goodwill and intangible assets; | | | | | | | | | | dilution to existing stockholders from equity issued as acquisition consideration or to finance acquisitions; and | | | | | | | | | | increased debt and associated covenants and restrictions. | | Acquired businesses may not perform as expected and may require significantly more capital than anticipated. Failure to successfully identify, execute, finance or integrate acquisitions could materially adversely affect our business, financial condition, and results of operations. **Potential business combinations could require significant management attention, prove difficult to integrate, and adversely affect our operating results.** Business combinations generally involve a number of additional difficulties and risks to our business, including failure to integrate management information systems, personnel, research and development and marketing, operations, sales and support; disruption of our ongoing business and diversion of managements attention from other business matters; potential loss of the acquired companys customers; failure to further develop or integrate the acquired companys products or technology successfully; unanticipated costs and liabilities; and other accounting consequences. In addition, we may not realize benefits from any business combination we may undertake in the future. If we fail to successfully integrate such businesses, or the products and technologies associated with such business combinations into our Company, the revenue and operating results of the combined company could be adversely affected. Any integration process would require significant time and resources, and we may not be able to manage the process successfully. We may not successfully evaluate, integrate or utilize the acquired technology and product lines or accurately forecast the financial impact of a combination. **The purchase price allocations for our acquisitions may be preliminary and subject to adjustment, which could materially affect our reported financial results.** In connection with our acquisitions, the initial purchase price allocations may be preliminary and subject to adjustment as we finalize our valuations of identifiable assets acquired and liabilities assumed. Adjustments to preliminary purchase price allocations during the measurement period could result in changes to the carrying values of acquired assets and liabilities, including goodwill, intangible assets, property and equipment, and deferred tax liabilities. Such adjustments could materially affect our consolidated balance sheet, results of operations and financial condition in future periods. 29 **We have recorded goodwill on our consolidated balance sheet that may be subject to impairment, which could adversely affect our financial results.** We have recorded goodwill arising from our acquisitions. Goodwill is not amortized but is subject to annual impairment testing, or more frequently if events or changes in circumstances indicate that the carrying value may not be recoverable. Factors that could trigger an impairment review include, among others, a significant decline in expected future cash flows of an acquired business, deterioration of market conditions, loss of key customers, underperformance relative to projected financial results, and a sustained decline in the market price of our Common Stock. If any of our reporting units fail to achieve projected results or if market conditions deteriorate, we may be required to record a non-cash goodwill impairment charge, which could have a material adverse effect on our reported financial results and the market price of our Common Stock. **Earn-out and contingent consideration arrangements may result in disputes or financial obligations that adversely affect our results.** Certain of our acquisition agreements include earn-out or contingent consideration provisions that are payable based on the achievement of specified financial milestones by the acquired businesses. If acquired businesses achieve the applicable performance thresholds, we will be required to make additional payments that will increase the overall cost of the acquisitions and reduce our available cash. Conversely, disagreements with sellers regarding the measurement or achievement of earn-out targets could result in disputes, litigation or strained relationships with key personnel who remain involved in the acquired businesses. Changes in fair value of contingent consideration are recognized in earnings and may cause volatility in our reported results of operations. **We depend on the founders and key employees of our acquired businesses, and their departure could adversely affect the performance of those businesses.** Our recently acquired subsidiaries have historically been operated by their founders and small teams with deep customer relationships, specialized technical knowledge and institutional know-how. The success of these businesses following acquisition depends in significant part on our ability to retain and motivate these individuals during the transition period and beyond. If the former owners or other key employees of our acquired businesses depart or become disengaged, we may experience disruptions to operations, loss of customer relationships, loss of critical technical expertise, and a decline in the performance of these businesses, any of which could materially adversely affect our revenue and results of operations. **RISKS RELATED TO OUR OPERATING SUBSIDIARIES** **Risks Related to Northstrive Biosciences Inc. (Biotechnology)** **Our biotechnology subsidiary, Northstrive Biosciences, is at an early stage of product development, and we may not develop products that can be successfully commercialized.** Northstrive Biosciences is at an early stage of product development. As of the date of this Annual Report, we have not commercialized any therapeutic products. Our lead asset, EL-22, has completed a Phase 1 clinical trial in South Korea but has not yet been tested in human subjects in the United States. Our second asset, EL-32, is in the preclinical stage. A key element of our growth strategy depends on our ability to develop and advance these product candidates through clinical trials, obtain regulatory approvals, and ultimately commercialize products, which may take many years and may never occur. We may not be able to successfully commercialize or synthesize any of our product candidates at a scale that is profitable. Our product candidates may prove to have undesirable and unintended side effects or other characteristics adversely affecting their safety, efficacy or cost effectiveness that could prevent or limit their use. 30 **Because our future commercial success with respect to our Licensed Products (as defined below) depends on gaining regulatory approval, we cannot generate therapeutic revenue without obtaining such approvals.** Our long-term success and generation of revenue with respect to the Licensed Products will depend upon the successful development of these product candidates from our research and development activities. Product development is very expensive and involves a high degree of risk. Only a small number of research and development programs result in the commercialization of a product. The process for obtaining regulatory approval to market product candidates is expensive, usually takes many years, and can vary substantially based on the type, complexity, and novelty of the product candidates involved. Our ability to generate revenue from the Licensed Products would be adversely affected if we are delayed or unable to successfully develop our products. We cannot guarantee that any marketing application for our product candidates will be approved. If we do not obtain regulatory approval of our products or we are significantly delayed or limited in doing so, we cannot generate therapeutic revenue, and we may need to significantly curtail operations related to Northstrive Biosciences. (Field means (a) all prophylactic and therapeutic uses in humans, including but not limited to the prevention and treatment of muscular (including, but not limited to, Duchenne muscular dystrophy and sarcopenia), obesity, metabolic, renal, cardiovascular, psychological, psychiatric, neurologic, and endocrine conditions in humans; and (b) all uses in animal health, including all applications as a feed additive. Licensed Products means any therapeutic product or course of treatment, in the Field comprising one or more Compound(s) including any Improvement(s) thereto. Capitalized terms in this definition not defined herein have the meanings set forth in the License Agreement between the Company and MOA Life Plus Co., Ltd (MOA) dated April 30, 2024, as amended, and as assigned to Northstrive Biosciences on February 28, 2025). **The development and acquisition of therapeutic product candidates could expose us to significant legal and regulatory risks.** Our acquisition and development of innovative therapeutic product candidates, specifically with our lead asset, EL-22, could expose us to significant legal and regulatory risks. The development and commercialization of therapeutic product candidates, including EL-22, are subject to extensive regulation by the FDA and other regulatory authorities. The regulations govern all aspects of product development, including pre-clinical studies, clinical trials, manufacturing and marketing. Any failure to comply with the regulations might result in significant delays in product development, approval and commercialization or suspension or termination of clinical trials. Any non-compliance could lead to enforcement actions, including warning letters, fines, injunctions and withdrawal of marketing approvals. The ability to proceed with human clinical trials for our product candidates is contingent upon receiving FDA clearance of our eventual IND submission. If the FDA requires us to provide extensive additional data to demonstrate safety and efficacy, including without limitation generating additional preclinical data, conducting further toxicology or pharmacology studies or addressing unforeseen issues, we may face significant delays or be unable to proceed as planned. In addition, as one of the first companies pursuing an oral myostatin formulation combined with GLP-1 receptor agonists, we may encounter heightened regulatory scrutiny. Regulators may impose unexpected conditions, mandate more extensive trials or request additional safety and efficacy data, all of which could increase our costs and delay timelines. **If we are unable to successfully complete preclinical testing and clinical trials of the Licensed Products or experience significant delays in doing so, our business will be materially harmed.** We expect to invest material efforts and financial resources in the development of the Licensed Products. Our ability to generate product revenues from our therapeutic candidates, which we do not expect will occur for many years, if ever, will depend heavily on the successful development and eventual commercialization of the Licensed Products. The commercial success of the Licensed Products will depend on several factors, including successful completion of preclinical studies and clinical trials; receipt of marketing and pricing approvals from regulatory authorities; obtaining and maintaining patent and trade secret protection for the Licensed Products; establishing and maintaining manufacturing relationships with third parties or establishing our own manufacturing capability; and commercializing our products, if and when approved, whether alone or in collaboration with others. 31 If we do not achieve one or more of these factors in a timely manner or at all, we could experience significant delays or an inability to successfully complete development of, or to successfully commercialize, the Licensed Products, which would materially harm our business. Most pharmaceutical products that do overcome the long odds of drug development and achieve commercialization still do not recoup their cost of capital. **The Licensed Products may cause adverse effects or have other properties that could delay or prevent their regulatory approval or limit the scope of any approved label or market acceptance.** Adverse events or serious adverse events that may be observed during clinical trials of the Licensed Products could cause us, other reviewing entities, clinical trial sites or regulatory authorities to interrupt, delay or halt such trials and could cause denial of regulatory approval. Serious or unexpected side effects caused by an approved product could result in significant negative consequences, including regulatory withdrawal of approval, mandatory labelling changes, additional clinical trials, removal from the marketplace, patient litigation, and reputational damage. These events could prevent us or our partners from achieving or maintaining market acceptance of the affected product and could substantially increase the costs of commercializing the Licensed Products. **We license from a third party the rights to our therapeutic product candidates and are therefore subject to the risk that we lose this license after investing substantial resources.** Under the License Agreement with MOA, MOA granted Northstrive Biosciences an exclusive license to commercialize under certain of MOAs patent rights concerning two Licensed Products: (i) a clinical stage engineered probiotic expressing myostatin (EL-22) and (ii) a preclinical engineered probiotic expressing dual myostatin & activin-A antigens (EL-32). If MOA terminates the License Agreement under the terms thereunder, including, amongst other things, if we breach our obligations under the License Agreement, or the license expires before we can successfully commercialize a product candidate, our investment in research, development, and commercialization efforts for such product candidate(s) would be lost. Additionally, if we or MOA fail to adequately protect the related intellectual property rights relating to the Licensed Products, we may not realize the perceived or potential benefits of the License Agreement. **Our products under development could be rendered obsolete by technological or other medical advances.** Our products under development may be rendered obsolete or uneconomical by our competitors products or technological advances or those advances within other markets that may better or more inexpensively address the conditions that our products are designed to address. Biotechnology is rapidly developing and could undergo significant change in the future. Several key companies are actively developing GLP-1 drugs for obesity and complementary treatments to address associated conditions such as muscle wasting, and research and discoveries by other bioengineering, pharmaceutical or other companies may render our technologies or potential products uneconomical or result in products superior to those we develop. **Since we rely on third parties to conduct, supervise and monitor pre-clinical and clinical trials, their failure to perform satisfactorily may materially harm our business.** We rely on contract research organizations (CROs) and other third parties to ensure the proper and timely conduct of our pre-clinical and clinical trials for the Licensed Products. While we have agreements governing the activities of such CROs and other third parties, we cannot guarantee the actual performance of these CROs and third parties. Nevertheless, we will be responsible for ensuring that each of our clinical trials is conducted in accordance with its protocol, and that all legal, regulatory and scientific standards are met. Our reliance on CROs and other third parties does not relieve us of our regulatory responsibilities. 32 If we or our CROs fail to comply with cGCPs, which are the ethical, scientific, and quality standards established by the FDA and the International Council for Harmonisation of Technical Requirements for Pharmaceuticals for Human Use for the design, conduct, performance, monitoring, auditing, recording, analysis, and reporting of clinical trials, the clinical data generated in our clinical trials may be deemed unreliable and the FDA or other regulators may require us to perform additional clinical trials before approving any marketing applications. If our CROs do not successfully carry out their contractual duties or obligations, fail to meet expected deadlines, or if the quality or accuracy of the clinical data they obtain is compromised, our clinical trials may be extended, delayed or terminated, and we may not obtain regulatory approval for our product candidates. **Because third parties may be developing competitive products without our knowledge, we may later learn that competitive products are superior to the Licensed Products.** We face potential competition from companies that may be developing competitive products that are superior to one or more of the Licensed Products. If in the future we learn of the existence of one or more competitive products, we may be required to cease our development efforts for a product candidate, cause a partner to terminate its support of a product candidate, or cause a potential partner to terminate discussions about a potential license. Any of these events may occur after we have expended substantial amounts in connection with the clinical research of one or more product candidates. **Our therapeutic products may be expensive to manufacture, and they may not be profitable if we are unable to control the costs to manufacture them.** Our therapeutic products may be significantly more expensive to manufacture than other products currently on the market. We hope to substantially reduce manufacturing costs through process improvements, development of new methods, increases in manufacturing scale and outsourcing to experienced manufacturers. If we are not able to make these improvements, our profit margins may be significantly less than those of competitive products. In addition, we may not be able to charge a high enough price for any product we develop, even if they are safe and effective, to make a profit. If we are unable to realize significant profits from our pipeline products, our business will be materially and adversely impacted. **Risks Related to Pacific Sun Packaging, Inc. (Specialty Packaging)** **Pacific Sun Packaging operates in a competitive industry and may face pricing pressure from larger competitors.** The packaging industry is highly competitive and includes large multinational packaging companies as well as smaller specialized providers. Pacific Sun Packaging competes primarily on the basis of specialization in component-level IT hardware packaging, custom engineering capabilities, and reputation for reliability. Larger competitors may have significantly greater financial, manufacturing, marketing and distribution resources. If competitors offer comparable products at lower prices or invest in technologies that render our packaging solutions less competitive, Pacific Suns revenue and margins could be adversely affected. **Pacific Sun Packagings revenue depends on the IT hardware industry, which is subject to cyclical and secular changes.** Pacific Sun Packaging designs and supplies custom-engineered protective packaging for IT hardware components, including CPUs, memory modules, SSDs, HDDs, and fiber-optic transceivers. Demand for Pacific Suns products is driven by activity levels in the semiconductor, data center, and networking equipment supply chains. These industries are subject to cyclical downturns, shifts in technology, and changes in end-market demand. A decline in IT hardware production, changes in component form factors that reduce the need for specialized packaging, or a shift to packaging solutions that do not require Pacific Suns products could materially and adversely affect Pacific Suns revenue and results of operations. 33 **Pacific Sun Packaging is dependent on a limited number of suppliers for raw materials and components.** A significant portion of Pacific Suns inventory purchases are concentrated among a limited number of key suppliers. Although we believe that alternative suppliers are available, a disruption in supply from one or more of these key suppliers, or a significant increase in the cost of raw materials, could adversely affect Pacific Suns ability to fulfill customer orders on a timely basis and at acceptable margins. **Risks Related to AGA Precision Systems LLC (Precision Manufacturing)** **AGA Precision Systems operates in industries subject to stringent regulatory requirements, including International Traffic in Arms Regulations.** AGA Precision Systems operates in industries subject to export control laws and regulations, including the ITAR. AGA is ITAR-registered and maintains AS9100 certification, reflecting the stringent quality and regulatory requirements of its aerospace and defense customers. Compliance with these regulations is complex and costly. Any failure to comply could result in significant penalties, loss of export privileges, reputational harm, restrictions on our ability to conduct business with certain customers, including U.S. government and defense contractors, and potential debarment from government contracting. Changes in export control regulations, trade restrictions, tariffs, or international sanctions could also adversely affect AGAs ability to conduct business and serve its customers. **Maintaining and renewing industry certifications, including AS9100, is critical to AGAs ability to serve its customers.** AGA Precision Systems holds AS9100 certification, which is required or strongly preferred by many aerospace and defense customers. Loss of or failure to renew this certification, or failure to meet evolving certification standards, could result in the loss of existing customers, inability to bid on new contracts, and reputational damage. The certification process requires ongoing compliance with quality management standards, investment in systems and personnel, and periodic audits. There can be no assurance that AGA will maintain its certifications at all times, and any lapse could have a material adverse effect on AGAs revenue and competitive position. **AGA Precision Systems has incurred, and may continue to incur, significant repair and maintenance costs, and the condition of its equipment may require ongoing capital investment.** Following the acquisitions of AGA Precision Systems and certain assets of Indarg Engineering, Inc., we incurred significant costs related to building maintenance, machine repair and recalibration of equipment. These costs were necessary to optimize operations and maintain the useful lives of acquired equipment. There can be no assurance that additional significant repair, maintenance or capital expenditure costs will not be required in the future. If the acquired equipment requires replacement or further significant investment, our results of operations and cash flows could be adversely affected. **AGA Precision Systems has historically operated without a formal sales and marketing function, which may limit its growth.** AGA Precision Systems has historically grown via referrals and repeat orders without a formalized sales or marketing department. While we believe there is opportunity to augment growth via more proactive business development, we cannot assure you that investments in sales and marketing efforts will result in meaningful revenue growth. If we are unable to expand AGAs customer base beyond its existing network of relationships, AGAs growth may be limited and its financial performance may be adversely impacted. 34 **Risks Related to All Operating Subsidiaries** **Our operations across multiple industries expose us to diverse and potentially conflicting market risks.** We operate in multiple industries, including biotechnology, aerospace and defense manufacturing, specialty packaging, and financial investments. These industries are subject to different economic cycles, regulatory frameworks, and competitive pressures. Adverse developments in any one sector may not be offset by performance in other segments, and the diversification of our operations may not mitigate overall risk as expected. A downturn affecting one or more of our operating sectors could have a disproportionate impact on our consolidated results. **We may be subject to liability for workplace safety and employment-related claims across our operating subsidiaries.** Our manufacturing subsidiaries operate facilities that involve the use of heavy machinery, hazardous materials, and industrial processes that present inherent risks of workplace accidents and injuries. We are subject to federal, state and local occupational safety and health laws and regulations, including those administered by the Occupational Safety and Health Administration (OSHA). Failure to comply with these requirements could result in fines, penalties, work stoppages, or litigation. In addition, employment-related claims, including claims related to wages, benefits, discrimination, harassment, wrongful termination, or misclassification of employees or independent contractors, could result in significant legal costs and liabilities. We rely in part on employees seconded from entities controlled by our Chief Executive Officer and Chairman pursuant to the Companys secondment agreements with each, and the classification and treatment of these individuals could be subject to challenge by regulatory authorities. **Our insurance coverage may be inadequate to protect us against all potential losses and liabilities.** We maintain insurance coverage that we believe is customary for businesses of our size and type; however, there can be no assurance that our insurance will be sufficient to cover all potential claims, liabilities or losses, including product liability, property damage, business interruption, cybersecurity incidents, environmental liabilities, and professional liability. Certain types of losses may be uninsurable or may only be insurable at prohibitive cost. If we incur losses or liabilities that exceed or are not covered by our insurance, our financial condition and results of operations could be materially adversely affected. **A portion of our revenue may be derived from a limited number of customers.** Certain of our subsidiaries may depend on a limited number of key customers or contracts. The loss of one or more significant customers, a reduction in orders, or unfavorable changes in the terms of business with these customers could materially adversely affect our revenue and operating results. Our recently acquired subsidiaries, Pacific Sun Packaging and AGA, are in the early stages of operating under PMGCs ownership, and customer relationships established by prior owners may not transfer smoothly or be maintained over time. **Disruptions in supply chains or manufacturing operations could adversely affect our business.** Our manufacturing and packaging operations depend on the availability of raw materials, components, and third-party services. Disruptions in supply chains, including those caused by geopolitical events, inflation, tariffs, trade restrictions, natural disasters, pandemics, labor disputes, supplier insolvency or supplier concentration, could increase costs, delay production and impair our ability to fulfill customer orders. If we are unable to maintain adequate supply chain resilience across our operating subsidiaries, our revenue, margins and customer relationships could be adversely affected. 35 **A disruption in our operations could have an adverse effect on our business.** Our operations, including those of our subsidiaries, third-party suppliers and distribution partners, are subject to the risks inherent in manufacturing and distribution activities, including industrial accidents, environmental events, strikes and other labor disputes, disruptions in information systems, product quality control, safety and licensing requirements and other regulatory issues, as well as natural disasters, pandemics or other public health emergencies, acts of terrorism and other external factors beyond our control. The loss of, or damage to, any of our operating facilities or those of our key suppliers may have an adverse effect on our business, financial condition, results of operations and prospects. **To sustain our growth, we will need to increase the size of our organization, and we may encounter difficulties managing growth across multiple subsidiaries.** If we are able to successfully grow our operating subsidiaries and execute additional acquisitions, we may experience significant growth in the number of our employees and the scope of our operations across disparate industries. The resulting growth will place significant demands on our financial, managerial and operational resources. We may not be able to accurately forecast the number of employees required, the timing of their hire or the associated costs of expansion. Our success will depend on the ability of our executive officers and senior management to implement and improve operational, information management and financial control systems across multiple businesses and to expand, train and manage our employee base. Our inability to manage growth effectively may cause our operating costs to grow faster than anticipated and adversely affect our results of operations. **RISKS RELATED TO OUR INVESTMENT ACTIVITIES (PMGC CAPITAL)** **PMGC Capital LLC may be deemed an investment company under the Investment Company Act of 1940, which could impose significant regulatory burdens.** PMGC Capital LLC is a multi-strategy investment firm engaged in investing, lending and pursuing diversified investment opportunities. If we are deemed to be an investment company under the Investment Company Act of 1940, as amended (the 1940 Act), we would become subject to extensive regulation, which could impose significant compliance costs and operational restrictions. Under the 1940 Act, a company may be deemed to be an investment company if more than 40% of its total assets (exclusive of cash and U.S. government securities) consist of investment securities. We must ensure that we do not exceed this threshold. If we fail to maintain our exclusion from the 1940 Act, we could be required to register as an investment company, which would impose significant limitations on our capital structure, affiliate transactions and other aspects of our business, or we could be required to restructure our operations or divest certain assets. Any such outcome could materially adversely affect our business, financial condition, and operations. **PMGC Capitals investment activities subject us to market risk, and we may incur losses on our investment portfolio.** Through PMGC Capital, we hold investments in publicly traded equity securities, private company stock, and convertible debentures. These investments are subject to market risk, including fluctuations in the market prices of publicly traded securities, credit risk associated with debt instruments, and liquidity risk associated with private company investments. We have in the past recognized, and may in the future recognize, realized and unrealized losses on our investment portfolio. There can be no assurance that our investments will appreciate in value or that we will not incur additional losses. Poor investment performance may adversely affect our financial results and our ability to fund operations. 36 **RISKS RELATED TO REGULATORY, LEGAL AND INTELLECTUAL PROPERTY MATTERS** **We may become subject to litigation, regulatory proceedings, or governmental investigations that could be costly and time-consuming.** From time to time, we may be subject to legal proceedings, claims, disputes, regulatory inquiries, or governmental investigations arising in the ordinary course of business or otherwise. Such matters may include contract disputes, employment claims, intellectual property disputes, product liability claims, stockholder litigation, regulatory enforcement actions, or claims arising from our acquisitions or divestitures. Litigation and regulatory proceedings are inherently uncertain, and adverse outcomes could result in significant monetary damages, injunctive relief, penalties, or restrictions on our business activities. Even if we prevail, the costs of defending against such claims may be substantial and could divert managements attention from our business operations. **We are subject to anti-corruption, anti-bribery, and similar laws, and non-compliance could expose us to significant penalties.** We are subject to the U.S. Foreign Corrupt Practices Act, and other anti-corruption and anti-bribery laws and regulations. As we expand our operations, pursue international business relationships, and engage third-party consultants, distributors and partners, our exposure to these laws increases. Any violation or alleged violation could result in significant criminal and civil penalties, sanctions, and reputational harm. Our policies and procedures designed to promote compliance with these laws may not be effective in preventing all violations by our employees, consultants, agents, or business partners. **Changes in U.S. trade policy, tariffs, and international relations could adversely affect our supply chain and cost structure.** Our manufacturing and packaging operations depend on materials and components that may be sourced domestically or internationally. Changes in U.S. trade policy, including the imposition or escalation of tariffs, export controls, sanctions, or trade restrictions, could increase our costs, disrupt our supply chains, or limit our ability to serve certain customers. AGA Precision Systems operates in the aerospace and defense sector, which is particularly sensitive to changes in government policy, defense spending priorities, and international relations. Adverse changes in any of these areas could materially affect our revenue and profitability. **If we fail to protect or enforce our intellectual property, others could compete against us more directly and we may not be able to compete effectively in our market.** Our success depends in part on our ability to protect our intellectual property rights. We rely on a combination of trademarks, trade secrets, confidential proprietary information, domains, patent rights and other intellectual property rights to protect our intellectual property. We also rely on patent applications licensed by us for the Licensed Products which we are contractually obligated to file, prosecute and maintain under our License Agreement with MOA. Patent protection is limited in time, and we may be unsuccessful in developing and commercializing a product before a patent expires and the underlying technology becomes available for commercialization by competitors, in which case our investment of substantial time and resources towards the applicable product or product candidate could be lost without the realization of the benefits we anticipated. 37 **Certain of our technology may not be subject to protection through patents, which leaves us vulnerable to theft of our technology.** Certain parts of our know-how and technology are not patentable or are trade secrets. To protect our proprietary position in such know-how and technology, we have entered and intend to require all employees, consultants, advisors and collaborators to enter into confidentiality and invention ownership agreements with us. These agreements may not provide meaningful protection for our trade secrets, know-how or other proprietary information in the event of any unauthorized use or disclosure. In the absence of patent protection, competitors who independently develop substantially equivalent technology may harm our business. If we cannot adequately protect or enforce our intellectual property rights, we may not be able to adequately compete, and our business and prospects could be adversely affected. **We may not be able to protect our proprietary technology, which may harm our ability to operate profitably.** The molecular biology and bioprocessing industries place considerable importance on obtaining patent and trade secret protection for new technologies, products and processes. Our success will depend, to a substantial degree, on our ability to obtain and enforce patent protection for our products, preserve any trade secrets and operate without infringing the proprietary rights of others. We cannot assure you that we will succeed in obtaining any patents or obtain them in a timely manner; that the use of our technology will not infringe on the proprietary rights of others; that patent applications relating to our product candidates will result in the issuance of any patents; that we will be successful in monitoring, enforcing or otherwise protecting our patents or other intellectual property rights; or that patents will not be issued to other parties which may be infringed by our potential products or technologies. **Patents held by other persons may result in infringement claims against us that are costly to defend and which may limit our ability to use disputed technologies.** A number of biotechnology and other companies, universities and research institutions have filed patent applications or have been issued patents relating to technologies potentially relevant to or required by our expected products. If third party patents or patent applications contain claims infringed by either our licensed technology or other technology required to make and use our potential products and such claims are ultimately determined to be valid, we might not be able to obtain licenses to these patents at a reasonable cost, if at all, or be able to develop or obtain alternative technology. Patent litigation is very expensive and could consume substantial resources and create significant uncertainties. **If our trademarks and trade names are not adequately protected, we may not be able to build name recognition in our target markets.** Our registered or unregistered trademarks or trade names may be challenged, infringed, circumvented, declared generic or determined to be infringing on other marks. We may not be able to protect our rights in these trademarks and trade names, which we need in order to build name recognition with potential partners or customers in our target markets. If we are unable to establish name recognition based on our trademarks and trade names, our business may be adversely affected. 38 **If we infringe or are alleged to infringe intellectual property rights of third parties, our business could be harmed.** Our research, development and commercialization activities may infringe or otherwise violate or be alleged to infringe or otherwise violate patents owned or controlled by other parties. These third parties could bring claims against us that would cause us to incur substantial expenses and, if successful, could cause us to pay substantial damages or be forced to stop or delay research, development, manufacturing or sales of the applicable product or product candidate. **We may need to license additional intellectual property from third parties in the future, and such licenses may not be available on commercially reasonable terms.** A third party may hold intellectual property, including patent rights, that are important or necessary to the development of our future products. It may be necessary for us to use the patented or proprietary technology of third parties to commercialize our prospective products, in which case we would be required to obtain a license from these third parties. Failure to obtain such licenses on commercially reasonable terms may limit or eliminate our ability to develop or commercialize our future product candidates, which may have a negative impact on our business and results of operations. **A recall or suspension of sale of our products, or the discovery of serious safety issues, could have a significant negative impact on us.** The FDA and comparable agencies of other countries regulate certain of our products. The FDA and equivalent foreign regulatory authorities have the authority to require the recall or suspension, either temporarily or permanently, of commercialized products in the event that a product has a reasonable probability of causing a serious adverse health risk due to adulteration or misbranding. Recalls, suspensions or other notices relating to any products that we distribute would divert managerial and financial resources and have an adverse effect on our reputation, financial condition and operating results. **Regulations governing our products could harm our business.** Certain of our products are or will be subject to extensive government regulation by numerous federal, state and local government agencies and authorities. Many of these laws and regulations involve a high level of subjectivity, are subject to interpretation, and vary significantly from market to market. These laws and regulations can have several impacts on our business, including delays or prohibitions in introducing or selling a product in one or more markets; limitations on the claims we can make regarding our products; and delays, expenses and potential product reformulations associated with compliance. **Government regulations relating to marketing and advertising may restrict, inhibit or delay our ability to sell our products.** If our products are marketed outside of their intended use, regulatory agencies such as the FDA or the FTC may investigate our marketing practices. Government authorities may regulate advertising and product claims regarding the benefits of our products, and enforcement actions could require us to revise our marketing materials, amend our claims or stop selling certain products, which could harm our business. 39 **We may incur product liability claims that could harm our business, and past product liability claims relating to our previously divested Elevai Skincare products could still adversely affect our business.** We may be subject to various product liability claims related to the products we sell or develop. Product liability claims could increase our costs, cause negative publicity, and adversely affect our business and financial results. Although we maintain general liability insurance, this insurance may not fully cover potential liabilities. In addition, even though we completed the divestiture of our Elevai Skincare business in January 2025, we may still be subject to liability for past product claims related to those products. Prior to the divestiture, we marketed and sold skincare products, and claims related to those productsincluding adverse reactions, product contamination, or labeling inaccuraciescould result in legal action against us. We cannot assure you that the indemnification provisions in the asset sale agreement will fully protect us from such liabilities. In connection with the divestiture, we also provided certain representations, warranties and indemnification obligations. Claims under these provisions could arise if post-sale issues emerge, such as regulatory non-compliance, product defects, or third-party intellectual property claims. If such claims are asserted and indemnification is required, we could incur substantial financial obligations. **We may not have sufficient product liability insurance, which may leave us vulnerable to future claims we will be unable to satisfy.** The development, testing, manufacturing, marketing and sale of our products entail an inherent risk of product liability claims. We currently have a limited amount of product liability insurance, which may not be adequate to meet potential product liability claims. Adequate insurance coverage may not be available in the future on acceptable terms, if at all. Whether or not a product liability insurance policy is obtained or maintained in the future, any product liability claim could harm our business or financial condition. **Our employees, independent contractors, consultants, distributors, vendors and strategic partners may engage in misconduct or improper activities.** We are exposed to the risk that our employees, independent contractors, consultants, distributors, vendors, strategic partners and other individuals or entities with whom we have arrangements may engage in unethical, fraudulent or illegal activity. It is not always possible to identify and deter misconduct by these parties, and the precautions we take to detect and prevent these activities may not be effective. If such actions are instituted against us, those actions could result in government investigations, legal proceedings, the imposition of significant fines or other sanctions, which could adversely affect our ability to operate our business and our results of operations. **If we, or our third-party manufacturers fail to comply with environmental laws and regulations, we could become subject to fines or penalties.** Our research and development activities and our third-party manufacturers and suppliers activities involve the controlled storage, use and disposal of hazardous materials and other hazardous compounds. We and our manufacturers and suppliers are subject to laws and regulations governing the use, manufacture, storage, handling and disposal of these hazardous materials. We cannot eliminate the risk of contamination, which could cause an interruption of our business operations and environmental damage resulting in costly clean-up and liabilities. **If our third-party suppliers, logistics providers, and manufacturers do not comply with ethical business practices or applicable laws, our reputation and business could be harmed.** Our reputation and our customers willingness to purchase our products and services depend in part on our suppliers, manufacturers, and service providers compliance with ethical employment practices and all legal and regulatory requirements relating to the conduct of their businesses. We do not exercise control over our third-party service providers and cannot guarantee their compliance with ethical and lawful business practices. 40 **The divestiture of our Elevai Skincare business could negatively impact our operations and strategic positioning.** **** In January 2025, we completed the divestiture of our Elevai Skincare business as part of our strategic realignment. While this divestiture allows us to focus on our core businesses, it may result in operational and strategic challenges, including adverse market perception, loss of diversification, and potential unforeseen expenses or liabilities related to the transition. If we fail to manage this transition effectively, our financial condition, results of operations and future growth prospects could be adversely affected. **RISKS RELATED TO OUR MANAGEMENT AND GOVERNANCE** **Our corporate governance documents and Nevada law may have anti-takeover effects that could discourage, delay, or prevent a change in control.** Provisions of our articles of incorporation, bylaws, and Nevada law may have the effect of discouraging, delaying, or preventing a merger, acquisition, tender offer, or other change in control of the Company that stockholders might consider favorable, including transactions in which stockholders might receive a premium over the then-current market price of our Common Stock. These provisions include the authority of the Board to issue preferred stock with rights, preferences, and privileges determined by the Board without stockholder approval, advance notice requirements for stockholder proposals and director nominations, and other provisions of Nevada corporate law that may limit the ability of stockholders to effect a change in control. These provisions may frustrate or prevent any attempt by stockholders to replace or remove our current management. **If we lose key personnel or are unable to attract and retain qualified personnel, we may be unable to execute our business plan.** We have a limited number of employees. Our Chief Executive Officer serves in a non-employee capacity pursuant to his consulting agreement with the Company. Our success depends on our continued ability to attract, retain and motivate highly qualified management, business development, and operational personnel. Our success depends in large part on the efforts and abilities of our Chief Executive Officer and Chief Financial Officer, Graydon Bensler, as well as other members of our senior management. Finding replacements for key individuals could be difficult, may take an extended period of time and could significantly impede the achievement of our business objectives. **Graydon Bensler serves as both our Chief Executive Officer and Chief Financial Officer, which presents governance risks and limitations.** **** Our Chief Executive Officer, Graydon Bensler, currently also serves as our Chief Financial Officer. While this dual role reduces costs, it concentrates significant authority and responsibility in a single individual and may limit the segregation of duties and independent oversight over financial reporting that would be provided by separate individuals in these roles. This concentration may increase the risk of errors or irregularities in financial reporting going undetected and may be viewed negatively by investors, analysts and regulatory bodies. Such perception may adversely impact our financial performance and/or business. **Significant related-party transactions with entities controlled by our executive officers and directors may present conflicts of interest.** The Company has entered into consulting agreements and secondment agreements with entities controlled by our Non-Employee Chief Executive Officer and our Non-Employee, Non-Executive Chairman, pursuant to which the Company pays significant consulting fees, contracted performance bonuses, management fees, and reimbursements to such entities. Compensation to such entities under the terms of such agreements include milestone-based bonuses, acquisition-based bonuses, and market capitalization-based bonuses. These compensation arrangements create potential conflicts of interest between the personal financial interests of our executive officers and directors and the interests of the Company and its stockholders. The milestone-based and acquisition-based bonus arrangements may incentivize management to pursue transactions that trigger bonus payments, even if such transactions are not in the best long-term interests of stockholders. Although our Audit Committee reviews and approves related-party transactions, there can be no assurance that these transactions are or will be on terms as favorable to the Company as those that could be obtained from unaffiliated third parties. 41 **We may be unable to accurately forecast revenue and appropriately plan our expenses.** Forecasts may be particularly challenging given our recently acquired subsidiaries, early-stage biotechnology programs, and ongoing acquisition strategy. We base our expense levels and investment plans on our estimates of revenue and gross margin. However, we cannot be sure that historical growth rates or trends of our acquired businesses are meaningful predictors of future performance, particularly under PMGC ownership. If our assumptions prove to be wrong, we may spend more than anticipated or may generate lower revenue than expected, either of which could have an adverse effect on our business, financial condition, results of operations and prospects. **We have a limited operating history at our current scale and with our current business model, which may make it difficult to evaluate our business and future prospects.** We began commercial operations in 2020 as a skincare development company, divested our skincare business in January 2025, and completed our first operating acquisitions in mid-2025. As a result, we have an extremely limited history of operating as a diversified holding company and an even more limited history of generating revenue from our current operating subsidiaries. Any evaluation of our business and prospects must be considered in light of this limited operating history, which may not be indicative of future performance. Because of our limited operating history in our current form, we face increased risks, uncertainties, expenses, and difficulties. **We have previously identified a material weakness in our internal control over financial reporting, and there can be no assurance that additional material weaknesses will not be identified in the future.** **** As disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, our management previously identified a material weakness in our internal control over financial reporting. During the fiscal year ended December 31, 2025, we implemented remediation measures, including the hiring of additional accounting and finance personnel and the implementation of standardized reconciliation procedures and enhanced review processes. Based on managements evaluation as of December 31, 2025, the Company has concluded that the previously reported material weakness has been remediated. However, there can be no assurance that our remediation efforts will remain effective or that additional material weaknesses or significant deficiencies will not be identified in the future, particularly as we integrate newly acquired subsidiaries into our financial reporting processes. If we identify additional material weaknesses or significant deficiencies, we could be subject to sanctions or investigations by Nasdaq, the SEC or other regulatory authorities, investor perceptions of our Company may suffer and cause a decline in the market price of our Common Stock. Any failure of our internal control over financial reporting may have a material adverse effect on our stated results of operations and harm our reputation. **The requirements of being a public company may strain our resources, divert managements attention and affect our results of operations.** **** As a public company in the United States, we face increased legal, accounting, administrative and other costs and expenses. We are subject to the reporting requirements of the Exchange Act and the Sarbanes-Oxley Act of 2002. Section 404 of the Sarbanes-Oxley Act requires that our management report on the effectiveness of our internal controls structure and procedures for financial reporting. Compliance with these requirements diverts internal resources and management attention. If we fail to maintain compliance, we could be subject to sanctions or investigations. We may need to hire additional employees with public accounting and disclosure experience, which will increase costs. These increased costs will require us to divert money that we could otherwise use to develop our business. 42 **If we cannot maintain our Company culture or focus on our mission as we grow, our success and competitive position may be harmed.** **** We believe our culture and mission have been key contributors to our success to date. Any failure to preserve our culture or focus on our mission could negatively affect our ability to retain and recruit personnel, which is critical to our growth. As we grow across multiple industries through acquisitions and develop the infrastructure of a public company, we may find it difficult to maintain a cohesive corporate culture. **RISKS RELATED TO OUR DEPENDENCE ON THIRD PARTIES** **** **We depend on our collaborators to help us develop and test our proposed products, and our ability to develop and commercialize products may be impaired or delayed if collaborations are unsuccessful.** **** Our strategy for the development, testing and commercialization of our proposed products may require entering into collaborations with corporate partners, licensors, licensees and others. We may then be dependent upon the subsequent success of these other parties in performing their respective responsibilities and the continued cooperation of our partners. Our potential collaborators may not cooperate with us or perform their obligations under our agreements with them. We cannot control the amount and timing of our collaborators resources that will be devoted to our research and development activities. Should collaborators fail to conduct activities in a timely manner, or at all, expected product pipeline timelines may be delayed. If we do not achieve milestones set forth in the agreements, or if our collaborators breach or terminate their collaborative agreements with us, our business may be materially harmed. **Our reliance on non-employee consultants, third-party vendors, and operational contractors may lead to delays in development of our proposed products and operation of our businesses.** **** We rely extensively on third parties for critical operational and strategic functions, including through secondment agreements with entities controlled by our Chief Executive Officer and Chairman. These individuals and entities are not our employees and may have commitments to other entities that limit their availability to us. We have limited control over the activities of these service providers and can expect only limited amounts of their time to be dedicated to our business objectives. If key consultants or contractors become unavailable or fail to perform satisfactorily, our operations and development activities could be materially delayed. **Certain market opportunity data and forecasts in this Annual Report were obtained from third-party sources and were not independently verified by us.** **** This Annual Report contains certain data and information that we obtained from various government and private entity publications and reports. While we believe the data and information is reliable, we have not independently verified them. There is no guarantee that any particular number or percentage of market participants covered by our market opportunity estimates will purchase our products or generate any particular level of revenue for us. Even if the markets in which we compete meet the size estimates and growth forecasts included in this Annual Report, our business may fail to grow at all or at the rate we anticipate. 43 **We or our third-party vendors may experience network or system failures, cybersecurity attacks, or other technology risks.** Our ability to operate uninterrupted depends upon the performance of our internal network, systems and related infrastructure, and those of our third-party vendors. Our systems and those of our third-party vendors may be vulnerable to computer viruses and other malware, physical or electronic security breaches, natural disasters, and similar disruptions. Although we have not experienced any material security breaches, we cannot be certain that our defensive measures will be sufficient to defend against all current and future methods of attack. Any actual or perceived security breach may lead to loss of customer confidence, regulatory scrutiny, compromise of intellectual property, costly litigation, fines and penalties, and reputational damage. A security breach could occur and persist for an extended period without detection, increasing the costs and consequences of such a breach. **Our business may be negatively impacted by cybersecurity threats and other security threats and disruptions.** ** Because our business relies on proprietary technology and computer systems, we face security threats, including threats to our information technology infrastructure, attempts to gain access to our proprietary or confidential information, and physical security threats. Cybersecurity threats are persistent, evolve quickly and include computer viruses, attempts to access information, denial of service and other electronic security breaches. A security breach or other significant disruption could disrupt operations, result in unauthorized access to or release of proprietary information, delay clinical studies, subject us to claims and regulatory actions, and damage our reputation. **RISKS RELATED TO THE OWNERSHIP OF OUR SECURITIES** **** **Our Common Stock may be affected by limited trading volume and price fluctuations, which could adversely impact the value of our Common Stock.** **** Our Common Stock has experienced and is likely to experience in the future significant price and volume fluctuations, which could adversely affect the market prices of our common stock without regard to our operating performance. In addition, factors such as quarterly fluctuations in our financial results, changes in the overall economy or the condition of the financial markets, announcements of acquisitions, and changes in investor sentiment could cause the market prices of our common stock to fluctuate substantially. These fluctuations may also cause short sellers to periodically enter the market. We cannot predict the actions of market participants and, therefore, can offer no assurances that the market for our common stock will be stable or appreciate over time. **We have a significant number of shares of Series B Preferred Stock outstanding with voting rights that may dilute the voting power of Common Stock holders.** **** As of the date of this Annual Report, we have shares of Series B Preferred Stock outstanding that carry voting rights. The voting power of our Series B Preferred Stock and Common Stock is concentrated in a small group of holders, mainly in entities controlled by our Chief Executive Officer and Chairman. This concentration of voting power may discourage potential acquirers and reduce the market price of our Common Stock. It also limits the ability of other stockholders to influence corporate matters, including but not limited to the election of directors, changes to the Companys governance documents, the expansion of employee equity or option pool, any merger, consolidation, sale of all or substantially all of our assets, and other major actions requiring stockholder approval. **Our Common Stock may be subject to significant volatility due to limited public float and market conditions.** **** Our Common Stock may experience significant price volatility due to limited trading volume, concentrated ownership, and market conditions affecting small-cap or microcap companies. This volatility may be unrelated to our operating performance and could result in substantial losses for investors. **We may not be able to continue to satisfy listing requirements of Nasdaq to maintain a listing of our Common Stock.** **** Our Common Stock is currently listed on Nasdaq and we must meet certain financial and liquidity criteria to maintain such listing. Our Common Stock may be delisted if we fail to meet Nasdaqs continued listing requirements. We have previously received notices from Nasdaq regarding non-compliance with listing requirements and have utilized reverse stock splits to regain compliance. There can be no assurance that we will maintain compliance with the Nasdaq continued listing requirements in the future. 44 If our Common Stock is delisted, it may be more difficult to buy or sell them or to obtain accurate quotations, and the price of the shares of Common Stock may suffer a material decline. Delisting may also impair our ability to raise capital. In addition, our Board may determine that the cost of maintaining our listing on a national securities exchange outweighs the benefits of such listing. **Changes to Nasdaq listing requirements, including potential minimum market capitalization requirements, could adversely affect our continued listing.** **** Nasdaq periodically reviews and may revise its continued listing standards, including requirements relating to minimum bid price, stockholders equity, market value of listed securities, and market capitalization. Any changes to these requirements, including potential increases in minimum market capitalization thresholds, may make it more difficult for us to maintain compliance. If we are unable to meet applicable listing standards, our Common Stock may be subject to delisting, which may adversely affect liquidity, market price, and our ability to raise capital. **We currently do not intend to declare dividends on our Common Stock in the foreseeable future and, as a result, your returns on your investment may depend solely on the appreciation of our common stock.** **** We currently do not expect to declare any dividends on our Common Stock in the foreseeable future. Instead, we anticipate that all of our earnings in the foreseeable future will be used to provide working capital, support our operations and finance the growth and development of our business. Any determination to declare or pay dividends in the future will be at the discretion of our Board, subject to applicable laws and dependent upon a number of factors, including our earnings, capital requirements and overall financial conditions. In addition, terms of any future debt or preferred securities may further restrict our ability to pay dividends on our Common Stock. Accordingly, your only opportunity to achieve a return on your investment in our Common Stock may be if the market price of our Common Stock appreciates and you sell your shares at a profit. The market price for our Common Stock may never exceed, and may fall below, the price that you pay for such Common Stock. **An investment in our securities is speculative and there can be no assurance of any return on any such investment.** **** An investment in our securities is speculative and there can be no assurance that investors will obtain any return on their investment. Investors may be subject to substantial risks involved in an investment in the Company, including the risk of losing their entire investment. **If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, our stock price and trading volume could decline.** **** The trading market for our Common Stock will depend in part on the research and reports that securities or industry analysts publish about us or our business. If one or more analysts downgrade our stock or publish inaccurate or unfavorable research about our business, our stock price would likely decline. If analysts cease coverage of our Company or fail to publish reports on us regularly, demand for our stock could decrease, which might cause our stock price and trading volume to decline. **If there is no active public market for our Common Stock, you may be unable to sell your shares at or above your purchase price.** **** Although our Common Stock is listed on Nasdaq, an active trading market for our shares may not be sustained. You may be unable to sell your shares quickly or at the market price if trading in shares of our common stock is not active. An inactive market may also impair our ability to raise capital by selling shares and may impair our ability to enter into strategic partnerships or acquire companies using our shares as consideration. **We may be subject to securities litigation, which is expensive and could divert our managements attention.** **** The market price of our securities may be volatile, and in the past companies that have experienced volatility in the market price of their securities have been subject to securities class action litigation. We may be the target of this type of litigation in the future. Securities litigation against us may result in substantial costs and divert our managements attention from other business concerns. 45 **Future issuances of our Common Stock or securities convertible into or exercisable for our Common Stock could cause the market price of our Common Stock to decline and result in additional dilution to our stockholders.** **** We may issue additional shares of Common Stock, warrants, options, or other equity-linked securities in connection with future financings, acquisitions, equity incentive plans, or the settlement of outstanding obligations. The issuance of additional shares of Common Stock, or securities convertible into or exercisable for shares of Common Stock, will dilute the ownership interest of existing common stockholders and could depress the market price of our Common Stock. Sales of substantial amounts of our Common Stock in the public market, or the perception that such sales could occur, could also adversely affect the market price of our Common Stock. **IN ADDITION TO THE ABOVE RISKS, BUSINESSES ARE OFTEN SUBJECT TO RISKS NOT FORESEEN OR FULLY APPRECIATED BY MANAGEMENT. IN REVIEWING THIS FILING, POTENTIAL INVESTORS SHOULD KEEP IN MIND THAT OTHER POSSIBLE RISKS MAY ADVERSELY IMPACT OUR BUSINESS OPERATIONS AND THE VALUE OF OUR SECURITIES.** **Item 1B. Unresolved Staff Comments.** None. **Item 1C. Cybersecurity.** We believe cybersecurity risk management is an important part of its overall risk management efforts. The Company has a policy of transparency regarding our data collection, use, retention and sharing practices, and it is our commitment to implement appropriate technical security measures to protect all Company stakeholders and manage third party risk. Our operations may, in some cases, involve the storage, transmission and other processing of customer and research data or sales information. Cyberattacks and other malicious internet-based activity continue to increase, and cloud-based platform providers of services are expected to continue to be targeted. Threats include traditional computer hackers, malicious code (such as viruses and worms), phishing attacks, employee theft or misuse and denial-of-service attacks, and use of artificial intelligence. We have not experienced cyberattacks in the past, and there can be no guarantee that in the future such cyberattacks will not be material. We maintain an information security program that is comprised of policies and controls designed to mitigate cybersecurity risk. However, at any given time, we face known and unknown cybersecurity risks and threats that are not fully mitigated, and we continuously work to enhance our information security program and risk management efforts. In addition, cybersecurity incidents could have material adverse effects on our business strategy, financial condition, and results of operations (e.g., a significant breach could result in direct financial losses due to fraud, system downtime impacting revenue generation, increased compliance costs or contractual liabilities with third-party vendors and customers). Depending on the environment and system, we implement and maintain various technical, physical, and organizational measures, processes, standards and policies designed to manage and mitigate material risks from cybersecurity threats, including, for example, periodic cybersecurity testing and cybersecurity awareness training for employees. The Company is actively engaged in identifying and managing cybersecurity risks. Protecting company data, non-public customer and employee data, and the systems that collect, process, and maintain this information is deemed critical. We use third-party service providers to perform a variety of functions throughout our business, including manufacturing our product candidates and assisting with R&D activities. Depending on the nature of the services provided, the sensitivity of the systems and data at issue, and the identity of the provider, our vendor contracting processes may include imposing certain contractual provisions related to privacy and cybersecurity. In addition, the Board will oversee any cybersecurity risk management framework and a dedicated committee of the Board or an officer appointed by the Board will review and approve any cybersecurity policies, strategies and risk management practices. The Board (or designated committee or officer) will receive periodic updates on cybersecurity risks, including emerging threats, mitigation efforts and incident response activities. The updates will be provided at least annually, or more frequently as needed, to ensure cybersecurity risks are appropriately managed and integrated into our broader risk oversight strategy. **Cybersecurity Risk** In 2023, the SEC adopted new rules to enhance and standardize disclosures regarding cybersecurity risk management, strategy, governance, and incidents by public companies that are subject to the reporting requirements of the Exchange Act. These require current disclosure about material cybersecurity incidents, as well as requiring periodic disclosures about a public companys processes to assess, identify, and manage material cybersecurity risks, managements role in assessing and managing material cybersecurity risks, and the board of directors oversight of cybersecurity risks. If we fail to comply with these rules, we could be subject to various regulatory sanctions, including financial penalties. 46 State regulators have been increasingly active in implementing privacy and cybersecurity standards and regulations. Recently, several states have adopted regulations requiring certain financial institutions to implement cybersecurity programs and providing detailed requirements with respect to these programs, including data encryption requirements. Many states have also recently implemented or modified their data breach notification, information security and data privacy requirements. We expect this trend of state-level activity in those areas to continue and are continually monitoring developments where our customers are located. Risks and exposures related to cybersecurity attacks, including litigation and enforcement risks, are expected to be elevated for the foreseeable future due to the rapidly evolving nature and sophistication of these threats, as well as due to the expanding use of Internet banking, mobile banking, and other technology-based products and services by us. *Governance* The Board, in coordination with the Audit Committee, oversees the Companys processes for assessing and managing risk. The Board and Audit Committee may review the measures implemented by the Company to identify and mitigate data protection and cybersecurity risks. The Companys Audit Committee is also responsible for overseeing cybersecurity risk and are informed in a timely manner of any incidents considered potentially serious, together with details on the prevention, detection, mitigation and remediation of such incidents. *Risks from Cybersecurity Threats* As of the date of this Annual Report, we are not aware of any material risks from cybersecurity threats that have materially affected or are reasonably likely to materially affect the Company, including our business strategy, results of operations, or financial condition. However, we cannot provide assurance that we will not experience any such event in the future. **Item 2. Properties.** Our principal executive office is located at 120 Newport Center Drive, Newport Beach, CA 92660. The office has 1,650 square feet, and the lease is on a month-to-month basis. The monthly rent is $9,273.50. The following table sets forth the leases term and monthly rent: | Lease Term | | Address | | Space (square feet) | | | Average Monthly Rent | | | | Month to Month | | 120 Newport Center Drive, Newport Beach, CA 92660 | | | 1,650 | | | $ | 9,273.50 | | | Some members of our management work outside of these premises in office space that we do not rent. **Item 3. Legal Proceedings.** As of the date of this Annual Report, there are no active legal proceedings pending or threatened against the Company. However, from time to time, we may be subject to various legal claims and proceedings that arise from the normal course of business activities, including, third party intellectual property infringement claims against us in the form of letters and other forms of communication. Litigation or any other legal or administrative proceeding, regardless of the outcome, could result in substantial cost, diversion of our resources, including managements time and attention, and, depending on the nature of the claims, reputational harm. In addition, if any litigation results in an unfavorable outcome, there exists the possibility of a material adverse impact on our results of operations, prospects, cash flows, financial position and brand. **Item 4. Mine Safety Disclosures.** Not Applicable. 47 **PART II** **Item 5. Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.** Our Common Stock is currently quoted on The Nasdaq Capital Market under the symbol ELAB. We had 1,936,757 shares of Common Stock issued and outstanding as of December 31, 2025 (such number of Common Stock on a pre-reverse stock split basis, not reflecting the Companys 1-for-4 reverse stock split which occurred on January 6, 2026 and 1-for-6 reverse stock split which occurred on March 10, 2026. **Holders of Capital Stock** As of December 31, 2025, we had 40 record holders of our Common Stock. **Stock Option Grants** As of December 31, 2025, the Company had no options outstanding to purchase Common Stock. As of December 31, 2025, no shares of Common Stock were issued under the 2025 Equity Incentive Plan. The 2025 Plan superseded the 2020 Plan and outstanding awards made under the 2020 Plan remained outstanding. As of December 31, 2025, there were 6 options outstanding from the 2020 Plan. **Transfer Agent** The transfer agent for our Common Stock is VStock Transfer, LLC. The transfer agents telephone number and address is (212) 828-8436 and 18 Lafayette Place Woodmere, New York 11598. **Dividends** To date, we have not declared or paid any dividends on our Common Stock. We currently do not anticipate paying any cash dividends in the foreseeable future on our Common Stock. Although we intend to retain our earnings, if any, to finance the exploration and growth of our business, the Board of Directors has the discretion to declare and pay dividends in the future. Payment of dividends in the future will depend upon our earnings, capital requirements, and any other factors that our Board deems relevant. **Nasdaq Compliance** On November 7, 2024, we received a letter from Nasdaq (the Bid Price Deficiency Letter) granting an exception for us to cure our lack of compliance with the bid price requirement in Listing Rule 5550(a)(2) (such rule, the Bid Price Rule, and such deficiency of the Bid Price Rule, the Bid Price Deficiency). In the Bid Price Deficiency Letter, Nasdaq permitted our continued listing on Nasdaq on the conditions that: (1) on or before December 26, 2024, we complete a reverse split at a ratio sufficient to maintain long-term compliance with the Bid Price Rule; and (2) on or before January 9, 2025, we demonstrate compliance with the Bid Price Rule. On January 14, 2025, the Company received a letter from Nasdaq (Compliance Letter) stating the Company had demonstrated compliance with the Bid Price Rule. **Recent Sales of Unregistered Securities** There were no equity securities of the registrant sold by the registrant during the period covered by this Annual Report that were not registered under the Securities Act. **Item 6. [Reserved]** Not applicable. **Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operation.** *The information set forth in this section contains certain forward-looking statements, including, among others (i) expected changes in our revenue and profitability, (ii) prospective business opportunities and (iii) our strategy for financing our business. Forward-looking statements are statements other than historical information or statements of current condition. Some forward-looking statements may be identified by use of terms such as believes, anticipates, intends or expects. These forward-looking statements relate to our plans, liquidity, ability to complete financing and purchase capital expenditures, growth of our business including entering into future agreements with companies, and plans to successfully develop and obtain approval to market our product. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs.* 48 *Although we believe that our expectations with respect to the forward-looking statements are based upon reasonable assumptions within the bounds of our knowledge of our business and operations, in light of the risks and uncertainties inherent in all future projections, the inclusion of forward-looking statements in this Annual Report should not be regarded as a representation by us or any other person that our objectives or plans will be achieved.* *We assume no obligation to update these forward-looking statements to reflect actual results or changes in factors or assumptions affecting forward-looking statements.* *Our revenues and results of operations could differ materially from those projected in the forward-looking statements as a result of numerous factors, including, but not limited to, the following: the risk of significant natural disaster, the inability of our company to insure against certain risks, inflationary and deflationary conditions and cycles, currency exchange rates, and changing government regulations domestically and internationally affecting our products and businesses.* *You should read the following discussion and analysis in conjunction with the Financial Statements and Notes attached hereto, and the other financial data appearing elsewhere in this Annual Report.* *US Dollars are denoted herein by USD, $ and dollars.* **** **Organization and Overview of Operations** On December 31, 2024, the Company entered into an asset purchase agreement (the Asset Purchase Agreement) with an unrelated third party, pursuant to which the Company agreed to sell, and the unrelated third party agreed to purchase, the Companys skincare business. The sale of the skincare business was consummated on January 16, 2025. Prior to entering into the Asset Purchase Agreement, the Companys principal business was operating a skincare development company engaged in the design, manufacture, and marketing of skincare products in the skincare industry. After the sale of the skincare business, the Company changed its principal business. PMGC Holdings Inc. is a diversified holding company that manages and grows its portfolio through strategic acquisitions, investments, and development across various industries. As part of its diversification and growth strategy, the Company completed the following acquisitions during the third quarter of 2025: **** | | | On July 7, 2025, the Company completed the acquisition of Pacific Sun Packaging Inc., a California-based custom IT packaging company. | | **** | | | On July 18, 2025, the Company acquired AGA Precision Systems LLC, a California-based CNC machining company. | | | | | On October 26, 2025, the Company, through its wholly owned subsidiary AGA Precision Systems LLC, acquired certain assets of Indarg Engineering, Inc., a California-based precision CNC machining business. | | The Company manages and operates a diverse portfolio of wholly owned subsidiaries, as of December 31, 2025: **** | | | NorthStrive BioSciences Inc. Biosciences is a biopharmaceutical company focusing on the development and acquisition of cutting-edge aesthetic medicines and therapeutic products. This companys lead asset, EL-22, is leveraging a first-in-class engineered probiotic approach to address obesitys pressing issue of preserving muscle while on weight loss treatments, including GLP-1 receptor agonists. For more information, please visit www.northstrivebio.com. | | | | | | | | | | PMGC Research Inc. PMGC Research was based in Canada and dedicated to medical scientific research and development efforts, utilizing Canadian research grants and partnering with leading Canadian Universities, with aims of pushing the boundaries of innovation. On November 12, 2025, PMGC Research was dissolved. | | | | | PMGC Capital LLC PMGC Capital is a multi-strategy investment firm focused on direct investments, strategic lending, and acquiring undervalued companies and assets across diverse markets. This companys mission is to identify and seize high-potential opportunities, delivering sustainable growth and maximizing returns on capital. | | **** | | | Pacific Sun Packaging Inc. Pacific Sun is a California-based custom IT packaging company providing innovative, sustainable, and technology-driven packaging solutions to industrial and consumer markets. | | **** | | | AGA Precision Systems LLC. AGA is a California-based precision engineering and CNC machining company specializing in the design and production of high-tolerance components for industrial and technology applications. In October 2025, AGA acquired substantially all the operating assets of Indarg Engineering, Inc. AGA expands PMGCs advanced manufacturing footprint and enhances its capacity to deliver vertically integrated engineering and production solutions across multiple sectors. | | **** 49 **** **Outlook** **** **Managements Plans** Over the next twelve months, we intend to focus on: | | | Increasing revenue by achieving successful returns on capital through PMGC Capital LLC, our multi-strategy investment vehicle, by acquiring and managing undervalued assets, public and private investments, and structured financing opportunities. | | | | | Establishing new wholly owned subsidiaries to develop and commercialize newly acquired or licensed assets across various industries. | | | | | Utilizing clinical validation studies to strengthen the commercial potential and scientific credibility of our portfolio companies technologies. | | | | | Advancing clinical development to progress NorthStrive Biosciences, Inc.s clinical assets toward Investigational New Drug (IND) applications. | | | | | Pursuing additional acquisitions of operating business-to-business companies with positive EBITDA. | | | | | Evaluating potential opportunities such as out licensing our biotechnology applications, potential spin-offs, and creating new publicly traded companies, such as Special Purpose Acquisition Corporations (SPACs). | | **Results of Operations** **** **Comparison of the Years Ended December 31, 2025 and 2024.** The following table provides certain selected financial information for continuing operations for the periods presented: | | | Year Ended December31, 2025 | | | Year Ended December31, 2024 | | | Change | | | | Revenue | | | 590,084 | | | | - | | | | 590,084 | | | | Cost of goods sold | | | 404,770 | | | | - | | | | 404,770 | | | | Gross profit | | | 185,314 | | | | - | | | | 185,314 | | | | Marketing and Promotion | | $ | 200,940 | | | | 292,522 | | | | (91,582 | ) | | | Consulting Fees | | $ | 1,769,505 | | | | 1,367,273 | | | | 402,232 | | | | Office and Administration | | $ | 2,238,660 | | | | 1,092,576 | | | | 1,146,084 | | | | Professional Fees | | $ | 1,423,021 | | | | 563,242 | | | | 859,779 | | | | Investor Relations | | $ | 253,333 | | | | 208,326 | | | | 45,007 | | | | Research and Development | | $ | 147,010 | | | | 104,654 | | | | 42,356 | | | | Repair and maintenance | | | 717,654 | | | | - | | | | 717,654 | | | | Total operating expenses | | $ | 7,067,262 | | | | 3,663,566 | | | | 3,403,696 | | | | Other income (expense)1 | | $ | (867,820 | ) | | | (353,148 | ) | | | (514,672 | ) | | | Net loss from continuing operations | | $ | (7,780,740 | ) | | | (4,016,714 | ) | | | (3,764,026 | ) | | | Basic and dilutive loss per common share continuing operations | | $ | (382.301 | ) | | | (4,239.702 | ) | | | 3,857.401 | | | | Weighted average number of shares outstandingbasic and diluted | | | 20,352 | | | | 947 | | | | | | | | 1 | Other expenses relate to finance cost, interest income, interest expense, dividend income, unrealized fair value gain/loss on investment, realized loss on sale of investments, fair value change on derivative liabilities, gain on the termination of the intangible asset and fair value gain/loss on derivative liability, gain on extinguish of related party debt, impairment on prepaid expense and loss on disposal of PP&E. | | 50 **Revenue** Revenue for the year ended December 31, 2025, was $590,084 as compared to $nil for the year ended December 31, 2024, an increase of $590,084. Revenue was generated by the Companys newly acquired subsidiaries. Our revenue by category is as follows: | | | For the yearEnded December 31, 2025 | | | | Pacific Sun Sale of IT packaging | | $ | 374,874 | | | | AGA Machine work | | | 215,210 | | | | Total Revenue | | $ | 590,084 | | | **Cost of Revenue** Cost of revenue for the year ended December 31, 2025, was $404,770 as compared to $nil for the year ended December 31, 2024. The increase in cost of revenue is directly attributed to the increase in sales during the year ended December 31, 2025, compared to 2024. The following is a breakdown of the components of the cost of revenue: | For the year ended December 31, 2025 | | Pacific Sun Sale of IT packaging | | | AGA Machine work | | | Total | | | | Cost of inventory | | $ | 208,402 | | | $ | 109,347 | | | $ | 317,749 | | | | Sales commission | | | 6,875 | | | | - | | | | 6,875 | | | | Assembly and manufacturing expense | | | 1,088 | | | | 23,560 | | | | 24,648 | | | | Shipping and handling cost | | | 48,466 | | | | 6,149 | | | | 54,615 | | | | Inventory write down and wastage | | | 883 | | | | - | | | | 883 | | | | Total Cost of Revenue | | $ | 265,714 | | | $ | 139,056 | | | $ | 404,770 | | | **** **Gross Profit** Gross profit for the year ended December 31, 2025, was $185,314, as compared to $nil for the year ended December 31, 2024, an increase of $185,314. This represents an overall gross margin percentage of 31.4% for the year ended December 31, 2025, compared to $nil in 2024. The increase in gross profit and gross margin percentage was primarily attributable to the inclusion of revenues generated from the newly acquired subsidiaries. The following is a breakdown of gross profit percentage by category: | | | For the yearEnded December 31, 2025 | | | | Pacific Sun Sale of IT packaging | | | 29.1 | % | | | AGA Machine work | | | 35.4 | % | | | Overall Gross Profit Percentage | | | 31.4 | % | | The gross margin percentage on the sale of IT packaging is negatively impacted by the fair value adjustment to inventory recorded as part of the purchase price allocation. This adjustment is expensed to cost of revenue as inventory is sold. Normalizing for this adjustment, the gross margin percentage on the sale of IT packaging would have been 49.2%. 51 **Research and Development Expenses** Research and development expenses for the year ended December 31, 2025, were $147,010 compared to $104,654 for the year ended December 31, 2024, an increase of $42,356. Research and development related to the Companys spending on clinical validation studies. The increase in research and development was mainly driven by the Company continuously working on its research project of EL-22 and the costs of its Type B pre-Investigational New Drug (pre-IND) meeting with the U.S. Food and Drug Administration. **** **Marketing and Promotion** Marketing and promotion expenses for the year ended December 31, 2025, were $200,940 compared to $292,522 for the year ended December 31, 2024, a decrease of $91,582. During the year ended December 31, 2024, the Company engaged an investor relations agency under a $125,000 agreement signed on January 5, 2024, to support external communications and investor engagement efforts. No comparable agreement was entered into during the year ended December 31, 2025. **** **Office and Administrative Expenses** Office and administrative expenses for the year ended December 31, 2025, were $2,238,660, compared to $1,092,576 for year ended December 31, 2024, an increase of $1,146,084. The increase was driven by higher business activity levels, general price increases, and a shift in cost responsibilities following the disposition of the Companys skincare business. The newly acquired businesses contributed $508,291 to office and administrative expenses since the acquisitions. **** **Consulting Fees** Consulting fees for the year ended December 31, 2025, were $1,769,505, compared to $1,367,273 for the year ended December 31, 2024, an increase of $402,232. The Companys Chief Executive Officer, Chief Financial Officer, and Chairman provide services in a consulting capacity. The increase was primarily driven by bonus-related consulting expenses of $871,600 (2024 $350,000), representing contractual bonuses approved by the Board of Directors and the Compensation Committee. The increases were partially offset by a decrease in external consulting services. **** **Professional Fees** Professional fees for the year ended December 31, 2025, was $1,423,021, compared to $563,242 for the year ended December 31, 2024, an increase of $859,779. Professional fees are comprised of legal, audit and accounting services. The increase during 2025, was primarily due to an increase in audit, legal and accounting services given the Companys corporate restructuring, business acquisition due diligence, and financing efforts conducted during the year ended December 31, 2025. **** **Investor Relations** Investor relations expenses for the year ended December 31, 2025, were $253,333, compared to $208,326 for the year ended December 31, 2024, an increase of $45,007. The increase is primarily attributable to an increase in public relations and media coverage expenses during the year ended December 31, 2025 compared to the year ended December 31, 2024. 52 **Repairs and Maintenance** Repairs and maintenance expenses for the year ended December 31, 2025, were $717,654, with no comparable expense in the year ended December 31, 2024. Following the acquisition of AGA and certain assets of Indarg Engineering, the Company incurred cost on building maintenance, machine repair and recalibration of equipment. These costs were necessary to optimize operations and maintain the useful lives of equipment acquired in the acquisition. **Other income (expense)** Other income (expense) for the year ended December 31, 2025, amounted to a net loss of $ 867,820, compared to net loss of $353,148 for the year ended December 31, 2024, representing an unfavorable variance of $514,672. The variance was primarily attributable to $500,000 of impairment on prepaid expense, $179,479 of finance costs, $113,917 of realized losses on investments, and $216,043 of unrealized losses on investments recognized during 2025, whereas no comparable amounts were recorded in the prior year and a decrease in fair value gain on derivative liabilities from $369,158 in the prior year to $214,167 in the current year. In addition, the Company recognized a $32,432 loss on the disposal of property and equipment during the year. These unfavorable items were partially offset by several favorable changes compared to the prior year, including a $490,563 decrease in interest expense to $244,634 in 2025 from $735,197 in 2024, $107,190 higher interest income, $15,550 of dividend income, a $129,613 gain on the termination of an intangible asset, a $31,261 gain on extinguishment of related-party debt, and a $31,028 increase in other income. **Liquidity and Capital Resources** The accompanying consolidated financial statements have been prepared on a going concern basis, which implies the Company will continue to realize its assets and discharge its liabilities in the normal course of business. The continuation of the Company as a going concern is dependent upon the continued financial support from its shareholders, the ability of the Company to obtain necessary equity financing to continue operations, and ultimately the attainment of profitable operations. As of December 31, 2025 and 2024, the Company had a net working capital of $2,928,959 and $4,251,867, respectively, and has an accumulated deficit of $21,017,440 and $13,269,627, respectively. Furthermore, for the years ended December 31, 2025 and 2024, the Company incurred a net loss of $7,747,813 and $6,245,737, respectively and used $5,933,881 and $5,486,980, respectively of cash flows for operating activities. These factors raise substantial doubt regarding the Companys ability to continue as a going concern. These consolidated financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. Our principal liquidity requirements are for working capital, capital expenditure and research and development. We fund our liquidity requirements primarily through cash on hand and the issuance of common and preferred stock. As of December 31, 2025, we had cash of $5,402,333, with $3,984,453 as of December31, 2024. The Company expects an improvement in liquidity and capital resources, including cash obtained from any sale of investment securities it currently owns. Cash flows used in discontinued operating and investing activities and assets and liabilities held for sale has been excluded from our analysis. The Company may be paid additional earn-out consideration in connection with the sale of its skincare business, consisting of potential payments for each year ending on the anniversary of the closing date of the disposition during the five-year period following the closing equal to 5% of the sales generated during such year from the existing products as of the closing and a one-time payment of $500,000 if the buyer achieves $500,000 in revenue from sales of the existing hair and scalp products as of the closing on or before the 24-month anniversary of the closing date of the disposition. The Company plans to use the cash obtained from any sale of investment securities or earnout payment for working capital. 53 The following table provides selected financial data as of December 31, 2025, and December 31, 2024, respectively (excluding assets and liabilities held for sale). | | | December31, 2025 | | | December31, 2024 | | | Change | | | | Current assets | | $ | 6,871,255 | | | $ | 4,858,193 | | | $ | 2,013,062 | | | | Current liabilities | | $ | 3,942,296 | | | $ | 1,250,218 | | | $ | 2,692,078 | | | | Working capital | | $ | 2,928,959 | | | $ | 3,607,975 | | | $ | (679,016 | ) | | The following table summarizes our cash flows from operating, investing and financing activities from continuing operations: | | | Year Ended December31, 2025 | | | Year Ended December31, 2024 | | | Change | | | | Cash used in operating activities | | $ | (5,802,550 | ) | | $ | (2,800,601 | ) | | $ | (3,001,949 | ) | | | Cash used in investing activities | | $ | (2,765,154 | ) | | $ | (601,404 | ) | | $ | (2,163,750 | ) | | | Cash provided by financing activities | | $ | 10,116,738 | | | $ | 6,757,500 | | | $ | 3,359,238 | | | **** **Cash Flow from Operating Activities** For the year ended December 31, 2025, net cash flows used in operating activities for continuing operations was $5,802,550 compared to $2,800,601 used during the year ended December 31, 2024, respectively, primarily due to net loss and timing of settlement of assets and liabilities. **Cash Flows from Investing Activities** During the year ended December 31, 2025, and 2024, we used $2,765,154 and $601,404, respectively, in investing activities. The increase was primarily driven by business acquisition activity of $2,162,756, purchases of investments of $1,789,044, equipment purchases of $442,255, earnout payments of $114,969, and purchases of intangible assets of $6,000. These uses of cash were partially offset by $1,762,201 proceeds from the sale of investments and $127,300 related to the issuance of a promissory note. **** **Cash Flows from Financing Activities** During the year ended December 31, 2025, we had net cash flow provided by financing activities of $10,116,738 compared to cash flow provided by financing activities of $6,757,500 in 2024. During 2025, the Company received $3,990,007 from the initial pre-paid purchase under its equity purchase facility (ELOC), $1,672,103 from the issuance of common stock under its At-the-Market (ATM) sales agreement, and $1,245,306 from a registered direct offering of common stock and prefunded warrants. In addition, the Company received $1,698,058 from the exercise of Series A warrants and $1,511,443 from the exercise of replacement warrants issued on January 27, 2025. These inflows were partially offset by $179 used for the repurchase of shares. **** **Critical Accounting Policies and Significant Judgments and Estimates** This discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States (U.S. GAAP). The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company regularly evaluates estimates and assumptions related to revenue recognition, the collectability of receivables, valuation of inventory, fair value of investments in securities, derivative liabilities and stock options, useful lives and recoverability of long-lived assets, and deferred income tax asset valuation allowances. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgements about the carrying value of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from those estimates. Estimates and assumptions are reviewed periodically, and the effects of revisions are reflected in the consolidated financial statements in the period they are determined. 54 *Business Combinations* The Company accounts for business combinations using the acquisition method of accounting in accordance with ASC 805, Business Combinations. Under this method, the purchase consideration transferred is measured at fair value on the acquisition date and allocated to the identifiable assets acquired and liabilities assumed based on their estimated fair values. Any excess of the purchase consideration over the fair value of the identifiable net assets acquired is recorded as goodwill. Acquisition-related costs (such as legal, due diligence, and advisory fees) are expensed as incurred and presented within general and administrative expenses in the consolidated statements of operations. Contingent consideration, if any, is recorded at fair value on the acquisition date and subsequently remeasured at each reporting period, with changes in fair value recognized in earnings in accordance with ASC 805-30-35 and ASC 450, Contingencies. During the year ended December 31, 2025, the Company completed three acquisitionsPacific Sun Packaging Inc. AGA Precision Systems LLC and certain assets of Indarg Engineering, Inc. which were accounted for under ASC 805. The initial purchase price allocations are preliminary and subject to adjustment upon completion of final valuation analyses. ** *Foreign Currency Translation* The Companys functional and reporting currency is the U.S. dollar. The functional currency of the Companys Canadian subsidiary, PMGC Research Inc. (PMGC Research) is the Canadian dollar. Monetary assets and liabilities denominated in foreign currencies are translated using the exchange rate prevailing at the balance sheet date. Non-monetary assets, liabilities, and items recorded in income arising from transactions denominated in foreign currencies are translated at rates of exchange in effect at the date of the transaction. Gains and losses arising on translation or settlement of foreign currency denominated transactions or balances are included in the determination of income. The accounts of PMGC Research are translated to U.S. dollars using the current rate method. Accordingly, assets and liabilities are translated into U.S. dollars at the period-end exchange rate while revenues and expenses are translated at the average exchange rates during the period. Related exchange gains and losses are included in a separate component of stockholders equity as accumulated other comprehensive income (loss). ** *Revenue Recognition* Revenue is recognized in accordance with ASC 606, Revenue from Contracts with Customers, when control of the promised goods or services is transferred to the customer, in an amount that reflects the consideration the Company expects to receive. For Pacific Sun Packaging Inc., revenue is recognized at a point in time upon shipment or delivery, as control transfers to the customer at that stage. For AGA Precision Systems LLC, which includes Indarg Engineering, Inc., revenue from CNC machining and precision component manufacturing is recognized at a point in time when control of the finished parts transfers to the customer. Standard shipping terms are FOB shipping point, resulting in transfer of control upon shipment. In limited delivery arrangements where AGA delivers parts to the customers dock, control transfers upon customer receipt. *Convertible debt and embedded derivative liabilities* Hybrid financial instruments with a convertible debt host contract and embedded derivative liability conversion feature are bifurcated and accounted for separately. The embedded derivative liability is initially and subsequently measured at fair value in accordance with ASC 815-15 Derivatives and Hedging Embedded Derivatives. The convertible debt host contract is accounted for at amortized cost in accordance with ASC 470, Debt and Convertible Instruments. **** 55 **** **Stock-Based Compensation** ** *Employees* - The Company accounts for share-based compensation under the fair value method which requires all such compensation to employees, including the grant of employee stock options, to be calculated based on its fair value at the measurement date (generally the grant date), and recognized in the consolidated statement of operations over the requisite service period. ** *Nonemployees* - During June 2018, the FASB issued ASU 2018-07, Compensation-Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting (ASU 2018-07) to simplify the accounting for share-based payments to nonemployees by aligning it with the accounting for share-based payments to employees. Under the requirements of ASU 2018-07, the Company accounts for share-based compensation to non-employees under the fair value method which requires all such compensation to be calculated based on the fair value at the measurement date (generally the grant date) and recognized in the statement of operations over the requisite service period. During the years ended December 31, 2025 and 2024, the Company recorded $(19,160) and $97,167, respectively, in share-based compensation expense, of which $60,440 and $(79,600) and $93,449 and $3,718, respectively is included in office and administration and discontinued operations, respectively. Within discontinued operations for the years ended December 31, 2025 and 2024, $(73,768) and $(5,832), and ($599) and $4,317, respectively is included in office and administration and research and development, respectively. Determining the appropriate fair value model and the related assumptions requires judgment. During the year ended December 31, 2025 and the year ended 2024, the fair value of each option grant was estimated using a Black-Scholes option-pricing model. The expected volatility represents the historical volatility of comparable publicly traded companies in similar industries, adjusted for variables such as stock price, market capitalization and life cycle. Due to limited historical data, the expected term for options granted is equal to the contractual life. The risk-free interest rate is based on a treasury instrument whose term is consistent with the expected life of stock options. The Company has not paid and does not anticipate paying cash dividends on its shares of common stock; therefore, the expected dividend yield is assumed to be zero. **** **Off-BalanceSheet Arrangements** We do not have any off-balancesheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditure or capital resources that is material to investors. **** **JOBS Act** **** On April 5, 2012, the Jumpstart Our Business Startups Act (the JOBS Act) was signed into law. The JOBS Act contains provisions that, among other things, eases certain reporting requirements for qualifying public companies. We will qualify as an emerging growth company and under the JOBS Act will be allowed to comply with new or revised accounting pronouncements based on the effective date for private (not publicly traded) companies. We are electing to delay the adoption of new or revised accounting standards, and as a result, we may not comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for non-emerging growth companies. As a result, our financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates. 56 **Future Related Party Transactions** ** The Corporate Governance Committee of our Board of Directors is required to approve all related party transactions. All related party transactions are made or entered into on terms that are no less favorable to use than can be obtained from unaffiliated third parties. **Impact of Inflation** We do not believe the impact of inflation on our Company is material. **Inflation Risk** We are also exposed to inflation risk. Inflationary factors, such as increases in labor costs, could impair our operating results. Although we do not believe that inflation has had a material impact on our financial position or results of operations to date, a high rate of inflation in the future may have an adverse effect on our ability to maintain current levels of gross margin and operating expenses. **Market Risk** Market risk is the risk of loss arising from adverse changes in market rates and prices. Our market risk exposure is generally limited to those risks that arise in the normal course of business, as we do not engage in speculative,non-operatingtransactions, nor do we utilize financial instruments or derivative instruments for trading purposes. **Item 7A. Quantitative and Qualitative Disclosures about Market Risk.** We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item. **Item 8. Financial Statements and Supplementary Data** **Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.** On December 17, 2024, the Company dismissed TPS Thayer, LLC (TPS) as its independent registered public accounting firm. The Board of Directors and Audit Committee participated in and approved the decision to change the Companys independent registered public accounting firm. During the Companys fiscal years ending in December 31, 2023 and December 31, 2022, there were (i) no disagreements with TPS on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of TPS, would have caused TPS to make reference to the subject matter of the disagreements in connection with its report, and (ii) with the exception of material weaknesses related to reconciliation of various accounts, lack of precision and accuracy to properly reflect in the financial statements, no reportable events, as such term is defined in Item 304(a)(1)(v) of Regulation S-K. Effective December 20, 2024, the Company engaged HTL International, LLC (HTL) as its new independent registered public accounting firm. During the two fiscal years ended December 31, 2023 and December 31, 2022 and through December 20, 2024, the Company did not consult with HTL regarding any of the following: the application of accounting principles to a specific transaction, either completed or proposed; the type of audit opinion that might be rendered on the Companys financial statements, and none of the following was provided to the Company: (a) a written report, or (b) oral advice that HTL concluded was an important factor considered by the Company in reaching a decision as to accounting, auditing or financial reporting issue; or any matter that was subject of a disagreement, as that term is defined in Item 304(a)(1)(iv) of Regulation S-K. The Company has not had any disagreements with our accountants or auditors that would need to be disclosed pursuant to Item 304 of Regulation S-K promulgated under the Securities Act. 57 **Item 9A. Controls and Procedures.** **Evaluation of Disclosure Controls and Procedures** Pursuant to Rule 13a-15(b) under the Exchange Act, the Company carried out an evaluation, with the participation of the Companys management, including the Companys Chief Executive Officer (the Companys principal executive officer and principal financial and accounting officer), of the effectiveness of the Companys disclosure controls and procedures (as defined under Rule 13a-15(e) under the Exchange Act) as of the end of the period covered by this Annual Report. Based upon that evaluation, the Companys Chief Executive Officer concluded that the Companys disclosure controls and procedures are effective to ensure that information required to be disclosed by the Company in the reports that the Company files or submits under the Exchange Act, is recorded, processed, summarized and reported, within the time periods specified in the SECs rules and forms, and that such information is accumulated and communicated to the Companys management, including the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. **Managements Report on Internal Control over Financial Reporting** Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Exchange Act Rule 13a-15(f) and 15d-15(f) under the Exchange Act. Internal control over financial reporting is a process used to provide reasonable assurance regarding the reliability of our financial reporting and the preparation of our financial statements for external purposes in accordance with U.S. GAAP. Internal control over financial reporting includes policies and procedures that pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets; provide reasonable assurance that transactions are recorded as necessary to permit preparation of our financial statements in accordance with U.S. GAAP, and that our receipts and expenditures are being made only in accordance with the authorization of our Board and management; and provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on our financial statements. Any system of internal control, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the objectives of the system are met. Because of the inherent limitations in all internal control systems, no system of internal control over financial reporting can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. Our management conducted an evaluation of the effectiveness of our internal control over financial reporting as of December 31, 2025. Based on this evaluation, management concluded that our internal control over financial reporting was effective as of December 31, 2025. **Remediation of Previously Reported Material Weakness** As previously disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, management identified a material weakness in our internal control over financial reporting related to insufficiently designed and operating controls surrounding accounting policies and controls, including standardized reconciliation schedules to ensure the Companys books and records are maintained in accordance with GAAP. During the fiscal year ended December 31, 2025, the Company implemented remediation measures to address the previously identified material weakness, including hiring additional accounting and finance personnel with the requisite knowledge, training and experience in U.S. GAAP and public company reporting requirements, and implementing standardized reconciliation procedures and enhanced review processes over the Companys financial close and reporting cycle. Based on managements evaluation as of December 31, 2025, the Company has concluded that the previously reported material weakness has been remediated and that the Companys internal control over financial reporting is effective as of December 31, 2025. **Changes in Internal Controls over Financial Reporting** **** Other than the remediation measures described above, no change in our internal control over financial reporting occurred during the fiscal year ended December 31, 2025, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. **Item 9B. Other Information.** During the year ended December 31, 2025, no director or officer adopted or terminated a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement, as each term is defined in Item 408(a) of Regulation S-K. The Company has adopted an insider trading policy governing the purchase, sale, and/or other dispositions of the Companys securities by directors, officers and employees, or the registrant itself, that have been designed to promote compliance with insider trading laws, rules and regulations, and Nasdaqs listing standards. **Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections** None. 58 **PART III** **Item 10. Directors, Executive Officers and Corporate Governance.** The following table sets forth certain information with respect to our directors, executive officers and significant employees. | Name | | Age | | Position | | | Executive Officers: | | | | | | | Graydon Bensler | | 34 | | Non-Employee Chief Executive Officer, Chief Financial Officer and Director | | | Non-Executive Directors: | | | | | | | Braeden Lichti | | 41 | | Non-Employee, Non-Executive Chairman of the Board | | | Jeffrey Parry(1)(2)(3) | | 64 | | Independent Director and Chair of Nominating Committee | | | George Kovalyov(1)(2)(3) | | 39 | | Independent Director and Chair of Compensation Committee | | | Juliana Daley(1)(2)(3) | | 36 | | Independent Director and Chair of the Audit Committee | | | (1) | Member of the Audit Committee. | | | (2) | Member of the Compensation Committee. | | | (3) | Member of the Nominating Committee. | | Each of our directors serves for a term of one year ending on the date of the subsequent annual meeting of stockholders following the annual meeting at which such director was elected. Notwithstanding the foregoing, each director is to serve until his or her successor is elected and qualified or until his death, resignation or removal. Our Board appoints our officers, and each officer is to serve until his or her successor is appointed and qualified or until his or her death, resignation or removal. **Graydon Bensler, CFA**, *Non-Employee Chief Executive Officer, Chief Financial Officer and Director* Mr. Bensler has served as our Chief Executive Officer since June 2024 and Chief Financial Officer since inception and a director since June 9, 2020. Mr. Bensler is a financial professional and analyst with over eight years of experience in financial consulting and management for both private businesses and US/Canadian publicly traded companies and is a CFA Charterholder (CFA). Mr. Bensler is the founder and sole owner of GB Capital Ltd, a privately held holding company he founded in 2019 and which company is engaged in capital markets advisory, financial consulting, and management. In 2017, Mr. Bensler co-founded an education technology curriculum management and scheduling company that was implemented in academic schools in Canada and the United States. From 2017 to 2019, Mr. Bensler was an account manager at a leading Canadian investor relations firm where he represented publicly traded companies across a wide range of sectors and worked directly with investment banks, investment brokers and company executives and directors. During his tenure at this investor relations firm, Mr. Bensler created and conveyed messaging about his clients strategic position in the market and successfully guided several companies through multiple financings. From 2019 to 2021, Mr. Bensler was a Senior Associate at Evans & Evans, a Canadian boutique investment banking firm where he led valuations and going public transactions for Canadian and United States companies. In this capacity, Mr. Bensler gained strong knowledge of the capital markets, public company compliance requirements, and regularly interfaced with regulators, auditors, board and executive management. We believe that Mr. Benslers past experience as our Chief Financial Officer, his familiarity with both the banking and the financial consulting sectors and his having served as an account manager for similarly situated companies makes him a qualified director for our Company. Mr. Bensler received his Bachelor of Management and Organizational Studies degree from the University of Western Ontario, with specialization in Finance, and is a CFA Charterholder. 59 **Braeden Lichti**, *Non-Employee, Non-Executive Chairman of the Board* ** Braeden Lichti is the founder and Chief Executive Officer of BWL Investments Ltd., a privately held holding corporation he established in 2016, and NorthStrive Companies, Inc., a U.S. based investment, advisory and management services company he founded in 2021. Mr. Lichti also serves as Chairman of Hydromer, Inc., a global leader in surface modification and coating solutions, focusing on hydrophilic, thromboresistant and antimicrobial coatings for medical devices and various industrial applications. Established in 1980 and headquartered in Concord, North Carolina, Mr. Lichti co-founded PMGC Holdings Inc. in 2020 and has served as its advisor and has been a principal stockholder since its formation. We believe that Mr. Lichtis past experience as a company founder, director and advisor, and his extensive capital markets and executive experience makes him a qualified director for our Company. **Jeffrey Parry**, *Independent Director, Chair of the Nominating Committee and member of the of Audit Committee and Compensation Committee* ** Mr. Parry was appointed as an independent director in June 2023 and is a partner of Mystic Marine Advisors LLC, a Connecticut based advisory firm he founded in 1998 focused on emerging and turnaround situations for strategic and financial stakeholders. Jeffrey served as Executive Chairman of TBS Shipping Limited from 2012 to 2018 where he led a successful restructuring and co-founded Valhalla Shipping, Inc with an $167 million equity investment by institutional investors. From July 2008 to October 2009, Mr. Parry was the Chief Executive Officer of Nasdaq-listed Aries Maritime Transport Limited and led a successful turn-around and sale to strategic investors. Mr. Parry was a Managing Director of Poten & Partners, an international energy advisor, from 2001 to 2007 where in 2006 he co-founded Poten Capital Services LLC, a New York based broker-dealer. Earlier in his career, Mr. Parry founded Cool FM and 7X Television in Athens, Greece and served as President of One Fifth Avenue Apartment Corporation. Since 2010, Jeffrey has served as an independent director of Nasdaq listed Globus Maritime Ltd. where he sits on the audit committee. Mr. Parry holds a BA from Brown University and MBA from Columbia University. His educational and professional experience in business, his background and familiarity in investment banking, and his having served as a director of a company listed on Nasdaq makes him a qualified director candidate for our Company. **George Kovalyov**, *Independent Director, Chair of the Compensation Committee and member of the of Audit Committee and Nominating Committee* Mr. Kovalyov has acted as Chief Financial Officer and Treasurer of Marizyme, Inc. since December 2021. Since November 2022, Mr. Kovalyov has also been a director of DGTL Holdings Inc. Previously he served as the chief operating officer and director of Health Logic Interactive Inc. (HLII) from September 2020 to November 2021, and as HLIIs chief financial officer from December 2021 to September 2022. In addition, Mr. Kovalyov served as a director and audit committee member of Margaret Lake Diamonds Inc. from January 2021 to August 2022. From September 2018 to September 2020, Mr. Kovalyov was VP of Finance and director of Phivida Holdings Inc., a brand of cannabidiol-infused foods, beverages and clinical products. From October 2016 to September 2020, Mr. Kovalyov was the principal owner of Schindler and Company, an accounting consulting firm. Mr. Kovalyov is a chartered accountant and is a member of Chartered Professional Accountants of Canada. Mr. Kovalyov is qualified to serve on the Board due to his extensive accounting and finance experience. 60 **Juliana Daley**, CPA *Independent Director, Chair of the Audit Committee and member of the of Compensation Committee and Nominating Committee* Ms. Daley was appointed as an independent director in June 2023 and holds over eleven years of accounting, controller, and financial reporting experience in the public sector. Ms. Daley has worked a variety of industries in both the United States and Canada. Since July 2021, Ms. Daley has served as Manager of Accounting at Anavex Life Sciences Corp. (NASDAQ: AVXL), a clinical-stage biopharmaceutical company based in New York, NY that is focused on developing treatments for debilitating neurodegenerative and neurodevelopmental diseases. In addition, from August 2021 to July 2022, she served as an independent director and audit committee chair to Vegano Foods (CSE: VAGN) during Vegano Foods initial public offering in February 2022. From October 2015 to July 2021, Ms. Daley was a Manager of Financial Reporting and Advisory Services to various public companies in the United States and Canada, through her position with the accounting firm, Treewalk (previously ACM Management, Inc.). At Treewalk Ms. Daley assisted clients in meeting their quarterly and annual reporting requirements including the preparation of complete financial reporting packages and managing assurance engagements from start to finish. At Treewalk, she also served as chief financial officer to Makena Resources Inc. (CSE: MKNA) (April 2018 - April 2019) and Naked Brand Group Inc. (NASDAQ: NAKD) (March 2018 - June 2018) until the completion of their prospective mergers in April 2019 and June 2018, respectively. From September 2011 to April 2015, Ms. Daley was employed with Naked Brand Group Inc., where she worked in the accounting department, serving as controller from August 2013 until her departure in April 2015, and where she was also responsible for assisting in various operational functions including EDI implementation, ERP implementation, inventory management, information technology and office administration. From July 2021 to present, Ms. Daley has acted as manager of accounting at Anavex Life Sciences where she assists to in the finalization of all internal reporting, budgeting, and operational matters such as annual SOX audits, quarterly reviews, IT audits, and annual audits. Ms. Daleys expertise in financial accounting for public companies and her having served as a chief financial officer and controller on companies listed on United States public exchanges makes her a qualified director candidate for our company. **Term of Office** Our directors are appointed for a one-year term to hold office until the next annual general meeting of our shareholders or until removed from office in accordance with our bylaws. Our officers are appointed by our board of directors and hold office until removed by the board. **Board Leadership Structure and Risk Oversight** Our Board has responsibility for the oversight of our risk management processes and, either as a whole or through its committees, regularly discusses with management our major risk exposures, their potential impact on our business and the steps we take to manage them. The risk oversight process includes receiving regular reports from Board committees and members of senior management to enable our Board to understand our risk identification, risk management and risk mitigation strategies with respect to areas of potential material risk, including operations, finance, legal, regulatory, cybersecurity, strategic and reputational risk. **Director Independence** Our Board is composed of a majority of independent directors as defined under the rules of Nasdaq. We use the definition of independence applied by Nasdaq to make this determination. Nasdaq Listing Rule 5605(a)(2) provides that an independent director is a person other than an officer or employee of the company or any other individual having a relationship which, in the opinion of the Companys Board, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. The Nasdaq listing rules provide that a director cannot be considered independent if: | | | the director is, or at any time during the past three (3) years was, an employee of the company; | | 61 | | | the director or a family member of the director accepted any compensation from the company in excess of $120,000 during any period of twelve (12) consecutive months within the three (3) years preceding the independence determination (subject to certain exemptions, including, among other things, compensation for board or board committee service); | | | | | the director or a family member of the director is a partner in, controlling shareholder of, or an executive officer of an entity to which the company made, or from which the company received, payments in the current or any of the past three fiscal years that exceed 5% of the recipients consolidated gross revenue for that year or $200,000, whichever is greater (subject to certain exemptions); | | | | | the director or a family member of the director is employed as an executive officer of an entity where, at any time during the past three (3) years, any of the executive officers of the company served on the compensation committee of such other entity; or | | | | | the director or a family member of the director is a current partner of the companys outside auditor, or at any time during the past three (3) years was a partner or employee of the companys outside auditor, and who worked on the companys audit. | | Under such definitions, our Board has undertaken a review of the independence of each director. Based on information provided by each director concerning his background, employment and affiliations, our Board has determined that Jeffrey Parry, George Kovalyov and Juliana Daley are independent directors of the Company. **Board Committees** We have established three committees under the board of directors: an audit committee, a compensation committee and a nominating committee. We have adopted a charter for each of the three committees. Copies of our committee charters are posted on our corporate investor relations website. Each committees members and functions are described below. **Audit Committee**. Our Audit Committee consists of Jeffrey Parry, George Kovalyov and Juliana Daley. Ms. Daley is the Chairman of our Audit Committee. We have determined that these directors satisfy the independence requirements of Nasdaq Rule 5605 and Rule 10A-3 under the Securities Exchange Act of 1934. Our Board of Directors has determined that Ms. Daley qualifies as an audit committee financial expert and has the accounting or financial management expertise as required under Item 407(d)(5)(ii) and (iii) of Regulation S-K. The Audit Committee will oversee our accounting and financial reporting processes and the audits of the financial statements of our company. The Audit Committee is responsible for, among other things: | | | appointing the independent auditors and pre-approving all auditing and non-auditing services permitted to be performed by the independent auditors; | | | | | reviewing with the independent auditors any audit problems or difficulties and managements response; | | | | | discussing the annual audited financial statements with management and the independent auditors; | | | | | reviewing the adequacy and effectiveness of our accounting and internal control policies and procedures and any steps taken to monitor and control major financial risk exposures; | | | | | reviewing and approving all proposed related party transactions; | | | | | monitoring managements communication and implementation of the Companys anti-fraud policy; | | 62 | | | reviewing the Companys cybersecurity mitigation measures and practices periodically; | | | | | meeting separately and periodically with management and the independent auditors; and | | | | | monitoring compliance with our code of business conduct and ethics, including reviewing the adequacy and effectiveness of our procedures to ensure proper compliance. | | **Compensation Committee**. Our Compensation Committee consists of Jeffrey Parry, George Kovalyov and Juliana Daley. Mr. Kovalyov is the Chairman of our Compensation Committee. The compensation committee assists the board in reviewing and approving the compensation structure, including all forms of compensation, relating to our directors and executive officers. Our chief executive officer may not be present at any committee meeting during which his compensation is deliberated. The compensation committee is responsible for, among other things: | | | reviewing and approving, or recommending to the board for its approval, the compensation for our chief executive officer and other executive officers; | | | | | reviewing and recommending to the shareholders for determination with respect to the compensation of our directors; | | | | | reviewing periodically and approving any incentive compensation or equity plans, programs or similar arrangements; and | | | | | selecting compensation consultant, legal counsel or other adviser only after taking into consideration all factors relevant to that persons independence from management. | | **Nomination Committee**. Our Nomination Committee consists of Jeffrey Parry, George Kovalyov and Juliana Daley. Mr. Parry is the chairman of our nomination committee. The nomination committee assists the board of directors in selecting individuals qualified to become our directors and in determining the composition of the board and its committees. The nomination committee is responsible for, among other things: | | | selecting and recommending to the board nominees for election by the shareholders or appointment by the board; | | | | | reviewing annually with the Board the current composition of the Board with regards to characteristics such as independence, knowledge, skills, experience and diversity; | | | | | making recommendations on the frequency and structure of Board meetings and monitoring the functioning of the committees of the Board; and | | | | | advising the Board periodically with regards to significant developments in the law and practice of corporate governance as well as our compliance with applicable laws and regulations, and making recommendations to the board on all matters of corporate governance and on any remedial action to be taken. | | **Family Relationships** There are no family relationships between any of our directors or executive officers. **Certain Legal Proceedings** To our knowledge, no director, independent director, or executive officer of the Company has been a party in any legal proceeding material to an evaluation of his ability or integrity during the past ten years. 63 **Code of Ethics** The Company adopted a Code of Ethics applicable to its directors, officers, and employees. This includes our principal executive officer, principal financial officer, and principal accounting officer or controller, or persons performing similar functions. The full text of our Code of Ethics is posted on our website. **Insider Trading Policy** **** The Company has adopted an insider trading policy that governs the purchase, sale, and/or other transactions of our securities by our directors, officers and employees. A copy of our insider trading policy is filed as Exhibit 19.1 to this Annual Report for the fiscal year ended December 31, 2025. In addition, with regard to the Companys trading in its own securities, it is the Companys policy to comply with the federal securities laws and the applicable exchange listing requirements. **** **Compensation Recovery Policy** **** Under the Sarbanes-Oxley Act, in the event of misconduct that results in a financial restatement that would have reduced a previously paid incentive amount, we can recoup those improper payments from our executive officers. The SEC also recently adopted rules which direct national stock exchanges to require listed companies to implement policies intended to recoup bonuses paid to executives if the company is found to have misstated its financial results. In 2023, we adopted an executive compensation recovery policy or Clawback Policy in compliance with Nasdaq rules. Under our Clawback Policy, if we are required to prepare an accounting restatement due to material noncompliance with the financial reporting requirements under any United States securities laws, we will be entitled to recover (and will seek to recover), from our executive officers, any excess incentive-based compensation received by our executive officers during the three-year period prior to the date on which we are required to prepare the restatement. This policy applies to both equity-based and cash compensation awards. The excess compensation is the difference between the actual amount that was paid and the amount that would have been paid if the financial statements were prepared properly in the first instance. **** **Involvement in Certain Legal Proceedings** To our knowledge, none of our current directors or executive officers has, during the past 10 years: | | | been convicted in a criminal proceeding or been subject to a pending criminal proceeding (excluding traffic violations and other minor offenses); | | | | | had any bankruptcy petition filed by or against the business or property of the person, or of any partnership, corporation or business association of which he was a general partner or executive officer, either at the time of the bankruptcy filing or within two (2) years prior to that time; | | | | | been subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction or federal or state authority, permanently or temporarily enjoining, barring, suspending or otherwise limiting, his or her involvement in any type of business, securities, futures, commodities, investment, banking, savings and loan, or insurance activities, or to be associated with persons engaged in any such activity; | | | | | been found by a court of competent jurisdiction in a civil action or by the SEC or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated; | | 64 | | | been the subject of, or a party to, any federal or state judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated (not including any settlement of a civil proceeding among private litigants), relating to an alleged violation of any federal or state securities or commodities law or regulation, any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order, or any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or | | | | | been the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Exchange Act), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member. | | **Item 11. Executive Compensation.** **Introduction** We are an emerging growth company, as defined in the JOBS Act. As an emerging growth company, we will be exempt from certain requirements related to executive compensation, including, but not limited to, the requirements to hold a nonbinding advisory vote on executive compensation and to provide information relating to the ratio of total compensation of our Chief Executive Officer to the median of the annual total compensation of all of our employees, each as required by the Investor Protection and Securities Reform Act of 2010, which is part of the Dodd-Frank Wall Street Reform and Consumer Protection Act. This section provides an overview of our executive compensation programs, including a narrative description of the material factors necessary to understand the information disclosed in the summary compensation table below. Our named executive officers (Named Executive Officers or NEOs) are: | | | Graydon Bensler, Chief Executive Officer and Chief Financial Officer. | | The objective of our compensation program is to provide a total compensation package to each NEO that will enable us to attract, motivate and retain outstanding individuals, align the interests of our executive team with those of our equity holders, encourage individual and collective contributions to the successful execution of our short- and long-term business strategies and reward NEOs for performance. **Compensation of Directors and Named Executive Officers** The following table presents information regarding the total compensation (excluding equity-based compensation reported) awarded to, earned by, and paid to our NEOs for services rendered to us in all capacities for the years indicated. | Name and Principal Position | | Year | | | Salary ($) | | | Bonus ($) | | | Option Awards ($) | | | Total ($) | | | | Graydon Bensler | | | 2025 | | | $ | 262,000 | | | $ | 435,800 | | | | - | | | $ | 697,800 | | | | Chief Executive Officer, Chief Financial Officer and Director | | | 2024 | | | $ | 196,333 | | | $ | 195,000 | | | $ | - | | | $ | 391,333 | | | 65 **Compensation Arrangements with Named Executive Officers** **** **Graydon Bensler** Mr. Bensler serves as Chief Executive Officer and Chief Financial Officer of the Company, which positions he accepted the Boards appointment for as of the close of business on June 21, 2024. On October25, 2024, the Company entered into the Second Amended and Restated Consulting Agreement for Non-Employee Chief Executive Officer (the Second Amended GB Capital Consulting Agreement) with GB Capital Ltd, a British Colombia, Canada corporation (GB Capital) wholly owned by Mr.Bensler. The Second Amended GB Capital Consulting Agreement amended and restated the terms of that certain Amended and Restated Consulting Agreement between the Company and GB Capital for Non-Employee Chief Executive Officer dated June1, 2020 (the Original GB Capital Consulting Agreement). The Original GB Capital Consulting Agreement was amended and restated again on June21, 2024 pursuant to that certain Amended and Restated Consulting Agreement for Non-Employee Chief Executive Officer between the Company and GB Capital. Under the Second Amended GB Capital Consulting Agreement, GB Capital agreed to designate Mr.Graydon Bensler, Director of GB Capital, to perform the Services (as defined in the Second Amended GB Capital Consulting Agreement). Pursuant to the terms of the Second Amended GB Capital Consulting Agreement, as consideration for Mr.Benslers services as non-employee Chief Executive Officer of the Company, the Company would pay GB Capital a consultant fee of $250,000 per annum and certain bonuses. Upon execution of the Second Amended GB Capital Consulting Agreement, the Company would make the following payments to GB Capital (such payments, the Bensler Sign-on Bonuses): (i)a one-time bonus of $175,000, with (A)$100,000 of such bonus to be paid to GB Capital in cash and (B)$75,000 of such bonus to be remitted to GB Capital in SeriesB Preferred Stock, with the cash equivalent of such shares of SeriesB Preferred Stock to be determined by mutual agreement of the Company and GB Capital, and provided such issuance of SeriesB Preferred Stock was approved by the Companys stockholders. In the Boards sole discretion, it may also award GB Capital a bonus at the end of the applicable fiscal year in the amounts it determines in its sole discretion (each of such bonuses, the GB Capital Annual Bonus), provided that GB Capital meets the Boards performance objectives for GB Capital and GB Capital is engaged by the Company for such fiscal year in full. The target of the Annual Bonus is 125% or greater of the Bensler Annual Consultant Fee. For the avoidance of doubt, the first fiscal year for which the Company will consider whether GB Capital qualifies for the GB Capital Annual Bonus is the fiscal year in which the Effective Date falls. Pursuant to the Second Amended GB Capital Consulting Agreement, the Company shall also pay GB Capital in the first fiscal quarter of 2026 a bonus in the amount of $60,000 if the Company has a positive adjusted Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) in 2025. Subject to the terms of the Second Amended GB Capital Consulting Agreement, GB Capital is also entitled to each of the following bonus payments (collectively, the GB Capital Milestone Bonuses). Such GB Capital Milestone Bonuses are payable upon the occurrence of the following events, at which time the Company shall remit the applicable Milestone Bonuses to GB Capital as follows: | | (i) | the Company shall pay GB Capital $50,000 for each Company acquisition consummated, provided the target company of such acquisition has $2,000,000 in annual revenue or more upon consummation of such acquisition; | | | | | | | | | (ii) | the Company shall pay GB Capital $50,000 upon any closing of an equity or equity-linked financing of the Company which results in net proceeds being raised in such financing of $3,000,000 in a fiscal quarter (the closing which qualifies GB Capital for such payment, the GB Triggering Equity Financing, and such payment, the GB Equity Financing Bonus). For the avoidance of doubt, GB Capital is entitled only to a one-time payment of the GB Equity Financing Bonus $50,000 per fiscal quarter and the Company will not make further payments as an Equity Financing Bonus in spite of the occurrence of any of the following events: (A)the closing of any equity or equity-linked financings subsequent to the GB Triggering Equity Financing in such fiscal quarter which result in proceeds of $3,000,000 to the Company; (B)any closings for the same equity financing round subsequent to the GB Triggering Equity Financing in such fiscal quarter which result in additional proceeds of $3,000,000 or more to the Company); | | | | (iii) | if and when the Company achieves each of the targeted EBITDA amounts in one fiscal quarter, as set forth in this Section1(e)(iii)(each of such amounts, EBITDA Milestone), the Company shall pay GB Capital a fee equal to 25% of the applicable EBITDA Milestone (such fee, the EBITDA Milestone Bonus: (A)$50,000; (B)$150,000; (C)$250,000; (D)$350,000. For the avoidance of doubt, GB Capital may only receive a one-time payment of the EBITDA Milestone Bonus in each fiscal quarter, upon the Companys achievement of the applicable EBITDA Milestone, and the Company will not make further payments to GB Capital as the EBITDA Milestone Bonus even upon achievement of an EBITDA Milestone in the same fiscal quarter which value exceeds the value of the first EBITDA Milestone GB Capital has achieved in such fiscal quarter; and | | | | | | | | | (iv) | the Company shall pay GB Capital $300,000 each time the Company achieves a Market Valuation (as defined in the Second Amended GB Capital Consulting Agreement) of $50,000,000 and $100,000,000, provided that each of such Market Valuations continues for each at least 5 consecutive TradingDays (as defined in the Second Amended GB Capital Consulting Agreement). | | 66 Additionally, GB Capital may elect to accrue the GB Capital Milestone Bonuses and convert the cash amount of the Bensler Milestone Bonus into shares of the Companys Common Stock or preferred stock. In such event, the conversion ratio of the Bensler Milestone Bonus shall be determined by mutual agreement between the Company and GB Capital. On October25, 2024, the Company entered into the Amendment to the Second Amended GB Capital Consulting Agreement which stipulated that the Companys issuances of SeriesB Preferred Stock to GB Capital as the Bensler Sign-on Bonuses, were subject to stockholder approval. On April 3, 2025, the Company entered into Amendment No. 2 to the Second Amended GB Capital Consulting Agreement, which amended and restated paragraph 1e of Exhibit B of the Second Amended GB Capital Consulting Agreement, to include the following: e. *Milestone*-*based Cash Bonuses*. Upon the occurrence of the following events, the Company shall remit the applicable cash bonuses to the Consultant as set forth in this Section 1(e) and subject to the terms and conditions of this Section 1(e): (i) The Company shall pay the Consultant $50,000 for each Company acquisition consummated, provided the target company of such acquisition has $2,000,000 in annual revenue or more upon consummation of such acquisition; (ii) The Company shall pay the Consultant $50,000 upon any closing of an equity or equity-linked financing of the Company which results in net proceeds being raised in such financing of $3,000,000 in a fiscal quarter (the closing which qualifies the Consultant for such payment, the Triggering Equity Financing, and such payment, the Equity Financing Bonus). For the avoidance of doubt, the Consultant is entitled only to a one-time payment of the Equity Financing Bonus $50,000 per fiscal quarter and the Company will not make further payments as an Equity Financing Bonus in spite of the occurrence of any of the following events: (A) the closing of any equity or equity-linked financings subsequent to the Triggering Equity Financing in such fiscal quarter which result in proceeds of $3,000,000 to the Company; (B) any closings for the same equity financing round subsequent to the Triggering Equity Financing in such fiscal quarter which result in additional proceeds of $3,000,000 or more to the Company. (iii) If and when the Company achieves each of the targeted EBITDA amounts in one fiscal quarter, as set forth in this Section 1(e)(iii) (each of such amounts, EBITDA Milestone), the Company shall pay the Consultant a fee equal to 25% of the applicable EBITDA Milestone (such fee, the EBITDA Milestone Bonus: (A) $50,000; (B) $150,000; (C) $250,000; (D) $350,000. For the avoidance of doubt, the Consultant may only receive a one-time payment of the EBITDA Milestone Bonus in each fiscal quarter, upon the Companys achievement of the applicable EBITDA Milestone, and the Company will not make further payments to the Consultant as the EBITDA Milestone Bonus even upon achievement of an EBITDA Milestone in the same fiscal quarter which value exceeds the value of the first EBITDA Milestone the Consultant has achieved in such fiscal quarter. (iv) Company shall pay the Consultant $50,000 each time the Company achieves a Market Valuation (as defined below) of $5,000,000, $10,000,000, $15,000,000, $20,000,000, and $25,000,000 (each of such payments, Valuation Payment); *provided that* each of such Market Valuations continue for each at least five (5) consecutive Trading Days (as defined below), and *provided further*that the Company may only recover any erroneously awarded amounts in Valuation Payments for one (1) year following the date of such erroneous award. (v) The Company shall pay the Consultant $600,000 each time the Company achieves a Market Valuation of $50,000,000 and $100,000,000, *provided that* each of such Market Valuations continues for each at least 5 consecutive Trading Days. 67 (vi) In any calendar year, the Company shall remit the Consultant a one-time payment of $300,000 upon the Companys achievement of its first positive EBITDA of $2,000,000 for such calendar year. (vii) The Board, in its sole discretion, may award a cash or equity bonus payment (Licensing Milestone Bonus) to the Consultant upon the Company or any of its Subsidiaries (as defined below) entry into a license agreement which provides for either: (A) the Company or Subsidiarys license of any intellectual property rights of the Company or Subsidiary to another party, including the license of intellectual property rights of the Company or Subsidiary to each other; or (B) a third partys license of intellectual property rights to the Company or Subsidiary; *provided, however*, that if the Board determines to award the Licensing Milestone Bonus to the Consultant in the form of preferred stock, such preferred stock issuance is subject to the approval of the Companys shareholders. (viii) Notwithstanding anything to the contrary in this Second A&R Agreement, the Consultant may elect to accrue the payments due to the Consultant under Section 1(e) of this Exhibit B (each, a Milestone Bonus) convert the cash amount of the Milestone Bonus into shares of the Companys common stock or preferred stock. In such event, the conversion ratio of the Milestone Bonus shall be determined by mutual agreement between the Company and the Consultant, *provided, however*, that if the Consultant determines to receive the Milestone Bonus payment in the form of preferred stock, the Milestone Bonus payment is subject to the approval of the Companys shareholders. Capitalized terms used in the text quoted immediately above have the meanings set forth in Amendment No. 2 to the Second Amended GB Capital Consulting Agreement. Amendment No. 2 to the Second Amended GB Capital Consulting Agreement further clarified that the equity grants made to GB Capital under Section 2 of Exhibit B of the GB Consulting Agreement, if determined by the Board to be in the form of preferred stock, is subject to the approval of the Companys shareholders. Amendment No. 2 to the Second Amended GB Capital Consulting Agreement also deleted Section 4a of the GB Consulting Agreement in its entirety. The foregoing summary of Amendment No. 2 to the Second Amended GB Capital Consulting Agreement does not purport to be complete and is subject to and is qualified in its entirety by a copy of Amendment No. 2 to the Second Amended GB Capital Consulting filed herein as Exhibit 10.9. On August 12, 2025, the Company entered into Amendment No. 3 to the Second Amended GB Capital Consulting Agreement, which provided for the Companys grant of a fully vested award in the form of either: (i) restricted stock units (RSUs), (ii) restricted stock, or (iii) cash (each, an Acquisition Award) to GB Capital on the consummation of any acquisition of (i) an entity, (ii) assets, or (iii) capital stock by the Company or any Subsidiary (as defined below). The amount of the Acquisition Award will be calculated based on the total purchase price of the consummated acquisition, regardless of whether or not such purchase price is paid in cash, stock, assumed debt, or other consideration (such purchase price, the Acquisition Value), and will be determined as follows: | | | Acquisition Value from $0 to $5,000,000 GB Capital is entitled to an Acquisition Award of 5% of the Acquisition Value; | | | | | Acquisition Value over $5,000,000 to $10,000,000 GB Capital is entitled to an Acquisition Award of 6% of the Acquisition Value; | | | | | Acquisition Value over $10,000,000 to $20,000,000 GB Capital is entitled to an Acquisition Award of 7% of the Acquisition Value; and | | | | | Acquisition Value over $20,000,000 GB Capital is entitled to an Acquisition Award of 8% of the Acquisition Value. | | In addition to the determinations of Acquisition Value set forth above, the Compensation Committee may, in its sole discretion, determine to award GB Capital an additional 1% of the applicable percentage of the Acquisition Value if: (i) the Board and/or Compensation Committee projects the applicable acquisition to be earnings before interest, tax, depreciation, and amortization (EBITDA) or net income accretive within twelve (12) months of closing or (b) the Compensation Committee deems the applicable acquisition as an advancement to the Companys long-term growth objectives, competitive positioning, and/or operational capabilities. 68 If GB Capital elects to receive its Acquisition Award in the form of RSUs or restricted stock, the number of RSUs (RSU Award Amount) or restricted stock granted shall equal (x) the dollar value of the Acquisition Award divided by (y) the trailing five (5) day volume-weighted average price (VWAP) of the Companys Common Stock ending on the trading day prior to the acquisition closing date (such RSU Award Amount rounded down to the nearest whole share). The RSUs or restricted stock granted to GB Capital will be fully vested and shall not be subject to any further service or performance conditions. Acquisition Awards may, at the Boards discretion and in compliance with applicable law, be issued directly to GB Capital or any other designated entity of GB Capital. All such Acquisition Awards shall be subject to applicable securities laws and the terms of the Companys then-effective equity incentive plan or other applicable grant policy. Person means an individual, a partnership, a limited liability company, a corporation, an association, a joint stock company, a trust, a joint venture, an unincorporated organization, any other entity, or a governmental entity. Subsidiary means, with respect to any Person, any corporation, limited liability company, partnership, joint venture or other legal entity of which such Person (either above or through or together with any other Subsidiary) owns, directly or indirectly, more than 50% of the stock or other equity interests the holders of which are generally entitled to vote for the election of the board of directors or other governing body of such entity. Amendment No. 3 to the Second Amended GB Capital Consulting Agreement also provided for the name change of the Second Amended GB Capital Consulting Agreement, going forward, to Consulting and Services Agreement for Non-Employee Chief Executive Officer. Amendment No. 3 to the Second Amended GB Capital Consulting Agreement is filed as Exhibit 10.17 herein. **** On October 16, 2025, the Company entered into Amendment No. 4 to the Consulting and Services Agreement for Non-Employee Chief Executive Officer (Amendment No. 4 to the GB Capital Consulting Agreement) with GB Capital. Amendment No. 4 to the Consulting and Services Agreement for Non-Employee Chief Executive Officer between the Company and GB Capital (the GB Capital Consulting Agreement) modified the terms of the GB Capital Consulting Agreement as follows: | a. | Add terms to Section 3 to provide for a monthly housing reimbursement of $8,000 to GB Capital solely for the purpose of facilitating its performance of services in Newport Beach, California. | | | b. | Amend and restate Section 5s provisions regarding GB Capitals independent contractor relationship with the Company; | | | c. | Amend and restate Section 6s provisions regarding GB Capitals determination of the method, detail, and means of performing its services, subject to the results required by the Company set forth in the GB Capital Consulting Agreement and applicable Statements of Work, if any; | | | d. | Amend and restate subsection 6(b)s provisions regarding GB Capitals ineligibility for the Companys employee benefits; | | | e. | Amend and restate subsection 6(c)s provisions regarding GB Capitals tax responsibilities for compensation paid under the GB Capital Consulting Agreement; | | 69 | f. | Add subsection 6(d) to provide for GB Capitals express authorization to enter into contracts and make commitments on behalf of the Company, subject to any limitations or approval requirements established by the Board or as otherwise provided in writing by the Company; | | | g. | Add subsection 6(e) to provide for GB Capitals non-exclusive engagement as consultant under the GB Capital Consulting Agreement and permit GB Capitals to provide services to other clients and other clients and to engage in other business activities; and | | | h. | Add subsection 6(f) to state that the GB Capital Consulting Agreement does not create an employment, agency, partnership, fiduciary, or joint venture relationship between the Parties. | | Additionally, Amendment No. 4 to the GB Capital Consulting Agreement replaces all references to severance payment, Severance Payment, and Severance Event) in the GB Capital Consulting Agreement with termination payment, Termination Payment, and Termination Event, respectively, on a nomenclature basis without changing the parties substantive rights or obligations. Except as expressly amended in Amendment No. 4 to the GB Capital Consulting Agreement, the GB Capital Consulting Agreement remains in full force and effect. The foregoing summary does not purport to be complete and is qualified in its entirety by reference to the full text of Amendment No. 4 to the GB Capital Consulting Agreement, a copy of which is filed as Exhibit 10.28 herein. **Director Compensation** The Company pays each of its independent directors $55,500 in compensation for their services to the Company as independent directors. The Companys current independent directors are paid this annual compensation on a quarterly basis, or $13,875 at each fiscal quarters end. We previously compensated our independent directors for their services as directors through a mix of cash and stock options. In addition to in-person attendance bonuses, we intend to reimburse our non-employee directors for reasonable travel and out-of-pocket expenses incurred in connection with attending Board and Board committee meetings. **Equity Incentive Awards** The Company has historically granted stock options to its employees, including its executive officers, under the Amended 2020 Equity Incentive Plan (2020 Plan). On September 15, 2025 (the 2025 Plan Effective Date), the 2025 Plan became effective. As of the 2025 Plan Effective Date, the 2025 Plan superseded the 2020 Plan, and any shares of Common Stock underlying awards already made under the 2020 Plan will be issued from the 2025 Plan. On the Plan Effective Date, (i) outstanding awards made under the 2020 Plan will remain outstanding, and such awards will remain subject to the original award terms; and (ii) shares subject to any outstanding awards made under the 2020 Plan will be administered from the share reserve of the 2025 Plan. The 2025 Plan is filed herein as Exhibit 10.1. The purpose of the 2025 Plan is to attract and retain the best available personnel for positions of substantial responsibility, to provide additional incentive to employees, directors and consultants, and to promote the success of our business. The administrator of the 2025 Plan (the Administrator) may, in its sole discretion, amend, alter, suspend or terminate the 2025 Plan, or any part thereof, at any time and for any reason. We will obtain stockholder approval of any 2025 Plan amendment to the extent necessary and desirable to comply with legal and regulatory requirements relating to the administration of equity-based awards. Unless earlier terminated by the Administrator, the 2025 Plan will terminate ten years after the 2025 Plan Effective Date. Any capitalized terms used in this 2025 Equity Incentive Plan subsection and not otherwise defined herein have the meaning given to that term in the 2025 Plan. 70 *Authorized Shares* Initially, the maximum number of shares of our Common Stock that may be subject to awards under the 2025 Plan is 169,281, or 25% of the issued and outstanding shares of Common Stock as of the 2025 Plan Effective Date. Subject to adjustment upon dividends or other distributions, recapitalizations, stock splits, reorganizations, merger, consolidations, split-ups, spin-offs, combinations, changes in control, repurchases or exchange of Shares or other securities of the Company as provided in Section 12 of the 2025 Plan, the number of shares of Common Stock reserved and available for issuance under the 2025 Plan will be (i) no less than twenty five percent (25%) of the shares of Common Stock issued and outstanding as of the 2025 Plan Effective Date; (ii) on January 1 of each calendar year after the 2025 Plan Effective Date, will automatically increase by an amount equal to the lesser of: (A) ten percent (10%) of the shares of Common Stock issued and outstanding as of January 1 of the applicable calendar year; and (B) such lesser amount as determined by the Administrator, in its sole discretion. Additionally, if an Award expires or becomes unexercisable without having been exercised in full, is surrendered pursuant to an exchange program, or, with respect to restricted stock, is forfeited to or repurchased by the Company due to the failure to vest, the unpurchased shares of Common Stock (or for Awards other than Options the forfeited or repurchased Shares) which were subject thereto will become available for future grant or sale under the 2025 Plan (unless the 2025 Plan has terminated). Shares of Common Stock that have actually been issued under the 2025 Plan under any Award will not be returned to the 2025 Plan and will not become available for future distribution under the 2025 Plan; provided, however, that if shares of Common Stock issued pursuant to Awards of Restricted Stock are repurchased by the Company or are forfeited to the Company due to the failure to vest or upon certain events, such shares of Common Stock will become available for future grant under the 2025 Plan. Shares of Common Stock used to pay the exercise price of an Award or to satisfy the tax withholding obligations related to an Award will become available for future grant or sale under the 2025 Plan. To the extent an Award under the 2025 Plan is paid out in cash rather than shares of Common Stock, such cash payment will not result in reducing the number of shares of Common Stock available for issuance under the 2025 Plan. Notwithstanding the foregoing and, subject to adjustment as provided in Section 12, the maximum number of shares of Common Stock that may be issued upon the exercise of Incentive Stock Options will equal the aggregate number of shares reserved and issuable under the 2025 Plan, plus, to the extent allowable under Section 422 of the Internal Revenue Code of 1986, as amended (the Code), and the Treasury Regulations promulgated under the Code, any shares of Common Stock that become available for issuance under the 2025 Plan pursuant to Section 3(b) of the 2025 Plan (shares of Common Stock which were subject to Awards which have: expired or becomes unexercisable without having been exercised in full, surrendered pursuant to an exchange program, or with respect to restricted stock, is forfeited to or repurchased by the Company due to the failure to vest, the unpurchased shares of Common Stock (or for Awards other than Options the forfeited or repurchased Shares). ** Plan Administration The 2025 Plan will be administered by (i) the Compensation Committee or (ii) the Board, if the Compensation Committee does not exist, and in any event, the administrator of the 2025 Plan shall administer the 2025 Plan in compliance with Applicable Laws. Subject to the provisions of the 2025 Plan, and in the case of the Compensation Committee, subject to the specific duties delegated by the Board to the Compensation Committee, the Administrator will have the authority, in its discretion: (A) to determine the Fair Market Value; (B) to select the Service Providers to whom Awards may be granted under the 2025 Plan; (C) to determine the number of Shares to be covered by each Award granted under the 2025 Plan; (D) to approve forms of Award Agreements for use under the 2025 Plan; (E) to determine the terms and conditions, not inconsistent with the terms of the 2025 Plan, of any Award granted under the 2025 Plan, of which terms and conditions include, but are not limited to, the exercise price, the time or times when Awards may be exercised (which may be based on performance criteria), any vesting acceleration or waiver of forfeiture restrictions, and any restriction or limitation regarding any Award or the Shares of Common Stock relating thereto, based in each case on such factors as the Administrator will determine; (F) to institute and determine the terms and conditions of an Exchange Program; (G) to construe and interpret the terms of the 2025 Plan and Awards granted pursuant to the 2025 Plan; (H) to prescribe, amend and rescind rules and regulations relating to the 2025 Plan, including rules and regulations relating to sub-plans established for the purpose of satisfying applicable foreign laws or for qualifying for favorable tax treatment under applicable foreign laws; (I) to modify or amend each Award (subject to the amendment and termination provisions of the 2025 Plan), including but not limited to, the discretionary authority to extend the post-termination exercisability period of Awards and to extend the maximum term of an Option (subject to the Option term provisions set forth in the 2025 Plan; (J) to allow Participants to satisfy withholding tax obligations in a manner prescribed in Section 13 of the 2025 Plan; (K) to authorize any person to execute on behalf of the Company any instrument required to effect the grant of an Award previously granted by the Administrator; (L) to allow a Participant to defer the receipt of the payment of cash or the delivery of shares of Common Stock that otherwise would be due to such Participant under an Award; and (M) to make all other determinations deemed necessary or advisable for administering the 2025 Plan. The Administrators decisions, determinations and interpretations will be final and binding on all Participants and any other holders of Awards. 71 Fair Market Value means as of any date, the value of Common Stock determined as follows: | | (i) | if the Common Stock is listed on any established stock exchange or a national market system, including without limitation The Nasdaq Global Select Market, The Nasdaq Global Market or The Nasdaq Capital Market of The Nasdaq Stock Market LLC, its Fair Market Value will be the closing sales price for such stock (or the closing bid, if no sales were reported) as quoted on such exchange or system on the day of determination, as reported in The Wall Street Journal or such other source as the Administrator deems reliable; | | | | (ii) | if the Common Stock is regularly quoted by a recognized securities dealer but selling prices are not reported, the Fair Market Value of a Share will be the mean between the high bid and low asked prices for the Common Stock on the day of determination (or, if no bids and asks were reported on that date, as applicable, on the last trading date such bids and asks were reported), as reported in The Wall Street Journal or such other source as the Administrator deems reliable; and | | | | (iii) | in the absence of an established market for the Common Stock, the Fair Market Value will be determined in good faith by the Administrator using one of the valuation methods set forth in Section 1.409A-1(b)(5)(iv)(B)(2) of the Treasury Regulation. Such determination shall be conclusive and binding on all persons. | | ** *Eligibility* Under the 2025 Plan, Non-statutory Stock Options, Restricted Stock, Restricted Stock Units and other equity awards granted may be granted to Service Providers. Additionally, Incentive Stock Options may be granted only to Employees. ** *Stock Options* Subject to the terms and provisions of the 2025 Plan, the Administrator, at any time and from time to time, may grant Options in such amounts as the Administrator, in its sole discretion, will determine. Each Award of an Option will be evidenced by an Award Agreement that will specify the exercise price, the term of the Option, the number of shares of Common Stock subject to the Option, the exercise restrictions, if any, applicable to the Option, and such other terms and conditions as the Administrator, in its sole discretion, will determine. Each Option will be designated in the Award Agreement as either an Incentive Stock Option or a Non-statutory Stock Option. Notwithstanding such designation, however, to the extent that the aggregate Fair Market Value of the shares of Common Stock with respect to which Incentive Stock Options are exercisable for the first time by the Participant during any calendar year (under all plans of the Company and any Parent or Subsidiary) exceeds one hundred thousand dollars ($100,000), such Options will be treated as Non-statutory Stock Options. The term of each Option will be stated in the Award Agreement; provided, however, that the term will be no more than five (5) years from the date of grant thereof. In the case of an Incentive Stock Option granted to a Participant who, at the time the Incentive Stock Option is granted, owns stock representing more than ten percent (10%) of the total combined voting power of all classes of stock of the Company or any Parent or Subsidiary, the term of the Incentive Stock Option will be five (5) years from the date of grant or such shorter term as may be provided in the Award Agreement. The terms of outstanding Awards may be amended without shareholder approval to reduce the exercise price of outstanding Options, or to cancel outstanding Options in exchange for cash, other Awards, or Options with an exercise price that is less than the exercise price of the original Option, to the extent permitted by Applicable Law or the listing rules of Nasdaq. 72 The per share exercise price for the shares of Common Stock to be issued pursuant to the exercise of an Option will be determined by the Administrator, but will be no less than one hundred percent (100%) of the Fair Market Value per Share on the date of grant. As to an Incentive Stock Option granted to an Employee who owns stock representing more than ten percent (10%) of the voting power of all classes of stock of the Company or any Parent or Subsidiary, the per share exercise price will be no less than one hundred ten percent (110%) of the Fair Market Value per Share on the date of grant. Options may be granted with a per share exercise price of less than one hundred percent (100%) of the Fair Market Value per Share on the date of grant pursuant to a transaction described in, and in a manner consistent with, Code Section 424(a). At the time an Option is granted, the Administrator will fix the period within which the Option may be exercised and will determine any conditions that must be satisfied before the Option may be exercised. The Administrator will determine the acceptable form of consideration for exercising an Option, including the method of payment. In the case of an Incentive Stock Option, the Administrator will determine the acceptable form of consideration at the time of grant. Such consideration may consist entirely of: (i) cash; (ii) check; (iii) promissory note, to the extent permitted by Applicable Laws; (iv) other Shares, provided that such Shares have a Fair Market Value on the date of surrender equal to the aggregate exercise price of the Shares as to which such Option will be exercised and provided further that accepting such Shares will not result in any adverse accounting consequences to the Company, as the Administrator determines in its sole discretion; (v) consideration received by the Company under cashless exercise program (whether through a broker or otherwise) implemented by the Company in connection with the 2025 Plan; (vi) by net exercise; (vii) such other consideration and method of payment for the issuance of Shares to the extent permitted by Applicable Law; or (viii) any combination of the foregoing methods of payment. In making its determination as to the type of consideration to accept, the Administrator will consider if acceptance of such consideration may be reasonably expected to benefit the Company. Any Option granted under the 2025 Plan will be exercisable according to the terms of the 2025 Plan and at such times and under such conditions as determined by the Administrator and set forth in the Award Agreement. An Option may not be exercised for a fraction of a share of Common Stock. *Restricted Stock* **** Subject to the terms and provisions of the 2025 Plan, the Administrator, at any time and from time to time, may grant Shares of Restricted Stock to Service Providers in such amounts as the Administrator, in its sole discretion, will determine. Each Award of Restricted Stock will be evidenced by an Award Agreement that will specify the Period of Restriction, the number of Shares granted, and such other terms and conditions as the Administrator, in its sole discretion, will determine. Unless the Administrator determines otherwise, the Company as escrow agent will hold Shares of Restricted Stock until the restrictions on such Shares have lapsed. Except as provided in the 2025 Plan or as the Administrator determines, shares of Restricted Stock may not be transferred until the end of the applicable Period of Restriction (as defined below). The Administrator, in its sole discretion, may impose such other restrictions on Shares of Restricted Stock as it may deem advisable or appropriate. Except as otherwise provided in the 2025 Plan, Shares of Restricted Stock covered by each Restricted Stock grant made under the 2025 Plan will be released from escrow as soon as practicable after the last day of the Period of Restriction or at such other time as the Administrator may determine. The Administrator, in its discretion, may accelerate the time at which any restrictions will lapse or be removed. During the Period of Restriction, Service Providers holding Shares of Restricted Stock granted under the 2025 Plan may exercise full voting rights with respect to those Shares, unless the Administrator determines otherwise. Period of Restriction means the period during which the transfer of shares of Restricted Stock are subject to restrictions and therefore, the shares of Common Stock are subject to a substantial risk of forfeiture. Such restrictions may be based on the passage of time, the achievement of target levels of performance, or the occurrence of other events as determined by the Administrator. During the Period of Restriction, Service Providers holding shares of Restricted Stock will be entitled to receive all dividends and other distributions paid with respect to such shares, unless the Administrator provides otherwise. If any such dividends or distributions are paid in shares of Common Stock, the shares of Common Stock will be subject to the same restrictions on transferability and forfeitability as the shares of Restricted Stock with respect to which they were paid. On the date set forth in the Award Agreement, the Restricted Stock for which restrictions have not lapsed will revert to the Company and again will become available for grant under the 2025 Plan. ** 73 ** *Restricted Stock Units* Subject to the terms and provisions of the 2025 Plan, the Administrator, at any time and from time to time, may grant Restricted Stock Units to Service Providers in such amounts as the Administrator, in its sole discretion, will determine. Each Award of Restricted Stock Units will be evidenced by an Award Agreement that will specify the terms, conditions, and restrictions (if any) related to the grant, including the number of Restricted Stock Units. The Administrator will set vesting criteria in its discretion, which, depending on the extent to which the criteria are met, will determine the number of Restricted Stock Units that will be paid out to the Participant. A Restricted Stock Unit Award may vest upon completion of a specified period of service with the Company or a Subsidiary and/or based on the achievement of certain performance goals during the applicable performance period, as set forth in the Participants Award Agreement. If Restricted Stock Units vest based upon satisfaction of performance goals, then the Administrator will: (x)determine the nature, length and starting date of any performance period for the Restricted Stock Units; (y)select the performance goals to be used to measure the performance; and (z)determine what additional vesting conditions, if any, should apply. Upon meeting the applicable vesting criteria, the Participant will be entitled to receive a payout as determined by the Administrator. Notwithstanding the foregoing, at any time after the grant of Restricted Stock Units, the Administrator, in its sole discretion, may reduce or waive any vesting criteria that must be met to receive a payout. The Administrator may, in its sole discretion, award dividend equivalents in connection with the grant of Restricted Stock Units that may be settled in cash, in Shares of equivalent value, or in some combination thereof. Payment of earned Restricted Stock Units will be made upon the date(s) determined by the Administrator and set forth in the Award Agreement. The Administrator, in its sole discretion, may only settle earned Restricted Stock Units in cash, Shares, or a combination of both. On the date set forth in the Award Agreement, all Shares underlying any unvested, unlapsed, unearned Restricted Stock Units will be forfeited to the Company for future issuance. ** *Other Awards* Other forms of Awards valued in whole or in part by reference to, or otherwise based on, Common Stock, including the appreciation in value thereof may be granted either alone or in addition to the specified Awards provided for in the 2025 Plan. Subject to the provisions of the 2025 Plan, the Board will have sole and complete discretion to determine the persons to whom and the time or times at which such Other Awards will be granted, the number of shares of Common Stock (or the cash equivalent thereof) to be granted pursuant to such other Awards and all other terms and conditions of such other Awards. **** **Non-transferability of Awards** **** Unless determined otherwise by the Administrator, Awards may not be sold, pledged, assigned, hypothecated, or otherwise transferred in any manner other than by will or by the laws of descent and distribution, and may be exercised, during the lifetime of the Participant, only by the Participant. If the Administrator makes an Award transferable, such Award may only be transferred (i) by will, (ii) by the laws of descent and distribution, or (iii) as permitted by Rule 701 of the Securities Act of 1933, as amended (the Securities Act). **Certain Adjustments** **** In the event that any dividend or other distribution (whether in the form of cash, shares of Common Stock, other securities, or other property), recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase, or exchange of shares of Common Stock or other securities of the Company, or other change in the corporate structure of the Company affecting the shares of Common Stock occurs, the Administrator, in order to prevent diminution or enlargement of the benefits or potential benefits intended to be made available under the 2025 Plan, the Company will adjust the number and class of shares of Common Stock that is reserved and issuable under the 2025 Plan and/or the number, class, and price of shares of Common Stock covered by each outstanding Award. **** 74 **** **Dissolution or Liquidation** In the event of the proposed dissolution or liquidation of the Company, the Administrator will notify each Participant as soon as practicable prior to the effective date of such proposed transaction. To the extent it has not been previously exercised, an Award will terminate immediately prior to the consummation of such proposed action. **Merger or Change in Control** **** In the event of a merger or Change in Control (as defined below), each outstanding Award will be treated as the Administrator determines (subject to the provisions of the following paragraph) without a Participants consent including, without limitation, that: (i) Awards will be assumed, or substantially equivalent Awards will be substituted, by the acquiring or succeeding corporation (or an affiliate thereof) with appropriate adjustments as to the number and kind of shares and prices; (ii) upon written notice to a Participant, that the Participants Awards will terminate upon or immediately prior to the consummation of such merger or Change in Control; (iii) outstanding Awards will vest and become exercisable, realizable, or payable, or restrictions applicable to an Award will lapse, in whole or in part prior to or upon consummation of such merger or Change in Control, and, to the extent the Administrator determines, terminate upon or immediately prior to the effectiveness of such merger or Change in Control; (iv) (A) the termination of an Award in exchange for an amount of cash and/or property, if any, equal to the amount that would have been attained upon the exercise of such Award or realization of the Participants rights as of the date of the occurrence of the transaction (and, for the avoidance of doubt, if as of the date of the occurrence of the transaction the Administrator determines in good faith that no amount would have been attained upon the exercise of such Award or realization of the Participants rights, then such Award may be terminated by the Company without payment), or (B) the replacement of such Award with other rights or property selected by the Administrator in its sole discretion; or (v) any combination of the foregoing. In taking any of the actions permitted under this Section 12(c), the Administrator will not be obligated to treat all Awards, all Awards held by a Participant, or all Awards of the same type, similarly. In the event that the successor corporation does not assume or substitute for the Award (or portion thereof), the Participant will fully vest in and have the right to exercise all of his or her outstanding Options, including Shares as to which such Awards would not otherwise be vested or exercisable, all restrictions on Restricted Stock will lapse, and, with respect to Awards with performance-based vesting, all performance goals or other vesting criteria will be deemed achieved at one hundred percent (100%) of target levels and all other terms and conditions met. In addition, if an Option is not assumed or substituted in the event of a merger or Change in Control, the Administrator will notify the Participant in writing or electronically that the Option will be exercisable for a period of time determined by the Administrator in its sole discretion, and the Option will terminate upon the expiration of such period. An Award will be considered assumed if, following the merger or Change in Control, the Award confers the right to purchase or receive, for each Share subject to the Award immediately prior to the merger or Change in Control, the consideration (whether stock, cash, or other securities or property) received in the merger or Change in Control by holders of Common Stock for each Share held on the effective date of the transaction (and if holders were offered a choice of consideration, the type of consideration chosen by the holders of a majority of the outstanding Shares); provided, however, that if such consideration received in the merger or Change in Control is not solely common stock of the successor corporation or its Parent, the Administrator may, with the consent of the successor corporation, provide for the consideration to be received upon the exercise of an Option, for each Share subject to such Award, to be solely common stock of the successor corporation or its Parent equal in fair market value to the per share consideration received by holders of Common Stock in the merger or Change in Control. Notwithstanding anything in Section 12(c) of the 2025 Plan to the contrary, an Award that vests, is earned or paid-out upon the satisfaction of one or more performance goals will not be considered assumed if the Company or its successor modifies any of such performance goals without the Participants consent; provided, however, a modification to such performance goals only to reflect the successor corporations post-Change in Control corporate structure will not be deemed to invalidate an otherwise valid Award assumption. 75 Notwithstanding anything in Section 12(c) of the 2025 Plan to the contrary, if a payment under an Award Agreement is subject to Code Section 409A and if the change in control definition contained in the Award Agreement does not comply with the definition of change of control for purposes of a distribution under Code Section 409A, then any payment of an amount that is otherwise accelerated under this Section 12 will be delayed until the earliest time that such payment would be permissible under Code Section 409A without triggering any penalties applicable under Code Section 409A. Change in Control means any of the following events: | | (i) | A change in the ownership of the Company which occurs on the date that any one person, or more than one person acting as a group (Person), acquires ownership of the stock of the Company that, together with the stock held by such Person, constitutes more than 50% of the total voting power of the stock of the Company, except that any change in the ownership of the stock of the Company as a result of a private financing of the Company that is approved by the Board will not be considered a Change in Control; | | | | (ii) | If the Company has a class of securities registered pursuant to Section 12 of the Exchange Act, a change in the effective control of the Company which occurs on the date that a majority of members of the Board is replaced during any twelve (12) month period by Directors whose appointment or election is not endorsed by a majority of the members of the Board prior to the date of the appointment or election. For purposes of this clause (ii), if any Person is considered to be in effective control of the Company, the acquisition of additional control of the Company by the same Person will not be considered a Change in Control; or | | | | (iii) | A change in the ownership of a substantial portion of the Companys assets which occurs on the date that any Person acquires (or has acquired during the twelve (12) month period ending on the date of the most recent acquisition by such person or persons) assets from the Company that have a total gross fair market value equal to or more than 50% of the total gross fair market value of all of the assets of the Company immediately prior to such acquisition or acquisitions. For purposes of this subsection (iii), gross fair market value means the value of the assets of the Company, or the value of the assets being disposed of, determined without regard to any liabilities associated with such assets. | | For purposes of the definition of Change in Control, persons will be considered to be acting as a group if they are owners of a corporation that enters into a merger, consolidation, purchase or acquisition of stock, or similar business transaction with the Company. Notwithstanding the foregoing, a transaction will not be deemed a Change in Control unless the transaction qualifies as a change in control event within the meaning of Code Section 409A, as it has been and may be amended from time to time, and any proposed or final Treasury Regulations and Internal Revenue Service guidance that has been promulgated or may be promulgated thereunder from time to time. Further, and for the avoidance of doubt, a transaction will not constitute a Change in Control if: (i) its sole purpose is to change the jurisdiction of the Companys incorporation; or (ii) its sole purpose is to create a holding company that will be owned in substantially the same proportions by the persons who held the Companys securities immediately before such transaction. **Treatment of Awards on Termination of Relationship as a Service Provider** Unless otherwise provided by the Administrator, if a Participant ceases to be a Service Provider, other than upon the Participants termination as the result of the Participants death or Disability, any unvested portion of any applicable Awards will be forfeited and shares of Common Stock covered by any vested portion of the applicable Awards that have not been issued to the Participant or its designees, as applicable, pursuant to the exercise or settlement thereof during the period beginning on the date of cessation of the Participant as a Service Provider until three (3) months thereafter, will revert to the 2025 Plan. Notwithstanding the immediately preceding sentence, if the Service Provider is terminated for Cause, any Award issued to such terminated Service Provider will be forfeited, regardless of any vested or unvested portion of such Award, and in the case of such forfeiture, the Shares covered by the Award will revert to the 2025 Plan. Unless otherwise provided by the Administrator, if a Participant ceases to be a Service Provider as a result of the Participants Disability, (i) the vested portion of the Option shall remain exercisable for the amount set forth in the Award Agreement (but in no event later than the expiration of the term of the Option as set forth in the Award Agreement), and if no time is specified in the Award Agreement, the vested portion of the Option shall remain exercisable for twelve (12) months following the Participants termination, and (ii) the unvested portion shall remain exercisable for three (3) months following the Participants termination due to Disability, and after such three (3) months the Shares underlying the unvested portion of the Option will be forfeited and revert to the 2025 Plan. If after termination the Participant does not exercise his or her Option within the time specified herein, the Option will terminate, and the Shares covered by such Option will revert to the 2025 Plan. 76 Unless otherwise provided by the Administrator, if a Participant dies while a Service Provider, the Option may be exercised within such period of time as is specified in the Award Agreement (but in no event later than the expiration of the term of such Option as set forth in the Award Agreement) to the extent that the Option is vested on the date of death, by the Participants designated beneficiary, provided such beneficiary has been designated prior to the Participants death in a form acceptable to the Administrator. If no such beneficiary has been designated by the Participant, then such Option may be exercised by the personal representative of the Participants estate or by the person(s) to whom the Option is transferred pursuant to the Participants will or in accordance with the laws of descent and distribution. In the absence of a specified time in the Award Agreement, the Option shall remain exercisable for twelve (12) months following the Participants termination. Unless otherwise provided by the Administrator, if at the time of death Participant is not vested as to his or her entire Option, the Shares covered by the unvested portion of the Option will immediately revert to the 2025 Plan. If the Option is not so exercised within the time specified herein, the Option will terminate, and the Shares covered by such Option will revert to the 2025 Plan. **** **Clawback** **** Awards will be subject to any Company clawback policy that the Company is required to adopt pursuant to the listing standards of any national securities exchange or association on which the Companys securities are listed or as is otherwise required by the Dodd-Frank Wall Street Reform and Consumer Protection Act or other applicable laws. The administrator also may specify in an award agreement that the participants rights, payments or benefits with respect to an award will be subject to reduction, cancellation, forfeiture or recoupment upon the occurrence of certain specified events. The Administrator may require a participant to forfeit, return or reimburse the Company all or a portion of the Award or shares issued under the Award, any amounts paid under the Award and any payments or proceeds paid or provided upon disposition of the shares issued under the Award in order to comply with such clawback policy or Applicable Laws. **U.S. Federal Income Tax Consequences** **** The 2025 Plan is, in part, is a qualified plan for federal income tax purposes. As such, the Company is entitled to (i) withhold and deduct from future wages of the Participant, or make other arrangements for the collection of, all legally required amounts necessary to satisfy any and all federal, state and local withholding and employment-related tax requirements attributable to a qualified stock option, including, without limitation, the grant, exercise or vesting of, or payment of dividends with respect to, a qualified stock option or a disqualifying disposition of stock received upon exercise of a qualified stock option, or (ii) require the Participant promptly to remit the amount of such withholding to the Company before taking any action, including issuing any shares of Common Stock, with respect to a qualified stock option. **Amendment and Termination** The Board may at any time amend, alter, suspend or terminate the 2025 Plan. The Company shall obtain stockholder approval of any Plan amendment to the extent necessary and desirable to comply with Applicable Laws. Additionally, the Company shall obtain stockholder approval for each of the following: (i) increases to the shares of Common Stock reserved and issuable under the 2025 Plan other than as set forth in Section 3(c)(ii) to 3(c)(iii) of the 2025 Plan (evergreen and adjustment provisions of the 2025 Plan); (ii) any changes to the applicable prices that a Participant may pay for with regard to applicable Awards granted under the 2025 Plan, provided, however, that the terms of outstanding Awards may be amended without shareholder approval to reduce the exercise price of outstanding Options, or to cancel outstanding Options in exchange for cash, other Awards, or Options with an exercise price that is less than the exercise price of the original Option; (iii) changes to the 2025 Plan which would expand eligibility for Participant or potential Participants Awards; (iv) changes to the 2025 Plan which would materially increase Participants or potential Participants benefits available under the 2025 Plan; and (v) changes to the 2025 Plan which would expand the types of Awards provided under the 2025 Plan. Notwithstanding anything to the contrary in the 2025 Plan, the terms of outstanding Awards may be amended without shareholder approval to reduce the exercise price of outstanding Options, or to cancel outstanding Options in exchange for cash, other Awards, or Options with an exercise price that is less than the exercise price of the original Option to the extent permitted by applicable law or the listing rules of the applicable trading market. 77 No amendment, alteration, suspension or termination of the 2025 Plan will impair the rights of any Participant, unless mutually agreed otherwise between the Participant and the Administrator, which agreement must be in writing and signed by the Participant and the Company. Termination of the 2025 Plan will not affect the Administrators ability to exercise the powers granted to it under the 2025 Plan with respect to Awards granted under the 2025 Plan prior to the date of such termination. As of December 31, 2025, no options to purchase shares of Common Stock under the Plan were outstanding, and 7,752 shares were available for future grant. Each option granted under the Plan will carry a term of no more than 10 years from the date of grant and the Plan will remain in effect until it is terminated by the Board. The term and vesting periods for options granted under the Plan are determined by the Board. The summary does not contain a complete description of all provisions of the 2025 Plan and is qualified in its entirety by reference to the 2025 Plan, a copy of which is filed as Exhibit 10.1 to this Annual Report. **Policies and Practices for Granting Certain Equity Awards** **** Our policies and practices regarding the granting of equity awards are carefully designed to ensure compliance with applicable securities laws and to maintain the integrity of our executive compensation program. The Compensation Committee is responsible for the timing and terms of equity awards to executives and other eligible employees. The timing of equity award grants is determined with consideration to a variety of factors, including but not limited to, the achievement of pre-established performance targets, market conditions and internal milestones. The Company does not follow a predetermined schedule for the granting of equity awards; instead, each grant is considered on a case-by-case basis to align with the Companys strategic objectives and to ensure the competitiveness of our compensation packages. In determining the timing and terms of an equity award, the Board or the Compensation Committee may consider material nonpublic information to ensure that such grants are made in compliance with applicable laws and regulations. The Boards or the Compensation Committees procedures to prevent the improper use of material nonpublic information in connection with the granting of equity awards include oversight by legal counsel and, where appropriate, delaying the grant of equity awards until the public disclosure of such material nonpublic information. The Company is committed to maintaining transparency in its executive compensation practices and to making equity awards in a manner that is not influenced by the timing of the disclosure of material nonpublic information for the purpose of affecting the value of executive compensation. The Company regularly reviews its policies and practices related to equity awards to ensure they meet the evolving standards of corporate governance and continue to serve the best interests of the Company and its shareholders. **Equity Compensation Plan Information** **** The table below sets forth information concerning securities granted under equity compensation plans approved and not approved by security holders of the Company and the weighted average exercise price for such securities as of December 31, 2025. **** | Plan Category | | Number of securities to be issued upon exercise of outstanding options, warrants and rights | | | Weighted- average exercise price of outstanding options, warrants and rights | | | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) | | | | | | (a) | | | (b) | | | (c) | | | | Equity compensation plans approved by security holders | | 6 | | | $265,384 | | | 7,746 | | | | Equity compensation plans not approved by security holders | | | - | | | $ | - | | | | - | | | | Total | | | 6 | | | $ | 265,384 | | | | 7,746 | | | **** 78 **Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.** **** The following table sets forth certain information regarding the ownership of the Companys Common Stock and Series B Preferred Stock as of March 30, 2026 by: (i)each director and nominee for director; (ii)each executive officer named in the Summary Compensation Table; (iii)all executive officers and directors of the Company as a group; and (iv)all those known by the Company to be beneficial owners of more than five percent (5%) of its Common Stock and Series B Preferred Stock. We have determined beneficial ownership in accordance with the rules and regulations of the SEC, and the information is not necessarily indicative of beneficial ownership for any other purpose. In general, under these rules a beneficial owner of a security includes any person who, directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise has or shares voting power or investment power with respect to such security. A person is also deemed to be a beneficial owner of a security if that person has the right to acquire beneficial ownership of such security within 60 days of March 30, 2026. Except as indicated by the footnotes below, we believe, based on information furnished to us, that the persons and entities named in the table below have sole voting and sole investment power with respect to all shares that they beneficially own, subject to applicable community property laws. Percentage ownership is based on 1,159,112 shares of Common Stock and 6,372,874 shares of outstanding Series B Preferred Stock as of March 30, 2026. | Number of Shares Beneficially Owned | | | | | Beneficial Ownership Percentages | | | | | | | Name and Address of Beneficial Owner (1) | | Common Stock | | | Series B Preferred Stock | | | Percent of Common Stock | | | Percent of Series B Preferred Stock (2) | | | Percent of Voting Stock (2) | | | | Officers and Directors | | | | | | | | | | | | | | | | | | | | | | | Braeden Lichti, Non-employee, Non-Executive Chairman of the Board | | | 35 | (3) | | | 3,336,437 | (4) | | | * | % | | | 52.35 | % | | | 44.30 | % | | | Graydon Bensler,Non-Employee Chief Executive Officer, Chief Financial Officer and Director | | | 10 | (5) | | | 3,036,437 | (6) | | | * | % | | | 47.65 | % | | | 40.31 | % | | | Jeffrey Parry,Director | | | 2 | (7) | | | 0 | | | | * | % | | | 0 | % | | | *% | | | | George Kovalyov,Director | | | 0 | | | | 0 | | | | * | % | | | 0 | % | | | *% | | | | Juliana Daley,Director | | | 2 | (8) | | | 0 | | | | * | % | | | 0 | % | | | *% | | | | All executive officers and directors as a group (5 persons) | | | 49 | (9) | | | 6,372,874 | | | | * | % | | | 100 | % | | | 84.64 | % | | | | | | | | | | | | | | | | | | | | | | | | | | 5%+ Stockholders of Series B Preferred Stock | | | | | | | | | | | | | | | | | | | | | | | Northstrive Companies Inc. (10) | | | ** | | | | 3,336,437 | (4) | | | ** | | | | 52.35 | % | | | 44.30 | % | | | GB Capital Ltd (11) | | | ** | | | | 3,036,437 | (6) | | | ** | | | | 47.65 | % | | | 40.31 | % | | | 5%+ Stockholders of Common Stock | | | | | | | | | | | | | | | | | | | | | | | * | Denotes less than one (1%) percent. | | | ** | This shareholder is not a 5% or greater holder of Common Stock, only a 5% or greater holder of Series B Preferred Stock. | | | (1) | Unless otherwise indicated, the business address of each of the individuals is our address of c/o PMGC Inc., 120 Newport Center Drive, Newport Beach, CA92660. | | | | | | | (2) | Rounded to the nearest tenth percent. | | | (3) | Consists of (i) 2 shares of Common Stock that Mr.Lichti has the right to acquire from us within 60days of March 30, 2026 pursuant to the exercise of stock options previously granted under the Amended 2020 Equity Incentive Plan, (ii)32 shares of Common Stock held by Northstrive Companies Inc., of which Mr.Lichti has sole voting and dipositive power over the shares, and (iii)1 share of Common Stock underlying warrants held by BWL Investments Ltd. | | | (4) | These shares of Series B Preferred Stock are held through Northstrive Companies Inc., a California corporation wholly owned by Braeden Lichti, the Companys Non-employee, Non-Executive Chairman. Mr. Lichti has sole voting and dispositive power over these shares. | | | | | | | (5) | Consists of (i)8 shares of Common Stock held by GB Capital Ltd, of which Mr.Bensler has sole voting and dipositive power over the shares and (ii)2 shares of Common Stock that Mr.Bensler has the right to acquire from us within 60days of March 30, 2026 pursuant to the exercise of stock options previously granted under the Amended 2020 Equity Incentive Plan. | | | | | | | (6) | These shares of Series B Preferred Stock are held through GB Capital Ltd, a British Columbia, Canada corporation wholly owned by Graydon Bensler, the Companys Non-employee Chief Executive Officer, Chief Financial Officer, and Director. Mr. Bensler has sole voting and dispositive power over these shares. | | | | | | | (7) | Consists of (i)1 share of Common Stock and (ii)1 share of Common Stock that Mr.Parry has the right to acquire from us within 60days of March 30, 2026, pursuant to the exercise of stock options previously granted under the Amended 2020 Equity Incentive Plan. | | | (8) | Consists of (i)1 share of Common Stock and (ii)1 share of Common Stock that Ms. Daley has the right to acquire from us within 60days of March 30, 2026, pursuant to the exercise of stock options previously granted under the Amended 2020 Equity Incentive Plan. | | 79 | (9) | Consists of (i)42 shares of Common Stock beneficially owned by our directors and executive officers, (ii)6 shares of Common Stock underlying outstanding options, exercisable within 60days of March 30, 2026 and (iii)1 share of Common Stock underlying warrants. | | | (10) | Northstrive Companies Inc. is an entity wholly owned by Braeden Lichti, the Companys Non-employee, Non-executive Chairman. Mr. Lichti has sole voting and dispositive power over the shares of Series B Preferred Stock held by Northstrive Companies Inc. | | | (11) | GB Capital Ltd is an entity wholly owned by Graydon Bensler, the Companys Non-employee Chief Executive Officer, Chief Financial Officer, and Director. Mr. Bensler has sole voting and dispositive power over the shares of Series B Preferred Stock held by GB Capital Ltd. | | **Item 13. Certain Relationships and Related Transactions, and Director Independence.** Our Audit Committee, pursuant to its written charter, is responsible for reviewing and approving related party transactions to the extent we enter into such transactions. The Audit Committee will consider all relevant factors when determining whether to approve a related party transaction, including whether the related party transaction is on terms no less favorable than terms generally available to an unaffiliated third-party under the same or similar circumstances and the extent of the related partys interest in the transaction. These procedures are intended to determine whether any such related party transaction impairs the independence of a director or presents a conflict of interest on the part of a director, employee or officer. The following is a summary of transactions entered since January 1, 2024 to which we have been a party in which the amount involved exceeded or will exceed $109,308.19, which represents 1% of the average of our total assets amounts as of December 31, 2025 and 2024), and in which any of our directors, executive officers or, to our knowledge, beneficial owners of more than 5% of our capital stock or any member of the immediate family of any of the foregoing persons had or will have a direct or indirect material interest, other than equity and other compensation, termination, change in control and other arrangements, which are described under *Executive and Director Compensation*. We also describe below certain other transactions with our directors, executive officers and stockholders. **GB Capital Ltd** The Company paid consulting fees of $412,000 and $391,333 to GB Capital Ltd, a company controlled by Graydon Bensler, Chief Executive Officer, Chief Financial Officer and Director in 2025 and 2024, respectively. The Company incurred consulting fees of $697,800 and $391,333 to GB Capital Ltd, a company wholly owned by Graydon Bensler, our current non-employee Chief Executive Officer, Chief Financial Officer and Director in 2025 and 2024, respectively. In the 2025 fiscal year, the Company paid GB Capital $262,000 in consulting fees under GB Capitals Consulting and Services Agreement for Non-Employee Chief Executive Officer. As of December 31, 2025, the Company has $285,800 due to GB Capital in contract performance bonus payments and has paid $150,000 to GB Capital in contract performance bonus payments under GB Capitals Consulting and Services Agreement for Non-Employee Chief Executive Officer. On July 25, 2025, the Company entered into the GB Capital Secondment Agreement with GB Capital, pursuant to which GB Capital agreed to second certain of its employees (each, a GB Capital Employee and, collectively, the GB Capital Employees), on an exclusive basis, to the Company from time to time to provide certain services in accordance with the terms of the GB Capital Secondment Agreement. The GB Capital Employees will remain employees of GB Capital during their respective periods of secondment (each, a GB Capital Secondment Period) and will not be employees of the Company. Under the GB Capital Secondment Agreement, GB Capital shall pay each Employees salary, incentives, health and retirement benefits, and other applicable compensation or benefits GB Capital Employee is entitled to as an employee of GB Capital. As consideration for GB Capital making GB Capital Employees available to provide services during the GB Capital Secondment Period, the Company shall reimburse GB Capital on a monthly basis based on (i) an agreed hourly rate set forth in Exhibit A of the GB Capital Secondment Agreement, multiplied by (ii) actual hours worked by the GB Capital Employee. Except as otherwise set forth in the GB Capital Secondment Agreement, each party to the GB Capital Secondment Agreement shall bear its own costs and expenses in connection with the GB Capital Secondment Agreement. However, if any extraordinary costs or expenses not contemplated by the GB Capital Agreement arise in connection with the GB Capital Agreement, including travel and expenses, the Company will reimburse GB Capital for such costs and expenses, provided that (i) the Company provided its written consent prior to GB Capitals incurrence of such costs and expenses, and (ii) such costs and expenses are documented to the reasonable satisfaction of the Company. Pursuant to the terms of the GB Capital Secondment Agreement, each GB Capital Employee will provide services to the Company as agreed between the parties up to the number of hours per week specified in Exhibit A. Further, each GB Capital Employee shall provide services at the Companys principal place of business or such other place as the parties may agree. The Company has full and exclusive responsibility for each GB Capital Employees actions performed in service to the Company during the GB Capital Secondment Period. 80 The Company may terminate the services provided by any GB Capital Employee at any time by providing at least fifteen (15) days prior written notice of termination to GB Capital, provided that the Company may terminate any GB Capital Employees secondment at any time, without advance notice, in the event of the GB Capital Employees misconduct, violation of the Companys policies, or any conduct that the Company reasonably determines may be detrimental to the business or reputation of the Company. Upon the termination of any GB Capital Employees employment with GB Capital, any GB Capital Employees services to the Company will also terminate, and if such employment with GB Capital is terminated, GB Capital shall provide notice of the same to the Company no later than the close of business on the same day such termination becomes effective. GB Capital may terminate the GB Capital Secondment Agreement by providing at least 90 days written notice of termination to the Company. The Company may terminate the GB Capital Secondment Agreement by providing at least 30 days written notice of termination to GB Capital. The GB Capital Secondment Agreement may be terminated by either party upon 10 days written notice if the other party breaches or is in default of any provision of the GB Capital Secondment Agreement and does not cure such breach or default within such 10 day period, with such notice to be made and delivered to the addresses as provided by the applicable party. The foregoing summary of the GB Capital Secondment Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the GB Capital Secondment Agreement, a copy of which is included as Exhibit 10.15 herein. On October 16, 2025, the Company entered into Amendment No. 1 to the GB Capital Secondment Agreement with GB Capital (Amendment No. 1 to the GB Capital Secondment Agreement). Amendment No. 1 to the GB Capital Secondment Agreement amends the GB Capital Secondment Agreement as follows: | | a. | The effective date of the GB Capital Secondment Agreement was amended to October 16, 2025. | | | | b. | Section 4 of the GB Capital Secondment Agreement was amended and supplemented to state that the seconded employees of GB Capital (GB Capital Seconded Employees) are classified as exempt under applicable law and will be paid on a salary basis, while non-exempt GB Capital Seconded Employees will be paid hourly, with overtime in accordance with law. Amendment No. 1 to the GB Capital Secondment Agreement also added terms to Section 4 providing for: GB Capital Seconded Employeess eligibility to participate in the Companys group health plans on the same terms as similarly situated employees; and GB Capitals proposal of milestone-driven bonuses or incentive payments for GB Capital Seconded Employees, subject to the Companys prior written approval. | | | | c. | Terms were added to Section 5 providing for: (i) the Companys reimbursement to GB Capital for all costs and expenses associated with any GB Capital Seconded Employees use of a company car in the course of providing services to the Company: (ii) the Companys reimbursement to GB Capital for reasonable costs and expenses incurred in providing office space for GB Capital Seconded Employees during the secondment period, including rent, utilities, and related overhead, to the extent such office space is used for the performance of services for the Company; (iii) the Companys provision of a mobile phone and/or reimbursement for certain costs associated with the phone if in performing the secondment, a mobile phone and/or associated service plan is reasonably required; and (iv) the Companys reimbursement to GB Capital for fees actually incurred in connection with the hiring and onboarding of GB Capital Seconded Employees. | | | | d. | Amendment No. 1 to the GB Capital Secondment Agreement replaced Exhibit A of the GB Capital Secondment Agreement with a new Exhibit A setting forth (i) approved GB Capital Seconded Employees; and (ii) the Companys payment of a fee equal to 30% of aggregate employment costs for all of the GB Capital Seconded Employees. Any additions of employees beyond those set forth in Exhibit A requires prior review and approval by the Board. | | Except as expressly amended by Amendment No. 1 to the GB Capital Secondment Agreement, all other terms and conditions of the GB Capital Secondment Agreement remain unchanged and in full force and effect. The foregoing summary of Amendment No. 1 to the GB Capital Secondment Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of Amendment No. 1 to the GB Capital Secondment Agreement, a copy of which is filed as Exhibit 10.26 herein. 81 As of December 31, 2025, the Company has paid GB Capital a total of $159,996 for management fees, bonuses and fees and reimbursements under the Secondment Agreement. This amount includes $31,755 in management fees and $128,241 in expense reimbursements. The reimbursed expenses cover costs and bonuses for seconded GB Capital employees working on the Companys operations, reimbursements for third party recruiting and temporary staffing fees paid by GB Capital and other personnel-related operating expenses required to operate the Companys wholly owned subsidiaries. **Northstrive Companies Inc.** The Company incurred consulting fees of $764,600 and $365,900 to Northstrive Companies Inc., a company wholly owned by our Non-Employee, Non-Executive Chairman, Braeden Lichti, in 2025 and 2024, respectively. In the fiscal year ending December 31, 2025, the Company has paid $328,800 to Northstrive in consulting fees under Northstrives Consulting and Services Agreement for Non-Employee, Non-Executive Chairman, and has $285,800 due to Northstrive in bonus payments. As of December 31, 2025, the Company has $285,800 due to Northstrive in bonus payments and has paid $150,000 to Northstrive in bonus payments under Northstrives Consulting and Services Agreement for Non-Employee, Non-Executive Chairman. As amended and agreed to on May1, 2023, and as effective on January4, 2022, we entered into a consulting agreement (the Northstrive Consulting Agreement) with Northstrive Companies Inc., a California corporation (Northstrive) owned and managed by Braeden Lichti. Pursuant to the Northstrive Consulting Agreement, Northstrive is to assist us in a variety of business matters, including assistance in our overall investor outreach and communications strategy, and advising us on becoming a public company. As ofDecember 31, 2025,the Company had $324,736 due to Northstrive. We retained the option, but not the obligation to issue the amount of Compensation due Northstrive in shares of our Common Stock equal to our series A preferred stock price at $1.34138 per share (pre 200:1 stock consolidation, pre 1-for-7 reverse stock split, pre 1-for-3.5 reverse stock split) equal to the value of the Compensation due to Northstrive for services provided through and up to March31, 2023 and $3.00 per share (pre 200:1 stock consolidation, pre 1-for-7 split, and pre 1-for-3.5 Split). On June21, 2024, we entered into the Amended and Restated Consulting Agreement with Northstrive (the First Amended Northstrive Consulting Agreement), pursuant to which Mr.Lichti would serve as non-executive Chairman of the Company. As consideration for his services as non-executive Chairman, the Company agreed to pay Northstrive $16,000 per month. For the fiscal year ended December31, 2025, we paid Northstrive $328,800 under the Northstrive Consulting Agreement. The First Amended Northstrive Consulting Agreement was filed as Exhibit 10.13 in the FormS-1 filed with the SEC on February12, 2025 and is incorporated herein by reference. On October25, 2024, the Company entered into the Second Amended and Restated Consulting Agreement for Non-Executive Chairman (the Second Amended Northstrive Companies Consulting Agreement) with Northstrive. The Second Amended Northstrive Companies Consulting Agreement provided that, as consideration for Mr.Lichtis provision of his services as non-executive Chairman, as set forth more fully in such agreement, the Company would compensate Northstrive as such: (i)an annual consultant fee of $300,000 per annum (the Lichti Annual Consultant Fee), 1/12 of which Lichti Annual Consultant Fee will be paid to Northstrive once per calendar month (Northstrive Payment Cycle), provided that Northstrive performs the Services required to be performed in each Northstrive Payment Cycle. The Company agreed that upon execution of the Second Amended Northstrive Companies Consulting Agreement, the Company would make the following payments to Northstrive (such payments, the Northstrive Sign-on Bonuses): (A)a one-time bonus of $175,000, with (I)$100,000 of such bonus to be paid to Northstrive in cash and (II)$75,000 of such bonus to be remitted to Northstrive in SeriesB Preferred Stock, with the cash equivalent of such shares of SeriesB Preferred Stock to be determined by mutual agreement of the Company and Northstrive; and (B)300,000 shares of SeriesB Preferred Stock. In the Boards sole discretion, it may also award Northstrive a bonus at the end of the applicable fiscal year in the amounts it determines in its sole discretion (each of such bonuses, the Northstrive Annual Bonus), provided that Northstrive meets the Boards performance objectives for Northstrive and Northstrive is engaged by the Company for such fiscal year in full. The target of the Northstrive Annual Bonus is 125% or greater of the Lichti Annual Consultant Fee. Subject to the terms of the Second Amended Northstrive Companies Consulting Agreement, Northstrive is also entitled to each of the following bonus payments (collectively, the Northstrive Milestone Bonuses). Such Northstrive Milestone Bonuses are payable upon the occurrence of the following events, at which time the Company shall remit the applicable Northstrive Milestone Bonuses to Northstrive as follows: | | (i) | The Company shall pay Northstrive $150,000 for each Company acquisition consummated, provided that the target company of such acquisition has $2,000,000 in annual revenue or more upon consummation of the acquisition. | | 82 | | (ii) | The Company shall pay Northstrive $50,000 upon any closing of an equity or equity-linked financing of the Company which results in net proceeds being raised in such financing of $3,000,000 in a fiscal quarter (the closing which qualifies Northstrive for such payment, the Northstrive Triggering Equity Financing, and such payment, the Northstrive Equity Financing Bonus). For the avoidance of doubt, Northstrive is entitled only to a one-time payment of the Northstrive Equity Financing Bonus $50,000 per fiscal quarter and the Company will not make further payments as a Northstrive Equity Financing Bonus in spite of the occurrence of any of the following events: (A)the closing of any equity or equity-linked financings subsequent to the Northstrive Triggering Equity Financing in such fiscal quarter which result in proceeds of $3,000,000 to the Company; (B)any closings for the same equity financing round subsequent to the Northstrive Triggering Equity Financing in such fiscal quarter which result in additional proceeds of $3,000,000 or more to the Company. | | | | (iii) | The Company shall pay Northstrive $75,000 each time the Company achieves a Market Valuation (as defined in the Second Amended Northstrive Companies Consulting Agreement) of $10,000,000, $20,000,000, $30,000,000, and $40,000,000 (each of such payments, Northstrive Valuation Payment), provided that each of such market valuations continue for each at least five (5)consecutive TradingDays, and provided further that the Company may only recover any erroneously awarded amounts in Northstrive Valuation Payments for one (1)year following the date of such erroneous award. | | | | (iv) | The Company shall pay Northstrive $300,000 each time the Company achieves a Market Valuation of $50,000,000 and $100,000,000, provided that each of such Market Valuations continues for each at least two (2)consecutive TradingDays. | | Notwithstanding anything to the contrary stated in the Second Amended Northstrive Companies Consulting Agreement, Northstrive may elect to accrue the Northstrive Milestone Bonuses and convert the cash amount of the Northstrive Milestone Bonus into shares of the Companys common stock or preferred stock. In such event, the conversion ratio of the Northstrive Milestone Bonus shall be determined by mutual agreement between the Company and Northstrive. The Second Amended Northstrive Companies Consulting Agreement was filed as Exhibit 10.20 in the FormS-1 filed with the SEC on February12, 2025 and is incorporated herein by reference. On October25, 2024, the Company entered into the Amendment to the Second Amended Northstrive Companies Consulting Agreement, which stipulated that the Companys issuances of SeriesB Preferred Stock to Northstrive as the Northstrive Sign-on Bonuses, were subject to stockholder approval. The Amendment to the Second Amended Northstrive Companies Consulting Agreement is filed as Exhibit 10.22 in the FormS-1 filed with the SEC on February12, 2025 and is incorporated herein by reference. For the fiscal year ended December31, 2025, we paid Northstrive $328,800 under the Second Amended Northstrive Companies Consulting Agreement. On April 3, 2025, the Company entered into Amendment No. 2 to the Second Amended Northstrive Companies Consulting Agreement, which amended and restated paragraph 1d of Exhibit B of the Second Amended and Restated Northstrive Companies Consulting Agreement to include: d. *Milestone*-*based Cash Bonuses*. Upon the occurrence of the following events, the Company shall remit the applicable cash bonuses to the Consultant as set forth in this Section 1(d) and subject to the terms and conditions of this Section 1(d): (i)The Company shall pay the Consultant $150,000 for each Company acquisition consummated, provided the target company of such acquisition has $2,000,000 in annual revenue or more upon consummation of the acquisition; 83 (ii)The Company shall pay the Consultant $50,000 upon any closing of an equity or equity-linked financing of the Company which results in net proceeds being raised in such financing of $3,000,000 in a fiscal quarter (the closing which qualifies the Consultant for such payment, the Triggering Equity Financing, and such payment, the Equity Financing Bonus). For the avoidance of doubt, the Consultant is entitled only to a one-time payment of the Equity Financing Bonus $50,000 per fiscal quarter and the Company will not make further payments as an Equity Financing Bonus in spite of the occurrence of any of the following events: (A) the closing of any equity or equity-linked financings subsequent to the Triggering Equity Financing in such fiscal quarter which result in proceeds of $3,000,000 to the Company; (B) any closings for the same equity financing round subsequent to the Triggering Equity Financing in such fiscal quarter which result in additional proceeds of $3,000,000 or more to the Company. (iii)The Company shall pay the Consultant $50,000 each time the Company achieves a Market Valuation (as defined below) of $5,000,000, $10,000,000, $15,000,000, $20,000,000, and $25,000,000 (each of such payments, Valuation Payment); *provided that* each of such Market Valuations continue for each at least five (5) consecutive Trading Days (as defined below), and *provided further*that the Company may only recover any erroneously awarded amounts in Valuation Payments for one (1) year following the date of such erroneous award. (iv)The Company shall pay the Consultant $600,000 each time the Company achieves a Market Valuation of $50,000,000 and $100,000,000; *provided that* each of such Market Valuations continues for each at least two (2) consecutive Trading Days. (v)The Board, in its sole discretion, may award a cash or equity bonus payment (Licensing Milestone Bonus) to the Consultant upon the Company or any of its Subsidiaries (as defined below) entry into a license agreement which provides for (A) the Company or Subsidiarys license of any intellectual property rights of the Company or Subsidiary to another party, including the license of intellectual property rights of the Company or Subsidiary to each other, or (B) a third partys license of intellectual property rights to the Company or Subsidiary; *provided, however*, that if the Board determines to award the Licensing Milestone Bonus to the Consultant in the form of preferred stock, such preferred stock issuance is subject to the approval of the Companys shareholders. Subsidiary means any corporation or other entity of which a majority of (i) the voting power of the voting equity securities or (ii) the outstanding equity interests is owned, directly or indirectly, by the Company. (vi)Notwithstanding anything to the contrary in this Second A&R Agreement, the Consultant may elect to accrue the payments due to the Consultant under Section 1(d) of this Exhibit B (each, a Milestone Bonus) convert the cash amount of the Milestone Bonus into shares of the Companys common stock or preferred stock. In such event, the conversion ratio of the Milestone Bonus shall be determined by mutual agreement between the Company and the Consultant, *provided, however*, that if the Consultant determines to receive the Milestone Bonus payment in the form of preferred stock, the Milestone Bonus payment is subject to the approval of the Companys shareholders. Capitalized terms used in the text quoted immediately above have the meanings set forth in Amendment No. 2 to the Second Amended Northstrive Companies Consulting Agreement. The Second Amended Northstrive Consulting Agreement further clarified that (the equity grants made to Northstrive under Section 2 of Exhibit B of the Northstrive Consulting Agreement, if determined by the Board to be in the form of preferred stock, is subject to the approval of the Companys shareholders. The foregoing summary of Amendment No. 2 to the Second Amended Northstrive Consulting Agreement does not purport to be complete and is subject to and is qualified in its entirety by a copy of Amendment No. 2 to the Second Amended Northstrive Consulting Agreement, filed as Exhibit 10.8 herein. 84 On August 12, 2025, the Company entered into Amendment No. 3 to the Second Amended Northstrive Consulting Agreement, which provided for the Companys grant of Acquisition Awards (as defined below) to Northstrive on the consummation of any acquisition of (i) an entity, (ii) assets, or (iii) capital stock by the Company or any Subsidiary (as defined below). The amount of the Acquisition Award will be calculated based on the total purchase price of the consummated acquisition, regardless of whether or not such purchase price is paid in cash, stock, assumed debt, or other consideration (such purchase price, the Agreement Acquisition Value), and will be determined as follows: | | (i) | Agreement Acquisition Value from $0 to $5,000,000 Northstrive is entitled to an Acquisition Award of 5% of the Northstrive Agreement Acquisition Value; | | | | (ii) | Agreement Acquisition Value over $5,000,000 to $10,000,000 Northstrive is entitled to an Acquisition Award of 6% of the Northstrive Agreement Acquisition Value; | | | | (iii) | Agreement Acquisition Value over $10,000,000 to $20,000,000 Northstrive is entitled to an Acquisition Award of 7% of the Northstrive Agreement Acquisition Value; and | | | | (iv) | Agreement Acquisition Value over $20,000,000 - Northstrive is entitled to an Acquisition Award of 8% of the Northstrive Agreement Acquisition Value. | | In addition to the determinations of Agreement Acquisition Value set forth above, the Compensation Committee may, in its sole discretion, determine to award Northstrive an additional 1% of the applicable percentage of the Acquisition Value if: (i) the Board and/or Compensation Committee projects the applicable acquisition to be earnings before interest, tax, depreciation, and amortization (EBITDA) or net income accretive within twelve (12) months of closing or (b) the Compensation Committee deems the applicable acquisition as an advancement to the Companys long-term growth objectives, competitive positioning, and/or operational capabilities. If Northstrive elects to receive its Acquisition Award in the form of RSUs or restricted stock, the number of RSUs (RSU Award Amount) or restricted stock granted shall equal (x) the dollar value of the Acquisition Award divided by (y) the trailing five (5) day volume-weighted average price (VWAP) of the Companys common stock ending on the trading day prior to the acquisition closing date (such RSU Award Amount rounded down to the nearest whole share). The RSUs or restricted stock granted to Northstrive will be fully vested and shall not be subject to any further service or performance conditions. Amendment No. 3 to the Second Amended Northstrive Consulting Agreement also provided for the name change of the Second Amended Northstrive Consulting Agreement, going forward, to Consulting and Services Agreement for Non-Employee, Non-Executive Chairman. Amendment No. 3 to the Second Amended Northstrive Consulting Agreement is filed as Exhibit 10.16 herein. On October 16, 2025, the Company entered into Amendment No. 4 to the Northstrive Consulting Agreement with Northstrive. Amendment No. 4 to the Northstrive Consulting Agreement modified the terms of the Consulting and Services Agreement for Non-Employee, Non-Executive Chairman between the Company and Northstrive dated October 25, 2024 as follows: | a. | Amend subsection 1(a) to state that NorthStrives the Non-Executive Chairman title is for consulting purposes only and does not confer officer, employee, or director status on Northstrive. | | | b. | Replace all references to Severance Payment and Severance Event in Section 4 to Termination Payment and Termination Event. | | 85 | c. | Amend Section 4 to: (i) additionally provide that Northstrive is entitled to payment for all services performed and approved expenses incurred up to the effective date of termination of the Northstrive Consulting Agreement, (ii) remove any references in Section 4 to the requirement that Northstrive execute a separation agreement and release of claims as a condition to payment, and (iii) remove any language stating the Northstrives unvested options will not accelerate on termination not for Cause. | | | d. | Amend Section 6 to state that Northstrive shall determine the method, details, and means of performing its services, subject only to the results required by the Company. | | | e. | Amend and restate subsection 6(a) to provide that Northstrive is expressly authorized to enter into contracts and make commitments on behalf of the Company, subject to any limitations or approval requirements established by the Board or as otherwise provided in writing by the Company. | | | f. | Amend and restate subsection 6(b)s provisions regarding Northstrives ineligibility for the Companys employee benefits; | | | g. | Amend and restate subsection 6(c)s provisions regarding Northstrives tax responsibilities for compensation paid under the Northstrive Consulting Agreement; | | | h. | Amend Section 7 to state that Northstrive retains the right to provide services to others, subject to applicable noncompete/conflict provisions in the Northstrive Consulting Agreement; and | | | i. | Add a new subsection 10(a) to emphasize that Northsrive does not have an employment relationship, partnership, joint venture, fiduciary, or agency relationship with the Company under the Northstrive Consulting Agreement. | | Capitalized terms used the description of Amendment No. 4 to the Northstrive Consulting Agreement in this Annual Report have the meanings set forth therein. Except as expressly amended in Amendment No. 4 to the Northstrive Consulting Agreement, the Northstrive Consulting Agreement remains in full force and effect. The foregoing summary does not purport to be complete and is qualified in its entirety by reference to the full text of Amendment No. 4 to the Northstrive Consulting Agreement, a copy of which is filed as Exhibit 10.29 herein. **Secondment Agreement with Northstrive** On May 7, 2025, the Company entered into a Secondment Agreement with Northstrive, pursuant to which Northstrive agreed to second certain of its employees (each, a Northstrive Employee and, collectively, the Northstrive Employees) to the Company from time to time to provide certain services in accordance with the terms of the Northstrive Secondment Agreement. The Northstrive Employees will remain employees of Northstrive during their respective periods of secondment (each, a Northstrive Employee Secondment Period) and will not be employees of the Company. Under the Northstrive Secondment Agreement, Northstrive shall pay each Northstrive Employees salary, incentives, health and retirement benefits, and other applicable compensation or benefits Northstrive Employee is entitled to as an employee of Northstrive. As consideration for Northstrive making Northstrive Employees available to provide services during the Northstrive Employee Secondment Period, the Company will reimburse Northstrive on a monthly basis based on (i) an agreed hourly rate set forth in the Secondment Agreement, multiplied by (ii) actual hours worked by the Northstrive Employee. Except as otherwise set forth in the Northstrive Secondment Agreement, each party to the Northstrive Secondment Agreement shall bear its own costs and expenses in connection with the Northstrive Secondment Agreement. However, if any extraordinary costs or expenses not contemplated by the Northstrive Secondment Agreement arise in connection with the Northstrive Secondment Agreement, including travel and expenses, the Company will reimburse Northstrive for such costs and expenses, provided that (i) the Company provided its written consent prior to Northstrives incurrence of such costs and expenses, and (ii) such costs and expenses are documented to the reasonable satisfaction of the Company. 86 Pursuant to the terms of the Northstrive Secondment Agreement, each Northstrive Employee will provide services to the Company as agreed between the parties up to the number of hours per week specified in the Northstrive Secondment Agreement. Further, each Northstrive Employee shall provide services at the Companys principal place of business or such other place as the parties may agree. The Company has full and exclusive responsibility for each Northstrive Employees actions performed in service to the Company during the Northstrive Secondment Period. The Company may terminate the services provided by any Northstrive Employee at any time by providing at least fifteen (15) days prior written notice of termination to Northstrive. Upon the termination of any Northstrive Employees employment with Northstrive, any Northstrive Employees services to the Company will also terminate, and if such employment with Northstrive is terminated, Northstrive shall provide notice of the same to the Company. Either party may terminate the Northstrive Secondment Agreement by providing at least 90 days written notice of termination to the other party. If a party is in breach or default of any provision of the Northstrive Secondment Agreement and does not cure such breach or default within ten (10) days, the other party may terminate the Agreement upon ten (10) days written notice to the other party, with such notice to be made pursuant to the terms of the Northstrive Secondment Agreement. The Northstrive Secondment Agreement contains customary provisions relating to confidentiality, indemnification, and limitations on liability. The foregoing summary of the Northstrive Secondment Agreement does not purport to be complete and is subject to and are qualified in their entirety by a copy of the Northstrive Secondment Agreement, filed herein as Exhibit 10.11. As of December 31, 2025, the Company has paid NorthStrive a total of $382,707for management fees, bonuses and fees and reimbursementsunder the Secondment Agreement. This amount includes $65,263in management fees and $317,444in expense reimbursements. The reimbursed expenses cover costs and bonuses for seconded NorthStrive employees working on the Companys operations, reimbursements for third party recruiting and temporary staffing fees paid by Northstrive, and other personnel-related operating expenses required to operate the Companys wholly owned subsidiaries. On October 16, 2025, the Company entered into Amendment No. 1 to the Northstrive Secondment Agreement with Northstrive. Amendment No. 1 to the Northstrive Secondment Agreement amends the Northstrive Secondment Agreement as follows: | | a. | The effective date of the Northstrive Secondment Agreement was amended to October 16, 2025. | | | | b. | Section 4 of the Northstrive Secondment Agreement was amended and supplemented to state that the Northstrive Seconded Employees are classified as exempt under applicable law and will be paid on a salary basis, while non-exempt Northstrive Seconded Employees will be paid hourly, with overtime in accordance with law. Amendment No. 1 to the Northstrive Secondment Agreement also added terms to Section 4 providing for: Northstrive Seconded Employees eligibility to participate in the Companys group health plans on the same terms as similarly situated employees; and Northstrives proposal of milestone-driven bonuses or incentive payments for Northstrive Seconded Employees, subject to the Companys prior written approval. | | On June 19, 2024, the Company entered into an Unsecured Revolving Line of Credit Promissory Note (the Revolving Note) with NorthStrive Fund II LP, an entity owned and controlled by Braeden Lichti. The Revolving Note provided for a $200,000 unsecured line of credit to the Company with a maturity date of June 19, 2025, and interest calculated at the rate of twenty percent (20.0%) per annum on the outstanding principal balance through the maturity date. Under the Revolving Note, the Company may prepay any outstanding balance of the Revolving Note at any time, *provided that* interest due on the Revolving Note is simultaneously satisfied in full. As of the date of this Proxy Statement, the Revolving Note has been repaid in full. The largest aggregate amount of principal outstanding in the last two (2) fiscal years was $200,000, and the interest paid in that time was $40,000. 87 **Other Agreements with Our Stockholders** **** Share Repurchases On March 7, 2025, the Company entered into two share buyback purchase agreements with two of its existing shareholders, pursuant to which the Company repurchased, in the aggregate, 11 shares of Common Stock (such share amount on a pre-adjusted basis and 4 on an as-adjusted basis) from such shareholders at a price of $5.0617 per share (such dollar amount on a pre-adjusted basis and $13.00 on an as-adjusted basis). These share repurchases were consummated on the same date. These shareholders had initially approached the Company for the share repurchases. On March 18, 2025, the Company entered into a securities purchase agreement with an existing shareholder, pursuant to which the Company purchased 30 shares of Common Stock (such share amount on a pre-adjusted basis and 9 on a as-adjusted basis) from such shareholder at a purchase price of $4.235 per share (such dollar amount on a pre-adjusted basis and $14.82 on an as-adjusted basis), and a warrant to purchase 36 shares of Common Stock (such share amount on a pre-adjusted basis and 11 on an as-adjusted basis) at an exercise price of $4,200.00 per share (such dollar amount on a pre-adjusted basis and $14,700 on an as-adjusted basis), at a purchase price of $0.01 (such dollar amount on a pre-adjusted basis and $0.035 on an as-adjusted basis). The total purchase price of such common stock and the warrant was equal to approximately $127. The purchase of such Common Stock and warrant was consummated on the same date. The shareholder had initially approached the Company for the share repurchases and purchase of the warrant. Registered Direct Offering On March 21, 2025, the Company entered into a securities purchase agreement (the Securities Purchase Agreement) with certain institutional investors in connection witha registered direct offering for the offer and sale of 129,145 shares of the Companys Common Stock (such share amount on a pre-adjusted basis and 36,899 on an as-adjusted basis) and pre-funded warrants to purchase 165,305 shares of Common Stock (such share amount on a pre-adjusted basis and 47,230 on an as-adjusted basis), in the aggregate (such offering, the Registered Direct Offering). Pursuant to the Securities Purchase Agreement, the Company also agreed to, amongst other things, adjustment terms in the Pre-Funded Warrants, issuance of the shares underlying the Pre-Funded Warrants upon the exercise of the Pre-Funded Warrants, in accordance with the terms of the Pre-Funded Warrants, and the Parties agreed to customary representations and warranties and agreements and indemnification rights and obligations. The Pre-Funded Warrants have an exercise price of $0.0001 per share and each Pre-Funded Warrant is exercisable for one share of Common Stock (the shares underlying the Pre-Funded Warrants, the Warrant Shares). A holder of the Pre-Funded Warrants (Holder) will not have the right to exercise any portion of its Pre-Funded Warrants if the Holder, together with its affiliates, would beneficially own in excess of 4.99% (or, at the election of the Holder, such limit may be increased to up to 9.99%) of the number of Common Stock outstanding immediately after giving effect to such exercise. The Pre-Funded Warrants will be immediately exercisable (subject to the aforementioned beneficial ownership limitation) and may be exercised at any time until all of the Pre-Funded Warrants are exercised in full. The Pre-Funded Warrant may be exercised, in whole or in part, at such time by means of a cashless exercise, under which cashless exercise the Holder is entitled to receive a number of Warrant Shares under the terms of the Pre-Funded Warrants. The exercise price of the Pre-Funded Warrants is subject to adjustment for stock splits, stock dividends, stock combinations, and similar capital transactions or such other event as further described in the Pre-Funded Warrants. As more fully described in the Securities Purchase Agreement, Holders are also entitled to acquire Purchase Rights (as defined in the Pre-Funded Warrants) upon subsequent rights offerings conducted by the Company, are entitled to certain pro rata distributions, and may be issued shares of Common Stock upon the occurrence of a Fundamental Transaction (as defined in the Pre-Funded Warrants). 88 The shares of Common Stock, the Pre-Funded Warrants, and the Warrant Shares were offered pursuant to the (i) registration statement on Form S-3 (File No. 333-284505) filed with the SEC on January 27, 2025 and declared effective by the SEC on February 7, 2025, and the (ii) prospectus supplement filed with the SEC on March 24, 2025. The Registered Direct Offering was consummated on March 24, 2025. The Company received net proceeds of approximately $1,245,305.76 from the Offering, after deducting offering expenses payable by the Company, including placement agent fees, legal fees, and clearing fees. The Company intends to use the net proceeds from the Offering for general corporate purposes and potential acquisitions of operating companies, which companies are yet to be identified at this time. **Director Independence** **** Mr.Parry, Ms. Daley, and Mr.Kovalyov are each independent within the meaning of Nasdaq Rule5605(b)(1). **Item 14. Principal Accounting Fees and Services.** The following table sets forth fees billed to us by our independent auditor for the years ended December 31, 2025, and 2024, for (i) services rendered for the audit of our annual consolidated financial statements and the review of our quarterly consolidated financial statements, (ii) services rendered that are reasonably related to the performance of the audit or review of our consolidated financial statements that are not reported as audit fees, and (iii) services rendered in connection with tax preparation, compliance, advice and assistance. | SERVICES | | 2025 | | | 2024 | | | | Audit fees | | $ | 155,000 | | | $ | 60,000 | | | | Audit-related fees | | | 69,500 | | | | 27,000 | | | | Tax fees | | | - | | | | - | | | | All other fees | | | - | | | | - | | | | Total fees | | $ | 224,500 | | | $ | 87,000 | | | Audit fees and audit related fees represent amounts billed for professional services rendered for the audit of our annual consolidated financial statements and the review of our interim consolidated financial statements. Before our independent accountants were engaged to render these services, their engagement was approved by our Directors. 89 **PART IV** **Item 15. Exhibits and Financial Statement Schedules.** | (a) | The following documents are filed as part of this Annual Report: | | | (1) | Financial Statements: | | The audited balance sheet of the Company as of December 31, 2025, the related statements of operations and comprehensive loss, changes in stockholders equity and cash flows for the year then ended, the footnotes thereto, and the report of HTL International, LLC, independent auditors, are filed herewith. | (2) | Financial Schedules: | | None Financial statement schedules have been omitted because they are either not applicable or the required information is included in the financial statements or notes hereto. | (3) | Exhibits: | | The exhibits listed in the accompanying index to exhibits are filed or incorporated by reference as part of this Report. | (b) | The following are exhibits to this Report and, if incorporated by reference, we have indicated the document previously filed with the SEC in which the exhibit was included. | | Certain of the agreements filed as exhibits to this Report contain representations and warranties by the parties to the agreements that have been made solely for the benefit of the parties to the agreement. These representations and warranties: | | | may have been qualified by disclosures that were made to the other parties in connection with the negotiation of the agreements, which disclosures are not necessarily reflected in the agreements; | | | | | may apply standards of materiality that differ from those of a reasonable investor; and | | | | | were made only as of specified dates contained in the agreements and are subject to subsequent developments and changed circumstances. | | Accordingly, these representations and warranties may not describe the actual state of affairs as of the date that these representations and warranties were made or at any other time. Investors should not rely on them as statements of fact. 90 | Exhibit Number | | Description | | | 3.1 | | Articles of Incorporation of the Registrant (incorporated by reference to Exhibit 3.1 to the Companys registration statement on Form S-1, filed with the SEC on February 11, 2025). | | | 3.2 | | Bylaws of Registrant (incorporated by reference to Exhibit 3.2 to the Companys registration statement on Form S-1, filed with the SEC on February 11, 2025) | | | 3.3 | | Certificate of Designations, Rights, and Preferences of Series B Preferred Stock. (incorporated by reference to Exhibit 3.3 to the Companys registration statement on Form S-1, filed with the SEC on February 11, 2025) | | | 3.4 | | Amended and Restated Certificate of Designations, Rights, and Preferences of Series B Preferred Stock (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K, filed with the SEC on February 27, 2025). | | | 3.5 | | Certificate of Amendment to the Amended and Restated Certificate of Designations, Rights, and Preferences of Series B Preferred Stock (incorporated by reference to Exhibit 3.2 to the Current Report on Form 8-K, filed with the SEC on February 27, 2025). | | | 3.6 | | Certificate of Amendment to Articles of Incorporation (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K, filed with the SEC on March 6, 2025). | | | 3.7 | | Certificate of Amendment to Articles of Incorporation (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K, filed with the SEC on September 4, 2025). | | | 3.8 | | Certificate of Amendment to Articles of Incorporation (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K, filed with the SEC on September 17, 2025). | | | 10.1+ | | 2025 Equity Incentive Plan | | | 10.2 | | Form of Warrant Inducement Agreement (incorporated by reference to Exhibit 10.23 to the Companys registration statement on Form S-1, filed with the SEC on February 11, 2025). | | | 10.3 | | Form of Warrant (incorporated by reference to Exhibit 10.24 to the Companys registration statement on Form S-1, filed with the SEC on February 11, 2025). | | | 10.4 | | Mutual Termination of License Agreement dated as of February 27, 2025, by and between the Company and INmune Bio, Inc. (incorporated by reference to Exhibit 10.1 to the Companys Fork 8-K, filed with the SEC on March 3, 2025) | | | 10.5 | | Form of Securities Purchase Agreement (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K, filed with the SEC on March 27, 2025). | | | 10.6 | | Form of Placement Agency Agreement between the Company and Univest (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K, filed with the SEC on March 27, 2025). | | | 10.7 | | Form of First Amendment to License Agreement between Northstrive Biosciences Inc. and MOA Life Plus Co., Ltd (incorporated by reference to Exhibit 10.3 to the Current Report on Form 8-K, filed with the SEC on March 27, 2025). | | | 10.8 | | Amendment No. 2 to Second Amended and Restated Consulting Agreement for Non-Executive Chairman between the Company and Northstrive Companies Inc. (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K, filed with the SEC on April 8, 2025). | | | 10.9 | | Amendment No. 2 to Second Amended and Restated Consulting Agreement for Non-Employee Chief Executive Officer between the Company and GB Capital Ltd (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K, filed with the SEC on April 8, 2025). | | | 10.10 | | Form of At-The-Market Issuance Sales Agreement between the Company and Univest (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K, filed with the SEC on April 24, 2025). | | | 10.11 | | Secondment Agreement between the Company and Northstrive Companies Inc. (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K, filed with the SEC on May 13, 2025). | | | 10.12 | | Second Amendment to License Agreement between Northstrive Biosciences Inc. and MOA Life Plus Co., Ltd. (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K, filed with the SEC on May 16, 2025).+ | | | 10.13 | | Binding Term Sheet between Northstrive Biosciences Inc. and Modulant Biosciences LLC (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K, filed with the SEC on May 16, 2025).+ | | | 10.14 | | Membership Interest Purchase Agreement by and between the Company, Jeffrey Uhrig, and AGA Precision Systems LLC (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K, filed with the SEC on July 22, 2025). | | | 10.15 | | Secondment Agreement between the Company and GB Capital Ltd (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K, filed with the SEC on July 31, 2025). | | | 10.16 | | Amendment No. 3 to Second Amended and Restated Consulting Agreement for Non-Executive Chairman between the Company and Northstrive Companies Inc. (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K, filed with the SEC on August 18, 2025). | | | 10.17 | | Amendment No. 3 to Second Amended and Restated Consulting Agreement for Non-Employee Chief Executive Officer between the Company and GB Capital Ltd (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K, filed with the SEC on August 18, 2025). | | | 10.18 | | Form of Warrant Inducement Agreement (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K, filed with the SEC on August 25, 2025). | | | 10.19 | | Form of Securities Purchase Agreement dated September 23, 2025 (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K, filed with the SEC on September 29, 2025). | | | 10.20 | | Form of Secured Pre-Paid Purchase (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K, filed with the SEC on September 29, 2025). | | | 10.21 | | Form of Guaranty (incorporated by reference to Exhibit 10.3 to the Current Report on Form 8-K, filed with the SEC on September 29, 2025). | | 91 | 10.22 | | Form of Security Agreement (incorporated by reference to Exhibit 10.4 to the Current Report on Form 8-K, filed with the SEC on September 29, 2025). | | | 10.23 | | Form of Pledge Agreement (incorporated by reference to Exhibit 10.5 to the Current Report on Form 8-K, filed with the SEC on September 29, 2025). | | | 10.24 | | Form of Placement Agency Agreement (incorporated by reference to Exhibit 10.6 to the Current Report on Form 8-K, filed with the SEC on September 29, 2025). | | | 10.25 | | Stock Purchase Agreement dated July 7, 2025 (incorporated by reference to Exhibit 10.2 to the Quarterly Report on Form 10-Q, filed with the SEC on November 14, 2025). | | | 10.26 | | Amendment No. 1 to the Secondment Agreement between the Company and GB Capital Ltd dated October 16, 2025 (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K, filed with the SEC on October 21, 2025). | | | 10.27 | | Amendment No. 1 to the Secondment Agreement between the Company and Northstrive Companies Inc. dated October 16, 2025 (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K, filed with the SEC on October 21, 2025). | | | 10.28 | | Amendment No. 4 to the Consulting and Services Agreement for Non-Employee Chief Executive Officer dated October 16, 2025 between the Company and GB Capital (incorporated by reference to Exhibit 10.3 to the Current Report on Form 8-K, filed with the SEC on October 21, 2025). | | | 10.29 | | Amendment No. 4 to the Consulting and Services Agreement for Non-Employee, Non-Executive Chairman dated October 16, 2025 between the Company and Northstrive (incorporated by reference to Exhibit 10.4 to the Current Report on Form 8-K, filed with the SEC on October 21, 2025). | | | 10.30 | | Asset Purchase Agreement between AGA Precision Systems LLC and Indarg Engineering dated October 26, 2025 (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K, filed with the SEC on October 30, 2025). | | | 10.31 | | Form of Note (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K, filed with the SEC on October 30, 2025). | | | 14.1 | | Code of Ethics (incorporated by reference Exhibit 14.1 to the Companys registration statement on Form S-1, filed with the SEC on September 28, 2023). | | | 19.1 | | Registrants Insider Trading Policy | | | 21.1 | | List of Subsidiaries. (incorporated by reference Exhibit 21.1 to the Companys registration statement on Form S-1, filed with the SEC on February 11, 2025). | | | 23.1 | | Consent of HTL International, LLC. | | | 24.1 | | Powers of Attorney (the signature page to this registration statement) | | | 31.1 | | Certification of Principal Executive Officer required by Rule 13a-14(a). | | | 31.2 | | Certification of Principal Financial Officer required by Rule 13a-14(a). | | | 32.1 | | Certification required by Section 1350 of Chapter 63 of Title 18 of the United States Code. | | | 32.2 | | Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | | | 97.1 | | Registrants Policy Related to Recovery of Erroneously Awarded Compensation | | | 101. INS | | Inline XBRL Instance Document. | | | 101. SCH | | Inline XBRL Taxonomy Extension Schema Document. | | | 101. CAL | | Inline XBRL Taxonomy Extension Calculation Linkbase Document. | | | 101. DEF | | Inline XBRL Taxonomy Extension Definition Linkbase Document. | | | 101. LAB | | Inline XBRL Taxonomy Extension Label Linkbase Document. | | | 101. PRE | | Inline XBRL Taxonomy Extension Presentation Linkbase Document. | | | 104 | | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). | | | | Information in this exhibit identified by brackets is confidential and has been excluded pursuant to Item 601(b)(10)(iv) of Regulation S-K because it is both (i) not material and (ii) the type the Company treats as private or confidential. | | | + | Management contract or compensatory plan | | **ITEM 16. FORM 10-K SUMMARY** We have elected not to provide a summary of the information provided in this Annual Report. 92 **SIGNATURES** Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. | | PMGC HOLDINGS INC. | | | | | | | | | By: | /s/ Graydon Bensler | | | | | Graydon Bensler | | | | | Chief Executive Officer and Chief Financial Officer (Principal Executive Officer and Principal Financial and Accounting Officer) | | Each person whose signature appears below constitutes and appoints Graydon Bensler as his or her attorney-in-fact, with the power of substitution, for him or her in any and all capacities, to sign any amendments to this Annual Report on Form 10-K and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that each of said attorneys-in-fact, or his or her substitute or substitutes, may do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Exchange Act of 1934, this Annual Report on Form 10-K has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. | Name | | Position | | Date | | | | | | | | | | /s/ Graydon Bensler | | Chief Executive Officer, Chief Financial Officer and Director | | March 30, 2026 | | | Graydon Bensler | | (Principal Executive Officer and Principal Financial and AccountingOfficer) | | | | | | | | | | | | /s/ Braeden Lichti | | Chairman of the Board of Directors | | March 30, 2026 | | | Braeden Lichti | | | | | | | | | | | | | | /s/ Jeffrey Parry | | Director | | March 30, 2026 | | | Jeffrey Parry | | | | | | | | | | | | | | /s/ Juliana Daley | | Director | | March 30, 2026 | | | Juliana Daley | | | | | | | | | | | | | | /s/ George Kovalyov | | Director | | March 30, 2026 | | | George Kovalyov | | | | | | 93 **Consolidated Financial Statements of** **** **PMGC Holdings Inc. (formerly Elevai Labs Inc.)** **** **For the years ended December 31, 2025 and 2024** **** **(Expressed in United States Dollars)** F-1 **REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM** To the Audit Committee and Shareholders of PMGC Holdings Inc. Opinion on The Financial Statements We have audited the accompanying consolidated balance sheets of PMGC Holdings, Inc (formerly Elevai Labs, Inc) and subsidiaries (the Company) as of December 31, 2025 and 2024, and the related consolidated statements of operations and other comprehensive loss, changes in shareholders equity, and cash flows for the years ended, December 31, 2025 and 2024, and the related notes (collectively referred to as financial statements). In our opinion, the financial statements present fairly, in all material respects, the consolidated financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its consolidated cash flows for the year ended December 31, 2025 and 2024, in accordance with accounting principles generally accepted in the United States of America. Going Concern The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As described in Note 2 to the financial statements the Company has suffered recurring losses from operations and has cash flows used in operations that raise substantial doubt about its ability to continue as a going concern. Managements plans regarding these matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. Basis for Opinion These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on the Companys financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Companys internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatements of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provided a reasonable basis for our opinion. /s/ HTL International, LLC HTL International, LLC We have served as PMGC Holdings, Incs auditor since 2024. Houston, TX March 30, 2026 HTL International, LLC Address: 12 Greenway Plaza, Suite 1100, Houston, TX 77046 Firm ID: 7000 F-2 PMGC Holdings Inc. (formerly Elevai Labs Inc.) Consolidated Balance Sheets (Expressed in United States dollars) | As of: | | December 31, 2025 | | | December 31, 2024 | | | | ASSETS | | | | | | | | | Current Assets | | | | | | | | | Cash | | $ | 5,402,333 | | | $ | 3,984,453 | | | | Receivables, net | | | 245,423 | | | | - | | | | Prepaids and deposits | | | 461,239 | | | | 868,464 | | | | Inventory | | | 95,098 | | | | - | | | | Other receivables | | | 95,108 | | | | 5,276 | | | | Investment in securities- current | | | 572,054 | | | | - | | | | Assets held for sale | | | - | | | | 1,192,808 | | | | Total Current Assets | | | 6,871,255 | | | | 6,051,001 | | | | | | | | | | | | | | | Operating lease right-of-use-assets | | | 1,241,527 | | | | - | | | | Investment in securities-noncurrent | | | - | | | | 139,084 | | | | Property and equipment, net | | | 885,520 | | | | 1,087 | | | | Intangibles, net | | | 2,892,397 | | | | 2,801,993 | | | | Goodwill | | | 977,774 | | | | - | | | | TOTAL ASSETS | | $ | 12,868,473 | | | $ | 8,993,165 | | | | LIABILITIES | | | | | | | | | | | Current Liabilities | | | | | | | | | | | Accounts payable and accrued liabilities | | $ | 697,633 | | | $ | 481,001 | | | | Due to related parties | | | 1,032,895 | | | | 419,217 | | | | Current portion of consideration payable | | | 206,250 | | | | 350,000 | | | | Current portion of operating lease liability | | | 247,627 | | | | - | | | | Derivative liabilities | | | 418,412 | | | | - | | | | Current portion of promissory notes payable | | | 85,000 | | | | - | | | | Convertible debt | | | 1,254,479 | | | | - | | | | Liabilities held for sale | | | - | | | | 548,916 | | | | Total Current Liabilities | | | 3,942,296 | | | | 1,799,134 | | | | | | | | | | | | | | | Promissory notes payable | | | 85,000 | | | | - | | | | Operating lease liability | | | 972,843 | | | | - | | | | Deferred tax liabilities | | | 30,972 | | | | - | | | | Consideration payable | | | - | | | | 534,467 | | | | TOTAL LIABILITIES | | $ | 5,031,111 | | | $ | 2,333,601 | | | | Commitments and Contingencies | | | | | | | | | | | | | | | | | | | | | | EQUITY | | | | | | | | | | | Preferred stock $0.0001 par value; 500,000,000 stock authorized: Series B preferred stock, 6,372,874 and Nil shares issued and outstanding as of December 31, 2025, and December 31, 2024, respectively | | | 637 | | | | - | | | | Common stock, $0.0001 par value, 83,333,334 shares authorized; 80,699 and 5,226 shares issued and outstanding as of December 31, 2025, and December 31, 2024, respectively(1) | | | 8 | | | | 1 | | | | Additional paid-in capital | | | 28,856,496 | | | | 19,929,527 | | | | Accumulated other comprehensive income | | | (2,339 | ) | | | (337 | ) | | | Accumulated deficit | | | (21,017,440 | ) | | | (13,269,627 | ) | | | TOTAL EQUITY | | | 7,837,362 | | | | 6,659,564 | | | | TOTAL LIABILITIES AND EQUITY | | $ | 12,868,473 | | | $ | 8,993,165 | | | | (1) | Reflects retrospectively the 1-for-200 reverse stock split that became effective on November 27, 2024, the 1-for-7 reverse stock split that became effective March 10, 2025, the 1 for 3.5 reverse stock split that became effective on September 2, 2025, the 1 for 4 reverse stock split that became effective on January 6, 2026, and the 1 for 6 reverse stock split that became effective on March 10, 2026. On a combined basis, this reflects retrospectively a reverse stock split of 1-for-117,600. Refer to Note 1, Organization and nature of operations | | The accompanying notes are an integral part of these consolidated financial statements F-3 PMGC Holdings Inc. (formerly Elevai Labs Inc.) Consolidated Statements of Operations and Comprehensive Loss For the years ended December 31, 2025 and 2024 (Expressed in United States dollars) | | | December 31, 2025 | | | December 31, 2024 | | | | | | | | | | | | | Revenue | | | 590,084 | | | | - | | | | Total revenue | | | 590,084 | | | | - | | | | | | | | | | | | | | | Cost of Goods Sold | | | 404,770 | | | | - | | | | Gross margin | | | 185,314 | | | | - | | | | | | | | | | | | | | | Operating expenses | | | | | | | | | | | Bad debt expense | | | 55,380 | | | | - | | | | Depreciation and amortization | | | 96,145 | | | | 546 | | | | Marketing and promotion | | | 200,940 | | | | 292,522 | | | | Consulting fees | | | 1,769,505 | | | | 1,367,273 | | | | Office and administrative | | | 2,238,660 | | | | 1,092,576 | | | | Professional fees | | | 1,423,021 | | | | 563,242 | | | | Investor relations | | | 253,333 | | | | 208,326 | | | | Research and development | | | 147,010 | | | | 104,654 | | | | Repairs and maintenance | | | 717,654 | | | | - | | | | Foreign exchange (gain) loss | | | 5,238 | | | | 5,846 | | | | Travel and entertainment | | | 160,376 | | | | 28,581 | | | | Total operating expenses | | $ | 7,067,262 | | | | 3,663,566 | | | | | | | | | | | | | | | Other income (expense) | | | | | | | | | | | Finance cost on ELOC | | | (289,498 | ) | | | - | | | | Change in fair value of derivative liabilities | | | 214,167 | | | | 369,158 | | | | Gain on the termination of intangible assets | | | 129,613 | | | | - | | | | Loss on disposal of PP&E | | | (32,432 | ) | | | - | | | | Gain on extinguishment of related-party debt | | | 31,261 | | | | - | | | | Interest income | | | 118,030 | | | | 12,891 | | | | Interest expense | | | (257,630 | ) | | | (735,197 | ) | | | Impairment on prepaid expense | | | (500,000 | ) | | | - | | | | Dividend income | | | 15,550 | | | | - | | | | Other Income | | | 33,079 | | | | - | | | | Realized gain (loss) on investments | | | (113,917 | ) | | | - | | | | Unrealized gain (loss) on investments | | | (216,043 | ) | | | - | | | | Loss from continuing operations before tax | | $ | (7,749,768 | ) | | | (4,016,714 | ) | | | Deferred tax expense | | | (30,972 | ) | | | - | | | | Net loss from continuing operations | | $ | (7,780,740 | ) | | | (4,016,714 | ) | | | | | | | | | | | | | | Income (loss) from discontinued operations | | | 32,927 | | | | (2,229,023 | ) | | | Total net loss | | | (7,747,813 | ) | | | (6,245,737 | ) | | | Other comprehensive income (loss) | | | | | | | | | | | Currency translation adjustment | | | (2,002 | ) | | | (539 | ) | | | Total comprehensive loss | | $ | (7,749,815 | ) | | | (6,246,276 | ) | | | | | | | | | | | | | | Basic and diluted loss per share: | | | | | | | | | | | Continuing operations | | $ | (382.301 | ) | | | (4,239.702 | ) | | | Discontinued operations | | $ | 1.618 | | | | (2,352.767 | ) | | | Weighted average shares outstanding(1) | | | 20,352 | | | | 947 | | | | (1) | Reflects retrospectively the 1-for-200 reverse stock split that became effective on November 27, 2024, the 1-for-7 reverse stock split that became effective March 10, 2025, the 1 for 3.5 reverse stock split that became effective on September 2, 2025, the 1 for 4 reverse stock split that became effective on January 6, 2026, and the 1 for 6 reverse stock split that became effective on March 10, 2026. On a combined basis, this reflects retrospectively a reverse stock split of 1-for-117,600. Refer to Note 1, Organization and nature of operations | | The accompanying notes are an integral part of these consolidated financial statements F-4 PMGC Holdings Inc. (formerly Elevai Labs Inc.) Consolidated Statements of Changes in Stockholders Equity For the years ended December 31, 2025 and 2024 (Expressed in United States dollars) | | | Common Stock | | | Series B Preferred Stock | | | Additional paid-in | | | Accumulated | | | Accumulated other comprehensive | | | | | | | | | Number of | | | Amount | | | Number of | | | Amount | | | capital | | deficit | | | income | | | Total | | | | | | shares # | | | $ | | | shares # | | | $ | | | $ | | | $ | | | $ | | | $ | | | | Balance, January 1, 2024(1) | | | 147 | | | | - | | | | - | | | | - | | | | 10,850,764 | | | | (7,023,890 | ) | | | 202 | | | | 3,827,076 | | | | Issued and issuable shares for acquisition of intangible assets | | | 24 | | | | - | | | | - | | | | - | | | | 1,610,778 | | | | - | | | | - | | | | 1,610,778 | | | | Issued pursuant to public offering | | | 243 | | | | - | | | | - | | | | - | | | | 7,045,000 | | | | - | | | | - | | | | 7,045,000 | | | | Issued pursuant to Securities Purchase Agreement | | | 11 | | | | - | | | | - | | | | - | | | | 325,819 | | | | - | | | | - | | | | 325,819 | | | | Exercise of Series B Warrants | | | 4,801 | | | | 1 | | | | - | | | | - | | | | (1 | ) | | | - | | | | - | | | | - | | | | Share-based compensation | | | - | | | | - | | | | - | | | | - | | | | 97,167 | | | | - | | | | - | | | | 97,167 | | | | Net loss for the year | | | - | | | | - | | | | - | | | | - | | | | - | | | | (6,245,737 | ) | | | - | | | | (6,245,737 | ) | | | Currency translation adjustment | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | (539 | ) | | | (539 | ) | | | Balance, December 31, 2024 | | | 5,226 | | | | 1 | | | | - | | | | - | | | | 19,929,527 | | | | (13,269,627 | ) | | | (337 | ) | | | 6,659,564 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Balance, January 1, 2025 | | | 5,226 | | | | 1 | | | | - | | | | - | | | | 19,929,527 | | | | (13,269,627 | ) | | | (337 | ) | | | 6,659,564 | | | | Settlement of accrued bonus liability | | | - | | | | - | | | | 6,372,874 | | | | 637 | | | | 149,363 | | | | - | | | | - | | | | 150,000 | | | | Issued and issuable shares for acquisition of intangible assets | | | 148 | | | | - | | | | - | | | | - | | | | 43,535 | | | | - | | | | - | | | | 43,535 | | | | Exercise of Series A Warrants | | | 1,649 | | | | - | | | | - | | | | - | | | | 1,698,058 | | | | - | | | | - | | | | 1,698,058 | | | | Issued pursuant to the registered direct offering | | | 1,538 | | | | - | | | | - | | | | - | | | | 1,245,306 | | | | - | | | | - | | | | 1,245,306 | | | | Repurchase of shares and warrants | | | (1 | ) | | | - | | | | - | | | | - | | | | (179 | ) | | | - | | | | - | | | | (179 | ) | | | Round up shares due to reverse stock splits | | | 3 | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | Exercise of Pre-funded Warrants | | | 1,968 | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | Issuance of common shares under ATM program | | | 7,827 | | | | 1 | | | | - | | | | - | | | | 1,672,102 | | | | - | | | | - | | | | 1,672,103 | | | | Exercise of replacement warrants | | | 9,856 | | | | 1 | | | | - | | | | - | | | | 1,511,442 | | | | - | | | | - | | | | 1,511,443 | | | | Issuance of commitment shares of ELOC | | | 2,363 | | | | - | | | | - | | | | - | | | | 306,180 | | | | - | | | | - | | | | 306,180 | | | | Issuance of Pre-Delivery shares of ELOC | | | 429 | | | | - | | | | - | | | | - | | | | 7 | | | | - | | | | - | | | | 7 | | | | Issuance of common shares in settlement of the Initial Pre-Paid Purchase | | | 49,693 | | | | 5 | | | | | | | | | | | | 2,320,315 | | | | | | | | | | | | 2,320,320 | | | | Share-based compensation | | | - | | | | - | | | | - | | | | - | | | | (19,160 | ) | | | - | | | | - | | | | (19,160 | ) | | | Net loss for the year | | | - | | | | - | | | | - | | | | - | | | | - | | | | (7,747,813 | ) | | | - | | | | (7,747,813 | ) | | | Currency translation adjustment | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | (2,002 | ) | | | (2,002 | ) | | | Balance, December 31, 2025 | | | 80,699 | | | | 8 | | | | 6,372,874 | | | | 637 | | | | 28,856,496 | | | | (21,017,440 | ) | | | (2,339 | ) | | | 7,837,362 | | | | (1) | Reflects retrospectively the 1-for-200 reverse stock split that became effective on November 27, 2024, the 1-for-7 reverse stock split that became effective March 10, 2025, the 1 for 3.5 reverse stock split that became effective on September 2, 2025, the 1 for 4 reverse stock split that became effective on January 6, 2026, and the 1 for 6 reverse stock split that became effective on March 10, 2026. On a combined basis, this reflects retrospectively a reverse stock split of 1-for-117,600. Refer to Note 1, Organization and nature of operations | | The accompanying notes are an integral part of these consolidated financial statement F-5 PMGC Holdings Inc. (formerly Elevai Labs Inc.) Consolidated Statements of Cash Flows For the years ended December 31, 2025 and 2024 (Expressed in United States dollars) | | | December 31, 2025 | | | December 31, 2024 | | | | Operating activities | | | | | | | | | Net loss | | $ | (7,747,813 | ) | | $ | (6,245,737 | ) | | | Adjustments to reconcile net loss to net cash used in operating activities: | | | | | | | | | | | Bad debt expense | | | 55,380 | | | | - | | | | Depreciation and amortization | | | 96,663 | | | | 12,950 | | | | Finance cost on ELOC | | | 289,498 | | | | - | | | | Share-based compensation | | | (19,160 | ) | | | 97,167 | | | | Straight-line rent expense | | | (22,848 | ) | | | (2,758 | ) | | | Change in fair value of derivative liabilities | | | (214,167 | ) | | | (369,158 | ) | | | Non-cash interest expense | | | 253,922 | | | | 686,334 | | | | R&D costs for intangible assets | | | 14,358 | | | | 82,556 | | | | Gain on termination of intangible asset | | | (129,613 | ) | | | - | | | | Loss on sale of Skincare | | | 39,676 | | | | - | | | | Loss on disposal of PP&E | | | 32,432 | | | | - | | | | Gain on extinguishment of related-party debt | | | (31,261 | ) | | | - | | | | Realized loss on sale of investments | | | 113,917 | | | | - | | | | Unrealized loss on investments | | | 216,043 | | | | - | | | | Impairment on prepaid expense | | | 500,000 | | | | - | | | | Deferred tax expense | | | 30,972 | | | | - | | | | | | | | | | | | | | | Changes in operating assets and liabilities: | | | | | | | | | | | Receivables | | | (100,594 | ) | | | (12,969 | ) | | | Prepaid expenses and deposits | | | 1,311 | | | | 65,096 | | | | Inventory | | | 147,868 | | | | (403,295 | ) | | | Accounts payable and accrued liabilities | | | 957,759 | | | | 207,497 | | | | Customer deposits | | | (20,496 | ) | | | (2,391 | ) | | | Due to related parties | | | (397,728 | ) | | | 397,728 | | | | Cash flows used in operating activities1 | | $ | (5,933,881 | ) | | $ | (5,486,980 | ) | | | | | | | | | | | | | | Investing activities | | | | | | | | | | | Purchase of equipment | | | (442,255 | ) | | | (9,160 | ) | | | Purchase of intangible assets | | | (6,000 | ) | | | (462,320 | ) | | | Purchase of investments | | | (1,789,044 | ) | | | (139,084 | ) | | | Proceeds from sale of investments | | | 1,762,201 | | | | - | | | | Issuance of promissory note | | | (127,300 | ) | | | - | | | | Net cash paid in business combinations | | | (2,162,756 | ) | | | - | | | | Cash flows used in investing activities1 | | $ | (2,765,154 | ) | | $ | (610,564 | ) | | | | | | | | | | | | | | Financing activities | | | | | | | | | | | Exercise of Series A warrants, net | | | 1,698,058 | | | | - | | | | Proceeds from the registered direct offering, net | | | 1,245,306 | | | | - | | | | Proceeds from issuance of common stock and warrants, net | | | - | | | | 6,993,058 | | | | Proceeds from issuance of Notes, net | | | - | | | | 914,442 | | | | Repayment of Notes | | | - | | | | (1,150,000 | ) | | | Repurchase of shares and warrants | | | (179 | ) | | | - | | | | Issuance of common stock under ATM agreement, net | | | 1,672,103 | | | | - | | | | Exercise of replacement warrants, net | | | 1,511,443 | | | | - | | | | Proceeds from the initial Pre-Paid Purchase of ELOC, net | | | 3,990,007 | | | | | | | | Cash flows provided by financing activities | | $ | 10,116,738 | | | $ | 6,757,500 | | | | | | | | | | | | | | | Effect of exchange rate changes on cash | | | 177 | | | | (2,354 | ) | | | | | | | | | | | | | | Increase in cash | | | 1,417,880 | | | | 657,602 | | | | Cash, beginning of year | | | 3,984,453 | | | | 3,326,851 | | | | Cash, ending of year | | $ | 5,402,333 | | | $ | 3,984,453 | | | | | | | | | | | | | | | Supplemental cash flow information: | | | | | | | | | | | Cash paid for interest | | | 37,770 | | | | 69,026 | | | | Cash paid for taxes | | | - | | | | - | | | | | | | | | | | | | | | Non-cash Investing and Financing transactions: | | | | | | | | | | | Common stock issued and issuable on acquisition of intangible asset | | | 43,535 | | | | 1,610,778 | | | | Shares received as proceeds for the sale of Skincare | | | 728,550 | | | | - | | | | Series B preferred shares issues to settle accrued bonus liability | | | 150,000 | | | | - | | | | Consideration payable settled through termination of the agreement | | | 894,151 | | | | - | | | | Commitment shares on the ELOC | | | 306,180 | | | | - | | | | Common stock issued to settle a portion of the ELOC | | | 2,320,320 | | | | - | | | | Settled of outstanding promissory note in business combination | | | 128,294 | | | | | | | | 1 | Refer to Note 4 for disclosure of cash flows used in operating and investing activities of discontinued operations. | | The accompanying notes are an integral part of these consolidated financial statements F-6 PMGC Holdings Inc. (formerly Elevai Labs Inc.) Notes to the Consolidated Financial Statements For the years ended December 31, 2025 and 2024 (Expressed in United States dollars) | 1. | Organization and nature of operations | | **** PMGC Holdings Inc. (formerly Elevai Labs Inc.) (PMGC) was incorporated under the laws of the State of Delaware on June 9, 2020. During 2024, PMGC completed a reorganization that included a name change and redomiciling from Delaware to Nevada. PMGC and its 100% owned subsidiaries, PMGC Research Inc. (formerly Elevai Research Inc) (PMGC Research), PMGC Impasse Corp (formerly Elevai Skincare Inc.), Northstrive Biosciences Inc. (formerly Elevai Biosciences, Inc), PMGC Capital LLC, Pacific Sun Packaging Inc.(Pacific Sun) and AGA Precision Systems LLC (AGA), are collectively referred to in these consolidated financial statements as the Company. On April 29, 2024, PMGC Impasse Corp (Skincare) and Northstrive Biosciences Inc. (BioSciences) were incorporated under the laws of the state of Delaware. PMGC is the sole shareholder of Skincare and BioSciences. The purpose of Skincare is to operate the Companys skincare business, while the purpose of BioSciences is to hold and develop the Companys intellectual property. Effective May 1, 2024, PMGC transferred its operating assets and liabilities relating to its skincare business to Skincare in exchange for common stock of Skincare. On November 13, 2024, PMGC Capital LLC (PMGC Capital) was incorporated under the laws of the state of Nevada, PMGC is the sole shareholder of PMGC Capital. On November 27, 2024, the Company completed a reverse stock split on a ratio of two hundred old shares of common stock for every one new post reverse split share of common stock. On March 10, 2025, the Company completed a second reverse stock split on a ratio of seven (7) shares of common stock for every one new post second reverse split common stock. On September 2, 2025, the Company completed a third reverse stock split of its common stock on a ratio of 3.5 common stock for every one new post third reverse split common stock. On January 6, 2026, the Company completed a fourth reverse stock split of its common stock on a ratio of 4 common stock for every one new post fourth reverse split common stock. On March 10, 2026, the Company completed a fifth reverse stock split of its common stock on a ratio of 6 common stock for every one new post fourth reverse split common stock. All current and comparative references to the number of common stock, warrants, options, weighted average number of common stock, and loss per share have been retrospectively adjusted to give effect to these reverse stock splits. On a combined basis, this reflects retrospectively a reverse stock split of 1-for-117,600. On December 31, 2024, PMGC and Skincare entered into an asset purchase agreement (the Asset Purchase Agreement) with an unrelated third party, pursuant to which PMGC agreed to sell, and the unrelated third party agreed to purchase, PMGCs skincare business. The sale of the skincare business closed on January 16, 2025. In accordance with Accounting Standards Codification (ASC) 205-20 Discontinued Operations, the assets and liabilities and the results of operations of the skincare business have been presented in these consolidated financial statements as assets and liabilities held for sale and discontinued operations. The Company also retrospectively adjusted the audited consolidated statement of operations and comprehensive loss for the three and year ended December 31, 2024, to reflect discontinued operations separately from continuing operations (Note 4). Prior to entering into the Asset Purchase Agreement, the Companys principal business was operating a skincare development company engaged in the design, manufacture, and marketing of skincare products in the skincare industry. With the sale of its skincare business, the Company changed its principal business. After this sale, PMGC became a diversified holding company that manages and grows its portfolio through strategic acquisitions, investments, and development across various industries. As part of its diversification and growth strategy, the Company completed the following acquisitions during the fiscal year 2025: | | On July 7, 2025, the Company completed the acquisition of Pacific Sun Packaging Inc., a California-based custom IT packaging company (Note 5). | | | | On July 18, 2025, the Company acquired AGA Precision Systems LLC, a California-based CNC machining company (Note 5). | | F-7 PMGC Holdings Inc. (formerly Elevai Labs Inc.) Notes to the Consolidated Financial Statements For the years ended December 31, 2025 and 2024 (Expressed in United States dollars) | | On October 26, 2025, the Company, through its wholly owned subsidiary AGA Precision Systems LLC, acquired certain assets of Indarg Engineering, Inc., a California-based precision CNC machining business (Note 5). | | PMGC currently manages and operates a diverse portfolio of wholly owned subsidiaries: | | | Northstrive BioSciences Inc. a biopharmaceutical company focusing on the development and acquisition of cutting-edge aesthetic medicines and therapeutic products. Our lead asset, EL-22, is leveraging a first-in-class engineered probiotic approach to address obesitys pressing issue of preserving muscle while on weight loss treatments, including GLP-1 receptor agonists. | | | | | PMGC Research Inc. PMGC Research was based in Canada and dedicated to medical scientific research and development efforts, utilizing Canadian research grants and partnering with leading Canadian Universities to push the boundaries of innovation. On November 12, 2025, PMGC Research was dissolved. | | | | | PMGC Capital LLC a multi-strategy investment firm focused on direct investments, strategic lending, and acquiring undervalued companies and assets across diverse markets. Our mission is to identify and seize high-potential opportunities, delivering sustainable growth and maximizing returns on capital. | | | | | Pacific Sun Packaging Inc.- a California-based custom IT packaging company providing innovative, sustainable, and technology-driven packaging solutions to industrial and consumer markets. | | | | | AGA Precision Systems LLC. - a California-based precision engineering and CNC machining company specializing in the design and production of high-tolerance components for industrial and technology applications. In October 2025, AGA acquired substantially all the operating assets of Indarg Engineering, Inc. AGA expands PMGCs advanced manufacturing footprint and enhances its capacity to deliver vertically integrated engineering and production solutions across multiple sectors. | | | | 2. | Going Concern | | **** These audited consolidated financial statements have been prepared on a going concern basis, which implies the Company will continue to realize its assets and discharge its liabilities in the normal course of business. The continuation of the Company as a going concern is dependent upon the continued financial support from its shareholders and the ability of the Company to obtain necessary equity financing to continue operations, and ultimately the attainment of profitable operations. As of December 31, 2025 and 2024, the Company had a net working capital of $2,928,959 and $4,251,867, respectively, and has an accumulated deficit of $21,017,440 and $13,269,627, respectively. Furthermore, for the years ended December 31, 2025 and 2024, the Company incurred a net loss of $7,747,813 and $6,245,737, respectively and used $5,933,881 and $5,486,980, respectively of cash flows for operating activities. These factors raise substantial doubt regarding the Companys ability to continue as a going concern. These audited consolidated financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. The assessment of whether the going concern assumption is appropriate requires management to take into account all available information about the future, which is at least, but not limited to, twelve (12) months from the date the financial statements are issued. The Company is aware that material uncertainties related to events or conditions may cast substantial doubt upon the Companys ability to continue as a going concern. F-8 PMGC Holdings Inc. (formerly Elevai Labs Inc.) Notes to the Consolidated Financial Statements For the years ended December 31, 2025 and 2024 (Expressed in United States dollars) Managements plans that alleviate substantial doubt about the Companys ability to continue as a going concern include: (a) raising additional debt or equity financing and (b) the acquisition of cash flow generating assets or businesses. Although the Company has been successful in raising funds in the past, and expects to do so in the future, there are no guarantees that it will be able to raise funds as anticipated. | 3. | Summary of Significant Accounting Policies | | **** Basis of Presentation The consolidated financial statements of the Company have been prepared in accordance with rules and regulations of the U.S. Securities and Exchange Commission (SEC) and generally accepted accounting principles in the United States (U.S. GAAP) and are expressed in U.S. dollars. These consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany accounts and transactions were eliminated upon consolidation. This summary of significant accounting policies of the Company is presented to assist in understanding the Companys consolidated financial statements. The consolidated financial statements and notes are representations of the Companys management who are responsible for their integrity and objectivity. These accounting policies conform to accounting principles generally accepted in the United States of America and have been consistently applied in the preparation of the consolidated financial statements. Principles of Consolidation The consolidated financial statements include the accounts of PMGC and its 100% owned subsidiaries, PMGC Research (until dissolution on November 12, 2025), Skincare, BioSciences, PMGC Capital, Pacific Sun and AGA. All intercompany accounts, transactions and profits were eliminated in the consolidated financial statements. Use of Estimates The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company regularly evaluates estimates and assumptions related to revenue recognition, the collectability of receivables, valuation of inventory, fair value of derivative liabilities and stock options, useful lives and recoverability of long-lived assets, and deferred income tax asset valuation allowances. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgements about the carrying value of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from those estimates. Estimates and assumptions are reviewed periodically, and the effects of revisions are reflected in the consolidated financial statements in the period they are determined. Emerging Growth Company The Company is an Emerging Growth Company, as defined in Section 2(a) of the Securities Act of 1933, as amended (the Securities Act), as modified by the Jumpstart Our Business Startups Act of 2012 (the JOBS Act), and it has taken advantage of certain exemptions that are not applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding anon binding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. F-9 PMGC Holdings Inc. (formerly Elevai Labs Inc.) Notes to the Consolidated Financial Statements For the years ended December 31, 2025 and 2024 (Expressed in United States dollars) Further, Section 102(b) (1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial reporting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public and private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. Foreign Currency Translation The Companys functional and reporting currency is the U.S. dollar. The functional currency of PMGC Research is the Canadian dollar. Monetary assets and liabilities denominated in foreign currencies are translated using the exchange rate prevailing at the balance sheet date. Non-monetary assets, liabilities, and items recorded in income arising from transactions denominated in foreign currencies are translated at rates of exchange in effect at the date of the transaction. Gains and losses arising on translation or settlement of foreign currency denominated transactions or balances are included in the determination of income. The accounts of PMGC Research are translated to U.S. dollars using the current rate method. Accordingly, assets and liabilities are translated into U.S. dollars at the period-end exchange rate while revenues and expenses are translated at the average exchange rates during the period. Related exchange gains and losses are included in a separate component of stockholders equity as accumulated other comprehensive income (loss). Business Combinations The Company accounts for business combinations using the acquisition method of accounting in accordance with ASC 805, Business Combinations. Under this method, the purchase consideration transferred is measured at fair value on the acquisition date and allocated to the identifiable assets acquired and liabilities assumed based on their estimated fair values. Any excess of the purchase consideration over the fair value of the identifiable net assets acquired is recorded as goodwill. Acquisition-related costs (such as legal, due diligence, and advisory fees) are expensed as incurred and presented within general and administrative expenses in the consolidated statements of operations. Contingent consideration, if any, is recorded at fair value on the acquisition date and subsequently remeasured at each reporting period, with changes in fair value recognized in earnings in accordance with ASC 805-30-35 and ASC 450, Contingencies. During the fiscal year of 2025, the Company completed three acquisitionsPacific Sun Packaging Inc., AGA Precision Systems LLC and Indarg Engineering Inc.which were accounted for under ASC 805. The initial purchase price allocations are preliminary and subject to adjustment upon completion of final valuation analyses (Note 5). Goodwill and Intangible Assets Goodwill arising from business combinations represents the excess of the purchase price over the fair value of identifiable net assets acquired. Goodwill is not amortized but is tested for impairment annually or more frequently if events or circumstances indicate that the carrying amount may not be recoverable, in accordance with ASC 350, Intangibles Goodwill and Other. F-10 PMGC Holdings Inc. (formerly Elevai Labs Inc.) Notes to the Consolidated Financial Statements For the years ended December 31, 2025 and 2024 (Expressed in United States dollars) Goodwill recognized from the 2025 acquisitions primarily reflects expected synergies, operational efficiencies, workforce know-how, and future growth opportunities within the Companys manufacturing segment. Identifiable intangible assets acquired in business combinations are recorded at fair value as of the acquisition date and are amortized on a straight-line basis over their estimated useful lives. In accordance with ASC 730 Research and development costs, an acquired in-process researched and development (IPR&D) intangible asset with an alternative future use is capitalized, in accordance with ASC 350, and amortized over its useful life. Although IPR&D assets are likely to be finite-lived, amortization does not begin until the research and development projects are completed. In accordance with the IPR&D asset purchase agreement, the Company is required to meet development milestones starting with the initiation of a pre-clinical IND-enabling study within 2 years of the acquisition date and ending with obtaining marketing approval from the FDA within 9 years of the acquisition date. Management assesses impairment indicators at each reporting period end. The Companys current classes and estimated useful lives of intangible assets are as follows: | Intangible asset | | Estimated useful life | | | Customer relationship | | 12 to 15 years | | | Brand | | 5 years | | | Backlog | | 1 year | | | License #2 MOA | | IPR&D project not yet complete | | Revenue Recognition The Company recognizes revenue in accordance with ASC 606, *Revenue from Contracts with Customers,* when control of promised goods or services is transferred to customers in an amount that reflects the consideration to which the Company expects to be entitled. The Companys revenue is derived from (i) the sale of standard IT packaging products through Pacific Sun Packaging Inc. and (ii) CNC machining and precision manufacturing services through AGA Precision Systems LLC. Contracts with customers are generally established through customer purchase orders, which specify product or service details, pricing, and payment terms, typically due within 30 to 60 days. For both revenue streams, each contract contains a single performance obligation, consisting of either the delivery of finished goods or the delivery of completed machined parts. Activities such as design, setup, tooling, and production processes are not distinct and are considered inputs into a single combined output. Accordingly, the entire transaction price, which is generally a fixed amount based on agreed-upon unit pricing and quantities, is allocated to the single performance obligation. The Company does not generally enter into arrangements with multiple performance obligations or significant financing components. Revenue is recognized at a point in time when control transfers to the customer, which is typically upon shipment under FOB shipping point terms or, in limited cases, upon delivery where shipping terms require. The Company evaluates whether it acts as a principal or agent for each revenue stream. For both packaging product sales and precision manufacturing services, the Company acts as the principal because it controls the goods or services prior to transfer, bears inventory and production risk, and has primary responsibility for fulfillment. Accordingly, revenue is recognized on a gross basis. AGA assesses variable consideration, including expected returns, rejections, and credits, at contract inception and throughout the contract term in accordance with ASC 606. Customers may reject non-conforming parts, which are typically reworked, replaced, or credited. The Company estimates expected returns based on historical experience and records a reduction of revenue, along with a corresponding refund liability and return asset, as applicable. Such amounts have historically not been material. AGA provides assurance-type warranties that products conform to customer specifications. These warranties do not represent separate performance obligations and are accounted for under ASC 460. The Company evaluates the need for a warranty reserve based on historical experience; however, warranty-related costs have not been material. Warranty coverage is limited to defects in conformance and excludes misuse or modifications, and the Companys liability is limited to the contract amount. Pacific Sun evaluates variable consideration, including expected returns and credits, at contract inception and throughout the contract term in accordance with ASC 606. Customers may receive replacements or credits for defective or incorrect products; however, general return rights are not provided. The Company estimates expected returns based on historical experience and records a reduction of revenue, along with a corresponding refund liability and return asset, as applicable. Such amounts have not been material for the periods presented. F-11 PMGC Holdings Inc. (formerly Elevai Labs Inc.) Notes to the Consolidated Financial Statements For the years ended December 31, 2025 and 2024 (Expressed in United States dollars) Pacific Sun does not provide formal warranty programs. Defective products are addressed through replacement or credit and are accounted for as variable consideration under ASC 606. Related amounts have not been material for the periods presented. Inventory Inventory entirely consists of IT packaging purchased and sold by Pacific Sun as finished goods and parts for machining purchased by AGA as raw materials. Inventory is stated at the lower cost or net realizable value. Cost is determined using the First in First out (FIFO) method. Net realizable value is determined on the basis of anticipated sales proceeds less the estimated selling expenses. To assess the need for an allowance due to obsolescence or a decline in net realizable value, management evaluates inventory aging in conjunction with expected future sales and compares the cost of inventory to its net realizable value. If the carrying amount exceeds net realizable value; an allowance is recorded to write down the inventory to its estimated net realizable value. Investments in securities Investments in securities include publicly traded equity securities and a convertible debenture that is convertible at any time into publicly traded securities. These investments are classified as trading securities and are reported at fair value, with both realized and unrealized gains and losses recognized in earnings. Publicly traded securities have readily determinable fair values and are measured in accordance with ASC 321 Accounting for Equity Interests. The convertible debenture is measured at fair value under ASC 320 Investments Debt Securities. Investments in securities also include private company stock. The Company has elected to account for investments in equity securities without readily determinable fair values at cost minus impairment, if any, as permitted under ASC 321 Investments Equity Securities. However, if the Company identifies observable price changes in orderly transactions for the identical or a similar investment of the same issuer, the Company shall measure the investment in equity security at fair value as of the date that the observable transaction occurred. At each reporting period, the Company makes a qualitative assessment considering impairment indicators to evaluate whether each equity investment without readily determinable fair value is impaired. Impairment indicators include, but are not limited to, the following: | | A significant deterioration in the earnings performance, credit rating, asset quality, or business prospects of the investee; | | | | A significant adverse change in the regulatory, economic, or technological environment of the investee; | | | | A significant adverse change in the general market condition of either the geographical area or the industry in which the investee operates; | | | | A bona fide offer to purchase, an offer by the investee to sell, or a completed auction process for the same or similar investment for an amount less than the carrying amount of that investment; | | | | Factors that raise significant concerns about the investees ability to continue as a going concern, such as negative cash flows from operations, working capital deficiencies, or noncompliance with statutory capital requirements or debt covenants. | | If equity security without a readily determinable fair value is deemed to be impaired based on the qualitative factors, the Company will estimate the fair value of the investment to determine the amount of the impairment loss, if any.No impairment loss related to such securities was recognized during the year ended December 31, 2025. The cost of securities sold is determined using the specific identification or average cost method. Investments, including publicly traded shares and those that management intends to convert into equity upon favorable market conditions, are classified as current assets on the consolidated balance sheet. F-12 PMGC Holdings Inc. (formerly Elevai Labs Inc.) Notes to the Consolidated Financial Statements For the years ended December 31, 2025 and 2024 (Expressed in United States dollars) Discontinued Operations, and Assets and Liabilities Held for Sale The Company classify long-lived assets, or disposal groups comprised of assets and liabilities, as held for sale in the period in which the following six criteria are met, (i) management, having the authority to approve the action, commits to a plan to sell the group of assets and liabilities; (ii) the assets and liabilities are available for immediate sale in its present condition, subject only to terms that are usual and customary; (iii) an active program to locate a buyer and other actions required to complete the plan to sell have been initiated; (iv) the sale is probable and is expected to be completed within one year; (v) the property is being actively marketed for sale at a price that is reasonable in relation to its current fair value; and (vi) actions necessary to complete the plan of sale indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn, in accordance with Accounting Standard Codification (ASC) 360, Property, Plant and Equipment. A business classified as held for sale is recorded at the lower of its carrying amount or estimated fair value less cost to sell. If the carrying amount of the business exceeds its estimated fair value less cost to sell, a loss is recognized. Assets and liabilities related to a business classified as held for sale are segregated in the current and prior balance sheets in the period in which the business is classified as held for sale, resulting in changes to the presentation of certain prior period amounts. The Company ceases depreciation and amortization on long-lived assets (or disposal groups) classified as held for sale and measures them at the lower of carrying value or estimated fair value less cost to sell. The Company reports the results of operations of a business as discontinued operations if a disposal represents a strategic shift that has (or will have) a major effect on the Companys operations and financial results when the business is classified as held for sale, in accordance with ASC 360, and ASC 205-20, Presentation of Financial Statements Discontinued Operations. Under ASC 360, assets may be classified as held for sale even though discontinued operations classification is not met. The results of discontinued operations are reported in Net loss from discontinued operations, net of tax in the accompanying consolidated statements of operations and comprehensive loss for current and prior periods, including any gain or loss recognized on closing or adjustment of the carrying amount to fair value less cost to sell. All other notes to these consolidated financial statements present the results of continuing operations and exclude amounts related to discontinued operations for all periods presented. Research and Development Research and development costs are expensed as incurred in accordance with ASC 730, Research and Development. The Company incurs research and development costs in the pursuit of new products and improving the formulation of existing products. Examples of research costs include laboratory research, studies, surveys, and other activities aimed at acquiring new knowledge. Development costs include expenses incurred in the process of applying research findings or other knowledge to a plan or design for a new product or process. Examples of development costs include engineering, design, testing, and other activities aimed at developing a product or process for commercial production. Development costs may be capitalized if the following criteria are met: (1) technological feasibility has been established, (2) the Company intends to complete the product or process. (3) the Company has the ability to use or sell the product or process, (4) the product or process will generate future economic benefits, and (5) the costs can be reliably measured. As of December 31, 2025 and 2024, the Company has not capitalized any development cost. Marketing and Promotion Costs associated with marketing and promoting the Companys products are expensed when incurred. Leases The Company accounts for leases in accordance with ASC 842, Leases. We determine if an arrangement meets the definition of a lease at inception of the contract. Leases are classified as either operating or finance leases. All of the Companys leases have been assessed as operating leases. Accounting for operating leases, other than short term leases, results in operating lease right-of-use (ROU) assets, operating lease liabilities - current, and operating lease liabilities - noncurrent on the balance sheets. F-13 PMGC Holdings Inc. (formerly Elevai Labs Inc.) Notes to the Consolidated Financial Statements For the years ended December 31, 2025 and 2024 (Expressed in United States dollars) ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As our lease do not provide an implicit rate, we use our incremental borrowing rate based on the estimated rate of interest for collateralized borrowing over a similar term of the lease payments at commencement date. The operating lease ROU asset also includes any lease payments made and excludes lease incentives. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term. Income Taxes The Company accounts for income taxes using the asset and liability method in accordance with ASC 740, Income Taxes. The asset and liability method provides that deferred income tax assets and liabilities are recognized for the expected future tax consequence of temporary differences between the financial reporting and taxes basis of assets and liabilities, and for operating loss and tax credit carryforwards. Deferred income tax assets and liabilities are measured using the currently enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company records a valuation allowance to reduce deferred income tax assets to the amount that it believes more likely than not to be realized. In making such a determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income tax planning, strategies and results of recent operations. If the Company determines that such deferred tax assets will be recognized in the future in excess of the net recorded amount, then the deferred tax asset valuation will be adjusted which would reduce the provision for income taxes. Significant judgments and estimates are required in the determination of the consolidated income tax expense. As of December 31, 2025 and 2024, the Company recorded $30,972 deferred tax liabilities and $nil, respectively. In addition, the Company recorded $30,972 tax expense during the year ended December 31, 2025. The Company records uncertain tax provisions in accordance with ASC 740 based on a two-step process whereby (1) a determination is made about whether it is more likely than not that the tax positions will be sustained based on the technical merits of the position and (2) for those tax positions that meet the more likely than not recognition threshold, the Company recognizes the largest amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority. As of December 31, 2025 and 2024, the Company did not have any amounts recorded pertaining to uncertain tax positions. The Company recognizes interest and penalties related to uncertain tax positions in office and administrative expense. The Company did not incur any penalties or interest during the years ended December 31, 2025 and 2024. Concentration of Credit Risk Cash, receivables, other receivables and refundable deposits are the only financial instruments that are potentially subject to credit risk. The Company places its cash in what it believes to be credit-worthy financial institutions. Receivables relate to the timing differences in receiving proceeds from sales transactions processed through on customers credit. Refundable deposits relate to the Companys security deposit on lease agreements. F-14 PMGC Holdings Inc. (formerly Elevai Labs Inc.) Notes to the Consolidated Financial Statements For the years ended December 31, 2025 and 2024 (Expressed in United States dollars) Risks and Uncertainties The Company is subject to risks from, among other things, competition associated with the industry in general, regulatory environment, other risks associated with financing, liquidity requirements, rapidly changing customer requirements, limited operating history, foreign currency exchange rates and the volatility of public markets. Contingencies Certain conditions may exist as of the date the consolidated financial statements are issued, which may result in a loss to the Company, but which will only be resolved when one or more future events occur or fail to occur. The Companys management and legal counsel assess such contingent liabilities, and such assessment inherently involves judgement. In assessing loss contingencies related to legal proceedings that are pending against the Company or un-asserted claims that may result in such proceedings, the Companys legal counsel evaluates the perceived merits of any legal proceedings or un-asserted claims as well as the perceived merits of the amount of relief sought or expected to be sought. If the assessment of a contingency indicates it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Companys consolidated financial statements. If the assessment indicates that a potential material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss if determinable and material would be disclosed. Loss contingencies considered to be remote by management are generally not disclosed unless they involve guarantees, in which case the guarantee would be disclosed. Cash and Cash Equivalents Cash includes cash on hand and cash in demand deposits. Cash equivalents include all highly liquid instruments with original maturities of three months or less. As of December 31, 2025 and 2024, the Company did not hold any cash equivalents. Receivables All receivables under standard terms are due thirty (30) days from the date billed. If the funds are not received within thirty (30) days, the customer is contacted to arrange payment. The Company uses the allowance for credit losses method to account for uncollectable receivables. As of December 31, 2025 and 2024, there was no allowance for credit losses related to receivables recorded. During the year ended December 31, 2025, the Company wrote off $55,380 of trade receivables deemed uncollectible. F-15 PMGC Holdings Inc. (formerly Elevai Labs Inc.) Notes to the Consolidated Financial Statements For the years ended December 31, 2025 and 2024 (Expressed in United States dollars) Property, Plant and Equipment Property and equipment is stated at cost less accumulated depreciation. Renewals and betterments that materially extend the life of assets are capitalized. Expenditure on maintenance and repairs are expensed as incurred. Property and equipment is depreciated using the straight-line method. The estimated useful lives of property and equipment are generally as follows: | Machinery equipment | 7-year straight-line | | | Furniture and office equipment | 5-year straight-line | | | Computers | 3-year straight-line | | | Leasehold improvement | Depreciated over the shorter of the estimated useful life of the improvement or the remaining lease term | | The Company ceases to depreciate property and equipment on the date that it is reclassified to assets held for sale. Impairment of Long-Lived Assets The Company reviews long-lived assets such as equipment for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. If the total of the expected undiscounted future cash flows is less than the carrying value of the asset, a loss is recognized for the excess of the carrying amount over the fair value of the asset. The Companys policy for long-lived assets requires judgement in determining whether the present value of future expected economic benefits exceeds capitalized costs. The policy requires management to make certain estimates and assumptions about future economic benefits related to its operations. Estimates and assumptions may change if new information becomes available. If information becomes available suggesting that the recovery of capitalized cost is unlikely, the capitalized cost is written off/impaired to the consolidated statement of operations. Derivative Financial Instruments The Company does not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks. The Company evaluates all of its financial instruments, including issued stock purchase warrants, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the consolidated statement of operations. For derivative instruments that qualify for equity classification under ASC 815-40 are recorded in stockholders equity at fair value on the issuance date and are not subsequently remeasured, unless reclassification is required due to changes in facts and circumstances. The Company reassesses the classification of derivative instruments at each reporting date. The Company uses the Black-Scholes or Binomial option-pricing model to value the derivative instruments at inception and subsequent valuation dates, generally applying the Black-Scholes model for instruments with standard terms and the Binomial model for instruments that include more complex features, such as variable settlement provisions, early exercise features, or path-dependent assumptions. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is reassessed at the end of each reporting period. F-16 PMGC Holdings Inc. (formerly Elevai Labs Inc.) Notes to the Consolidated Financial Statements For the years ended December 31, 2025 and 2024 (Expressed in United States dollars) Common Stock Warrants The Company classifies as equity any warrants that (i) require physical settlement or net-share settlement or (ii) provide the Company with a choice of net-cash settlement or settlement in its own shares (physical settlement or net-share settlement). The Company classifies as assets or liabilities any warrants that (i) require net-cash settlement (including a requirement to net cash settle the contract if an event occurs and if that event is outside the Companys control), (ii) gives the counterparty a choice of net-cash settlement or (iii) that contain reset provisions that do not qualify for the scope exception. The Company assesses classification of its common stock warrants at each reporting date to determine whether a change in classification is required. Warrants classified as liabilities are initially recorded at fair value, with gains and losses arising from changes in fair value recognized in other income (expenses) in the consolidated statements of operations at each period end while such instruments remain outstanding. Financial Instruments and Fair Value Measurements The Company analyzes all financial instruments with features of both liabilities and equity under ASC 480, Distinguishing Liabilities from Equity, and ASC 815 Derivatives and Hedging. ASC 820, Fair Value Measurements and Disclosures, requires disclosure of the fair value of financial instruments held by the Company. ASC 825, Financial Instruments, defines fair value, and establishes a three-level valuation hierarchy for disclosures of fair value measurement that enhances disclosure requirements for fair value measures. The carrying amounts reported in the consolidated balance sheets for receivables and current liabilities each qualify as financial instruments and are a reasonable estimate of their fair values because of the short period of time between the origination of such instruments and their expected realization and their current market rate of interest. The three levels of valuation hierarchy are defined as follows: *Level 1* Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities. *Level 2* Level 2 applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data. *Level 3* Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities. The Companys financial instruments consist of cash, trade and other receivables, investment in securities, accounts payable and accrued liabilities, amounts due to related parties, consideration payable, promissory notes payable, convertible debt, and derivative liabilities. Except for cash, investment in securities, and derivative liabilities, the carrying amounts of the Companys financial instruments approximate their fair values due to their short-term nature. Cash is measured and recognized at fair value based on Level 1 input for all periods presented. Investment in securities is measured and recognized at fair value based on Level 1, Level 2 and Level 3 inputs as at December 31, 2025. Derivative liabilities are measured and recognized at fair value based on Level 3 inputs. F-17 PMGC Holdings Inc. (formerly Elevai Labs Inc.) Notes to the Consolidated Financial Statements For the years ended December 31, 2025 and 2024 (Expressed in United States dollars) | | | Level 1 | | | Level 2 | | | Level 3 | | | Total | | | | December 31, 2025: | | | | | | | | | | | | | | | Cash | | $ | 5,402,333 | | | $ | - | | | $ | - | | | $ | 5,402,333 | | | | Investment in securities | | | 398,942 | | | | 48,111 | | | | - | | | | 447,053 | | | | Derivative liabilities | | | - | | | | | | | | 418,412 | | | | 418,412 | | | | | | $ | 5,801,275 | | | $ | 48,111 | | | $ | 418,412 | | | $ | 6,267,798 | | | | | | | | | | | | | | | | | | | | | | | December 31, 2024: | | | | | | | | | | | | | | | | | | | Cash | | $ | 3,984,453 | | | $ | - | | | $ | - | | | $ | 3,984,453 | | | | Investment in securities | | | - | | | | 139,084 | | | | - | | | | 139,084 | | | | Derivative liabilities | | | - | | | | - | | | | - | | | | - | | | | | | $ | 3,984,453 | | | $ | 139,084 | | | $ | - | | | $ | 4,123,537 | | | Loss per Share The Company computes net income (loss) per share in accordance with ASC 260, Earnings per Share. ASC 260 requires presentation of both basic and diluted earnings per share (EPS) on the face of the consolidated statement of operations. Basic EPS is computed by dividing net income (loss) available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential shares of common stock outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all potential shares if their effect is anti-dilutive. The Companys stock options and warrants outstanding during the years ended December 31, 2025 and 2024, are considered potential common shares that could dilute earnings per share but were not included in the diluted loss per share computation because their effect was antidilutive for the periods presented. As a result, there is no difference between the computation of basic and diluted loss per shares for the periods presented. Share-Based Compensation *Employees*- The Company accounts for share-based compensation under the fair value method which requires all such compensation to employees, including the grant of employee stock options, to be calculated based on its fair value at the measurement date (generally the grant date), and recognized in the consolidated statement of operations over the requisite service period. *Nonemployees*- During June 2018, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2018-07, Compensation-Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting (ASU 2018-07) to simplify the accounting for share-based payments to nonemployees by aligning it with the accounting for share-based payments to employees. Under the requirements of ASU 2018-07, the Company accounts for share-based compensation to non-employees under the fair value method which requires all such compensation to be calculated based on the fair value at the measurement date (generally the grant date) and recognized in the statement of operations over the requisite service period. During the years ended December 31, 2025 and 2024, the Company recorded $(19,160) and $97,167, respectively, in share-based compensation expense, of which $60,440 and $(79,600) and $93,449 and $3,718, respectively is included in office and administration and discontinued operations, respectively. Within discontinued operations for the years ended December 31, 2025 and 2024, $(73,768) and $(5,832), and ($599) and $4,317, respectively is included in office and administration and research and development, respectively. F-18 PMGC Holdings Inc. (formerly Elevai Labs Inc.) Notes to the Consolidated Financial Statements For the years ended December 31, 2025 and 2024 (Expressed in United States dollars) Determining the appropriate fair value model and the related assumptions requires judgment. During the years ended December 31, 2025 and 2024, the fair value of each option grant was estimated using a Black-Scholes option-pricing model. The expected volatility represents the historical volatility of comparable publicly traded companies in similar industries, adjusted for variables such as stock price, market capitalization and life cycle. Due to limited historical data, the expected term for options granted is equal to the contractual life. The risk-free interest rate is based on a treasury instrument whose term is consistent with the expected life of stock options. The Company has not paid and does not anticipate paying cash dividends on its shares of common stock; therefore, the expected dividend yield is assumed to be zero. Convertible debentures The Company accounts for convertible debentures in accordance with ASC 470, *Debt*. Convertible debentures are recorded at face value less unamortized issuance costs, assuming the conversion feature does not meet the requirements for bifurcation. If the conversion feature does not meet the requirements to be classified as equity, it is bifurcated and accounted for separately as a derivative liability under ASC 815, *Derivatives and Hedging*, and measured at fair value, with subsequent changes recognized in earnings. If the conversion feature meets the equity classification criteria, no separate accounting for the conversion feature is required, and the entire instrument is classified as a liability. Interest expense is recognized using the effective interest method, which includes the amortization of any debt issuance costs and discounts or premiums. *Debt Modifications and Extinguishments* The Company evaluates modifications to convertible debt instruments in accordance with ASC 470-50, *Modifications and Extinguishments.* A modification is deemed to be substantial if: | | The present value of the cash flows under the terms of the modified debt differs by at least 10% from the present value of the remaining cash flows under the original debt terms, using the original effective interest rate (the 10% Test); or | | | | The modification results in a change in the embedded conversion option that requires re-evaluation under ASC 815. | | If the modification is determined to be substantial, the original debt is extinguished, and the modified instrument is accounted for as a new debt issuance. The Company also assesses whether a modification constitutes a troubled debt restructuring under ASC 470-60. A restructuring is considered troubled if the Company is experiencing financial difficulty and the creditor has granted a concession. For modifications that are not substantial, the Company accounts for the changes prospectively, adjusting the effective interest rate to reflect the revised cash flows. In evaluating convertible debt where the conversion option is bifurcated as a derivative liability before and after the modification, the 10% cash flow test is applied to the host debt instrument (without the conversion feature). Any change in fair value of the bifurcated conversion option is recognized in earnings. F-19 PMGC Holdings Inc. (formerly Elevai Labs Inc.) Notes to the Consolidated Financial Statements For the years ended December 31, 2025 and 2024 (Expressed in United States dollars) New Accounting Standards *Recently Adopted Accounting Standards* In June 2022, the FASB issued ASU 2022-03, ASC Subtopic 820 Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions. The FASB is issuing this Update (1) to clarify the guidance in Topic 820, Fair Value Measurement, when measuring the fair value of an equity security subject to contractual restrictions that prohibit the sale of an equity security, (2) to amend a related illustrative example, and (3) to introduce new disclosure requirements for equity securities subject to contractual sale restrictions that are measured at fair value in accordance with Topic 820. Stakeholders asserted that the language in the illustrative example resulted in diversity in practice on whether the effects of a contractual restriction that prohibits the sale of an equity security should be considered in measuring that equity securitys fair value. Some stakeholders apply a discount to the price of an equity security subject to a contractual sale restriction, whereas other stakeholders consider the application of a discount to be inappropriate under the principles of Topic 820. For public business entities, the amendments in this Update are effective for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years. The adoption of this standard did not have a significant impact on the Companys consolidated financial statements. In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (ASU 2023-07), intended to improve reportable segments disclosure requirements primarily through enhanced disclosures about significant segment expenses. In December 2023, the FASB issued ASU 2023-09Income Taxes (Topic 740)Improvements to Income Tax Disclosures (ASU 2023-09) which amends the Codification to enhance the transparency and decision usefulness of income tax disclosures. ASU 2023-09 requires additional disaggregation of the reconciliation between the statutory and effective tax rate for an entity and of income taxes paid, both of which are disclosures required by current GAAP. The amendments improve the transparency of income tax disclosures by requiring (1) consistent categories and greater disaggregation of information in the rate reconciliation and (2) income taxes paid disaggregated by jurisdiction. The amendments in ASU 2023-09 apply to all entities that are subject to Topic 740, Income Taxes. For public business entities, the amendments in ASU 2023-09 are effective for annual periods beginning after December 15, 2024. The Company adopted the ASU prospectively for the period ending December 31, 2025, the effect being only related to our disclosures with no impact on our results of operations or financial condition. ASU 2023-07 includes a requirement to disclose significant segment expenses that are regularly provided to the CODM and included within each reported measure of segment profit or loss, the title and position of the CODM, an explanation of how the CODM uses the reported measure(s) of segment profit or loss in assessing segment performance and deciding how to allocate resources, and all segments profit or loss and assets disclosures. ASU 2023-07 is effective for all public companies for fiscal years beginning after December 15, 2023, and interim periods for the interim period beginning on January 1, 2025. Adoption of ASU 2023-07 did not have a material impact on the Companys consolidated financial statement. In November 2024, the FASB issued ASU 2024-03, Expense Disaggregation Disclosures (Subtopic 220-40), which requires enhanced disclosures of the nature and composition of certain expense captions presented in the income statement, including inventory purchases, employee compensation, depreciation, and other significant expenses. The Company adopted this guidance during the year ended December 31, 2025. The adoption of this guidance did not have a material impact on the Companys consolidated financial statements but resulted in additional disclosures in the notes to the consolidated financial statements. F-20 PMGC Holdings Inc. (formerly Elevai Labs Inc.) Notes to the Consolidated Financial Statements For the years ended December 31, 2025 and 2024 (Expressed in United States dollars) *Recently Issued Accounting Standards* The Company assesses the adoption impacts of recently issued, but not yet effective, accounting standards by the Financial Accounting Standards Board on the Companys consolidated financial statements. There are no recently issued accounting standards which may have effect on the Companys consolidated financial statements. **** | | 4. | Assets and liabilities held for sale and Discontinued operations | | **** Pursuant to the Asset Purchase Agreement, the Company agreed to sell its skincare business for (i) 1,267,040 shares of common stock of the buyer, having a market value of $728,550 at the closing of the agreement; (ii) buyers assumption of certain liabilities; and, (iii) $56,525 in cash, to be paid upon the sale of specified inventory existing as of the consummation of this transaction (the Closing). Following the Closing, which occurred on January 16, 2025 (such date, the Closing Date), buyer will pay additional earn-out consideration for the sale, if and when payable: (a) buyer will pay, for each year ending on the anniversary of the Closing Date during the five-year period following the Closing, an amount, if any, equal to 5% of the sales generated during such year from the existing products as of the Closing; and (b) buyer will pay a one-time payment of $500,000 if buyer achieves $500,000 in revenue from sales of the existing hair and scalp products as of the Closing on or before the 24-month anniversary of the Closing Date. The following table summarizes the major line items for the skincare business that are included in loss from discontinued operations, net of taxes in the consolidated statements of operations: **** | | | December 31, 2025 | | | December 31, 2024 | | | | Revenue | | $ | 152,381 | | | $ | 2,467,298 | | | | Cost of goods sold | | | 30,530 | | | | 670,197 | | | | Gross profit | | $ | 121,851 | | | $ | 1,797,101 | | | | | | | | | | | | | | | Expenses | | | | | | | | | | | Depreciation | | | 517 | | | | 10,390 | | | | Marketing and promotion | | | 6,924 | | | | 1,023,200 | | | | Consulting fees | | | - | | | | 40,110 | | | | Office and administrative | | | 56,763 | | | | 2,051,571 | | | | Professional fees | | | 50,460 | | | | 415,878 | | | | Investor relations | | | - | | | | 6,667 | | | | Research and development | | | 16,921 | | | | 308,597 | | | | Foreign exchange (gain) loss | | | 1,874 | | | | (1,972 | ) | | | Travel and entertainment | | | 10,726 | | | | 186,244 | | | | Total expenses | | $ | 144,185 | | | | 4,040,685 | | | | | | | | | | | | | | | Other income | | | 94,937 | | | | 34,723 | | | | Interest expense | | | - | | | | (20,162 | ) | | | Loss on the sale of Skincare | | | (39,676 | ) | | | | | | | | | | | | | | | | | | Net income (loss) from discontinued operations | | $ | 32,927 | | | | (2,229,023 | ) | | F-21 PMGC Holdings Inc. (formerly Elevai Labs Inc.) Notes to the Consolidated Financial Statements For the years ended December 31, 2025 and 2024 (Expressed in United States dollars) The following table summarizes the carrying amounts of major classes of assets and liabilities of discontinued operations as at the Closing Date (January 16, 2025) and December 31, 2024: | | | Closing Date January 16, 2025 | | | December 31, 2024 | | | | Assets | | | | | | | | | | | Receivables, net | | | 71,793 | | | | 43,497 | | | | Inventory | | | 875,996 | | | | 898,962 | | | | Prepaid expenses and deposits | | | 94,568 | | | | 137,875 | | | | Property and equipment | | | 47,618 | | | | 48,134 | | | | Right of use asset | | | 51,721 | | | | 64,340 | | | | Total assets held for sale | | | 1,141,696 | | | | 1,192,808 | | | | | | | | | | | | | | | Liabilities | | | | | | | | | | | Accounts payable and accrued liabilities | | | 307,024 | | | | 449,125 | | | | Customer deposits | | | 13,806 | | | | 34,302 | | | | Lease liability | | | 52,640 | | | | 65,489 | | | | Total liabilities held for sale | | | 373,470 | | | | 548,916 | | | | Total assets and liabilities held for sale, net | | | 768,226 | | | | 643,892 | | | The Company recorded a loss on sale of discontinued operations of $39,676. The proceeds on sale, which was the fair value of the buyer shares received on Closing, amounted to $728,550, and the carrying amounts of the net assets and liabilities sold amounted to $768,226. The following represents the cash flows from operating and investing activities of discontinued operations for the years ended December 31, 2025 and 2024: | | | December31, 2025 | | | December31, 2024 | | | | Cashflows used in operating activities | | $ | (131,331 | ) | | $ | (2,686,379 | ) | | | Cashflows used in investing activities | | | - | | | | (9,160 | ) | | | 5. | Business combinations | | **** Pacific Sun Packaging Inc. On July 7, 2025, the Company completed the acquisition of 100% of the outstanding shares of common stock of Pacific Sun Packaging Inc., a California corporation specializing in custom antistatic and high-precision protective packaging for electronic and IT hardware components (Pacific Sun). As consideration for the acquisition, the Company paid cash of $1,020,700 and settled an outstanding promissory note of $128,294. The Company also agreed to a contingent earn-out payable up to a maximum of $250,000 if sales during the 12-month period following the acquisition equal or exceed $1,145,915 (the Earn-out Target). The earn-out payable will be reduced on a proportional basis if the Earn-out Target is not reached, with no amount payable if sales during the 12-month period following the acquisition are equal to or below $458,366. The contingent consideration was recognized at fair value as of the acquisition date and is classified as a liability. The fair value was estimated using a probability-weighted discounted cash flow approach, incorporating managements revenue projections and an estimated discount rate of approximately 11%. As of December 31, 2025, the estimated fair value of the contingent consideration liability was $206,249. The Company remeasures the contingent consideration liability at each reporting date. Changes in the liability due to the passage of time are recognized as accretion expense, while other changes in fair value, if any, are recognized in earnings. For the year ended December 31, 2025, the Company recognized accretion expense of $10,178. F-22 PMGC Holdings Inc. (formerly Elevai Labs Inc.) Notes to the Consolidated Financial Statements For the years ended December 31, 2025 and 2024 (Expressed in United States dollars) In connection with the acquisition, the Company agreed to pay retention bonuses for past services to the remaining employees of the Company. The working capital target of the acquired business was set at $260,000 and the difference of $114,969, as agreed between the parties, is accounted for as a working capital adjustment as part of the total consideration. The acquisition was accounted for under ASC 805, Business Combinations, with PMGC Holdings Inc., identified as the acquirer. The purchase price was allocated to the acquired assets and assumed liabilities based on their estimated fair values as of the acquisition date, determined with assistance from an independent valuation specialist. The resulting allocation is summarized below: | Cash | | $ | 1,020,700 | | | | Promissory note and interest | | | 128,294 | | | | Sign on bonus | | | 130,000 | | | | Earn out payment payable | | | 196,072 | | | | Working capital adjustment | | | 114,969 | | | | Total consideration | | $ | 1,590,035 | | | | | | | | | | | Net assets (liabilities) acquired of the Company: | | | | | | | Cash | | $ | 108,507 | | | | Receivables, net | | | 130,893 | | | | Prepaid expenses and deposits | | | 14,949 | | | | Inventory | | | 210,000 | | | | Property and equipment | | | 9,060 | | | | Intangible - customer relationships | | | 340,000 | | | | Intangible brand name | | | 150,000 | | | | Accounts payable and accrued liabilities | | | (33,009 | ) | | | Total net assets (liabilities) | | $ | 930,400 | | | | | | | | | | | Goodwill | | $ | 659,635 | | | Goodwill recognized primarily reflects expected synergies from integrating Pacific Suns operations and workforce and is not expected to be deductible for tax purposes. The results of Pacific Suns operations are included in the consolidated financial statements beginning July 7, 2025. AGA Precision Systems LLC On July 18, 2025, the Company acquired 100 percent of the membership interests of AGA Precision Systems LLC (AGA), for $650,000 in cash. AGA is a California-based high-tolerance CNC machining company serving the aerospace, defense, and industrial sectors. The seller entered into a five-year non-compete and non-solicitation agreement as part of the transaction. The working capital target of the acquired business was set at $nil and the difference of $228,174, as agreed between the parties, is accounted for as a working capital adjustment as part of the total consideration. F-23 PMGC Holdings Inc. (formerly Elevai Labs Inc.) Notes to the Consolidated Financial Statements For the years ended December 31, 2025 and 2024 (Expressed in United States dollars) The acquisition was accounted for as a business combination under ASC 805, and the purchase price was allocated to the identifiable assets acquired and liabilities assumed based on their estimated fair values as of the acquisition date, as determined by an independent valuation specialist. The allocation is summarized below: | Cash | | $ | 650,000 | | | | Working capital adjustment | | | 228,174 | | | | Total consideration | | $ | 878,174 | | | | | | | | | | | Net assets (liabilities) acquired of the Company: | | | | | | | Cash | | $ | 22,406 | | | | Receivables, net | | | 188,117 | | | | Prepaid expenses and deposits | | | 38,188 | | | | Property and equipment | | | 328,000 | | | | Intangible - Customer Relationships | | | 182,300 | | | | Intangible - Backlog | | | 29,000 | | | | Accounts payable and accrued liabilities | | | (20,537 | ) | | | Total net assets (liabilities) | | $ | 767,474 | | | | | | | | | | | Goodwill | | $ | 110,700 | | | Goodwill represents the assembled workforce and expected operating synergies and is not expected to be deductible for income tax purposes. The results of AGAs operations are included in the consolidated financial statements beginning July 18, 2025. Indarg Engineering, Inc. On October 26, 2025, AGA Precision Systems LLC, a wholly owned subsidiary of the Company, acquired substantially all of the operating assets of Indarg Engineering, Inc., a California-based provider of high-tolerance precision machining services, including CNC machining, prototyping, and quality inspection for aerospace, defense, and industrial sectors. The acquisition was accounted for as a business combination under ASC 805, and the purchase price was allocated to the identifiable assets acquired and liabilities assumed based on their estimated fair values as of the acquisition date, as determined by an independent valuation specialist. The allocation is summarized below: | Cash | | $ | 378,000 | | | | Promissory note | | | 170,000 | | | | Total consideration | | $ | 548,000 | | | | | | | | | | | Net assets (liabilities) acquired of the Company: | | | | | | | Inventory | | | 10,000 | | | | Prepaid expenses and deposits | | | 561 | | | | Property and equipment | | | 170,000 | | | | Intangible - Customer Relationships | | | 160,000 | | | | Total net assets (liabilities) | | $ | 340,561 | | | | | | | | | | | Goodwill | | $ | 207,439 | | | F-24 PMGC Holdings Inc. (formerly Elevai Labs Inc.) Notes to the Consolidated Financial Statements For the years ended December 31, 2025 and 2024 (Expressed in United States dollars) The aggregate purchase price for the acquired business was $548,000, of which $170,000 was satisfied through the issuance of a promissory note. The promissory note bears interest at 8% per annum and is payable in equal quarterly installments over a two-year period. As of December 31, 2025, the outstanding principal balance of the promissory note was $170,000. No principal repayments had been made as of that date. The note is presented as current and non-current promissory notes payable on the consolidated balance sheet based on its contractual maturity terms. Goodwill represents the value of the assembled workforce, expected operating synergies, and other intangible benefits that do not qualify for separate recognition. The goodwill recognized from the acquisition is not expected to be deductible for income tax purposes. The results of operations have been included in the Companys consolidated financial statements beginning October 26, 2025. | 6. | Short term loan receivable | | **** On May 30, 2025, the Company entered into a secured promissory note agreement with an individual, pursuant to which the Company loaned $127,300 to the borrower. The note incurred interest at a variable rate equal to the U.S. prime rate as published in the Wall Street Journal (7.5%), with interest computed on the basis of a 365-day year and actual days elapsed. The entire principal amount, together with accrued and unpaid interest, was due and payable on or before September 30, 2025. On July 7, 2025, the outstanding principal and accrued interest totaling $128,294 was fully settled through the transfer of a 10% equity interest in Pacific Sun to the Company. The loan settlement was effected as part of the Companys acquisition of all outstanding equity interests of Pacific Sun Packaging Inc. (Note 5). | | 7. | Receivables, net | | **** As of December 31, 2025, and December 31, 2024, receivables consisted of trade receivables of $245,423 and $Nil, respectively. As of December 31, 2025, and December 31, 2024, the Company wrote off $55,380 of trade receivables deemed uncollectible and $nil, respectively. | | 8. | Prepaids and Deposits | | **** As of December 31, 2025 and 2024, prepaid and deposits consisted of the following: | | | December 31, 2025 | | | December 31, 2024 | | | | Prepaid expenses | | $ | 363,314 | | | $ | 867,420 | | | | Deposits | | | 97,925 | | | | 1,044 | | | | | | $ | 461,239 | | | $ | 868,464 | | | During the year ended December 31, 2025, the Company impaired a $500,000 payment made for contract manufacturing of human stem cells using and supporting preclinical research for injectable exosomes. The $500,000 was paid and initially capitalized as a prepaid expense. Due to non-performance of the contracted services, the entire prepaid amount was fully written off in the current period. | 9. | Inventory | | **** As of September 30, 2025, and December 31, 2024, inventory consisted of the following: | | | December31, 2025 | | | December31, 2024 | | | | Finished goods | | $ | 85,098 | | | $ | - | | | | Raw materials | | | 10,000 | | | | - | | | | | | $ | 95,098 | | | $ | - | | | Cost of inventory recognized as expense in cost of sales for the year ended December 31, 2025 and 2024, totaled $317,749 and $nil, respectively. As at December 31, 2025 and December 31, 2024, the Company recorded an allowance for inventory of $nil F-25 PMGC Holdings Inc. (formerly Elevai Labs Inc.) Notes to the Consolidated Financial Statements For the years ended December 31, 2025 and 2024 (Expressed in United States dollars) | 10. | Investment in securities | | **** The Companys investments consist of publicly traded equity securities, warrants and a convertible debenture. These investments are reported under ASC 321 Investments in Equity Securities and ASC 320 Investments Debt Securities, as applicable. The Company has classified the investments as held for trading. The following table summarizes the changes in investments for the year ended December 31, 2025 and 2024: | | | Public Company Investments | | | Private Company Investment | | | Convertible Debentureand Warrants | | | Total | | | | Balance, December 31, 2023 | | $- | | | - | | | - | | | - | | | | Purchases | | | - | | | | 139,084 | | | | - | | | | 139,084 | | | | Balance, December 31, 2024 | | $ | - | | | | 139,084 | | | | - | | | | 139,084 | | | | Purchases | | $ | 1,539,044 | | | | 125,000 | | | | 125,000 | | | | 1,789,044 | | | | Transfer | | | 139,084 | | | | (139,084 | ) | | | - | | | | - | | | | Acquired in the sale of Skincare business | | | 728,550 | | | | - | | | | - | | | | 728,550 | | | | Proceeds on sale | | | (1,762,201 | ) | | | - | | | | - | | | | (1,762,201 | ) | | | Interest income | | | - | | | | - | | | | 7,537 | | | | 7,537 | | | | Conversion of debenture | | | 132,537 | | | | | | | | (132,537 | ) | | | - | | | | Realized loss | | | (113,917 | ) | | | - | | | | - | | | | (113,917 | ) | | | Unrealized gain (loss) | | | (264,154 | ) | | | - | | | | 48,111 | | | | (216,043 | ) | | | Balance, December 31, 2025 | | $ | 398,943 | | | | 125,000 | | | | 48,111 | | | | 572,054 | | | The Company accounts for investments in warrants as equity securities in accordance with ASC 321, InvestmentsEquity Securities, and measures such investments at fair value, with changes in fair value recognized in earnings. As of December 31, 2025, the Company held warrants with an estimated fair value of approximately $48,111. The Company estimated fair value using an adjusted intrinsic value approach, calculated as the excess of the underlying share price over the exercise price, multiplied by the number of warrants outstanding. The Company determined that this approach was appropriate as the warrants were in-the-money at the measurement date and the time value component was not considered significant. The valuation was calibrated by applying a discount, which was determined based on the cash paid to acquire the warrants relative to the implied intrinsic value at that date. The Company considers the transaction price and underlying share price to represent observable market inputs, and no significant unobservable inputs were used in the valuation at the reporting date. Key inputs used in the valuation included: | | Underlying share price: $8.08 per share (observable market input) | | | | Exercise price: $3.00 per share | | | | Number of warrants: 26,041 (post reverse stock split) | | Based on the nature of the valuation inputs, the warrants are classified within Level 2 of the fair value hierarchy under ASC 820, Fair Value Measurement. F-26 **** PMGC Holdings Inc. (formerly Elevai Labs Inc.) Notes to the Consolidated Financial Statements For the years ended December 31, 2025 and 2024 (Expressed in United States dollars) **Fair Value Measurement** The following table presents the Companys financial instruments measured at fair value on a recurring basis as of December 31, 2025 and 2024, in accordance with the fair value hierarchy of ASC 820: | December 31, 2025 | | Level 1 | | | Level 2 | | | Level 3 | | | Total | | | | Equity securities | | $ | 398,943 | | | | | | | | | | | | 398,943 | | | | Warrants | | | - | | | | 48,111 | | | | | | | | 48,111 | | | | Total | | $ | 398,943 | | | | 48,111 | | | | | | | | 447,054 | | | | December 31, 2024 | | Level 1 | | | Level 2 | | | Level 3 | | | Total | | | | Equity securities | | $ | - | | | | 139,084 | | | | | | | | 139,084 | | | | Total | | $ | - | | | | 139,084 | | | | | | | | 139,084 | | | | 11. | Property, plant and equipment | | | | | Computers | | | Machinery& Equipment | | | Furniture and office equipment | | | Leasehold improvement | | | Total | | | | | | | | | | | | | | | | | | | | | | Cost | | | | | | | | | | | | | | | | | | Balance, December 31, 2023 | | $ | 2,820 | | | | - | | | | - | | | | - | | | | 2,820 | | | | Foreign currency translation | | | (219 | ) | | | - | | | | - | | | | - | | | | (219 | ) | | | Balance, December 31, 2024 | | $ | 2,601 | | | | - | | | | - | | | | - | | | | 2,601 | | | | Business combinations | | | - | | | | 487,060 | | | | 20,000 | | | | - | | | | 507,060 | | | | Additions | | | 41,022 | | | | 354,768 | | | | 35,578 | | | | 48,020 | | | | 479,388 | | | | Disposal | | | | | | | (50,000 | ) | | | | | | | | | | | (50,000 | ) | | | Foreign currency translation | | | 3 | | | | - | | | | - | | | | - | | | | 3 | | | | Balance, December 31, 2025 | | $ | 43,626 | | | | 791,828 | | | $ | 55,578 | | | | 48,020 | | | | 939,052 | | | | | | | | | | | | | | | | | | | | | | | | | | | Accumulated depreciation | | | | | | | | | | | | | | | | | | | | | | | Balance, December 31, 2023 | | $ | 1,079 | | | | - | | | | - | | | | - | | | | 1,079 | | | | Depreciation | | | 546 | | | | - | | | | - | | | | - | | | | 546 | | | | Foreign currency translation | | | (111 | ) | | | - | | | | - | | | | - | | | | (111 | ) | | | Balance, December 31, 2024 | | $ | 1,514 | | | | - | | | | - | | | | - | | | | 1,514 | | | | Depreciation | | | 5,044 | | | | 43,314 | | | | 2,740 | | | | 3,512 | | | | 54,610 | | | | Disposal | | | - | | | | (2,568 | ) | | | - | | | | - | | | | (2,568 | ) | | | Foreign currency translation | | | (24 | ) | | | - | | | | - | | | | - | | | | (24 | ) | | | Balance, December 31, 2025 | | $ | 6,534 | | | | 40,746 | | | | 2,740 | | | | 3,512 | | | | 53,532 | | | | | | | | | | | | | | | | | | | | | | | | | | | Net book value | | | | | | | | | | | | | | | | | | | | | | | December 31, 2024 | | $ | 1,087 | | | | - | | | | - | | | | - | | | | 1,087 | | | | December 31, 2025 | | $ | 37,092 | | | | 751,082 | | | | 52,838 | | | | 44,508 | | | | 885,520 | | | F-27 PMGC Holdings Inc. (formerly Elevai Labs Inc.) Notes to the Consolidated Financial Statements For the years ended December 31, 2025 and 2024 (Expressed in United States dollars) | 12. | Intangible assets, net | | **** | | | License #1 | | | License # 2 (IPR&D asset) | | | Customer relationship | | | Brand | | | Backlog | | | Total | | | | Cost: | | | | | | | | | | | | | | | | | | | | | Balance, December 31, 2024 | | $ | 861,452 | | | | 2,023,097 | | | | - | | | | - | | | | - | | | | 2,884,549 | | | | Additions | | | - | | | | 49,535 | | | | - | | | | - | | | | - | | | | 49,535 | | | | Business combinations | | | - | | | | - | | | | 682,300 | | | | 150,000 | | | | 29,000 | | | | 861,300 | | | | Termination of agreement | | | (861,452 | ) | | | - | | | | - | | | | - | | | | - | | | | (861,452 | ) | | | Balance, December 31, 2025 | | $ | - | | | | 2,072,632 | | | | 682,300 | | | | 150,000 | | | | 29,000 | | | | 2,933,932 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Accumulated amortization: | | | | | | | | | | | | | | | | | | | | | | | | | | | Balance, December 31, 2024 | | $ | 82,556 | | | | - | | | | - | | | | - | | | | - | | | | 82,556 | | | | Amortization | | | 14,358 | | | | - | | | | 16,946 | | | | 14,568 | | | | 10,021 | | | | 55,893 | | | | Termination of agreement | | | (96,914 | ) | | | - | | | | - | | | | - | | | | - | | | | (96,914 | ) | | | Balance, December 31, 2025 | | $ | - | | | | - | | | | 16,946 | | | | 14,568 | | | | 10,021 | | | | 41,535 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Net book value: | | | | | | | | | | | | | | | | | | | | | | | | | | | December 31,2024 | | $ | 778,896 | | | | 2,023,097 | | | | - | | | | - | | | | - | | | | 2,801,993 | | | | December 31, 2025 | | | - | | | | 2,072,632 | | | | 665,354 | | | | 135,432 | | | | 18,979 | | | | 2,892,397 | | | **** License #1: On January 15, 2024, the Company entered into a license agreement with a Biotechnology company to use their proprietary technology and process to assist in formulating stem cells (License #1). The term of the license is 10 years and has a purchase price of $1,000,000. The payments structure for License #1 is as follows: | a) | $50,000 payable upon executing the license (paid) | | | | b) | $350,000 payable on March 15, 2025 (updated from July 15, 2024 in an amendment dated July 9, 2024)1 | | | | c) | $600,000 payable on completion of technology transfer or two years from January 15, 2024, whichever comes first1. | | | 1 | Effective February 27, 2025, the Company and the biotechnology company entered into a mutual termination agreement to terminate the Companys right to License # 1 and to release the Company of the remaining undiscounted obligation payable of $950,000. Upon termination, no further obligations are required of either party. | | The cost of License #1 was measured at $861,452, which is the fair value of the consideration payable on initial recognition, determined by discounting the future payments using a market interest rate of 11.75%. F-28 PMGC Holdings Inc. (formerly Elevai Labs Inc.) Notes to the Consolidated Financial Statements For the years ended December 31, 2025 and 2024 (Expressed in United States dollars) | | | Consideration payable | | | | | | | | | | Consideration payable undiscounted | | $ | 1,000,000 | | | | Discount on initial recognition | | | (138,548 | ) | | | Fair value on initial recognition | | $ | 861,452 | | | | | | | | | | | Paid in cash | | | (50,000 | ) | | | Accretion | | | 73,015 | | | | Balance, December 31, 2024 | | $ | 884,467 | | | | Accretion | | | 9,684 | | | | Termination of agreement | | | (894,151 | ) | | | Balance, December 31, 2025 | | $ | - | | | As a result of the termination, the Company derecognized the associated intangible asset and the related consideration payable, recognizing a gain of $129,613 in the consolidated statements of operations for the year ended December 31, 2025. License #2: On April 30, 2024, the Company entered into an exclusive license agreement with a pharmaceutical company granting the Company rights to develop, manufacture, and commercialize licensed products (the license granted under this license agreement, License # 2). The Company has classified License # 2 as an IPR&D asset resulting in only the acquisition costs plus any transaction costs to be capitalized upon acquisition. The research and development project associated with License # 2 is not yet complete and as a result the Company has not yet determined the useful life of the IPR&D asset. The Company paid consideration of $400,000 and 9 shares of common stock with a value of $492,850 to the pharmaceutical company. The shares issued to the pharmaceutical company are unregistered and subject to trading restrictions for six months from the issue date, resulting in a fair value discount adjustment of $173,100 on the value of the shares of common stock issued to the pharmaceutical company. The Company incurred transaction costs of $12,320 in legal fees and $1,117,771 in shares of common stock paid to a consultant who assisted in acquiring License # 2. The shares of common stock to be issued to the consultant will be unregistered and subject to trading restrictions for a 1-year period from the issue date of the first tranche resulting in a fair value discount adjustment of $599,863 on the value of the common shares issued to the consultant. The fair value adjustments were calculated using the Black-Scholes Option Pricing Model. The Black-Scholes Option Pricing Model requires six basic data inputs: the exercise or strike price, expected time to expiration or exercise, the risk-free interest rate, the current stock price, the estimated volatility of the stock price in the future, and the dividend rate. Changes to these inputs could produce a significantly higher or lower fair value measurement. The following assumptions were used in the Black-Scholes option pricing model: | | | Initial recognition April 30, 2024 | | | | Risk-free interest rate | | | 5.12-5.44% | | | | Expected life | | | 0.5-1 years | | | | Expected dividend rate | | | 0.00 | % | | | Expected volatility | | | 100 | % | | F-29 PMGC Holdings Inc. (formerly Elevai Labs Inc.) Notes to the Consolidated Financial Statements For the years ended December 31, 2025 and 2024 (Expressed in United States dollars) The consultant who assisted in acquiring License # 2 is to receive 21 shares in the following tranches and all shares were earned (i.e. fully vested) upon the Companys acquisition of License # 2 as follows: | | May 3, 2024: 6 shares (issued) | | | | August 1, 2024: 5 shares (issued) | | | | November 1, 2024: 5 shares (issued) | | | | February 2, 2025: 5 shares (issued) | | The cost of License # 2 IPR&D asset is $2,023,097, which is the fair value of the consideration paid on initial recognition. On February 18, 2025, Northstrive Biosciences Inc. submitted a pre-Investigational New Drug (pre-IND) meeting request to the U.S. Food and Drug Administration (FDA) for EL-22, a potential obesity therapy designed to promote fat loss and preserve muscle mass when used in combination with GLP-1 receptor agonists. On March 21, 2025, the Company entered into a first amendment to the exclusive license agreement covering License # 2, expanding the licensed fields in the exclusive license agreement to include all uses in animal health, including all applications as a feed additive. The Company paid $6,000 and issued 857 shares of common stock to the pharmaceutical company in consideration for entry into this first amendment to the exclusive license agreement regarding License # 2. The shares issued to the pharmaceutical company are unregistered and subject to trading restrictions for six months from the issue date resulting in a fair value discount adjustment of $15,624 on the value of the common stock issued to the pharmaceutical company. The fair value adjustments were calculated using the Black-Scholes Option Pricing Model. The first amendment to the exclusive license agreement did not result in a remeasurement of the intangible asset under ASC 350 Intangibles Goodwill and Other, as it does not constitute a new acquisition or recognition event. The Company will continue to monitor the asset for impairment indicators consistent with U.S. GAAP. The Black-Scholes Option Pricing Model requires six basic data inputs: the exercise or strike price, expected time to expiration or exercise, the risk-free interest rate, the current stock price, the estimated volatility of the stock price in the future, and the dividend rate. Changes to these inputs could produce a significantly higher or lower fair value measurement. The following assumptions were used in the Black-Scholes option pricing model: | | | Initial recognition March 26, 2025 | | | | Risk-free interest rate | | | 4.26 | % | | | Expected life | | | 0.5 years | | | | Expected dividend rate | | | 0.00 | % | | | Expected volatility | | | 100 | % | | F-30 PMGC Holdings Inc. (formerly Elevai Labs Inc.) Notes to the Consolidated Financial Statements For the years ended December 31, 2025 and 2024 (Expressed in United States dollars) On May 12, 2025, the Company entered into a second amendment to an existing license agreement related to License # 2. The second amendment to the license agreement clarified the scope and terms of use within the animal health field. Key changes included clarification that certain provisions regarding (i) the exclusive license granted to the pharmaceutical company, (ii) milestone payment obligations of the Company, (iii) research and development obligations of the Company, (iv) recording obligations of the Company, (v) development data provisions, (vi) regulatory responsibilities of the Company, (vii) commercialization plan obligations of the Company, did not apply to licensing rights granted under the license agreement as the rights applied to the animal health field. The second amendments provisions also narrowed the Companys payment obligations as to royalty payments on direct sales and a proportion of amounts received from sublicensees, as the payment related to the animal health field. There was no cost associated with the second amendment. As License #2 is an IPR&D intangible asset, the Company is required to perform an annual impairment test. In accordance with ASC 350 IntangiblesGoodwill and Other, the Company has the option to perform a qualitative assessment first, to determine if it is more likely than not that the IPR&D intangible asset is impaired. Only if the qualitative test indicates that it is more likely than not that the intangible asset is impaired, is the Company required to calculate the fair value of the intangible asset and perform a quantitative impairment test. Under the qualitative analysis, the Company determined that it is more likely than not that the intangible asset is not impaired, and as a result was not required to perform a quantitative test as of December 31, 2025. Customer relationship In connection with the acquisition of AGA Precision Systems, the Company recognized an intangible asset for customer relationships, representing the value associated with the acquired customer base, including both contractual and non-contractual relationships, and the expected future economic benefits from recurring business with such customers. The customer relationships intangible asset was recorded at its estimated fair value as of the acquisition date in accordance with ASC 805, Business Combinations. The fair value of customer relationships was determined using an income approach, specifically the multi-period excess earnings method (MPEE), which estimates the present value of cash flows attributable solely to the existing customer base after deducting contributory asset charges for supporting assets. Based on this methodology, the fair value of customer relationships was determined to be approximately $182,300 at the acquisition. The asset is amortized on a straight-line basis over an estimated useful life of 12 years. For the year ended December 31, 2025, the Company recognized amortization expense of approximately $3,780, resulting in a net carrying value of approximately $178,520 as of December 31, 2025. The Company evaluated the customer relationships intangible asset for impairment and determined that no impairment indicators were present as of December 31, 2025. In connection with the acquisition of Pacific Sun Packaging, the Company recognized an intangible asset for customer relationships, representing the value associated with the acquired customer base, including both contractual and non-contractual relationships, and the expected future economic benefits from recurring business with such customers. The customer relationships intangible asset was recorded at its estimated fair value of approximately $340,000 as of the acquisition date in accordance with ASC 805, Business Combinations. The fair value of customer relationships was determined using an income approach, specifically the MPEE, which estimates the present value of cash flows attributable solely to the existing customer base after deducting contributory asset charges. The asset is amortized on a straight-line basis over an estimated useful life of 15 years. For the year ended December 31, 2025, the Company recognized amortization expense of approximately $11,007, resulting in a net carrying value of approximately $328,993 as of December 31, 2025. The Company evaluated the customer relationships intangible asset for impairment and determined that no impairment indicators were present as of December 31, 2025. In connection with the acquisition of Indarg Engineering, Inc. , the Company recognized an intangible asset for customer relationships, representing the value associated with the acquired customer base, including both contractual and non-contractual relationships, and the expected future economic benefits from recurring business with such customers. The customer relationships intangible asset was recorded at its estimated fair value of approximately $160,000 as of the acquisition date in accordance with ASC 805, Business Combinations. The fair value of customer relationships was determined using an income approach, specifically the MPEE, based on projected cash flows attributable to existing customers, net of contributory asset charges. Key assumptions included a long-term revenue growth rate of approximately 2.7%, an attrition rate of 12.0%, and a discount rate of approximately 16.2% reflecting the risk profile of the asset. The customer relationships intangible asset is amortized on a straight-line basis over an estimated useful life of approximately 13.2 years, which reflects the period over which the asset is expected to contribute to future cash flows. For the year ended December 31, 2025, the Company recognized amortization expense of approximately $2,159, resulting in a net carrying value of approximately $157,841 as of December 31, 2025. F-31 PMGC Holdings Inc. (formerly Elevai Labs Inc.) Notes to the Consolidated Financial Statements For the years ended December 31, 2025 and 2024 (Expressed in United States dollars) The Company evaluated the customer relationships intangible asset for impairment and determined that no impairment indicators were present as of December 31, 2025. Brand In connection with the acquisition of Pacific Sun Packaging, the Company recognized an intangible asset for the Pacific Sun brand name, representing the value associated with brand recognition, market presence, and customer awareness within the electronics packaging industry. The brand intangible asset was recorded at its estimated fair value of approximately $150,000 as of the acquisition date in accordance with ASC 805, Business Combinations. The fair value of the brand was determined using an income approach, specifically the relief-from-royalty (RFR) method, which estimates the present value of royalties that the Company is deemed to avoid by owning the brand name rather than licensing it. The valuation was based on projected revenues attributable to the brand, an estimated royalty rate of approximately 3.5% derived from comparable market transactions, and a discount rate reflecting the risk profile of the asset. The analysis also considered qualitative factors including the Companys historical brand development efforts, industry recognition, operating history, and expected future growth. The brand is amortized on a straight-line basis over an estimated useful life of 5 years, which reflects the period over which the asset is expected to contribute to future cash flows. For the year ended December 31, 2025, the Company recognized amortization expense of approximately $14,568, resulting in a net carrying value of approximately $135,432 as of December 31, 2025. The Company evaluated the brand intangible asset for impairment and determined that no impairment indicators were present as of December 31, 2025. Backlog In connection with the AGA Precision Systems, the Company recognized an intangible asset for backlog, representing confirmed customer purchase orders and contractual commitments on hand as of the acquisition date that are expected to be fulfilled and recognized as revenue within a short period, generally within the subsequent fiscal year. Backlog is considered a finite-lived intangible asset and was recognized separately from customer relationships to avoid double counting of economic benefits. The fair value of backlog was determined using an income approach, which estimates the earnings attributable to the fulfillment of existing orders, and was determined to be approximately $29,000 at the acquisition date. Backlog is amortized over its expected realization period. The asset is amortized on a straight-line basis over an estimated useful life of one year. For the year ended December 31, 2025, the Company recognized amortization expense of approximately $10,021, resulting in a net carrying value of approximately $18,979 as of December 31, 2025. The Company evaluated the backlog intangible asset for impairment and determined that no impairment indicators were present as of December 31, 2025. | 13. | Operating Leases | | **** The Companys subsidiaries, AGA and Pacific Sun, entered into non-cancelable operating leases for the office and warehouse spaces occupied to operate its business. The Pacific Sun lease was executed on July 9, 2025, and the Company committed to monthly lease payments of $6,300 through June 30, 2026. Thereafter, monthly payments increase by 3% each year starting on July 1, 2026. The lease expires on June 30, 2030. On October 20, 2025, the lease was modified to expand the premises to the entire building. The modification revised the monthly base rent and shifted the remaining term to commence payments on January 1, 2026, and end on December 31, 2030. Modified monthly base rent is $7,415 for 2026, increasing 3% annually thereafter. The modification was accounted for as a lease remeasurement under ASC 842; the lease liability and right-of-use asset were adjusted using the incremental borrowing rate. F-32 PMGC Holdings Inc. (formerly Elevai Labs Inc.) Notes to the Consolidated Financial Statements For the years ended December 31, 2025 and 2024 (Expressed in United States dollars) The AGA lease was executed on July 19, 2025, and the Company committed to monthly lease payments of $18,905 through August 31, 2026. Thereafter, monthly payments increase to $22,020 starting on September 1, 2026 and increase by 3% each year starting on September 1, 2027. The lease expires on August 31, 2029. The Company committed to paying common area maintenance cost which is currently $1,045 per month. The Company used a discount rate of 8%, as the incremental cost of borrowing, to calculate the present value of the future lease payments and the resulting operating lease liabilities and right-of-use assets. The Company recognized a total lease cost related to its non-cancelable operating leases of $165,091 for the year ended December 31, 2025, included in office and administrative expenses. The Company recognizes right-of-use (ROU) assets and corresponding lease liabilities for operating leases in accordance with ASC 842, Leases. ROU assets represent the Companys right to use underlying leased assets over the lease term and are initially measured at the amount of the lease liability, adjusted for initial direct costs, prepaid lease payments, and lease incentives. As of December 31, 2025, the Companys operating lease ROU assets had a carrying value of approximately $1,241,527. During the year ended December 31, 2025, additions to ROU assets were approximately $1,280,137, primarily related to a new lease for office space with an associated warehouse component. Lease modifications during the year resulted in an increase of approximately $82,147 to the ROU assets. Amortization of ROU assets for the year ended December 31, 2025 was approximately $120,757, which is included in operating expenses, primarily within office and administrative. The Companys ROU assets relate primarily to office and warehouse facilities used in its operations. As of December 31, 2025 and 2024, the Company recorded a security deposit of $81,757 and $nil, associated with these operating leases. Future minimum lease payments under the Companys operating leases that have an initial non-cancelable lease term in excess of one year at December 31, 2025, are as follows: | As at December 31, 2025 | | Lease payments ($) | | | | 2026 | | | 332,480 | | | | 2027 | | | 348,396 | | | | 2028 | | | 358,464 | | | | 2029 | | | 292,476 | | | | 2030 and thereafter | | | 100,152 | | | | Total future payments | | $ | 1,431,968 | | | | Less: imputed interest | | | (211,498 | ) | | | Operating lease liabilities | | $ | 1,220,470 | | | | | | | | | | | Operating lease liabilities-current | | $ | 247,627 | | | | Operating lease liabilities- non-current | | $ | 972,843 | | | | 14. | Convertible debt under ELOC Agreement | | On September 23, 2025, the Company entered into a securities purchase agreement, establishing an equity line of credit of up to $20,000,000 through one or more secured pre-paid purchases of the Companys common stock (the ELOC Agreement). Under the ELOC Agreement, the Company may, from time to time, sell and issue common stock to the investor pursuant to individual pre-paid purchases, subject to the terms and conditions of the ELOC Agreement. The Company issued 2,363 shares of common stock to the investor as a commitment fee for the first pre-paid purchase (Note 16). The Company also issued 429 shares of common stock as pre-delivery shares for the first pre-paid purchase. The investor may request the Company to issue and sell common stock to the investor as to the outstanding balance on the first pre-paid purchase at a pre-delivery purchase price of $0.0001 per share, subject to an aggregate pre-delivery purchase cap of $25,000 (Note 16). When all of the Companys obligations under the ELOC Agreement are settled and after the commitment period has ended, the Company may repurchase any pre-delivery shares outstanding at a purchase price of $0.001 per share. The share issuances under the first pre-paid purchase are subject to a 9.99% beneficial ownership limitation. F-33 PMGC Holdings Inc. (formerly Elevai Labs Inc.) Notes to the Consolidated Financial Statements For the years ended December 31, 2025 and 2024 (Expressed in United States dollars) On September 26, 2025, the Company consummated the first pre-paid purchase under the equity line of credit with a principal amount of $5,000,000, bearing interest at 8.5% per annum and maturing three years from issuance (the convertible debt). The instrument included an original-issue discount of $425,000 and a $30,000 transaction expense allowance; the initial purchase price received at closing was $4,545,000, with net cash proceeds of approximately $3,990,000 after placement and closing costs. The principal and accrued interest is convertible at any time during the three-year term at the option of the investor, in whole or in part, at a price that equals 88% of the lowest VWAP during the 10 trading days preceding the applicable measurement date. If that calculated price is below the floor price of $25.392 per share, the investor may elect to have the applicable purchase amount settled in cash rather than in shares. The Company is accounting for the convertible debt host contract under ASC 470-20 at amortized cost and has determined that the conversion option meets the definition of an embedded derivative liability which is separately accounted for at fair value in accordance with ASC 815-15 Derivatives and Hedging Embedded Derivatives (Note 15). During the month of December 2025, the Company settled outstanding principal of $ $2,921,706 and accrued interest of $103,294 through the issuance of 49,693 shares of common stock pursuant to eleven purchase notices totaling $3,025,000. In connection with these settlements, the Company derecognized $1,853,134 of the convertible debt host liability and $467,186 of the related derivative liability, with $2,320,320 recorded to common stock and additional paid-in capital. As of December 31, 2025, the remaining derivative liability associated with the conversion feature was $418,412 (Note 15), and the remaining balance of the convertible debt continues to be accounted for at amortized cost. The outstanding principal as of December 31, 2025 was $2,078,294 and accrued interest was $nil. Subsequent to December 31, 2025, the Company settled the remaining outstanding principal of $2,078,294 through the issuance of 67,735 shares of common stock pursuant to the ELOC arrangement. In connection with this settlement, the Company derecognized the remaining convertible debt host liability of $1,254,479 and the related derivative liability of $418,412 associated with the conversion feature, with the total amount recorded to common stock and additional paid-in capital. (Note 22) A continuity of the amortized cost of the convertible debt host contract is as follows: | | | Convertible debt | | | | Balance, January 1, 2025 | | $ | - | | | | Principal | | | 5,000,000 | | | | Fair value of embedded derivative liability | | | (1,099,765 | ) | | | Allocation of original issue discount and issuance cost (1) | | | (1,026,682 | ) | | | Accretion | | | 130,766 | | | | Interest expense | | | 103,294 | | | | Repayment through common stock | | | (1,853,134 | ) | | | Balance, December 31, 2025 | | $ | 1,254,479 | | | | (1) | Total original issuance discount and issuance cost amounted to $1,316,180, of which $1,026,682 were allocated to the amortized cost of the convertible debt and $289,498 were allocated to the derivative liability and recorded as finance cost in the statement of operations. | | F-34 PMGC Holdings Inc. (formerly Elevai Labs Inc.) Notes to the Consolidated Financial Statements For the years ended December 31, 2025 and 2024 (Expressed in United States dollars) | 15. | Derivative liabilities | | **** Liability classified stock purchase warrants A continuity of the Companys common stock purchase derivative liability warrants is as follows: | | | Derivative liabilities | | | | Outstanding, December 31, 2023 | | $ | 369,158 | | | | Change in fair value of derivative liabilities | | | (369,158 | ) | | | Outstanding, December 31, 2024 | | $ | - | | | | Change in fair value of derivative liabilities | | | - | | | | Outstanding, December 31, 2025 | | $ | - | | | We determined the derivative liabilities to be a Level 3 fair value measurement and used the Black-Scholes Option Pricing Model to calculate the fair value as of initial recognition and at subsequent period ends through December 31, 2024. Given the exercise price of these warrants compared to the fair market value of the Companys shares, the value is deemed to be $nil. As of December 31, 2025, the following liability classified stock purchase warrants were outstanding: | Outstanding | | Expiry date | | Weighted average exercise price ($) | | | | 5 | | April 27, 2027 | | | 236,619.42 | | | | 1 | | November 21, 2028 | | | 470,400 | | | | 6 | | | | | 275,582.86 | | | As of December 31, 2025 and 2024, the weighted average life of derivative liability classified stock purchase warrants outstanding was 1.66 and 2.71 years, respectively. Embedded derivative liabilities The Company determined that the fair value of embedded derivative liability separated from the convertible debt host contract, issued in connection with the ELOC Agreement (Note 14), had an initial fair value of $1,099,765, calculated on the initial recognition date of September 26, 2025. The derivative liability was remeasured at fair value as of September 30, 2025 using the Binomial option pricing model. The estimated fair value at September 30, 2025 was $976,432. Changes in fair value from initial recognition through September 30, 2025 recognized in the consolidated statement of operations were $123,333. During the month of December 2025, the Company issued common shares to partially settle the outstanding balance of the convertible debt under the ELOC Agreement. In connection with these settlements, the Company derecognized $467,186 of the derivative liability associated with the portion of the debt settled in shares. The derivative liability was remeasured at fair value as of December 31, 2025 using the Binomial option pricing model. The estimated fair value at December 31, 2025 was $418,412. Changes in fair value from September 30, 2025 through December 31, 2025 recognized in the consolidated statement of operations were $90,834. F-35 PMGC Holdings Inc. (formerly Elevai Labs Inc.) Notes to the Consolidated Financial Statements For the years ended December 31, 2025 and 2024 (Expressed in United States dollars) We determined the derivative liability to be a Level 3 fair value measurement and used a Binomial Option Pricing Modelto calculate the fair value as of initial recognition and through December 31, 2025. The following assumptions were used in the Binomial Option Pricing Model: | | | Initial | | | December 31, 2025 | | | | Risk-free interest rate | | | 3.90 | % | | | 4.25 | % | | | Expected life | | | 3 years | | | | 2.7 years | | | | Expected dividend rate | | | 0.00 | % | | | 0.00 | % | | | Expected volatility | | | 158.40 | % | | | 158.40 | % | | | Exercise price | | $ | 26.5584 | | | $ | 7.3920 | | | | Number of steps | | | 300 | | | | 300 | | | The following table presents the changes in the Companys Level 3 derivative liability for the year ended December 31, 2025: | | | Amount | | | | Balance, September 26, 2025 (initial recognition) | | $ | 1,099,765 | | | | Change in fair value | | | (214,167 | ) | | | Derecognition upon settlement of convertible debt | | | (467,186 | ) | | | Balance, December 31, 2025 | | $ | 418,412 | | | Subsequent to December 31, 2025, the Company settled the remaining outstanding principal of $2,078,294 through the issuance of 67,735 shares of common stock pursuant to the ELOC arrangement. In connection with this settlement, the Company derecognized the related derivative liability of $418,412 associated with the conversion feature, with the total amount recorded to common stock and additional paid-in capital. (Note 22) | 16. | Equity | | **** Common Stock *Authorized* As of December 31, 2025, and December 31, 2024, the Company had 83,333,334 and 3,401,360 shares of common stock authorized, each having a par value of $0.0001. *Issued and outstanding* As of December 31, 2025 and 2024, the Company had 80,699 and 5,226 shares of common stock issued and outstanding, respectively. *Transactions during the year ended December 31, 2025* On January 28, 2025, the Company entered into and completed a warrant inducement transaction with the holders of its Series A Common Stock Purchase Warrants pursuant to a warrant inducement agreement (Series A Warrants). Under the warrant inducement agreement, the exercise price of the outstanding Series A Warrants was reduced from $1,646.40 to $1,176 per share of common stock as an incentive for immediate exercise. As a result, the holders exercised all outstanding Series A Warrants, and the Company issued 1,649 shares of common stock, generating gross proceeds of $1,938,772. On February 2, 2025, the Company issued 6 shares of common stock to a consultant in relation to the acquisition of the License # 2 IPR&D asset. On March 7, 2025, the Company repurchased 1 share of common stock from two existing shareholders at for total consideration of approximately $52. The shares were retired upon repurchase. F-36 PMGC Holdings Inc. (formerly Elevai Labs Inc.) Notes to the Consolidated Financial Statements For the years ended December 31, 2025 and 2024 (Expressed in United States dollars) On March 10, 2025, the Company effected a 1-for-7 reverse stock split of its issued and outstanding common stock. As a result of the reverse stock split, every seven shares of the Companys common stock issued and outstanding were automatically combined into one share, with any fractional shares rounded in accordance with the Companys governing documents. The reverse stock split did not change the number of authorized shares or the par value of the common stock. All share and per share amounts presented in the accompanying consolidated financial statements, including earnings (loss) per share and weighted-average shares outstanding, have been retroactively adjusted to reflect the reverse stock split for all periods presented. In addition, all outstanding stock options, warrants, and other equity-linked instruments were proportionately adjusted in accordance with their respective terms. On March 18, 2025, the Company entered into a securities purchase agreement with an existing investor to repurchase one (1) share of common stock and warrants to purchase 1 share of common stock at an exercise price of $352,800 per share. The total consideration paid in the transaction was $127. The repurchased shares and warrants were retired and cancelled. The transaction was initiated by the existing investor. On March 21, 2025, the Company entered into a Securities Purchase Agreement between the Company and certain institutional investors with respect to a registered direct offering for the offer and sale of 1,538 shares of common stock and 1,968 prefunded warrants for gross proceeds of $1,484,028, with the issuance cost of $238,722. On March 26, 2025, the Company entered into a first amendment to the exclusive license agreement covering License # 2 (Note 12), expanding its rights to include the growing animal health market. The Company issued 858 shares of common stock in exchange for the expansion of its rights under License # 2. On August 22, 2025, the Company entered into warrant inducement agreements with certain existing common stock purchase warrant holders. Under these warrant inducement agreements, the exercise price of the outstanding replacement warrants was reduced from $270.48 to $169.26 per share of common stock as an incentive for the existing warrant holders immediate exercise of their warrants. As a result, these holders exercised all outstanding replacement warrants, and the Company issued new common stock purchase warrants exercisable for an aggregate of 9,856 shares of common stock, generating gross proceeds of $1,668,219, with the issuance cost of $156,775. These warrant inducement transactions were consummated on August 25, 2025. On September 2, 2025, the Company effected a 1-for-3.5 reverse stock split of its issued and outstanding common stock. Under the terms of the reverse stock split, each three and one-half shares of common stock were combined into one share, with fractional shares treated in accordance with applicable provisions. The reverse stock split did not affect the authorized number of shares or the par value per share. All historical share and per share data included in these consolidated financial statements have been retroactively restated to reflect the reverse stock split for all periods presented. Corresponding adjustments were made to outstanding equity awards, including stock options and warrants, to preserve their economic value. On September 23, 2025, in connection with the ELOC Agreement, the Company issued 429 shares of common stock pre-delivery shares to the investor for total proceeds of $7. In addition, the Company issued 2,363 shares of common stock with a fair value of $306,180, as a commitment fee and consideration under the ELOC Agreement. These shares were non-cash consideration and were accounted for as issuance cost allocated to the convertible debt and derivative liability (Note 14). During the year ended December 31, 2025, the Company sold an aggregate of 7,827 shares of common stock under its at-the-market (ATM) equity offering program, generating total gross proceeds of approximately $1,730,292. After deducting total commissions and fees of approximately $58,189, net proceeds amounted to approximately $1,672,103. The shares were issued in multiple tranches between April and August 2025, with sales prices ranging from $54.24 to $81.36 per share. F-37 PMGC Holdings Inc. (formerly Elevai Labs Inc.) Notes to the Consolidated Financial Statements For the years ended December 31, 2025 and 2024 (Expressed in United States dollars) During the month of December 2025, the Company issued an aggregate of 49,693 shares of common stock in settlement of amounts outstanding under its ELOC arrangement (Note 14). The shares were issued in multiple tranches between December 8, 2025 and December 31, 2025 pursuant to purchase notices delivered under the ELOC agreement. The shares issued settled outstanding principal of $ $2,921,706 and accrued interest of $ $103,294. *Transactions during the year ended December 31, 2024* On April 30, 2024, the Company issued 49 shares of common stock on acquisition of License # 2 and $492,945 was recognized in equity. A total of $nil was recognized in common stock and the remainder of $492,945 to additional paid in capital (Note 12). These shares are unregistered and restricted from trading as disclosed in Note 12. On May 3, 2024, the Company committed to issue 21 fully vested shares of common stock, of which 6 shares of common stock were issued by December 31, 2024, for the acquisition of License # 2. A total of $1,117,832 was recognized in equity, of which $nil was recognized in common stock and the remainder of $1,117,832 to additional paid in capital (Note 12). These shares are unregistered and restricted from trading as disclosed in Note 12. On August 2, 2024, the Company issued 11 shares of common stock as consideration for purchasers who entered into the Securities Purchase Agreement. Transaction costs of $51,942 were associated with this share issuance. A total of $325,819 was recognized in equity. On September 24, 2024, the Company issued 76 shares of common stock and 168 pre-funded warrants in lieu of shares of common stock, along with 435 common stock purchase warrants. The purchasers had the option to elect to purchase pre-funded warrants in lieu of common stock in order to avoid exceeding the Beneficial Ownership Limitation, which is 4.99% (or 9.99% upon election of the holder prior to the issuance of any warrants) of the number of shares of common stock outstanding immediately after giving effect to the issuance of shares of common stock issuable upon exercise of the warrant. The pre-funded warrants had an exercise price of $11.76, had no expiry date and had a cashless exercise provision. All pre-funded warrants were exercised by December 31, 2024. The purchase price of each share of common stock and accompanying warrants was $32,928, and the purchase price of each pre-funded warrant and accompanying warrants was equal to such price minus $11.76. Share issuance costs of $955,000 were associated with this offering. A total of $7,045,000 was recognized in equity, of which $nil was recognized in common stock and all of $7,045,000 to additional paid in capital. Preferred Stock *Authorized* As of December 31, 2025, and December 31, 2024, the Company had 500,000,000 preferred stock authorized, respectively, of all preferred stock authorized, each share of preferred stock having a par value of $0.0001. Of this amount, 300,000,000 and 50,000,000 shares were designated as Series B Preferred Stock as of December 31, 2025 and 2024, respectively. *Issued and outstanding* ** As at December 31, 2025 and 2024, the Company had 6,372,874 and nil shares of Series B Preferred Stock issued and outstanding. ** *Transactions during the year ended December 31, 2025, and 2024* On March 26, 2025, at a special meeting of the Companys shareholders, the shareholders approved the issuance of 3,036,437 shares of non-trading, non-convertible Series B Preferred Stock to GB Capital Ltd as a signing bonus pursuant to that certain Second Amended and Restated Consulting Agreement for Non-Employee Chief Executive Officer between the Company and GB Capital Ltd, dated October 25, 2024, as amended; and 3,336,437 shares of non-trading, non-convertible Series B Preferred Stock to Northstrive Companies Inc as a signing bonus pursuant to that certain Second Amended and Restated Consulting Agreement for Non-Executive Chairman between the Company and Northstrive Companies Inc., dated October 25, 2024, as amended. The total issuances of Series B Preferred Stock approved by the shareholders at this meeting was 6,372,874 shares. These bonuses to GB Capital Ltd and Northstrive Companies Inc. in the form of Series B Preferred Stock represented bonuses of $75,000 to each entity pursuant to their respective agreements aforementioned in this paragraph. These bonuses, totaling $150,000, were accrued and included due to related parties as of December 31, 2024. F-38 PMGC Holdings Inc. (formerly Elevai Labs Inc.) Notes to the Consolidated Financial Statements For the years ended December 31, 2025 and 2024 (Expressed in United States dollars) Equity Warrants *Transactions during the year ended December 31, 2025.* On January 28, 2025, in connection with the warrant inducement agreement (see above) and the exercise of the Series A Warrants, the Company issued 1,649 replacement warrants with an initial exercise price of $1,617.12 and a five-year term. On April 29, 2025, the exercise price of the replacement warrants were reset to the contractual floor price of $270.48 per share. Following the adjustment, each of the five investors held 1,971 warrants, resulting in a total of 9,856 replacement warrants outstanding at the adjusted exercise price, maintaining the aggregate exercise value of $2,665,836. On March 18, 2025, the Company entered into a securities purchase agreement with an existing investor to repurchase warrants to purchase 1 share of common stock at an exercise price of $352,800 per share for a nominal amount. On March 24, 2025, the Company consummated a registered direct offering with institutional investors, issuing 1,538 shares of common stock and 1,969 pre-funded warrants. The pre-funded warrants are immediately exercisable at an exercise price of $0.0084 per share, subject to a beneficial ownership limitation of 4.99%, which may be increased to 9.99% at the holders election. On April 14, 2025, all 1,968 pre-funded warrants issued in connection with the Companys registered direct offering consummated on March 24, 2025 were fully exercised for shares of common stock, at an exercise price of $0.0084 per share. ** On August 22, 2025, the Company entered into a warrant inducement agreement with existing warrant holders to amend and reprice their outstanding common stock purchase warrants and issue new common stock purchase warrants to the existing warrant holders. These holders existing warrants were repriced from $270.48 to $169.20 per share, and holders agreed to exercise those repriced warrants in exchange for 9,856 new unregistered warrants with an exercise price of $169.26 per share. The transaction closed on August 25, 2025, generating gross proceeds of $1,668,219 with the issuance cost of $156,775. ** *Transactions during the year ended December 31, 2024* On September 24, 2024, with each of the 243 shares of common stock or pre-funded warrants issued on the same date, he Company also issued one Series A Warrant (the Series A Warrants) and one Series B Warrant (the Series B Warrants). The Series A Warrants will be exercisable beginning on the date of completion of the requisite waiting period following the filing of the Information Statement related to the approval by the stockholders of the Company (the Initial Exercise Date or Shareholder Approval Date) of the issuance of shares upon exercise of the Warrants, among other things (the Shareholder Approval). The Initial Exercise Date was October 30, 2024. The Series B Warrants will be exercisable beginning on the Shareholder Approval Date. The Series A Warrants will expire on the five-year anniversary of the Initial Exercise Date and the Series B Warrants will expire on the two and one-half-year anniversary of the Initial Exercise Date. The exercise price of the Series A and Series B Warrants shall be $44,688, subject to adjustments. On September 24, 2024, the Company issued 12 placement agent warrants to the placement agent in connection with the financing that closed on the same date (the Placement Agent Warrants). These Placement Agent Warrants have an exercise price of $39,504 and shall expire three and a half years from issuance. As these warrants are accounted for as equity warrants, they have no net impact on the consolidated statement of changes in stockholders equity. F-39 PMGC Holdings Inc. (formerly Elevai Labs Inc.) Notes to the Consolidated Financial Statements For the years ended December 31, 2025 and 2024 (Expressed in United States dollars) As of December 31, 2025, the following equity warrants were outstanding: | Outstanding | | | Expiry date | | Weighted average exercise price ($) | | | | | 2 | | | August 28, 2026 | | | 352,800 | | | | | 1 | | | March 12, 2027 | | | 352,800 | | | | | 12 | | | March 24, 2028 | | | 39,504 | | | | | 9,855 | | | August 25, 2030 | | | 158.88 | | | | | 9,870 | | | | | | 300.96 | | | As of December 31, 2025 and 2024, the weighted average life of equity warrants outstanding was 4.65 and 4.90 years, respectively. Stock Options The Company has a stock option plan included in the Companys 2025 Equity Incentive Plan (the Plan) where the Board of Directors or any of its committees can grant Incentive Stock Options, Nonstatutory Stock Options, and Restricted Stock to employees, advisors and directors of the Company. As of December 31, 2025 and 2024, the aggregate number of shares allocated and made available for issuance pursuant to stock options granted under the Plan shall not exceed 7,752 shares. The Plan shall remain in effect until it is terminated by the Board of Directors. *Transactions during the year ended December 31, 2025* There was no stock option activity during the year ended December 31, 2025. *Transactions during the year ended December 31, 2024* ** In January 2024, the Company granted 1 stock option with a contractual life of ten years and an exercise price of $588,000 per common stock. The stock option was valued at $16,178 using the Black-Scholes Option Pricing Model. The options vest 25% on the first anniversary of the grant date and the remaining 75% vest evenly over 36 months thereafter. On March 6, 2024, the Company granted 1 stock option with a contractual life of ten years and an exercise price of $117,600 per common stock. These stock options were valued at $52,845 using the Black-Scholes Option Pricing Model. The options vest 25% on the first anniversary of the grant date and the remaining 75% vest evenly over 36 months thereafter. ** The continuity of stock options for the years ended December 31, 2025 and 2024 is summarized below: | | | Number of stock options | | | Weighted average exercise price | | | | Outstanding, December 31, 2023 | | | 13 | | | | 200,698.80 | | | | Granted | | | 1 | | | | 181,167.84 | | | | Forfeited | | | (4 | ) | | | 204,005.04 | | | | Outstanding, December 31, 2024 | | | 10 | | | | 197,168.40 | | | | Granted | | | - | | | | - | | | | Forfeited/Cancelled | | | (3 | ) | | | (243,040.00 | ) | | | Expired | | | (1 | ) | | | (70,560.00 | ) | | | Outstanding, December 31, 2025 | | | 6 | | | | 265,384.00 | | | F-40 PMGC Holdings Inc. (formerly Elevai Labs Inc.) Notes to the Consolidated Financial Statements For the years ended December 31, 2025 and 2024 (Expressed in United States dollars) As of December 31, 2025, the following options were outstanding, entitling the holders thereof the right to purchase one common stock for each option held as follows: | Outstanding | | | Vested | | | Expiry date | | Weighted average exercise price ($) | | | | | 2 | | | | 2 | | | 08-Feb-31 | | | 70,560 | | | | | 1 | | | | 1 | | | 30-Sep-32 | | | 157,584 | | | | | 1 | | | | 1 | | | 30-Sep-32 | | | 588,000 | | | | | 1 | | | | 1 | | | 1-May-33 | | | 588,000 | | | | | 1 | | | | 1 | | | 5-Mar-34 | | | 117,600 | | | | 6 | | | | 6 | | | | | 265,384 | | | As of December 31, 2025, and December 31, 2024, the weighted average life of stock options outstanding was 5.98 years and 6.88 years, respectively. With the sale of the Companys skincare business on January 16, 2025, 2 vested stock options with a weighted average exercise price of $70,560 have been cancelled on April 16, 2025, after the 90-day exercise window following termination of employment with the Company. | 17. | Related Party Transactions | | **** Related parties consist of the following individuals and corporations: | | | Braeden Lichti, Non-executive Chairman | | | | | Jordan Plews, Former Director (resigned December 23, 2024) and CEO of Skincare and BioSciences (resigned January 16, 2025) | | | | | Graydon Bensler, non-employee CFO, CEO and Director | | | | | Tim Sayed, Former Chief Medical Officer and Former Director (resigned August 1, 2024) | | | | | Brenda Buechler, Former Chief Marketing Officer (termination effective June 20, 2024) | | | | | Christoph Kraneiss, Former Chief Commercial Officer (termination effective June 20, 2024) | | | | | Jeffrey Parry, Director (appointed June 1, 2023) | | | | | Julie Daley, Director (appointed June 1, 2023) | | | | | Crystal Muilenburg, Former Director (appointed June 1, 2023, resigned February 29, 2024) | | | | | George Kovalyov, Director (appointed March 1, 2024) | | | | | GB Capital Ltd., controlled by Graydon Bensler | | | | | JP Bio Consulting LLC, controlled by Jordan Plews | | | | | BWL Investments Ltd., controlled by Braeden Lichti | | | | | Northstrive Companies Inc., controlled by Braeden Lichti | | | | | Mystic Marine Advisors, controlled by Jeffrey Parry | | Key management personnel include those persons having authority and responsibility for planning, directing, and controlling the activities of the Company as a whole. The Company has determined that key management personnel consist of members of the Companys Board of Directors, corporate officers, and individuals with more than 10% control. F-41 PMGC Holdings Inc. (formerly Elevai Labs Inc.) Notes to the Consolidated Financial Statements For the years ended December 31, 2025 and 2024 (Expressed in United States dollars) Remuneration attributed to key management personnel are summarized as follows: | | | December 31, 2025 | | | December 31, 2024 | | | | Consulting fees | | $ | 1,462,400 | | | $ | 757,233 | | | | Management fees | | | 155,918 | | | | - | | | | Salaries | | | 26,228 | | | | 539,174 | | | | Director fees | | | 166,570 | | | | 165,000 | | | | Share-based compensation | | | 60,453 | | | | 23,861 | | | | | | $ | 1,871,568 | | | $ | 1,485,268 | | | During the year ended December 31, 2025: The Company incurred consulting fees and contracted performance bonuses of $697,800 (December 31, 2024 - $391,333) to GB Capital Ltd., a company controlled by Graydon Bensler, CEO, CFO and Director. The Company incurred consulting fees and contracted performance bonuses of $ $764,600 (December 31, 2024 - $365,900) to Northstrive Companies Inc., a company controlled by the Companys Chairman and former President. The Company incurred directors fees of $55,500 (December 31, 2024 $55,000) to George Kovalyov, a director of the Company. The Company incurred directors fees of $55,570 (December 31, 2024 $55,000) to Julie Daley, a director of the Company. The Company incurred directors fees of $55,500 (December 31, 2024 $55,000) to Mystic Marine Advisors, LLC, a company owned and controlled by Jeffrey Parry, a director of the Company. The Company incurred management fees of $31,755 (December 31, 2024 - $nil) to GB Capital Ltd., a company controlled by Graydon Bensler, CEO, CFO and Director, under a Secondment Agreement for management services. The Company incurred management fees of $124,163 (December 31, 2024 - $nil) to Northstrive Companies Inc., a company controlled by the Companys Chairman and former President, under a Secondment Agreement for management services. Jordan Plews, Former Director and former CEO of Skincare and BioSciences, earned a Salary of $26,228 and $283,549 respectively during the year ended December 31, 2025 and 2024. Brenda Buechler, Former Chief Marketing Officer, earned a Salary of $nil and $132,807, respectively during the year ended December 31, 2025 and 2024. Christoph Kraneiss, Former Chief Commercial Officer, earned a Salary of $nil and $122,818, respectively during the year ended December, 2025 and 2024. During the year ended December 31, 2025, and 2024, the Company issued the following stock options to related parties: On March 1, 2024, the Company granted 4 stock options to directors of the company with a contractual life of 10 years and exercise price of $19,600 per share of common stock. These stock options were valued at $45,986 using the Black-Scholes Option Pricing Model. The options vest 25% on the first anniversary of the grant date and the remaining 75% vest evenly over 36 months thereafter. F-42 PMGC Holdings Inc. (formerly Elevai Labs Inc.) Notes to the Consolidated Financial Statements For the years ended December 31, 2025 and 2024 (Expressed in United States dollars) Details of the fair value of the options granted to each individual and the related expense recorded for the years ended December 31, 2025 and 2024 are as follows: | | | December 31, 2025 | | | December 31, 2024 | | | Grant date fair value | | | | Braeden Lichti, Non-executive Chairman | | $ | 11 | | | $ | 2,069 | | | $ | 50,995 | | | | Graydon Bensler, CEO, CFO and Director | | | 11 | | | | 2,069 | | | | 50,995 | | | | Jordan Plews, Former Director and former CEO of Skincare and BioSciences2 | | | 11 | | | | 2,069 | | | | 50,995 | | | | Tim Sayed, Former Chief Medical Officer and Former Director1 | | | - | | | | (4,291 | ) | | | 50,995 | | | | Jeffrey Parry, Director | | | 10,485 | | | | 22,923 | | | | 107,669 | | | | Julie Daley, Director | | | 33,098 | | | | 82,070 | | | | 210,245 | | | | Crystal Muilenburg, Former Director1 | | | - | | | | (41,668 | ) | | | 210,245 | | | | George Kovalyov, Director | | | 16,837 | | | | 25,987 | | | | 52,845 | | | | Brenda Buechler, Former Chief Marketing Officer1 | | | - | | | | (36,918 | ) | | | 143,671 | | | | Christoph Kraneiss, Former Chief Commercial Officer1 | | | - | | | | (30,449 | ) | | | 121,243 | | | | | | $ | 60,453 | | | $ | 23,861 | | | $ | 1,049,898 | | | | 1 | 5 options of related parties were forfeited or cancelled during the year ended December 31, 2024 | | | 2 | 1 option of Jordan Plews were cancelled during the year ended December 31, 2025 | | As of December 31, 2025 and 2024, the Company had $642,925 and $227,749, respectively due to companies controlled by Braeden Lichti, of which $642,925 and $227,749 respectively is unsecured, non-interest bearing and are due on demand. As of December 31, 2025, the Company had $342,077 (December 31, 2024 - $179,655) due to GB Capital Ltd. controlled by Graydon Bensler, CEO, CFO and Director, and $Nil and $15,127 (December 31, 2024 - $11,813 and $Nil) due to Jordan Plews, Former Director and Former CEO of Skincare and BioSciences, and Jeffrey Parry, Director, respectively, for expenses incurred on behalf of the Company. As of December 31, 2025, the Company recorded accrued director fees payable to related parties of $32,765, including $13,890 payable to Julie Daley (December 31, 2024- $Nil) and $18,875 (December 31, 2024- $Nil) payable to George Kovalyov. These balances are unsecured, non-interest bearing, and due on demand. These amounts are unsecured, non-interest bearing and are due on demand. | 18. | Income Tax | | **** During the years ended December 31, 2025 and 2024, there is $Nil and $30,972 current and deferred income tax expense, respectively, reflected in the Statement of Operations and Comprehensive Loss. The components of loss from continuing operations before provision for income taxes for the years ended December 31, 2025 and 2024 consist of the following: | | | Year Ended December 31, | | | | | | 2025 | | | 2024 | | | | Domestic | | | (8,353,923 | ) | | | (6,051,077 | ) | | | Foreign | | | 597,827 | | | | (194,660 | ) | | | | | | (7,756,096 | ) | | | (6,245,737 | ) | | F-43 PMGC Holdings Inc. (formerly Elevai Labs Inc.) Notes to the Consolidated Financial Statements For the years ended December 31, 2025 and 2024 (Expressed in United States dollars) There were no cash income taxes paid (refunded) during the years ended December 31, 2025 or 2024. The components of income tax expense from continuing operations for the years ended December 31, 2025 and 2024 are as follows: | | | Year Ended December 31, | | | | | | 2025 | | | 2024 | | | | Current Taxes | | | | | | | | | Federal | | - | | | - | | | | State | | - | | | - | | | | Foreign | | - | | | - | | | | Total Current Taxes | | - | | | - | | | | | | | | | | | | | Deferred Taxes | | | | | | | | | Federal | | | 9,359 | | | | - | | | | State | | | 21,613 | | | | - | | | | Foreign | | | - | | | | - | | | | Total Deferred Taxes | | | 30,972 | | | | - | | | | Total Tax Expense / (Benefit) | | | 30,972 | | | | - | | | A reconciliation of the U.S. federal statutory income tax rate to the Companys effective continuing operations income tax rate is as follows: | Rate Reconciliation | | As at December 31, 2025 | | | | Income Taxes at Statutory Rates | | | (1,628,780 | ) | | | 21.00 | % | | | State Income Tax, Net of Federal Effect * | | | 16,053 | | | | -0.22 | % | | | Foreign Tax Effects | | | - | | | | 0.00 | % | | | Canada | | | | | | | | | | | Foreign Rate Differential | | | (12,210 | ) | | | 0.17 | % | | | Permanent Items | | | (139,091 | ) | | | 1.89 | % | | | Write off deferrals due to dissolution | | | 178,743 | | | | -2.43 | % | | | Change in Valuation Allowance | | | (152,986 | ) | | | 2.08 | % | | | Effects of Changes in Tax Laws or Rates | | | - | | | | 0.00 | % | | | Effects of Cross-Border Tax Laws | | | - | | | | 0.00 | % | | | Tax Credits | | | - | | | | 0.00 | % | | | Changes in Valuation Allowance | | | 1,844,709 | | | | -23.98 | % | | | Non-taxable or Non-deductible Items | | | - | | | | 0.00 | % | | | Permanent Items | | | 5,520 | | | | -0.08 | % | | | Changes in Unrecognized Tax Benefits | | | - | | | | 0.00 | % | | | Other | | | - | | | | 0.00 | % | | | Other | | | (80,986 | ) | | | 1.05 | % | | | Provision for income taxes | | | 30,972 | | | | -0.4 | % | | | * | The state that contributed to the majority (greater than 50%) of the tax effect in this category for the year ended December 31, 2025 was California. | | F-44 PMGC Holdings Inc. (formerly Elevai Labs Inc.) Notes to the Consolidated Financial Statements For the years ended December 31, 2025 and 2024 (Expressed in United States dollars) As previously disclosed prior to the adoption of ASU 2023-09, the difference between the provision (benefit) for income taxes and the amount computed by applying the U.S. federal income tax rate for the year ended December 31, 2024 is as follows: | | | December31, 2024 | | | | Net loss before income tax | | | (6,245,737 | ) | | | Effective tax rate | | | 27.87 | % | | | U.S. income tax at federal statutory rate | | | (1,740,687 | ) | | | State Income Tax, Net of Federal Benefits | | | | | | | Share-based compensation | | | 27,083 | | | | Other non-deductible items | | | 88,406 | | | | Foreign exchange | | | 10,750 | | | | Tax rate differences | | | 1,513 | | | | Change in Valuation Allowance | | | 1,612,935 | | | | Tax expense (recovery) | | | - | | | The components of the Companys deferred tax assets and liabilities related to continuing operations at December 31, 2025 and 2024, consisted of: | | | December31, 2025 | | | December31, 2024 | | | | Deferred tax assets: | | | | | | | | | | | Net operating loss carry forward | | | 4,896,406 | | | | 3,322,654 | | | | Lease Liability | | | 341,533 | | | | - | | | | Accruals and reserves | | | 489,163 | | | | - | | | | Other | | | 322,394 | | | | - | | | | | | | 6,049,496 | | | | 3,322,654 | | | | | | | (5,542,874 | ) | | | (3,322,654 | ) | | | Valuation allowance | | | 506,622 | | | | - | | | | Total deferred tax assets | | | | | | | | | | | Deferred tax liabilities: | | | | | | | | | | | Right of Use asset | | | (347,426 | ) | | | - | | | | Other | | | (190,168 | ) | | | - | | | | | | | (537,594 | ) | | | - | | | | Total deferred tax liabilities | | | (30,972 | ) | | | - | | | | Net deferred tax assets | | | - | | | | - | | | The Company has evaluated the positive and negative evidence bearing upon its ability to realize its deferred tax assets, which are composed principally of net operating loss carry forwards. Management has considered the Companys history of cumulative net losses incurred since inception and has concluded that it is more likely than not that the Company will not realize the benefits of its federal and state net deferred tax assets. Accordingly, a full valuation allowance has been established against the net deferred tax assets as of December 31, 2025 and 2024. The Company reevaluates the positive and negative evidence at each reporting period. During the year ended December 31, 2025, the valuation allowance increased by approximately 2.1 million. At December 31, 2025, the Company had U.S. federal and state net operating loss carryforwards of $17.7 million and $16.9 million, respectively. The federal net operating loss carryforwards were generated post January 1, 2018 and will carryforward indefinitely but are subject to an 80% taxable income limitation when utilized. The state net operating loss carryforwards will begin to expire in 2040. The utilization of net operating losses and tax credit carryforwards may be subject to an annual limitation as a result of ownership changes that have occurred previously or may occur in the future. Under Sections 382 and 383 of the Internal Revenue Code (the Code), a corporation that undergoes and ownership change may be subject to limitations on its ability to utilize its pre-change net operating losses and other tax attributes otherwise available to offset future taxable income or tax liability. An ownership change is defined as a cumulative change of 50% or more in the ownership positions of certain stockholders during a rolling 3-year period. The Company has not completed a formal study to determine if any ownership changes within the meaning of Code Section 382 and 383 have occurred. If such ownership change has occurred, the Companys ability to use its net operating losses or tax credit carryforwards may be restricted, which could require the Company to pay federal or state income taxes earlier than would be required if such limitations were not in effect. F-45 PMGC Holdings Inc. (formerly Elevai Labs Inc.) Notes to the Consolidated Financial Statements For the years ended December 31, 2025 and 2024 (Expressed in United States dollars) The Company recognizes the financial statement benefit of a tax position only when it determines that the position is more likely than not to be sustained upon examination by the relevant taxing authority. For tax positions that meet the more-likely-than-not threshold, the amount recognized in the financial statements is measured as the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the taxing authority. The Company records interest related to uncertain tax positions as interest expense and penalties within general and administrative expenses. As of December 31, 2025 and 2024, the Company had no unrecognized tax benefits. The Company is subject to taxation in the United States and various state jurisdictions. The Company is no longer subject to taxation in Canada following the dissolution of its Canadian subsidiary. There are currently no ongoing examinations by taxing authorities. The Companys U.S. federal and state tax years 2021 through 2024 remain open for examination, generally for three and four years, respectively, from the date of utilization of any net operating loss carryforwards. The Companys Canadian tax years remain open for examination by the Canadian tax authority for four years from the filing deadline. On July 4, 2025, the One Big Beautiful Bill Act (OBBBA) was enacted, introducing several changes to U.S. tax laws affecting corporations. Key provisions include the expensing of domestic research expenditures, an increase in the limitation on the deduction of interest expense to 30% of EBITDA, and 100% bonus depreciation for eligible property acquired after January 19, 2025. These provisions became effective for the Company during the three months ended September 30, 2025. The Company evaluated the impact of the new legislation and determined that it did not have a material effect on the Companys current or future effective income tax rate or cash taxes paid. | 19. | Commitments and Contingencies | | There were no commitments as of December 31, 2025, and December 31, 2024, or during the periods then ended. As of December 31, 2024, the Company had an ongoing dispute that arose in the normal course of business. In February 2025, solely to avoid the cost and burdens associated with litigation, the Company and the other parties to this dispute entered into a settlement agreement to fully and finally resolve any and all claims between them, without the Company or any party admitting any liability or fault. Due to the confidential nature of the settlement agreement, the Company is not in a position to disclose the terms of the settlement; however, the amounts payable by the Company to the parties and their legal counsel is included in accounts payable and accrued liabilities as of December 31, 2024. The amounts were paid in full by December 31, 2025. As of December 31, 2025, the Company had an ongoing dispute that arose in the normal course of business and mediation discussions are ongoing. It is not yet possible to predict the likelihood of an unfavorable outcome, or the amount or range of potential loss. F-46 PMGC Holdings Inc. (formerly Elevai Labs Inc.) Notes to the Consolidated Financial Statements For the years ended December 31, 2025 and 2024 (Expressed in United States dollars) | 20. | Concentrations | | *Customers* For the year ended December 31, 2025, the Company had 4 key customers that represented approximately 45% of the Companys revenue. The Company recorded 12% of its revenue from its largest customer. The Companys largest customer, representing $69,028 of revenue, relates to machining casting work performed for a customer during the period. | | | The year Ended December31, 2025 | | | | Customer 1 | | | 12 | % | | | Customer 2 | | | 11 | % | | | Customer 3 | | | 11 | % | | | Customer 1 | | | 11 | % | | | | | | 45 | % | | *Suppliers* During the year ended December 31, 2025, the Company had 2 key suppliers that represented approximately 35% of the cost incurred in the purchase of inventory. The table below represents a breakdown of each supplier as a percentage of the cost incurred. (Suppliers are shown from largest to smallest): | | | The year Ended December 31, 2025 | | | | Supplier 1 | | | 19 | % | | | Supplier 2 | | | 16 | % | | | | | | 35 | % | | The Company continually evaluates the performance of its suppliers and the availability of alternatives to substitute or supplement its inventory production supply chain. The Company believes that a breakdown in supply from one of its key suppliers would be overcome in a short amount of time given the availability of alternatives. | 21. | Reportable Segments and Geographic Areas | | The Companys continuing operations consist of three reportable segments: (i) corporate, treasury and biosciences (ii) IT packaging solutions (iii) precision engineering and machining. The Chief Executive Officer has been identified as the Chief Operating Decision Maker (CODM). F-47 PMGC Holdings Inc. (formerly Elevai Labs Inc.) Notes to the Consolidated Financial Statements For the years ended December 31, 2025 and 2024 (Expressed in United States dollars) The following is a summary of the Companys operations for the year ended December 31, 2025, and assets and liabilities as of December 31, 2025, split between reportable segments: | | | Corporate, Treasury and Biosciences | | | IT Packaging Solutions | | | Precision Engineering and Machining | | | Total | | | | Revenue | | $ | - | | | $ | 374,874 | | | $ | 215,210 | | | $ | 590,084 | | | | Cost of sales | | $ | - | | | $ | 265,714 | | | $ | 139,056 | | | $ | 404,770 | | | | Gross profit | | $ | - | | | $ | 109,160 | | | $ | 76,154 | | | $ | 185,314 | | | | | | | | | | | | | | | | | | | | | | | Expenses | | $ | 5,519,383 | | | $ | 203,616 | | | $ | 1,344,263 | | | $ | 7,067,262 | | | | Other income (expense) | | $ | (391,340 | ) | | $ | - | | | $ | (476,480 | ) | | $ | (867,820 | ) | | | Net loss from continuing operations | | $ | (5,910,723 | ) | | $ | (94,456 | ) | | $ | (1,744,589 | ) | | $ | (7,749,768 | ) | | | | | | | | | | | | | | | | | | | | | | Current Assets | | $ | 6,213,831 | | | $ | 395,526 | | | $ | 261,898 | | | $ | 6,871,255 | | | | Non-current assets | | $ | 2,091,621 | | | $ | 1,522,468 | | | $ | 2,383,129 | | | $ | 5,997,218 | | | | Total Assets | | $ | 8,305,452 | | | $ | 1,917,994 | | | $ | 2,645,027 | | | $ | 12,868,473 | | | | | | | | | | | | | | | | | | | | | | | Current liabilities | | $ | 3,413,529 | | | $ | 83,057 | | | $ | 445,710 | | | $ | 3,942,296 | | | | Non-current liabilities | | $ | 30,972 | | | $ | 326,263 | | | $ | 731,580 | | | $ | 1,088,815 | | | | Total Liabilities | | $ | 3,444,501 | | | $ | 409,320 | | | $ | 1,177,290 | | | $ | 5,031,111 | | | | | | | | | | | | | | | | | | | | | | | Total Equity | | $ | 4,860,951 | | | $ | 1,508,674 | | | $ | 1,467,737 | | | $ | 7,837,362 | | | All of the Companys revenue is generated with customers located in the United States. The majority of the Companys continuing operations are conducted from and its assets are located in the United States. PMGC Research, the Companys Canadian subsidiary, was located in Canada and provided limited operational support and research. | 22. | Subsequent Events | | **** Management has evaluated events subsequent to the year ended December 31, 2025 up to March 27, 2026, for transactions and other events that may require adjustment of and/or disclosure in the consolidated financial statements. On January 6, 2026 and March 10, 2026, the Company completed reverse stock splits of its common shares on a ratio of 4:1 and 6:1, respectively (Note 1). On January 7, 2026, the Company consummated Secured Pre-Paid Purchase #2 under its previously disclosed equity purchase facility. The Second Pre-Paid Purchase had an original principal amount of $3,278,700, included an original issue discount of $278,700, and provided for an initial purchase price of $3,000,000. The Company received net proceeds of approximately $2,732,704 after placement agent fees and legal fees. The instrument matures on January 7, 2029. F-48 PMGC Holdings Inc. (formerly Elevai Labs Inc.) Notes to the Consolidated Financial Statements For the years ended December 31, 2025 and 2024 (Expressed in United States dollars) On January 7, the Company settled the remaining outstanding principal under its ELOC arrangement of $2,078,294 through the issuance of 67,735 shares of common stock. In connection with this settlement, the Company derecognized the remaining convertible debt host liability of $1,254,479 and the related derivative liability of $418,412 associated with the conversion feature. The aggregate carrying amount of these liabilities was recorded to common stock and additional paid-in capital (Note 14). On January 13, 2026, the Company consummated Secured Pre-Paid Purchase #3 under the same equity purchase facility. The Third Pre-Paid Purchase had an original principal amount of $5,464,500, included an original issue discount of $464,500, and provided for an initial purchase price of $5,000,000. The Company received net proceeds of approximately $4,562,840 after placement agent fees. The instrument matures three years after the effective date. On February 2, 2026, the Company completed the acquisition of 100% of the issued and outstanding shares of SVM Machining, Inc. pursuant to a Stock Purchase Agreement. The aggregate purchase price was approximately $2,449,148, consisting of $2,250,000 in cash, $130,000 for cash acquired, and $69,148 related to estimated closing net working capital in excess of target, subject to post-closing true-up. In addition, the agreement provides for contingent earnout consideration of up to $750,000 based on 2026 revenue and up to $500,000 based on 2027 revenue. The Company is accounting for this transaction as a business combination. Because the acquisition occurred subsequent to year-end, the initial accounting for the transaction was incomplete as of the date these consolidated financial statements were issued. On February 6, 2026, the Company consummated Secured Pre-Paid Purchase #4 under the same equity purchase facility. The Fourth Pre-Paid Purchase had an original principal amount of $8,147,570, included an original issue discount of $692,570, and provided for a purchase price of $7,455,000. The purchase price was distributed in accordance with the transaction documents, including amounts deposited into a controlled account, placement agent fees, legal fees, and cash payable to the Company. On March 4, 2026, the Company filed a Certificate of Amendment to effect a 1-for-6 reverse stock split of its common stock, which became effective on March 10, 2026. Each six issued and outstanding shares of common stock were automatically combined into one share, with no change to the $0.0001 par value per share, and no fractional shares issued. Following the split, the Companys authorized capital stock consists of 583,333,334 shares, including 83,333,334 shares of common stock and 500,000,000 shares of preferred stock. The Companys common stock began trading on a split-adjusted basis on the Nasdaq Capital Market on March 10, 2026 under the ticker symbol ELAB. The Company also proportionally adjusted outstanding equity awards, warrants, and related exercise prices to reflect the reverse stock split. F-49