PMGC Holdings Inc. 10-K

Item 9A. Controls and Procedures. Evaluation of Disclosure Controls and Procedures Pursuant to Rule 13a-15(b) under the Securities Exchange Act of 1934 (“Exchange Act”), the Company carried out an evaluation, with the participation of the Company’s management, including the Company’s Chief Executive Officer (the Company’s principal executive officer and interim principal accounting officer), of the effectiveness of the Company’s 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 report. Based upon that evaluation, the Company’s Chief Executive Officer concluded that the Company’s 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 SEC’s rules and forms, and that such information is accumulated and communicated to the Company’s management, including Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. Management’s 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. 59 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. Based on this evaluation, management concluded that Elevai has limited accounting personnel and other resources with which to address its internal control over financial reporting in accordance with requirements applicable to public companies. Historically, Elevai had not retained a sufficient number of professionals with an appropriate level of accounting knowledge, training and experience to appropriately analyze, record and disclose accounting matters under U.S. GAAP. Material Weakness Our management’s conclusion that our disclosure controls and procedures were ineffective was due to the identification of a material weakness in our internal control over financial reporting in connection with the preparation of our year-end Financial Statements. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim consolidated financial statements would not be prevented or detected on a timely basis. Our management identified the following material weakness in our internal control over financial reporting: ● We have insufficiently designed and operating controls surrounding the accounting policies and controls, including standardized reconciliation schedules to ensure the company’s books and records are maintained in accordance with GAAP. Notwithstanding the identified material weakness, management believes that the consolidated financial statements included in this Form 10-K present fairly, in all material respects, our consolidated financial position, consolidated results of operations, and consolidated cash flows as of and for the periods presented in accordance with U.S. GAAP. Changes in Internal Controls over financial reporting No change in our internal control over financial reporting occurred during the fiscal year ended December 31, 2024, 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, 2024, 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 Company’s 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 Nasdaq’s listing standards. Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections None. 60 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 as of March 31, 2025: Name Age Position Executive Officers: Graydon Bensler 33 Chief Executive Officer, Chief Financial Officer and Director Braeden Lichti 39 Chairman of the Board Non-Executive Directors: 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 , 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 seven years of experience in financial consulting and management for both private businesses and US/Canadian publicly traded companies and is a CFA Charterholder (CFA) In 2017, Mr. Bensler Co-founded an Ed Tech curriculum management and scheduling company that was implanted 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 where he worked directly with investment banks, investment brokers and company executives and directors. During his tenure, 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. Mr. Bensler was also a director of publicly traded Health Logic Interactive Inc. (TSXv:CHIP) from 2020 to 2024. We believe that Mr. Bensler’s 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. Braeden Lichti , 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 and advisory 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, Hydromer offers a wide range of services, including polymer research and development, contract coating and specialized analytical testing. Mr. Lichti co-founded PMGC Holdings Inc. in 2020 and has served as its advisor and has been a principal stockholder since its formation. He has remained the largest stockholder through companies he controls and recently assumed the role of Chairman in 2024. We believe that Mr. Lichti’s past experience as our director and advisor, his extensive executive experience and his having served as Chairman for similarly situated companies makes him a qualified director for our Company. 61 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, 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 HLII’s 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. 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 Food’s 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. Daley’s 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. 62 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 Company’s 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; ● 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 recipient’s 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 company’s outside auditor, or at any time during the past three (3) years was a partner or employee of the company’s outside auditor, and who worked on the company’s 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. 63 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 committee’s 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 management’s 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 management’s communication and implementation of the Company’s anti-fraud policy; ● reviewing the Company’s 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 person’s 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. 64 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. 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, 2024. In addition, with regard to the Company’s trading in its own securities, it is the Company’s 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; 65 ● 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; ● 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 or were, as applicable: ● Graydon Bensler, Chief Executive Officer and Chief Financial Officer; ● Jordan R. Plews, former Chief Executive Officer and President; ● Brenda Buechler, former Chief Marketing Officer; and ● Christoph Kraneiss, former Chief Commercial 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. 66 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 2024 $ 196,333 $ 195,000 - $ 391,333 Chief Executive Officer, Chief Financial Officer and Director 2023 $ 85,000 $ 25,000 $ - $ 110,000 Jordan R. Plews (1) 2024 $ $ Director and Former CEO and President 2023 $ 200,000 - - $ 200,000 Brenda Buechler (2) 2024 $ - - - $ - Former Chief Marketing Officer 2023 $ 190,000 - - $ 190,000 Christoph Kraneiss (3) 2024 $ - - - $ - Former Commercial Officer 2023 $ 180,000 - - $ 180,000 (1) On December 23, 2024, Jordan Plews resigned as Director of the Company. (2) On June 20, 2024, we notified Brenda Buechler that she was involuntarily terminated without “cause” or laid off from employment as part of a wider job elimination/restructuring or reduction in force of the Company in order to streamline the Company’s operations and organizational structure. (3) On June 20, 2024, we notified Christoph Kraneiss that he was involuntarily terminated without “cause” or laid off from employment as part of a wider job elimination/restructuring or reduction in force of the Company in order to streamline the Company’s operations and organizational structure. Employment 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 Board’s appointment for as of the close of business on June 21, 2024. On October 25, 2024, the Company entered into the Second Amended and Restated Consulting Agreement for Non-Employee Chief Executive Officer (the Second Amended Bensler Consulting Agreement”) with GB Capital Ltd, a British Colombia, Canada corporation (“GB Capital”), an entity controlled by Mr. Bensler. The Second Amended Bensler 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 June 1, 2020 (the “Original Bensler Consulting Agreement”). The Original Bensler Consulting Agreement was amended and restated again on June 21, 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 Bensler Consulting Agreement, GB Capital agreed to designate Mr. Graydon Bensler, Director of GB Capital, to perform the Services (as defined in the Second Amended Bensler Consulting Agreement). 67 Pursuant to the terms of the Second Amended Bensler Consulting Agreement, as consideration for Mr. Bensler’s 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 Bensler Consulting Agreement, the Company would make the following payments to GB Capital (such payments, the Bensler Sign-on Bonuses”): (a) a one-time bonus of $175,000, with (1) $100,000 of such bonus to be paid to GB Capital in cash and (2) $75,000 of such bonus to be remitted to GB Capital in Series B Preferred Stock, with the cash equivalent of such shares of Series B Preferred Stock to be determined by mutual agreement of the Company and GB Capital, and provided such issuance of Series B Preferred Stock was approved by the Company’s shareholders. In the Board’s 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 “Bensler Annual Bonus”), provided that GB Capital meets the Board’s 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 Bensler Annual Bonus is the fiscal year in which the Effective Date falls. Pursuant to the Second Amended Bensler 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 Bensler Consulting Agreement, GB Capital is also entitled to each of the following bonus payments (collectively, the “Bensler Milestone Bonuses”). Such Bensler 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: (A) 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. (B) 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. (C) 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 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 Company’s 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. (D) The Company shall pay GB Capital $300,000 each time the Company achieves a Market Valuation (as defined in the Second Amended Bensler Consulting Agreement) of $50,000,000 and $100,000,000, provided that each of such Market Valuations continues for each at least 5 consecutive Trading Days (as defined in the Second Amended Bensler Consulting Agreement). 68 Additionally, GB Capital may elect to accrue the Bensler Milestone Bonuses and convert the cash amount of the Bensler Milestone Bonus into shares of the Company’s 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. The Second Amended Bensler Consulting Agreement is filed herein as Exhibit 10.19. On October 25, 2024, the Company entered into the Amendment to the Second Amended Bensler Consulting Agreement which stipulated that the Company’s issuances of Series B Preferred Stock to GB Capital as the Bensler Sign-on Bonuses, were subject to shareholder approval. The Amendment to the Second Amended Bensler Consulting Agreement is filed herein as Exhibit 10.21. Jordan R. Plews In September 2021, we entered into an employment contract with Dr. Jordan R. Plews pursuant to which he served as the Company’s Chief Executive Officer, effective as of October 1, 2021 until his resignation on June 21, 2024. The agreement is at will and subject to termination prior to completion of the services at any time by us, or with 14 days’ prior written notice by Dr. Plews and for any reason not prohibited by law. Pursuant to the terms and provisions of the agreement: (a) Dr. Plews was appointed as our Chief Executive Officer and undertook and performed the duties and responsibilities normally and reasonably associated with such office; and (b) we agreed to pay Dr. Plews an annual salary of $200,000 in addition to equity compensation in the form of stock options in accordance with our 2020 Equity Incentive Plan, as amended. Brenda Buechler In June 2022, we entered into an employment contract with Brenda Buechler as the Company’s Chief Marketing Officer, effective as of August 1, 2022. On June 20, 2024, we terminated this employment agreement. Pursuant to the terms and provisions of the agreement: (a) Ms. Buechler was appointed as our Chief Marketing Officer and undertook and performed the duties and responsibilities normally and reasonably associated with such office; and (b) we agreed to pay Ms. Buechler an annual salary of $190,000 in addition to equity compensation in the form of stock options in accordance with our 2020 Equity Incentive Plan, as amended. except that 25% of those stock-options shall not vest and become exercisable until the first anniversary of the grant date and, thereafter, the options shall vest at a rate of 25% per annum and become exercisable with respect to 100% of the shares subject to the option on the fourth anniversary of the grant date. Christoph Kraneiss In August 2022, we entered into an employment contract with Christoph Kraneiss as the Company’s Chief Commercial Officer, effective as of August 8, 2022. Pursuant to the terms and provisions of the agreement: (a) Mr. Kraneiss was appointed as our Chief Commercial Officer and undertook and performed the duties and responsibilities normally and reasonably associated with such office; and (b) we agreed to pay Mr. Kraneiss an annual salary of $180,000 in addition to equity compensation in the form of stock options in accordance with our 2020 Equity Incentive Plan, as amended. except that 25% of those stock-options shall not vest and become exercisable until the first anniversary of the grant date and, thereafter, the options shall vest at a rate of 25% per annum and become exercisable with respect to 100% of the shares subject to the option on the fourth anniversary of the grant date. On June 20, 2024, we terminated this employment agreement. 69 Director Compensation We intend to and have agreed to compensate our independent directors for their service 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 of director and committee meetings. On June 1, 2023, we rescinded previously granted but unissued nonstatutory stock options to each of our independent director nominees and instead granted nonstatutory stock options to purchase 240,000 shares of the Company’s Common Stock to our then independent director nominees and related parties Jeffery Parry, Crystal Muilenburg and Julianna Daley under our 2021 Equity Incentive Plan. The equity compensation grants were directly in relation to the appointment of Mr. Parry, Ms. Daley and Ms. Muilenburg as our independent directors. The options maintain a contractual life of 10 years and an exercise price of $5.00 per share of Common Stock. All options vest at a rate of 25% on the first anniversary of the date of grant and the remaining 75% vest evenly over 36 months thereafter. Equity Incentive Awards The Company has historically granted stock options to its employees, including its executive officers, under the 2020 Equity Incentive Plan where our Board or any of its committees can grant issuances of incentives stock options, nonstatutory stock options, and restricted stock to our employees, advisors and directors. The exercise price of incentive stock options and nonqualified stock options will be no less than 100% of the fair value per share of the Company’s Common Stock on the date of grant. If an individual owns Common Stock representing more than 10% of the voting shares and the grant is an incentive stock option, the price of each share will be at least 110% of the fair value on the date of grant. The aggregate number of shares of Common Stock allocated and made available for issuance pursuant to stock options granted under the Plan may not exceed 8,671 shares of Common Stock. As of the date of this Annual Report, options to purchase 4,925 shares of Common Stock under the Plan were outstanding, and 3,225 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 2020 Plan and is qualified in its entirety by reference to the 2020 Plan, a copy of which is filed as Exhibit 10.2 to our offering statement of which this Annual Report forms a part. 70 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 Company’s 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 Board’s or the Compensation Committee’s 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, 2024. 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 $ 5,228 $ 335.32 $ 2,922 (1) Equity compensation plans not approved by security holders - $ - - Total $ 5,228 $ 335.32 2,922 (1) 2,922 securities remaining available for future issuance under the Company’s 2020 Equity Incentive Plan (the “Plan”). The aggregate number of shares allocated and made available for issuance pursuant to stock options granted under the Plan shall not exceed 8,671 shares. 71 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. The following table provides information with respect to the beneficial ownership of our Common Stock as of March 26, 2025 by: ● each of our executive officers and directors; ● all of our current directors and executive officers as a group; and ● each person or entity, or group of persons or entities, known by us to own beneficially more than 5% of our Common 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 26, 2025. 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 577,961 shares of Common Stock outstanding as of March 26, 2025. Name and Address of Beneficial Owner (1) Amount and Nature of Beneficial Ownership Percentage of Beneficial 5% or Greater Shareholders: Directors, Named Executive Officers and Other Executive Officers: Graydon Bensler, Chief Executive Officer, Chief Financial Officer and Director 744 (2) * % Braeden Lichti, Chairman of the Board 2,732 (3) * % Jeffrey Parry, Director 58 (4) * % George Kovalyov, Director - - % Juliana Daley, Director 25 (5) * % All executive officers and directors as a group (5 persons) 4,489 (6) * % * Denotes less than one (1%) percent. (1) Unless otherwise indicated, the business address of each of the individuals is our address of c/o PMGC Inc., 120 Newport Center Drive, Ste. 250, Newport Beach, CA 92660. 72 (2) Consists of (i) 601 shares of Common Stock held by GB Capital Ltd., of which Mr. Bensler has sole voting and dipositive power over the shares and (ii) 143 shares of Common Stock that Mr. Bensler has the right to acquire from us within 60 days of March 26, 2025 pursuant to the exercise of stock options granted under the 2020 Equity Incentive Plan. (3) Consists of (i) 143shares of Common Stock that Mr. Lichti has the right to acquire from us within 60 days of March 26, 2025 pursuant to the exercise of stock options granted under the 2020 Equity Incentive Plan, (ii) 1362 shares of Common Stock held by BWL Investments Ltd. of which Mr. Lichti has sole voting and dipositive power over the shares, (iii) 591 shares of Common Stock held by BWL Holdings Ltd. of which Mr. Lichti has sole voting and dipositive power over the shares, (iv) 591 shares of Common Stock held by Northstrive Fund II LP of which Mr. Lichti has sole voting and dipositive power over the shares and (v) 44 shares of Common Stock underlying warrants held by BWL Investments Ltd. (4) Consists of (i) 30 shares of Common Stock and (ii) 29 shares of Common Stock that Mr. Parry has the right to acquire from us within 60 days of March 26, 2025, pursuant to the exercise of stock options granted under the 2020 Equity Incentive Plan. (5) Consists of (i) one share of Common Stock and (ii) 24 shares of Common Stock that Ms. Daley has the right to acquire from us within 60 days of March 26, 2025, pursuant to the exercise of stock options granted under the 2020 Equity Incentive Plan. (6) Consists of (i) 4,489 shares of Common Stock beneficially owned by our directors and executive officers and (ii) 338 shares of Common Stock underlying outstanding options, exercisable within 60 days of March 26, 2025 and (iii) 44 shares of Common Stock underlying warrants. 73 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 party’s 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, 2022 to which we have been a party in which the amount involved exceeded or will exceed $70,915, which represents 1% of the average of our total assets amounts as of December 31, 2024 and 2023), 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. The Company paid consulting fees of $391,333, $110,000, and $95,078 to GB Capital Ltd., a company controlled by Graydon Bensler, Chief Financial Officer and Director in 2024, 2023, and 2022, respectively. BWL Investments Ltd., a British Columbia Canadian Corporation (“BWL”) owned and managed by Braeden Lichti and Hatem Abou-Sayed “Tim” Sayed, our former Chief Medical Officer, subscribed to $48,980 and $10,000 in promissory notes, respectively. On July 15, 2022, these promissory notes and accrued interest were converted into Series A preferred shares and warrants as follows: Series A preferred shares Warrants Promissory notes and accrued interest BWL Investments Ltd. 61,551 61,551 $ 49,538 Tim Sayed, former director and Chief Medical Officer 12,563 12,563 10,112 74,114 74,114 $ 59,650 Pursuant to an advisory board agreement between us and Jeffery Parry, (an independent director to the Company as of June 1, 2023) dated August 12, 2021, on August 16, 2021, the Company granted Mr. Parry equity compensation in the form of non-statutory stock options to purchase 208 shares of the Company’s Common Stock (41,667 pre 200:1 share consolidation). Under an amended advisory board agreement between us and Jeffery Parry dated September 30, 2022 additional nonstatutory stock options to purchase 80 shares of the Company’s Common Stock (16,000 pre 200:1 share consolidation) were granted to Mr. Parry. The stock options held a contractual life of ten years and exercise price of $120 ($0.60 pre 200:1 share consolidation) per Common Stock. These stock options were valued at $10,630 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. Through unanimous written consent, the Board of the Company amended the vesting schedule for those stock options to accelerate the vesting of such stock options so that those stock options fully vested as of December 3, 2022. On December 16, 2022, Mr. Parry exercised all 41,667 (pre 200:1 stock consolidation) stock options for a total exercise price of $25,000.20. On June 1, 2023, we terminated the advisory board agreement between us and Jeffery Parry. As amended and agreed to on May 1, 2023, and as effective on January 4, 2022, we entered into a consulting agreement (the “Lichti Consulting Agreement”) with NorthStrive Companies Inc., a California Corporation (“NorthStrive”) owned and managed by Braeden Lichti. Pursuant to the Lichti 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 of May 31, 2023, the Company had $192,705 (2022 - $120,000, 2021 - $23,520) due to NorthStrive, of which $22,705 (2021 - $23,520) is unsecured, non-interest bearing and are due on demand. $120,000 was due as of December 31, 2022, and the remaining $50,000 was due as of May 31, 2022. The aforementioned fees are due in contemplation for NorthStrive’s advisement under the CA, whereby starting on January 4, 2022, we agreed to compensate NorthStrive $10,000 per month (the “Compensation”). 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) equal to the value of the Compensation due to NorthStrive for services provided through and up to March 31, 2023 and $3.00 per share (pre 200:1 stock consolidation) equal to the value of the Compensation due to NorthStrive for services provided after March 31, 2023 or via cash payment equal to the amount of Compensation outstanding however, that Compensation due NorthStrive shall accrue interest-free and payment of that Compensation has been deferred until the earlier of either (a) our raising an aggregate of at least US$2,000,000 of equity and/or debt investment from and after October 1, 2022, (b) our becoming listed on any established stock exchange or a national market system, or (c) a determination by our Board that Company has sufficient cash flows to support payment of the Compensation due to NorthStrive at the time of that determination. For the fiscal year ended December 31, 2022, we did not make payments to Northstrive under the Lichti Consulting Agreement. For the fiscal year ended December 31, 2023, we paid Northstrive $230,000 under the Lichti Consulting Agreement. On June 21, 2024, we entered into the Amended and Restated Consulting Agreement with Northstrive (the “First Amended Lichti 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. The First Amended Lichti Consulting Agreement is filed herein as Exhibit 10.13. 74 On October 25, 2024, the Company entered into the Second Amended and Restated Consulting Agreement for Non-Executive Chairman (the “Second Amended Lichti Consulting Agreement”) with Northstrive. The Second Amended Lichti Consulting Agreement provided that, as consideration for Mr. Lichti’s 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 Lichti 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 (1) $100,000 of such bonus to be paid to Northstrive in cash and (2) $75,000 of such bonus to be remitted to Northstrive in Series B Preferred Stock, with the cash equivalent of such shares of Series B Preferred Stock to be determined by mutual agreement of the Company and Northstrive; and (b) 300,000 shares of Series B Preferred Stock. In the Board’s 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 “Lichti Annual Bonus”), provided that Northstrive meets the Board’s performance objectives for Northstrive and Northstrive is engaged by the Company for such fiscal year in full. The target of the Lichti Annual Bonus is 125% or greater of the Lichti Annual Consultant Fee. Subject to the terms of the Second Amended Lichti 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: (A) 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. (B) 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. (C) The Company shall pay Northstrive $75,000 each time the Company achieves a Market Valuation (as defined in the Second Amended Lichti 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 Trading Days, 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. (D) 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 Trading Days. Notwithstanding anything to the contrary stated in the Second Amended Lichti 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 Company’s 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 Lichti Consulting Agreement is filed herein as Exhibit 10.20. On October 25, 2024, the Company entered into the Amendment to the Second Amended Lichti Consulting Agreement, which stipulated that the Company’s issuances of Series B Preferred Stock to Northstrive as the Northstrive Sign-on Bonuses, were subject to shareholder approval. The Amendment to the Second Amended Lichti Consulting Agreement is filed herein as Exhibit 10.22. For the fiscal year ended December 31, 2024, we paid Northstrive $188,500 under the Second Amended Lichti Consulting Agreement. 75 On May 1, 2023, as effective on February 1, 2023, we entered into an advisory agreement (the “Advisory Agreement”) with Braeden Litchi which terminates after twenty-two months to strategically assist us in our maintenance of board governance, director recruitment, and direction for our board of directors strategy sessions. The Advisory Agreement was entered into under contemplation of Mr. Litchi’s resignation from our Board effective February 1, 2023, and our desire to maintain Mr. Litchi’s compensation as a valuable advisor to us. Pursuant to the Advisory Agreement, we agreed with Mr. Litchi that in exchange for services under the Advisory Agreement, his options granted on February 9, 2021 to purchase 1,000 shares of our Common Stock (200,000 pre 200:1 share consolidation) under our 2020 Equity Incentive Plan shall continue to vest pursuant to the aforementioned terms of the Advisory Agreement. On June 21, 2024, we terminated the Advisory Agreement, which was a condition to Mr. Lichti’s appointment to the Board and as non-executive Chairman of the Board on the same date. Prior to our reorganization, BWL Investments Ltd., a British Columbia Canadian Corporation (“BWL”) also owned and managed by Braeden Lichti, owned approximately 29.4% of our issued and outstanding shares of Common Stock and 100% of the equity interests in Reactive Labs. On June 4, 2021, we issued 100 shares of Common Stock (pre 200:1 stock consolidation) to BWL in in exchange for substantially all of the assets and liabilities of Reactive Labs. Braeden Lichti is one of our co-founders and our current Chairman and director. He is the current chief executive officer of NorthStrive and BWL, as described herein and may be deemed a “promoter” as defined by Rule 405 of the Securities Act though we elect to refer to him as a “founder” or “organizer” as permitted under Rule 405. There are no other promoters of the Company. In May, and December of 2022, we granted nonstatutory stock options to purchase1,250 ( 250,000 pre 200:1 share consolidation) shares of the Company’s Common Stock to Brenda Buechler, our former Chief Marketing Officer, and Christoph Kraneiss, our former Chief Commercial Officer. The options maintain a contractual life of ten years and weighted average exercise price of $244 ($1.22 pre 200:1 share consolidation) per share of Common Stock. These stock options were valued at $264,906 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. Details of the fair value granted to each individual and the related expense recorded for the year ended December 31, 2022, are as follows: December 31, 2022 Fair value of stock options granted Brenda Buechler, former Chief Marketing Officer $ 43,488 $ 143,679 Christoph Kraneiss, former Chief Commercial Officer 28,344 121,227 $ 71,832 $ 264,906 On June 1, 2023, we rescinded previously granted but unissued nonstatutory stock options to each of our independent director nominees and instead granted nonstatutory stock options to purchase 1,200 (240,000 pre 200:1 share consolidation) shares of the Company’s Common Stock to our then independent director nominees and related parties Jeffery Parry, Crystal Muilenburg and Julianna Daley under our 2021 Equity Incentive Plan. The equity compensation grants were directly in relation to the appointment of Mr. Parry, Ms. Daley and Ms. Muilenburg as our independent directors. The options maintain a contractual life of ten years and an exercise price of $1,000 ($5.00 pre 200:1 share consolidation) per share of Common Stock. All options vest at a rate of 25% on the first anniversary of the date of grant and the remaining 75% vest evenly over 36 months thereafter. Other Agreements with Our Stockholders In connection with our Series A convertible preferred stock financing, we entered into an investors’ rights, and voting agreements containing registration rights, information rights, voting rights among other things, with certain holders of our preferred stock. Similarly, in connection with our Common Stock financing, we entered into a subordinate investors’ rights agreement containing registration rights and information rights with certain holders of our Common Stock. Each of those stockholder agreements terminated upon the closing of our initial public offering in 2023 whereby such stockholders are no longer entitled to the rights to them afforded therein. 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, 2024, and 2023, 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 2024 2023 Audit fees $ 60,000 $ 29,000 Audit-related fees 27,000 - Tax fees - - All other fees - - Total fees $ 87,000 $ 29,000 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. 76 PART IV Item 15. Exhibits and Financial Statement Schedules. (a) The following documents are filed as part of this report: (1) Financial Statements: The audited balance sheet of the Company as of December 31, 2024, 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 TPS Thyer, 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. 77 Exhibit Number Description 3.1 Articles of Incorporation of the Registrant (incorporated by reference to Exhibit 3.1 to the Company’s 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 Company’s 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 Company’s registration statement on Form S-1, filed with the SEC on February 11, 2025) 10.1+ 2020 Equity Incentive Plan, as amended, and forms of award agreements thereunder. (incorporated by reference to Exhibit 10.1 to the Company’s registration statement on Form S-1, filed with the SEC on February 11, 2025) 10.2 Form of Amended and Restated Consulting Agreement between the Registrant and Northstrive Companies Inc. (incorporated by reference to Exhibit 10.2 to the Company’s registration statement on Form S-1, filed with the SEC on February 11, 2025) 10.3 Form of Advisory Agreement between the Registrant and Braeden Lichti (incorporated by reference to Exhibit 10.3 to the Company’s registration statement on Form S-1, filed with the SEC on February 11, 2025) 10.4† Authorized Distributor Agreement, dated August 30, 2022, between the Registrant and Refine USA, LLC (incorporated by reference to Exhibit 10.4 to the Company’s registration statement on Form S-1, filed with the SEC on February 11, 2025) 10.5† Authorized Distributor and Trademark License Agreement, dated January 17, 2022, between the Registrant and Dermapenworld Pty Ltd. (incorporated by reference to Exhibit 10.5 to the Company’s registration statement on Form S-1, filed with the SEC on February 11, 2025). 10.6† Collaboration Agreement, dated November 28, 2023, by and between the Registrant and Yuva BioSciences, Inc. (incorporated by reference to Exhibit 10.6 to the Company’s registration statement on Form S-1, filed with the SEC on February 11, 2025). 10.7† License Agreement, dated January 16, 2024, by and between the Company and INmune Bio, Inc. (incorporated by reference to Exhibit 10.7 to the Company’s registration statement on Form S-1, filed with the SEC on February 11, 2025). 10.8+† Employment Agreement of Jordan R. Plews, dated September 26, 2021 (incorporated by reference to Exhibit 10.8 to the Company’s registration statement on Form S-1, filed with the SEC on February 11, 2025). 10.9† Employment Agreement of Brenda Buechler, dated June 24, 2022 (incorporated by reference to Exhibit 10.9 to the Company’s registration statement on Form S-1, filed with the SEC on February 11, 2025). 10.10† Employment Agreement of Chris Kraneiss, dated August 6, 2022 (incorporated by reference to Exhibit 10.10 to the Company’s registration statement on Form S-1, filed with the SEC on February 11, 2025). 10.11† License Agreement, dated April 30, 2024, by and between the Company and MOA Life Plus Co., Ltd. (incorporated by reference to Exhibit 10.11 to the Company’s registration statement on Form S-1, filed with the SEC on February 11, 2025). 10.12 Consulting Agreement with Santorio Biomedical, LLC. (incorporated by reference to Exhibit 10.12 to the Company’s registration statement on Form S-1, filed with the SEC on February 11, 2025). 10.13+ Amended and Restated Consulting Agreement by and between the Company and GB Capital Ltd. (incorporated by reference to Exhibit 10.13 to the Company’s registration statement on Form S-1, filed with the SEC on February 11, 2025). 10.14+ Amended and Restated Consulting Agreement by and between the Company and NorthStrive Companies Inc. (incorporated by reference to Exhibit 10.14 to the Company’s registration statement on Form S-1, filed with the SEC on February 11, 2025). 10.15+ Chairman Appointment Letter to Mr. Braeden Lichti (incorporated by reference to Exhibit 10.15 to the Company’s registration statement on Form S-1, filed with the SEC on February 11, 2025). 78 Exhibit Number Description 10.16 Termination Agreement by and between the Company and Mr. Lichti (incorporated by reference to Exhibit 10.16 to the Company’s registration statement on Form S-1, filed with the SEC on February 11, 2025). 10.17† First Amendment to License Agreement dated as of July 9, 2024, by and between the Company and INmune Bio, Inc. (incorporated by reference to Exhibit 10.17 to the Company’s registration statement on Form S-1, filed with the SEC on February 12, 2025). 10.18 Form of Securities Purchase Agreement dated September 22, 2024 (incorporated by reference to Exhibit 10.18 to the Company’s registration statement on Form S-1, filed with the SEC on February 11, 2025). 10.19 Second Amended and Restated Consulting Agreement for Non-Employee Chief Executive Officer by and between the Company and GB Capital Ltd. (incorporated by reference to Exhibit 10.19 to the Company’s registration statement on Form S-1, filed with the SEC on February 11, 2025). 10.20 Second Amended and Restated Consulting Agreement for Non-Executive Chairman by and between the Company and Northstrive Companies Inc. (incorporated by reference to Exhibit 10.20 to the Company’s registration statement on Form S-1, filed with the SEC on February 11, 2025). 10.21 Amendment to the Second Amended and Restated Consulting Agreement for Non-Employee Chief Executive Officer by and between the Company and GB Capital Ltd. (incorporated by reference to Exhibit 10.21 to the Company’s registration statement on Form S-1, filed with the SEC on February 11, 2025). 10.22 Amendment to the Second Amended and Restated Consulting Agreement for Non-Executive Chairman by and between the Company and GB Capital Ltd Northstrive Companies Inc. (incorporated by reference to Exhibit 10.22 to the Company’s registration statement on Form S-1, filed with the SEC on February 11, 2025). 10.23 Form of Warrant Inducement Agreement (incorporated by reference to Exhibit 10.23 to the Company’s registration statement on Form S-1, filed with the SEC on February 11, 2025). 10.24 Form of Warrant (incorporated by reference to Exhibit 10.24 to the Company’s registration statement on Form S-1, filed with the SEC on February 11, 2025). 10.25 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 Company’s Fork 8-K, filed with the SEC on March 3, 2025) 14.1 Code of Ethics (incorporated by reference Exhibit 14.1 to the Company’s registration statement on Form S-1, filed with the SEC on September 28, 2023). 19.1 Registrant’s Insider Trading Policy 21.1 List of Subsidiaries. (incorporated by reference Exhibit 21.1 to the Company’s registration statement on Form S-1, filed with the SEC on February 11, 2025). 23.1 Consent of TPS Thayer. 23.2 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 Registrant’s 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. 79 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 27, 2025 Graydon Bensler (Principal Executive Officer and Principal Financial and Accounting Officer) /s/ Braeden Lichti Chairman of the Board of Directors March 27, 2025 Braeden Lichti /s/ Jeffrey Parry Director March 27, 2025 Jeffrey Parry /s/ Juliana Daley Director March 27, 2025 Juliana Daley /s/ George Kovalyov Director March 27, 2025 George Kovalyov 80 INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Page Consolidated Financial Statements Report of Independent Registered Public Accounting Firm (PCAOB ID 7000 ) F-3 Report of Independent Registered Public Accounting Firm (PCAOB ID: 6706) F-4 Consolidated Balance Sheets as of December 31, 2024 and 2023 F-5 Consolidated Statements of Operations and Comprehensive Loss for the years ended December 31, 2024 and 2023 F-6 Consolidated Statements of Changes in Stockholders’ Equity for the years ended December 31, 2024 and 2023 F-7 Consolidated Statements of Cash Flows for the years ended December 31, 2024 and 2023 F-8 Notes to the Consolidated Financial Statements F-9 F- 1 Consolidated Financial Statements of PMGC Holdings Inc. (formerly Elevai Labs Inc.) For the years ended December 31, 2024 and 2023 (Expressed in United States Dollars) F- 2 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Audit Committee and Stockholders 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, 2024, and the related consolidated statements of operations and other comprehensive loss, changes in Stockholders’ equity, and cash flows for the year ended, December 31, 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, 2024, and the results of its operations and its consolidated cash flows for the year ended December 31, 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. Management’s 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 Company’s management. Our responsibility is to express an opinion on the Company’s 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 Company’s 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. HTL International, LLC We have served as PMGC Holdings, Inc’s auditor since 2024. Houston, TX March 27, 2025 F- 3 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Shareholders Elevai Labs, Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Elevai Labs, Inc. and subsidiaries (collectively, “the Company”) as of December 31, 2023, and 2022, and the related consolidated statements of operations and other comprehensive loss, shareholders’ equity and cash flows for the two year period then ended and the related notes (collectively referred to as the “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, 2023 and 2022, and the consolidated results of its operations and its consolidated cash flows for the two year period ended December 31, 2023 and 2022 in conformity with generally accepted accounting principles 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 the financial statements, the Company has suffered recurring losses from operations and has stockholders’ deficit that raise substantial doubt about its ability to continue as going concern. Management’s 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 Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. 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 Company’s 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/ TPS Thayer, LLC TPS Thayer, LLC We have served as the Company’s auditor since 2022 Sugar Land, Texas March 28, 2024 F- 4 PMGC Holdings Inc. (formerly Elevai Labs Inc.) Consolidated Balance Sheets (Expressed in United States dollar) As of: December 31, 2024 December 31, 2023 ASSETS Current Assets Cash $ 3,984,453 $ 3,326,851 Receivables, net 5,276 3,072 Prepaids and deposits 868,464 902,053 Assets held for sale 1,192,808 687,468 Total Current Assets 6,051,001 4,919,444 Investment in securities 139,084 - Equipment, net 1,087 1,741 Intangibles, net 2,801,993 - Assets held for sale – non-current - 268,733 TOTAL ASSETS $ 8,993,165 $ 5,189,918 LIABILITIES Current Liabilities Accounts payable and accrued liabilities $ 481,001 $ 134,014 Due to related parties 419,217 77,127 Current portion of consideration payable 350,000 - Derivative liabilities - 369,158 Liabilities held for sale 548,916 717,054 Total Current Liabilities 1,799,134 1,297,353 Consideration payable 534,467 - Liabilities held for sale – non-current - 65,489 TOTAL LIABILIITES $ 2,333,601 $ 1,362,842 Commitments and Contingencies EQUITY Common stock, $ 0.0001 par value, 285,714,286 shares authorized; 438,987 and 12,384 shares issued and outstanding as of December 31, 2024 and 2023, respectively (1) 44 1 Additional paid-in capital 19,929,484 10,850,763 Accumulated other comprehensive income ( 337 ) 202 Accumulated deficit ( 13,269,627 ) ( 7,023,890 ) TOTAL EQUITY 6,659,564 3,827,076 TOTAL LIABILITIES AND EQUITY $ 8,993,165 $ 5,189,918 (1) Reflects retrospectively the 1-for-200 reverse stock split that became effective on November 27, 2024 and the subsequent 1-for-7 reverse stock split that became effective March 10, 2025. On a combined basis, this reflects retrospectively a reverse stock split of 1-for-1,400. Refer to Note 1, “Organization and nature of operations” The accompanying notes are an integral part of these consolidated financial statements F- 5 PMGC Holdings Inc. (formerly Elevai Labs Inc.) Consolidated Statements of Operations and Comprehensive Loss For the years ended December 31, 2024 and 2023 (Expressed in United States dollar) December 31, 2024 December 31, 2023 Operating expenses Depreciation $ 546 554 Marketing and promotion 292,522 256,450 Consulting fees 1,367,273 279,767 Office and administrative 1,092,576 347,653 Professional fees 563,242 132,600 Investor relations 208,326 91,009 Research and development 104,654 7,410 Foreign exchange (gain) loss 5,846 6,130 Travel and entertainment 28,581 19,385 Total operating expenses $ 3,663,566 1,140,958 Other income (expense) Listing expense - ( 450,079 ) Change in fair value of derivative liabilities 369,158 ( 71,266 ) Interest income 12,891 5,564 Interest expense ( 735,197 ) - Net loss from continuing operations $ ( 4,016,714 ) ( 1,656,739 ) Loss from discontinued operations (Note 4) ( 2,229,023 ) ( 2,644,778 ) Total net loss ( 6,245,737 ) ( 4,301,517 ) Other comprehensive income (loss) Currency translation adjustment ( 539 ) 91 Total comprehensive loss $ ( 6,246,276 ) ( 4,301,426 ) Basic and diluted loss per share: Continuing operations $ ( 50.473 ) ( 215.834 ) Discontinued operations $ ( 28.009 ) ( 344.552 ) Weighted average shares outstanding (1) 79,582 7,676 (1) Reflects retrospectively the 1-for-200 reverse stock split that became effective on November 27, 2024 and the subsequent 1-for-7 reverse stock split that became effective March 10, 2025. On a combined basis, this reflects retrospectively a reverse stock split of 1-for-1,400. Refer to Note 1, “Organization and nature of operations”” The accompanying notes are an integral part of these consolidated financial statements F- 6 PMGC Holdings Inc. (formerly Elevai Labs Inc.) Consolidated Statements of Changes in Stockholders’ Equity For the years ended December 31, 2024 and 2023 (Expressed in United States dollars) Series seed 1 preferred stock Series seed 2 preferred stock Series A preferred stock Common Stock Additional Accumulated other Number of shares Amount Number of shares Amount Number of shares Amount Number of shares Amount paid-in capital Accumulated deficit comprehensive income Total # $ # $ # $ # $ $ $ $ $ Balance, January 1, 2023 (1) 153 - 2,596 - 1,330 - 6,840 1 3,853,571 ( 2,722,373 ) 111 1,131,310 Private placement - - - - - - 349 - 1,463,586 - - 1,463,586 Exercise of stock options - - - - - - 45 - 37,500 - - 37,500 Conversion of preferred shares on IPO ( 153 ) - ( 2,596 ) - ( 1,330 ) - 4,079 - - - - - Shares issued alongside IPO - - - - - - 1,071 - 6,000,000 - - 6,000,000 Share issuance costs for IPO - - - - - - - - ( 991,632 ) - - ( 991,632 ) Share-based compensation - - - - - - - - 487,738 - - 487,738 Net loss for the year - - - - - - - - - ( 4,301,517 ) - ( 4,301,517 ) Currency translation adjustment - - - - - - - - - - 91 91 Balance, December 31, 2023 (1) - - - - - - 12,384 1 10,850,763 ( 7,023,890 ) 202 3,827,076 Balance, January 1, 2024 (1) - - - - - - 12,384 1 10,850,763 ( 7,023,890 ) 202 3,827,076 Issued and issuable shares for acquisition of intangible assets - - - - - - 1,991 - 1,610,778 - - 1,610,778 Issued pursuant to public offering - - - - - - 20,408 2 7,044,998 - - 7,045,000 Issued pursuant to Securities Purchase Agreement - - - - - - 929 - 325,819 - - 325,819 Exercise of Series B Warrants - - - - - - 403,275 41 ( 41 ) - - - 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 (1) - - - - - - 438,987 44 19,929,484 ( 13,269,627 ) ( 337 ) 6,659,564 (1) Reflects retrospectively the 1-for-200 reverse stock split that became effective on November 27, 2024 and the subsequent 1-for-7 reverse stock split that became effective March 10, 2025. On a combined basis, this reflects retrospectively a reverse stock split of 1-for-1,400. Refer to Note 1, “Organization and nature of operations” The accompanying notes are an integral part of these consolidated financial statements F- 7 PMGC Holdings Inc. (formerly Elevai Labs Inc.) Consolidated Statements of Cash Flows For the years ended December 31, 2024 and 2023 (Expressed in United States dollars) December 31, 2024 December 31, 2023 Operating activities Net loss $ ( 6,245,737 ) $ ( 4,301,517 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation 12,950 11,649 Share-based compensation 97,167 487,738 Straight-line rent expense ( 2,758 ) ( 2,757 ) Change in fair value of derivative liabilities ( 369,158 ) 71,266 Non-cash interest expense 686,334 - R&D costs for intangible assets 82,556 - Changes in operating assets and liabilities: Receivables ( 12,969 ) ( 23,218 ) Prepaid expenses and deposits 65,096 ( 907,343 ) Inventory ( 403,295 ) ( 265,522 ) Accounts payable and accrued liabilities 207,497 466,891 Customer deposits ( 2,391 ) 26,521 Due to related parties 397,728 ( 120,519 ) Cash flows used in operating activities 1 $ ( 5,486,980 ) $ ( 4,556,811 ) Investing activities Purchase of equipment ( 9,160 ) ( 11,191 ) Purchase of intangible assets ( 462,320 ) - Purchase of investments ( 139,084 ) - Cash flows used in investing activities 1 $ ( 610,564 ) $ ( 11,191 ) Financing activities Net proceeds from issuance of common stock and warrants 6,993,058 1,463,585 Net proceeds from issuance of Notes 914,442 - Repayment of Notes ( 1,150,000 ) - Exercise of stock options - 37,500 Proceeds from IPO, net - 5,237,805 Cash flows provided by financing activities $ 6,757,500 $ 6,738,890 Effect of exchange rate changes on cash ( 2,354 ) 1,062 Increase in cash 657,602 2,171,950 Cash, beginning of period 3,326,851 1,154,901 Cash, ending of period $ 3,984,453 $ 3,326,851 Supplemental cash flow information: Cash paid for interest 69,026 14,397 Cash paid for taxes - - Non-cash Investing and Financing transactions: Common stock issued and issuable on acquisition of intangible asset 1,610,778 - Conversion of preferred stock to common stock - 3,527,701 Derivative liability broker warrants included in share issuance cost for IPO - 229,437 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- 8 PMGC Holdings Inc. (formerly Elevai Labs Inc.) Notes to the Consolidated Financial Statements For the years ended December 31, 2024 and 2023 (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), and PMGC Capital LLC, 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 Company’s skincare business, while the purpose of BioSciences is to hold and develop the Company’s 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 common shares for every one new post reverse split common share. In addition, on March 10, 2025, the Company completed a second reverse stock split on a ratio of 7 common shares for every one new post second reverse split common share. All current and comparative references to the number of common shares, warrants, options, weighted average number of common shares, 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-1,400. 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 it was agreed to sell the skincare business. The sale of the skincare business closed on January 16, 2025. In accordance with 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 consolidated balance sheet as at December 31, 2023, and the consolidated statement of operations and comprehensive loss for the year ended December 31, 2023, to reflect assets and liabilities held for sale and discontinued operations separately from continuing operations (Note 4). F- 9 PMGC Holdings Inc. (formerly Elevai Labs Inc.) Notes to the Consolidated Financial Statements For the years ended December 31, 2024 and 2023 (Expressed in United States dollars) Prior to entering into the Asset Purchase Agreement, the Company’s 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 the skincare business, the Company changed its principal business. PMGC is a diversified holding company that manages and grows its portfolio through strategic acquisitions, investments, and development across various industries. PMGC currently manages and operates a diverse portfolio of three wholly owned subsidiaries: ● 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 obesity’s 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 – based in Canada, is currently dedicated to medical scientific research and development efforts, utilizing Canadian research grants and partnering with leading Canadian Universities to push the boundaries of innovation. ● 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. 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, 2024 and 2023, the Company had a net working capital of $ 4,251,867 and $ 3,622,091 , respectively, and has an accumulated deficit of $ 13,269,627 and $ 7,023,890 , respectively. Furthermore, for the years ended December 31, 2024 and 2023, the Company incurred a net loss of $ 6,245,737 and $ 4,301,517 , respectively and used $ 5,486,980 and $ 4,556,811 , respectively of cash flows for operating activities. These factors raise substantial doubt regarding the Company’s 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, 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 Company’s ability to continue as a going concern. Management’s plans that alleviate substantial doubt about the Company’s ability to continue as a going concern include the sale of the loss-making skincare business and raising additional equity financing. 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. F- 10 PMGC Holdings Inc. (formerly Elevai Labs Inc.) Notes to the Consolidated Financial Statements For the years ended December 31, 2024 and 2023 (Expressed in United States dollars) 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 Company’s consolidated financial statements. The consolidated financial statements and notes are representations of the Company’s 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 account of PMGC, and its 100 % owned subsidiaries, PMGC Research, Skincare, BioSciences and PMGB Capital. 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. Foreign Currency Translation The Company’s 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). F- 11 PMGC Holdings Inc. (formerly Elevai Labs Inc.) Notes to the Consolidated Financial Statements For the years ended December 31, 2024 and 2023 (Expressed in United States dollars) Reportable Segments and Geographic Areas The Company’s continuing operations consists of one reportable segment. The Chief Executive Officer has been identified as the Chief Operating Decision Maker (CODM). The Company’s activities are interrelated, and each activity is dependent upon and supportive of the other. The CODM manages business activities using consolidated information for the Company as a whole. Accordingly, all significant operating decisions are based on analysis of financial products provided as a single global business. As a result, no disaggregated segment information is presented. The majority of the Company’s continuing operations are conducted from and its assets are located in the United States. PMGC Research, the Company’s Canadian subsidiary, is located in Canada and provide limited operational support and research. The following is a summary of the Company’s continuing operations, assets and liabilities split between the Unites States and Canada: United States Canada Total Expenses $ 3,468,907 $ 194,659 $ 3,663,566 Other income (expense) ( 353,148 ) - ( 353,148 ) Net loss from continuing operations $ 3,822,055 $ 194,659 $ 4,016,714 Current Assets $ 4,826,296 $ 31,897 $ 4,858,193 Non-current assets 2,941,078 1,086 2,942,164 Total Assets $ 7,767,374 $ 32,983 $ 7,800,357 Current liabilities $ 1,238,243 $ 11,975 $ 1,250,218 Non-current liabilities 534,467 - 534,467 Total Liabilities $ 1,772,710 $ 11,975 $ 1,784,685 Total Equity $ 7,255,391 $ ( 595,827 ) $ 6,659,564 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. F- 12 PMGC Holdings Inc. (formerly Elevai Labs Inc.) Notes to the Consolidated Financial Statements For the years ended December 31, 2024 and 2023 (Expressed in United States dollars) 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 Company’s 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. Revenue Recognition In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers. Since ASU 2014-09 was issued, several additional ASUs have been issued to clarify various elements of the guidance. These standards provide guidance on recognizing revenue, including a five-step model to determine when revenue recognition is appropriate. The Company recognizes revenue when it satisfies a performance obligation by transferring control over a product to a customer. Revenue is measured based on the consideration the Company expects to receive in exchange for those products. In instances where financial acceptance of the product is specified by the customer, revenue is deferred until all acceptance criteria have been met. Revenues are recognized under ASC 606, “Revenue from Contracts with Customers,” in a manner that reasonably reflects the delivery of its products and services to customers in return for expected consideration. The Company generates revenue through the sale of skincare products. Revenue from the sale of skincare products are recognized at the point in time when the Company considered revenue realized or realizable and earned, which is typically when all of the five following criteria are met: (1) the contract with the customer is identifiable (i.e. when a sales transaction has been entered into between the Company and the customer), (2) the performance obligation in the contract is identifiable (i.e. the customer has ordered a known quantity of product to be delivered), (3) the transaction price is determinable (i.e. the customer has agreed to the Company’s price for the products ordered), (4) the Company is able to allocate the transaction price to the performance obligations in the contract, and (5) the performance obligations have been satisfied, which is typically upon delivery of the product to the customer. Transaction prices for performance obligations are explicitly outlined in relevant agreements; therefore, the Company does not believe that significant judgements are required with respect to the determination of the transaction price, including any variable consideration identified. The Company is responsible for providing the products to customers. As a result, the Company is considered the Principal when providing products to customers. As the Company collects payment at the time of the customer order, its contracts do not have a significant financing component. Customers are entitled to replacement or full refund of any damaged or defective product, after the return of the damaged or defective product to the Company. There were no significant returns or refunds during the years ended December 31, 2024 and 2023. F- 13 PMGC Holdings Inc. (formerly Elevai Labs Inc.) Notes to the Consolidated Financial Statements For the years ended December 31, 2024 and 2023 (Expressed in United States dollars) 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, 2024 and 2023, the Company has not capitalized any development cost. Intangible Assets In accordance with ASC 350 “Intangibles—Goodwill and Other”, intangible assets are recorded at cost less accumulated amortization. They are depreciated using the straight-line method over their estimated useful lives, which reflect the period over which economic benefits are expected to be realized. 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 estimated useful lives of intangible assets are generally as follows: License #1 – INmune 10 -year straight-line License #2 – MOA IPR&D project not yet complete Marketing and Promotion Costs associated with marketing and promoting the Company’s products are expensed when incurred. The Company includes the cost of products given out as samples in marketing and promotion expenses. 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 Company’s 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- 14 PMGC Holdings Inc. (formerly Elevai Labs Inc.) Notes to the Consolidated Financial Statements For the years ended December 31, 2024 and 2023 (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, 2023 and 2022, the Company did not have any amounts recorded pertaining to tax assets or liabilities as the Company has incurred losses since inception and has taken a full valuation allowance against its tax loss carry forwards. In addition, the Company did not have any amounts recorded pertaining to tax expense or recovery. 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, 2024 and 2023, 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, 2024 and 2023. Concentration of Credit Risk Cash, 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 sales taxes paid that is reimbursable from the Canadian government and timing differences on receiving proceeds from sales transactions processed through customer credit cards. Refundable deposits relate to the Company’s security deposit on lease agreements. F- 15 PMGC Holdings Inc. (formerly Elevai Labs Inc.) Notes to the Consolidated Financial Statements For the years ended December 31, 2024 and 2023 (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 Company’s 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 Company’s 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 Company’s 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, 2024 and 2023, 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, 2024 and 2023, there was no allowance for credit losses related to receivables recorded. Inventory Inventory consist of raw materials, work-in-progress and finished goods and are valued at the lower of cost or net realizable value. The Company’s manufacturing process involves the production of our proprietary stem cell-derived Elevai Exosomes TM . Finished goods consists of a new generation of cosmetic topical products containing our proprietary stem cell-derived Elevai Exosomes TM . Cost is determined using the weighted average cost formula. Net realizable value is determined on the basis of anticipated sales proceeds less the estimated selling expenses. Management compares the cost of inventories with the net realizable value and an allowance is made to write down inventories to net realizable value, if lower. F- 16 PMGC Holdings Inc. (formerly Elevai Labs Inc.) Notes to the Consolidated Financial Statements For the years ended December 31, 2024 and 2023 (Expressed in United States dollars) Property and Equipment Property and equipment is stated at cost less accumulated depreciation. Renewals and betterments that materially extend the life of assets are capitalized. Expenditures for 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: Lab equipment 7 -year straight-line Furniture and fixtures 7 -year straight-line Computers 5 -year straight-line 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 Company’s 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. The Company uses the Black-Scholes option-pricing model to value the derivative instruments at inception and subsequent valuation dates. 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. 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 Company’s 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 (expense) in the consolidated statements of operations at each period end while such instruments remain outstanding. F- 17 PMGC Holdings Inc. (formerly Elevai Labs Inc.) Notes to the Consolidated Financial Statements For the years ended December 31, 2024 and 2023 (Expressed in United States dollars) 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 asset 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 Company’s financial instruments consist of cash, receivables, investment in securities, accounts payable and accrued liabilities, consideration payable, due to related parties and derivative liabilities. Except for cash, investment in securities and derivative liabilities, the Company’s financial instruments’ carrying amounts, excluding unamortized discounts, approximate their fair values due to their short term to maturity. Cash is measured and recognized at fair value based on level 1 inputs for all periods presented. Investment in securities is measured and recognized at fair value based on level 2 inputs as at December 31, 2024. Derivative liabilities are measured and recognized at fair value based on level 3 inputs. F- 18 PMGC Holdings Inc. (formerly Elevai Labs Inc.) Notes to the Consolidated Financial Statements For the years ended December 31, 2024 and 2023 (Expressed in United States dollars) Level 1 Level 2 Level 3 Total 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 December 31, 2023: Cash $ 3,326,851 $ - $ - $ 3,326,851 Derivative liabilities - - 369,158 369,158 $ 3,326,851 $ - $ 369,158 $ 3,696,009 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 Company’s preferred stock, stock options and warrants outstanding during the years ended December 31, 2024 and 2023, 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, 2024 and 2023, the Company recorded $ 97,167 and $ 487,738 , respectively, in share-based compensation expense, of which $ 93,449 and $ 3,718 , and $ 250,067 and $ 237,671 , respectively is included in office and administration and discontinued operations, respectively. Within discontinued operations for the years ended December 31, 2024 and 2023, ($ 599 ) and $ 4,317 , and $ 226,838 and $ 10,833 , respectively is included in office and administration and research and development, respectively. F- 19 PMGC Holdings Inc. (formerly Elevai Labs Inc.) Notes to the Consolidated Financial Statements For the years ended December 31, 2024 and 2023 (Expressed in United States dollars) Determining the appropriate fair value model and the related assumptions requires judgment. During the years ended December 31, 2024 and 2023, 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. Accounting for Freestanding Instruments Issued Together The Company accounts for multiple instruments issued together in accordance with ASC 470 “Debt”, ASC 480 “Distinguishing Liabilities from Equity” and ASC 505 “Equity”. The Company first identifies all freestanding instruments. When multiple freestanding instruments are issued in a single transaction, the total proceeds from the transaction are allocated among the individual freestanding instruments identified based on their relative fair values at issuance. Transaction costs that are directly attributable to the issuance of both debt and equity are allocated between the liability and equity components based on their relative fair values. Recently Adopted Accounting Standards In March 2022, the FASB issued ASU 2022-02, ASC Subtopic 326 “Credit Losses”: Troubled Debt Restructurings and Vintage Disclosures. Since the issuance of Accounting Standards Update No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, the Board has provided resources to monitor and assist stakeholders with the implementation of Topic 326 (“Update”). Post-Implementation Review (PIR) activities have included forming a Credit Losses Transition Resource Group, conducting outreach with stakeholders of all types, developing educational materials and staff question-and-answer guidance, conducting educational workshops, and performing an archival review of financial reports. ASU No. 2022-02 is effective for annual and interim periods beginning after December 15, 2022. The adoption of this standard did not have a significant impact on the Company’s consolidated financial statements. 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 security’s 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. F- 20 PMGC Holdings Inc. (formerly Elevai Labs Inc.) Notes to the Consolidated Financial Statements For the years ended December 31, 2024 and 2023 (Expressed in United States dollars) 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 Company’s 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. 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 Company’s financial statement. 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 Company’s consolidated financial statements. There are no recently issued accounting standards which may have effect on the Company’s 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) shares of common stock of the buyer, having a market value of $ 1,075,463 at the time of entering into the agreement; (ii) buyer’s assumption of certain liabilities; and, (iii) $ 56,525 in cash. Following the closing which occurred on January 15, 2025 (the “Closing” or “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, 2024 December 31, 2023 Revenue $ 2,467,298 $ 1,712,595 Cost of goods sold 670,197 578,015 Gross profit $ 1,797,101 $ 1,134,580 Expenses Depreciation 10,390 9,741 Marketing and promotion 1,023,200 403,841 Consulting fees 40,110 179,731 Office and administrative 2,051,571 1,981,414 Professional fees 415,878 446,511 Investor relations 6,667 - Research and development 308,597 418,833 Foreign exchange (gain) loss ( 1,972 ) - Travel and entertainment 186,244 319,762 Total expenses $ 4,040,685 3,759,833 Other income ( 34,723 ) - Interest expense 20,162 19,525 Loss from discontinued operations $ 2,229,023 2,644,778 F- 21 PMGC Holdings Inc. (formerly Elevai Labs Inc.) Notes to the Consolidated Financial Statements For the years ended December 31, 2024 and 2023 (Expressed in United States dollars) The following table summarizes the carrying amounts of major classes of assets and liabilities of discontinued operations as at December 31, 2024 and 2023: December 31, 2024 December 31, 2023 Assets Receivables, net 43,497 33,089 Inventory 898,962 495,667 Prepaid expenses and deposits 137,875 158,712 Property and equipment 48,134 - Right of use asset 64,340 - Total current assets held for sale 1,192,808 687,468 Deposit 10,773 Property and equipment - 51,378 Right of use asset - 206,582 Total assets held for sale 1,192,808 956,201 Liabilities Accounts payable and accrued liabilities 449,125 535,361 Customer deposits 34,302 36,693 Lease liability 65,489 145,000 Total current liabilities held for sale 548,916 717,054 Lease liability - 65,489 Total liabilities held for sale 548,916 782,543 Total assets and liabilities held for sale, net 643,892 173,658 As the estimated proceeds on sale exceed the net assets and liabilities held for sale, there is no write down to net realizable value required as at December 31, 2024. The following represents the cash flows from operating and investing activities of discontinued operations for the years ended December 31, 2024 and 2023: December 31, 2024 December 31, 2023 Cashflows used in operating activities $ ( 2,686,379 ) $ ( 2,441,940 ) Cashflows used in investing activities ( 9,160 ) ( 11,191 ) F- 22 PMGC Holdings Inc. (formerly Elevai Labs Inc.) Notes to the Consolidated Financial Statements For the years ended December 31, 2024 and 2023 (Expressed in United States dollars) 5. Receivables As of December 31, 2024 and 2023, receivables consisted of sales taxes receivable of $ 5,276 and $ 3,072 , respectively. The Company records sales taxes receivable for recoverable sales taxes paid on eligible purchases in its Canadian subsidiary. 6. Prepaids and Deposits As of December 31, 2024 and 2023, prepaid and deposits consisted of the following: December 31, 2024 December 31, 2023 Prepaid expenses $ 867,420 $ 902,053 Deposits 1,044 - $ 868,464 $ 902,053 7. Investment in securities On December 23, 2024, the Company participated in a private placement of a company in the U.S. uranium energy market with an investment of $ 139,084 . The fair value of the investments as at December 31, 2024 were determined based on the most recently observable market transaction and there were no changes in the value since its initial recognition. The investment has been classified as a long-term investment. 8. Equipment Computers Cost Balance, December 31, 2022 $ 2,759 Foreign currency translation 61 Balance, December 31, 2023 $ 2,820 Foreign currency translation ( 219 ) Balance, December 31, 2024 $ 2,601 Accumulated depreciation Balance, December 31, 2022 $ 505 Depreciation 554 Foreign currency translation 20 Balance, December 31, 2023 $ 1,079 Depreciation 546 Foreign currency translation ( 111 ) Balance, December 31, 2024 $ 1,514 Net book value December 31, 2023 $ 1,741 December 31, 2024 $ 1,087 F- 23 PMGC Holdings Inc. (formerly Elevai Labs Inc.) Notes to the Consolidated Financial Statements For the years ended December 31, 2024 and 2023 (Expressed in United States dollars) 9. Intangible assets and consideration payable 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 first 1 . 1 Effective February 27, 2025, the Company and the Biotechnology company entered into a mutual termination agreement to terminate the Company’s right to License #1 and to release the Company of the remaining undiscounted obligation payable of $ 950,000 . Upon termination, no further obligations will be 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 %. 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 Consideration payable – current $ 350,000 Consideration payable – non-current $ 534,467 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 (“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 679 common shares 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 common shares issued to the pharmaceutical company. The Company incurred transaction costs of $ 12,320 in legal fees and $ 1,117,771 in common shares paid to a consultant who assisted in acquiring License #2. The common shares 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. F- 24 PMGC Holdings Inc. (formerly Elevai Labs Inc.) Notes to the Consolidated Financial Statements For the years ended December 31, 2024 and 2023 (Expressed in United States dollars) 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 Risk-free interest rate 5.12 - 5.44 % Expected life 0.5 - 1 years Expected dividend rate 0.00 % Expected volatility 100 % The consultant is to receive 1,750 shares in the following tranches and all shares were earned (i.e. fully vested) upon the Company’s acquisition of License #2 as follows: ● May 3, 2024: 438 Shares (issued) ● August 1, 2024: 437 Shares (issued) ● November 1, 2024: 437 Shares (issued) ● February 2, 2025: 438 Shares (issued – Note 16) The cost of License #2 IPR&D asset is $ 2,023,097 , which is the fair value of the consideration paid on initial recognition. The table below provides a continuity of the intangible assets acquired during and as of the year ended December 31, 2024: License #1 License #2 (IPR&D asset) Total Cost Balance, December 31, 2023 $ - - - Additions 861,452 2,023,097 2,884,549 Balance, December 31, 2024 $ 861,452 2,023,097 2,884,549 Accumulated amortization Balance, December 31, 2023 $ - - - Additions 82,556 - 82,556 Balance, December 31, 2024 $ 82,556 - 82,556 Net Book value – December 31, 2024 $ 778,896 2,023,097 2,801,993 F- 25 PMGC Holdings Inc. (formerly Elevai Labs Inc.) Notes to the Consolidated Financial Statements For the years ended December 31, 2024 and 2023 (Expressed in United States dollars) With the sale of the skincare business, the Company identified indicators of impairment associated with License #1 given that there was a change in the Company’s intention to use the intangible asset in its continuing operations. Given the termination of the license agreement effective February 27, 2025 (as discussed above), the Company determined that there is no impairment required as at December 31, 2024 as the carrying amount of the intangible asset of $ 778,896 , is recoverable through the termination of the license agreement and the Company being released from its consideration payable obligation with a carrying value of $ 884,467 as of December 31, 2024. The Company expects to record a gain on derecognition of the intangible asset and consideration payable in fiscal 2025. As License #2 is an IPR&D intangible asset, the Company is required to perform an annual impairment test. In accordance with ASC 350 “Intangibles—Goodwill 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, 2024. 10. Derivative liabilities On July 15, 2022, the Company issued 167 common stock purchase warrants with an exercise price of $ 2,817 as part of the conversion of promissory notes. On November 21, 2023, the Company completed its Initial Public Offering (“IPO”) and issued 54 warrants (the “IPO warrants”). Each IPO warrant is exercisable into one share of common stock of the Company at $ 5,600 per share and expire on November 21, 2028 . We analyzed the common stock purchase warrants issued as partial settlement of the promissory notes payable and the IPO warrants against the requirements of ASC 480, Distinguishing Liabilities from Equity, and determined that the warrants should be classified as financial liabilities. ASC 815, Derivatives and Hedging, requires that the warrants be accounted for as derivative liabilities with initial and subsequent measurement at fair value with changes in fair value recorded as other income (expense). A continuity of the Company’s common stock purchase derivative liability warrants is as follows: Derivative liabilities Outstanding, December 31, 2022 $ 68,455 Addition of new derivatives during IPO 229,437 Change in fair value of derivative liabilities 71,266 Outstanding, December 31, 2023 $ 369,158 Change in fair value of derivative liabilities ( 369,158 ) Outstanding, December 31, 2024 $ - We determined our 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. 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. F- 26 PMGC Holdings Inc. (formerly Elevai Labs Inc.) Notes to the Consolidated Financial Statements For the years ended December 31, 2024 and 2023 (Expressed in United States dollars) The following assumptions were used in the Black-Scholes option pricing model: December 31, 2024 December 31, 2023 November 21, 2023 December 31, 2022 July 15, 2022 Risk-free interest rate 4.25 % - 4.27 % 3.84 - 4.01 % 4.41 % 4.73 % 3.12 % Expected life 1 2.32 – 3.90 years 3.32 – 4.90 years 5 years 0.75 years 0.6 years Expected dividend rate 0.00 % 0.00 % 0.00 % 0.00 % 0.00 % Expected volatility 100 % 100 % 100 % 100 % 100.00 % As of December 31, 2024, the following warrants were outstanding: Outstanding Expiry date 1 Weighted average exercise price ($) 167 April 27, 2027 2,817 54 November 21, 2028 5,600 221 3,497 As of December 31, 2024 and December 31, 2023, the weighted average life of derivative liability warrants outstanding was 2.71 and 3.71 years, respectively. 1 On April 28, 2023, the Company amended the warrant agreements for the 167 derivative liability warrants outstanding. The amendment removed the clause to automatically convert warrants to shares on IPO date and all warrants were given an expiry date of April 27, 2027 . This led to an increase in the expected life input in the Black-Scholes model as of December 31, 2023 compared to December 31, 2022, when the Company used the expected IPO date to calculate the expected life of the warrants. 11. Notes payable On July 31, 2024, the Company signed a securities purchase agreement (the “Securities Purchase Agreement”) to sell an aggregate of $ 1,150,000 in Notes with a $ 150,000 original issue discount. Pursuant to the Securities Purchase Agreement, the Company also agreed to issue 929 shares of common stock (Note 12). Given the original issue discount, the subscription amount received by the Company was an aggregate of $ 1,000,000 . The Notes were non-interest bearing except in the event of default, in which case interest would accrue at 14 % per annum. The maturity date of the Notes was 90 days from the date of issuance. While the Notes were outstanding, the Company agreed to use the net proceeds of any offering of its equity or debt securities to first redeem the Notes in full, including the principal amount and all other amounts due and payable pursuant to the Notes. The fair value of the Notes was $ 622,239 . The Company incurred total transaction costs of $ 137,500 in relation to the Security Purchase Agreement, of which $ 85,558 was attributed to the issuance of the Notes and $ 51,942 was attributed to the issuance of common shares. The Company repaid $ 1,150,000 in relation to the Notes Payable in September 2024, resulting in a Notes payable balance of $ nil at December 31, 2024. F- 27 PMGC Holdings Inc. (formerly Elevai Labs Inc.) Notes to the Consolidated Financial Statements For the years ended December 31, 2024 and 2023 (Expressed in United States dollars) A continuity of the Company’s Notes Payable during the year ended December 31, 2024 is as follows: Notes Payable Outstanding, December 31, 2023 $ - Fair value of Notes issued 622,239 Transaction costs ( 85,558 ) Interest accretion 613,319 Repayment ( 1,150,000 ) Outstanding, December 31, 2024 $ - 12. Equity Common Stock Authorized As of December 31, 2024 and 2023, the Company had 285,714,286 and 42,857,143 common stock authorized, respectively, each having a par value of $ 0.0001 . Issued and outstanding As of December 31, 2024 and 2023, the Company had 438,987 and had 12,384 shares issued and outstanding, respectively (Note 1) Transactions during the year ended December 31, 2024 On April 30, 2024, the Company issued 679 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 9). These shares are unregistered and restricted from trading as disclosed in Note 9. On May 3, 2024, the Company committed to issue 1,750 fully vested shares for the acquisition of License #2. As at December 31, 2024, 1,312 of these shares have been issued. A total of $ 1,117,833 was recognized in equity in relation to the issuance of these shares, of which $ nil was recognized in common stock and the remainder of $ 1,117,833 to additional paid in capital (Note 9). These shares are unregistered and restricted from trading as disclosed in Note 9. On August 2, 2024, the Company issued 929 shares as consideration for purchasers who entered into the Securities Purchase Agreement (Note 11). Transaction costs of $ 51,942 were associated with this share issuance. A total of $ 325,819 was recognized in equity, of which $ nil was recognized in common stock and the remainder of $ 325,819 to additional paid in capital. On September 24, 2024, the Company issued 6,357 shares of the Company’s common stock and 14,051 pre-funded warrants in lieu of shares of common stock, along with 36,531 common stock purchase warrants. The purchasers had the option to elect to purchase pre-funded warrants in lieu of common shares 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 $ 0.14 , 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 $ 392 , and the purchase price of each pre-funded warrant and accompanying warrants was equal to such price minus $ 0.14 . Share issuance costs of $ 955,000 were associated with this offering. A total of $ 7,045,000 was recognized in equity, of which $ 2 was recognized in common stock and the remainder of $ 7,044,998 to additional paid in capital. F- 28 PMGC Holdings Inc. (formerly Elevai Labs Inc.) Notes to the Consolidated Financial Statements For the years ended December 31, 2024 and 2023 (Expressed in United States dollars) Transactions during the year ended December 31, 2023 On January 6, 2023, the Company issued 45 common stock upon the exercise of 45 stock options with an exercise price of $ 840 per common stock for $ 37,500 , of which $ nil was recognized in common stock and the remaining $ 37,500 in additional paid-in capital. On March 2, 2023, the Company issued 179 common stock and 179 common stock purchase warrants for $ 750,000 , of which $ nil was recognized in common stock and the remaining $ 750,000 in additional paid-in capital. These warrants are accounted for as equity warrants. On April 14, 2023, the Company issued 70 common stock, of which $ nil was recognized in common stock and the remaining $ 293,589 in additional paid-in capital. On May 15, 2023, the Company issued 7 common stock, of which $ nil was recognized in common stock and the remaining $ 30,000 was recognized in additional paid-in capital. On August 25, 2023, the Company issued 33 common stock, of which $ nil was recognized in common stock and the remaining $ 140,000 was recognized in additional paid-in capital. On September 13, 2023, the Company issued 60 common stock and 72 common stock purchase warrants, of which $ nil was recognized in the common stock and the remaining $ 249,997 was recognized in additional paid-in capital. These warrants are accounted for as equity warrants. On November 21, 2023, the Company completed its IPO and issued 1,071 common shares, of which $ nil was recognized in common stock and the remaining $ 6,000,000 was recognized in additional paid in capital. The gross proceeds of the offering were $ 6,000,000 . The Company issued 54 underwriter warrants in connection with the IPO exercisable at $ 5,600 per warrant (Note 10). Additionally, the 153 series 1 preferred shares, 2,596 series 2 preferred shares, and 1,330 series A preferred shares were converted to common shares on a 1:1 basis. This conversion resulted in accordance with the original terms of the preferred shares and as such no gain or loss were recorded on the conversion. This resulted in the Company issuing a total of 4,079 common shares. In connection with the IPO financing, the Company paid share issuance costs of $ 762,194 consisting of $ 730,000 in underwriting fees, and $ 32,194 in other directly related expenses. The Company also incurred listing expenses in the amount of $ 450,079 in connection with its IPO. Preferred Stock Authorized As of December 31, 2024, and December 31, 2023, the Company had 500,000,000 and 75,000,000 , respectively, of all preferred stock authorized, each having a par value of $ 0.0001 per stock. F- 29 PMGC Holdings Inc. (formerly Elevai Labs Inc.) Notes to the Consolidated Financial Statements For the years ended December 31, 2024 and 2023 (Expressed in United States dollars) Issued and outstanding As at December 31, 2024, and December 31, 2023, the Company had Nil preferred stock issued and outstanding. Transactions during the years ended December 31, 2024 and 2023 On November 21, 2023 the Company completed its IPO and converted the 153 series 1 preferred shares, 2,596 series 2 preferred shares, and 1,330 series A preferred shares into common shares on a 1:1 basis. Equity Warrants Transactions during the year ended December 31, 2024 On September 24, 2024, with each of the 20,408 shares of common stock or pre-funded warrants issued on the same date, the 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 $ 532 , subject to adjustments, including the following: A. On the day that is the eleventh trading day following the Initial Exercise Date (the “Reset Date”), the exercise price shall be adjusted to equal the reset price (the “Reset Price”), which is the greater of: (i) the lowest daily volume-weighted average price (“VWAP”) during the 10-day period following the Initial Exercise Date (the “Reset Period”); and (ii) the floor price in effect as of the Reset Date, being a price equal to $ 78.40 (the “Floor Price”). B. Upon reset of the Series A and Series B Warrants’ exercise price, the number of Series A and Series B Warrants and the number of common shares issuable shall be increased such that the aggregate exercise price (“Initial Exercise Value”) on the issuance date shall remain unchanged following such reset. Furthermore, holders of the Series B Warrants may effect an “alternative cashless exercise”. In such an event, the aggregate number of common shares issuable in such alternative cashless exercise shall equal the product of (i) the aggregate number of common shares that would be issuable upon exercise of a Series B Warrant if such exercise were by means of a cash exercise rather than a cashless exercise, multiplied by (ii) 3.0. F- 30 PMGC Holdings Inc. (formerly Elevai Labs Inc.) Notes to the Consolidated Financial Statements For the years ended December 31, 2024 and 2023 (Expressed in United States dollars) As of the Reset Date, the exercise price of the Series A Warrants has been adjusted to the Floor Price of $ 78.40 . In addition, the number of Series A Warrants outstanding was adjusted to 138,485 such that the Initial Exercise Value on the issuance date remained unchanged. As of the Reset Date, the exercise price of the Series B Warrants has been adjusted to the Floor Price. In addition, the number of Series B Warrants outstanding was adjusted to 134,425 such that the Initial Exercise Value on the issuance date remained unchanged. All of the Series B Warrants were exercised using the alternative cashless exercise resulting in the issuance of 403,275 common shares. On September 24, 2024, the Company issued 1,021 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 $ 470.40 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. Transactions during the year ended December 31, 2023 On March 2, 2023, the Company issued 179 common stock and 179 common stock purchase warrants. Each warrant is exercisable at $ 4,200 per common stock. The warrants shall be exercisable, in whole or in part at the issue date but such exercisability shall cease upon the date of the Company’s IPO and listing of its common shares on the Nasdaq Capital Market or other Trading Market and shall continue to be exercisable in whole or in part immediately after the Lock-up Period but no later than the Warrant Expiration Date or Accelerated Warrant Expiration Date (the “Exercise Period”). In the event of the Company’s initial public offering and listing of shares of its common stock on a Trading Market, the Company shall notify the holder at least fifteen (15) calendar days prior to the consummation of such IPO. “Trading Market” shall mean a “national securities exchange” that has registered with the SEC under Section 6 of the Securities Exchange Act of 1934. The Expiration Date shall be the earlier of (i) three years and one hundred eighty (180) days from the issue date (the “Warrant Expiration Date”) or (ii) upon the Company’s reasonable judgment and written notice to the purchaser, of the Company’s option to accelerate the Warrant Expiration Date whereby upon purchaser’s receipt of the Company’s written notice of acceleration during the Exercise Period, the Purchaser’s option to exercise any number of warrants shall occur no later than fourteen (14) days following the receipt of the written notice of acceleration (the “Accelerated Warrant Expiration Date”). For the avoidance of doubt, it shall be reasonable for the Company to accelerate the Expiration Date of this warrant to coincide with transactions including, but not limited to (i) a change of control including but not limited to the voluntary or involuntary sale, assignment, transfer or other disposition, or transfer by operation of law, of more than 50 % of any direct or indirect equity interest of the Company; or (ii) a subsequent capital financing other than the IPO consisting of but not limited to an offer or proposal for, or indication of interest in, the issuance of debt or the capital stock of the Company. On September 13, 2023, the Company issued 60 common stock and 72 common stock purchase warrants. Each warrant is exercisable at $ 4,200 per common stock. The Warrants shall be exercisable, in whole or in part immediately upon issuance, but such exercisability shall cease upon the date of the Company’s initial public offering (the “IPO”) and listing of its Common Shares on the Nasdaq Capital Market or other Trading Market (as defined herein) and will only become exercisable after the expiration of one hundred eighty ( 180 ) days following the Company’s initial public offering (the “Lock-up Period”). The expiration date shall be three years and one hundred eighty ( 180 ) days following the issuance of the Warrant Shares. F- 31 PMGC Holdings Inc. (formerly Elevai Labs Inc.) Notes to the Consolidated Financial Statements For the years ended December 31, 2024 and 2023 (Expressed in United States dollars) As of December 31, 2024, the following equity warrants were outstanding: Outstanding Expiry date Weighted average exercise price ($) 179 August 28, 2026 4,200.00 72 March 12, 2027 4,200.00 138,485 October 30, 2029 78.40 1,021 March 24, 2028 470.40 139,978 88.67 As of December 31, 2024, and December 31, 2023, the weighted average life of equity warrants outstanding was 4.82 and 2.81 years, respectively. Stock Options The Company has a stock option plan included in the Company’s 2020 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, 2024 and 2023, the aggregate number of shares allocated and made available for issuance pursuant to stock options granted under the Plan shall not exceed 1,239 shares. The plan shall remain in effect until it is terminated by the Board of Directors. Transactions during the year ended December 31, 2024 In January 2024, the Company granted 9 stock options with a contractual life of ten years and an exercise price of $ 7,000 per common stock. These stock options were 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 57 stock options with a contractual life of ten years and an exercise price of $ 1,400 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. Transactions during the year ended December 31, 2023 On February 1, 2023, the Company granted 7 stock options with a contractual life of ten years and an exercise price of $ 7,000 per common stock. These stock options were valued at $ 10,767 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. From May 12, 2023 to June 30, 2023, the Company granted 159 stock options (includes 57 each to two of its newly appointed independent directors) with a contractual life of ten years and an exercise price of $ 7,000 per common stock. These stock options were valued at $ 584,787 using the Black-Scholes Option Pricing Model. The options vest 25 % on the first vesting date and the remaining 75 % vest evenly over 36 months thereafter. F- 32 PMGC Holdings Inc. (formerly Elevai Labs Inc.) Notes to the Consolidated Financial Statements For the years ended December 31, 2024 and 2023 (Expressed in United States dollars) On June 30, 2023, the Company cancelled and reissued 57 options previously issued to an advisor of the Company upon their appointment as a director effective June 1, 2023. The cancelled and re-issued options had the same exercise price of $ 7,000 per common stock and the same vesting terms and expiry date, and as such the cancellation and reissuance had no impact on the Company’s consolidated financial statements. On July 1, 2023, the Company granted 1 stock options with a contractual life of ten years and an exercise price of $ 7,000 per common stock. These stock options were valued at $ 3,940 using the Black-Scholes Option Pricing Model. The options vest 25 % on the first vesting date and the remaining 75 % vest evenly over 36 months thereafter. The following assumptions were used in the Black-Scholes option pricing model: December 31, 2024 December 31, 2023 Risk-free interest rate 3.95 % - 4.19 % 3.39 % - 3.86 % Expected life 10 years 10 years Expected dividend rate 0.00 % 0.00 % Expected volatility 100 % 100 % Forfeiture rate 0.00 % 0.00 % The continuity of stock options for the years ended December 31, 2024 and 2023 is summarized below: Number of stock options Weighted average exercise price Outstanding, December 31, 2022 976 1,512.00 Granted 167 7,000.00 Forfeited ( 10 ) 840.00 Exercised ( 45 ) 840.00 Outstanding, December 31, 2023 1,088 2,389.27 Granted 66 2,156.76 Forfeited ( 407 ) 2,428.63 Outstanding, December 31, 2024 747 2,347.25 As of December 31, 2024, 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 ($) 459 450 February 8, 2031 840 25 25 February 27, 2031 840 4 2 April 25, 2032 840 11 7 June 1, 2032 1,876 11 6 September 30, 2032 1,876 57 32 September 30, 2032 7,000 7 4 October 15, 2032 1,876 4 2 November 1, 2032 7,000 7 3 February 1, 2033 7,000 36 14 April 16, 2033 7,000 57 24 May 1, 2033 7,000 7 3 June 27, 2033 7,000 1 - July 1, 2033 7,000 4 - February 12, 2034 7,000 57 - March 5, 2024 1,400 747 572 2,347.25 F- 33 PMGC Holdings Inc. (formerly Elevai Labs Inc.) Notes to the Consolidated Financial Statements For the years ended December 31, 2024 and 2023 (Expressed in United States dollars) As of December 31, 2024 and 2023, the weighted average life of stock options outstanding was 6.88 years and 7.84 years, respectively. With the sale of the skincare business on January 16, 2025, 253 stock options with a weighted average exercise price of $ 2,334 will be forfeited or expire after the 90 -day exercise window following termination of employment with the Company. 13. 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, CFO, CEO and Director ● Tim Sayed, Former Chief Medical Officer and Former Director (resigned August 1, 2024) ● Brenda Buechler, Former Chief Marketing Officer (effective June 20, 2024) ● Christoph Kraneiss, Former Chief Commercial Officer (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 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 Company’s Board of Directors, corporate officers, and individuals with more than 10 % control. F- 34 PMGC Holdings Inc. (formerly Elevai Labs Inc.) Notes to the Consolidated Financial Statements For the years ended December 31, 2024 and 2023 (Expressed in United States dollars) Remuneration attributed to key management personnel are summarized as follows: December 31, 2024 December 31, 2023 Consulting fees $ 757,233 $ 230,000 Salaries 539,174 633,957 Director fees 165,000 - Share-based compensation 23,861 357,349 $ 1,485,268 $ 1,221,306 During the year ended December 31, 2024, the Company incurred consulting fees of $ 391,333 (December 31, 2023 - $ 110,000 ) to GB Capital Ltd., a company controlled by Graydon Bensler, CEO, CFO and Director. In addition, the Company incurred consulting fees of $ 365,900 (December 31, 2023 - $ 120,000 ) to Northstrive Companies Inc., a company controlled by the Company’s Chairman and former President. Jordan Plews, Former Director and former CEO of Skincare and BioSciences, earned a Salary of $ 283,549 and $ 223,646 respectively during the year ended December 31, 2024 and 2023. Brenda Buechler, Former Chief Marketing Officer, earned a Salary of $ 132,807 and $ 212,913 , respectively during the year ended December 31, 2024 and 2023. Christoph Kraneiss, Former Chief Commercial Officer, earned a Salary of $ 122,818 and $ 197,398 , respectively during the year ended December, 2024 and 2023. During 2024, the Company paid director fees of $ 55,000 to each of non-executive directors for a total of $ 165,000 . During the year ended December 31, 2024, and 2023, the Company issued the following stock options to related parties: On June 1, 2023, the Company granted 114 stock options to directors of the company ( 57 stock options each) with a contractual life of ten years and exercise price of $ 7,000 per share of common stock. These stock options were valued at $ 420,521 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 June 1, 2023, the Company cancelled and re-issued 57 stock options to a director of the company with a contractual life of ten years and exercise price of $ 7,000 per share of common stock. The cancelled and re-issued options had the same exercise price of $ 7,000 per common stock and the same vesting terms and expiry date, and as such the cancellation and reissuance did not impact on the Company’s consolidated financial statements. On March 1, 2024, the Company granted 57 stock options to a director of the company with a contractual life of 10 years and exercise price of $ 1,400 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- 35 PMGC Holdings Inc. (formerly Elevai Labs Inc.) Notes to the Consolidated Financial Statements For the years ended December 31, 2024 and 2023 (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, 2024 and 2023 are as follow: December 31, 2024 December 31, 2023 Fair value of stock options granted Braeden Lichti, Non-executive Chairman $ 2,069 $ 6,563 $ 50,995 Graydon Bensler, CEO, CFO and Director 2,069 6,563 50,995 Jordan Plews, Former Director and former CEO of Skincare and BioSciences 2,069 6,563 50,995 Tim Sayed, Former Chief Medical Officer and Former Director 1 ( 4,291 ) 6,563 50,995 Jeffrey Parry, Director 22,923 29,855 107,669 Julie Daley, Director 82,070 98,613 210,245 Crystal Muilenburg, Former Director 1 ( 41,668 ) 82,252 210,245 George Kovalyov, Director 25,987 - 121,243 Brenda Buechler, Former Chief Marketing Officer 1 ( 36,918 ) 62,705 143,671 Christoph Kraneiss, Former Chief Commercial Officer 1 ( 30,449 ) 57,672 121,243 $ 23,861 $ 357,349 $ 1,118,296 1 379 options of related parties were forfeited in during the year ended December 31, 2024. As of December 31, 2024 and 2023, the Company had $ 227,749 and $ 37,598 , respectively due to companies controlled by Braeden Lichti, these amounts are unsecured, non-interest bearing and are due on demand. Additionally, the Company drew $ 200,000 on a line of credit provided by a company controlled by Braeden Lichti during the year ended December 31, 2024. The line of credit incurs interest at a rate of 20 % per annum on the outstanding principal. Prior to December 31, 2024, the Company repaid the $ 200,000 principal in full in addition to $ 40,000 in interest which was due in full upon early repayment of the line of credit. As of December 31, 2024, the Company had $ 179,655 (December 31, 2023 - $ 34,378 ) due to Graydon Bensler, CEO, CFO and Director, $ 11,813 and $ nil (December 31, 2023 - $ 4,272 and $ 879 ) due to Jordan Plews, Director and CEO of Skincare and BioSciences, and Christopher Kraneiss, Former Chief Commercial Officer. These amounts are unsecured, non-interest bearing and are due on demand. 14. Income Tax During the years ended December 31, 2024 and 2023, there is $ Nil and $ Nil current and deferred income tax expense, respectively, reflected in the Statement of Operations and Comprehensive Loss. The following are the components of income before income tax reflected in the Consolidated Statement of Operations and Comprehensive Loss for the years ended December 31, 2024 and 2023: Component of Loss Before Income Tax December 31, 2024 December 31, 2023 Net loss before income tax $ ( 6,245,737 ) $ ( 4,301,517 ) Effective tax rate % 27.87 % % 27.87 % Expected recovery ( 1,740,687 ) ( 1,198,833 ) Share-based compensation 27,083 135,947 Other non-deductible items 88,406 19,864 Foreign exchange 10,750 ( 2,168 ) Tax rate differences 1,513 1,031 Change in valuation allowance 1,612,935 1,044,159 Tax expense (recovery) $ - $ - F- 36 PMGC Holdings Inc. (formerly Elevai Labs Inc.) Notes to the Consolidated Financial Statements For the years ended December 31, 2024 and 2023 (Expressed in United States dollars) Deferred income taxes arise from temporary differences between the tax and financial statement recognition of revenue and expense. In evaluating the ability to recover the deferred tax assets within the jurisdiction from which they arise, the Company considered all available positive and negative evidence, including scheduled reversals of deferred tax liabilities, projected future taxable income, tax planning strategies, and recent financial operations. In projecting future taxable income, the Company began with historical results adjusted for changes in accounting policies and incorporates assumptions including the amount of future pretax operating income, the reversal of temporary differences, and the implementation of feasible and prudent tax planning strategies. These assumptions require significant judgement about the forecasts of future taxable income and are consistent with the plans and estimates the Company is using to manage the underlying businesses. In evaluating objective evidence that historical results provide, the Company consider three years of cumulative operating income (loss). As of December 31, 2024, the Company had aggregate net operating losses for income tax purposes of $ 11,937,946 (2023 – $ 4,168,622 ) to offset future taxable income in the United States and Canada. As of December 31, 2024, the deferred tax asset related to these loss carry forwards amounted to approximately $ 3,323,000 (2023 - $ 1,710,000 ) and were fully reserved. Management believes that it is not yet more likely than not that these assets will be realized in the near future. 15. Commitments and Contingencies There were no commitments as of December 31, 2024 and 2023 or during the years 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 parties (each a “Party” or collectively “Parties”) 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. 16. Subsequent Events Management has evaluated events subsequent to the year ended December 31, 2024 up to March 27, 2025, for transactions and other events that may require adjustment of and/or disclosure in the consolidated financial statements. On January 16, 2025, the Company closed the sale of the skincare business in accordance with the Asset Purchase Agreement (Notes 1 and 4). On January 28, 2025, the Company completed a warrant inducement transaction under the terms of a warrant inducement agreement entered into with the holders of the Series A Warrants. The Company received gross proceeds of $ 1,938,772 from the exercise of all outstanding Series A Warrants at a reduced exercise price of $ 14 per common share (lowered from $ 78.40 to $ 14 under the warrant inducement agreement). In addition, the Company issued 138,485 replacement warrants with an exercise price of $ 19.25 , subject to adjustments, and a 5 year term. (Note 12). In connection with the registered direct offering at a purchase price of $ 5.04 on March 24, 2025 (see below), the number and the exercise price of the replacement warrants adjusted to 528,940 warrants at an exercise price of $ 5.04 , such that the aggregate exercise value of $ 2,665,836 remained unchanged. On February 2, 2025, the Company issued 438 shares to a consultant in relation to the acquisition of the License #2 IPR&D asset (Note 9). On February 27, 2025, the Company and the Biotechnology company entered into a mutual termination agreement to terminate the Company’s right to License #1 and to release the Company of the remaining undiscounted obligation payable of $ 950,000 (Note 9). On March 10, 2025, the Company completed a second reverse stock split on a ratio of 7 common shares for every one new post second reverse split common share (Note 1). On March 24, 2025, the Company closed the issuance of 294,450 common shares at a purchase price of $ 5.04 per share in a registered direct offering priced at-the-market under Nasdaq for gross proceeds of approximately $ 1.48 million. On March 26, 2025, at a special meeting of the 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 GB Capital Consulting Agreement 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 Northstrive Companies Consulting Agreement dated October 25, 2024, as amended ( 6,372,874 total Series B Preferred Stock). These bonuses are accrued and included in due to related parties as of December 31, 2024. On March 26, 2025, the Company entered into a first amendment to the exclusive license agreement covering License #2 (Note 9), expanding its rights to include the growing animal health market. The amendment to the existing agreement now covers a broad array of animal health applications, including pharmaceuticals for muscular, metabolic, cardiovascular, neurological, and endocrine conditions, alongside innovative animal health solutions such as feed additive applications. The Company agreed to pay $ 6,000 and issue 12,000 common shares in exchange for the expansion of its rights under License #2. F-37