What changed in this filing

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Item 7. Management’s Discussion and Analysis

2026-03-30 compared with 2025-03-28 · 393 added, 248 removed, 34 unchanged (95% of the section changed)

Management’s Discussion and Analysis of Financial Condition and Results of Operation.

information set forth in this section contains certain “forward-looking statements”, including, among others (i) expected

changes in our revenue and profitability, (ii) prospective business opportunities and (iii) our strategy for financing our business.

Forward-looking statements are statements other than historical information or statements of current condition.

Some forward-looking

statements may be identified by use of terms such as “believes”, “anticipates”, “intends” or “expects”.

These forward-looking statements relate to our plans, liquidity, ability to complete financing and purchase capital expenditures, growth

of our business including entering into future agreements with companies, and plans to successfully develop and obtain approval to market

We have based these forward-looking statements largely on our current expectations and projections about future events and

financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs.

we believe that our expectations with respect to the forward-looking statements are based upon reasonable assumptions within the bounds

of our knowledge of our business and operations, in light of the risks and uncertainties inherent in all future projections, the inclusion

of forward-looking statements in this Annual Report should not be regarded as a representation by us or any other person that our objectives

or plans will be achieved.

assume no obligation to update these forward-looking statements to reflect actual results or changes in factors or assumptions affecting

forward-looking statements.

revenues and results of operations could differ materially from those projected in the forward-looking statements as a result of numerous

factors, including, but not limited to, the following:

the risk of significant natural disaster, the inability of our company to insure

against certain risks, inflationary and deflationary conditions and cycles, currency exchange rates, and changing government regulations

domestically and internationally affecting our products and businesses.

should read the following discussion and analysis in conjunction with the Financial Statements and Notes attached hereto, and the other

financial data appearing elsewhere in this Annual Report.

Dollars are denoted herein by “USD”, “$” and “dollars”.

and Overview of Operations

December 31, 2024, the Company 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.

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 Holdings Inc.

is a diversified holding company that manages and grows its portfolio through

strategic acquisitions, investments, and development across various industries.

The Company currently manages and operates a diverse

portfolio of three wholly owned subsidiaries:

● NorthStrive

BioSciences Inc.

– 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.

Management’s Discussion and Analysis

of Financial Condition and Results of Operation.

The information set forth in this section contains

certain “forward-looking statements”, including, among others (i) expected changes in our revenue and profitability, (ii)

prospective business opportunities and (iii) our strategy for financing our business.

Forward-looking statements are statements other

than historical information or statements of current condition.

Some forward-looking statements may be identified by use of terms such

as “believes”, “anticipates”, “intends” or “expects”.

These forward-looking statements

relate to our plans, liquidity, ability to complete financing and purchase capital expenditures, growth of our business including entering

into future agreements with companies, and plans to successfully develop and obtain approval to market our product.

We have based these

forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe

may affect our financial condition, results of operations, business strategy and financial needs.

Although we believe that our expectations with

respect to the forward-looking statements are based upon reasonable assumptions within the bounds of our knowledge of our business and

operations, in light of the risks and uncertainties inherent in all future projections, the inclusion of forward-looking statements in

this Annual Report should not be regarded as a representation by us or any other person that our objectives or plans will be achieved.

We assume no obligation to update these forward-looking

statements to reflect actual results or changes in factors or assumptions affecting forward-looking statements.

Our revenues and results of operations could

differ materially from those projected in the forward-looking statements as a result of numerous factors, including, but not limited to,

the following:

the risk of significant natural disaster, the inability of our company to insure against certain risks, inflationary and

deflationary conditions and cycles, currency exchange rates, and changing government regulations domestically and internationally affecting

our products and businesses.

You should read the following discussion and

analysis in conjunction with the Financial Statements and Notes attached hereto, and the other financial data appearing elsewhere in this

Annual Report.

US Dollars are denoted herein by “USD”,

“$” and “dollars”.

Organization and Overview of Operations

On December 31, 2024, the Company entered into

an asset purchase agreement (the “Asset Purchase Agreement”) with an unrelated third party, pursuant to which the Company

agreed to sell, and the unrelated third party agreed to purchase, the Company’s skincare business.

The sale of the skincare business

was consummated on January 16, 2025.

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.

After the sale of the skincare business, the Company changed its principal business.

Holdings Inc.

is a diversified holding company that manages and grows its portfolio through strategic acquisitions, investments, and development

across various industries.

As part of its diversification and growth strategy,

the Company completed the following acquisitions during the third quarter of 2025:

On July 7, 2025, the Company completed the acquisition of Pacific Sun Packaging Inc., a California-based custom IT packaging company.

On July 18, 2025, the Company acquired AGA Precision Systems LLC, a California-based CNC machining company.

On October 26, 2025, the Company, through its wholly owned subsidiary AGA Precision Systems LLC, acquired certain assets of Indarg Engineering, Inc., a California-based precision CNC machining business.

The Company manages and operates a diverse portfolio of wholly owned

subsidiaries, as of December 31, 2025:

NorthStrive BioSciences Inc.

– Biosciences is a biopharmaceutical company focusing on the development and acquisition of cutting-edge aesthetic medicines and therapeutic products.

This company’s 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.

Research Inc.

– 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.

Capital LLC – 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.

the next twelve months, we intend to focus on:

revenue by achieving successful returns on capital through PMGC Capital LLC, our multi-strategy

investment vehicle, by acquiring and managing undervalued assets, public and private investments,

and structured financing opportunities.

● Establishing

new wholly owned subsidiaries to develop and commercialize newly acquired or licensed biotechnology

assets across various unrelated pharmaceutical indications.

clinical validation studies to strengthen the commercial potential and scientific credibility

of our portfolio companies’ technologies.

clinical development to progress NorthStrive Biosciences, Inc.’s clinical assets toward

Investigational New Drug (IND) applications.

additional acquisitions of operating companies and biotechnology assets to expand and diversify

our portfolio.

potential spin-offs of wholly owned subsidiaries, creating new publicly traded companies

to unlock shareholder value.

of Operations

of the Years Ended December 31, 2024 and 2023.

following table provides certain selected financial information for continuing operations for the periods presented:

Year Ended December 31, 2024

Year Ended December 31, 2023

PMGC Research Inc.

– PMGC Research was based in

Canada and dedicated to medical scientific research and development efforts, utilizing Canadian research grants and partnering with leading

Canadian Universities, with aims of pushing the boundaries of innovation.

On November 12, 2025, PMGC Research was dissolved.

PMGC Capital LLC – PMGC

Capital is a multi-strategy investment firm focused on direct investments, strategic lending, and acquiring undervalued companies

and assets across diverse markets.

This company’s mission is to identify and seize high-potential opportunities, delivering

sustainable growth and maximizing returns on capital.

Pacific Sun Packaging Inc .

– Pacific Sun is a California-based custom IT packaging company providing innovative, sustainable, and technology-driven packaging solutions to industrial and consumer markets.

AGA Precision Systems LLC.

– AGA is a California-based precision engineering and CNC machining company specializing in the design and production of high-tolerance components for industrial and technology applications.

In October 2025, AGA acquired substantially all the operating assets of Indarg Engineering, Inc.

AGA expands PMGC’s advanced manufacturing footprint and enhances its capacity to deliver vertically integrated engineering and production solutions across multiple sectors.

Management’s Plans

Over the next twelve months, we intend to focus

Increasing revenue by achieving successful returns on capital through PMGC Capital LLC, our multi-strategy investment vehicle, by acquiring and managing undervalued assets, public and private investments, and structured financing opportunities.

Establishing new wholly owned subsidiaries to develop and commercialize newly acquired or licensed assets across various industries.

Utilizing clinical validation studies to strengthen the commercial potential and scientific credibility of our portfolio companies’ technologies.

Advancing clinical development to progress NorthStrive Biosciences, Inc.’s clinical assets toward Investigational New Drug (IND) applications.

Pursuing additional acquisitions of operating business-to-business companies with positive EBITDA.

Evaluating potential opportunities such as out licensing our biotechnology applications, potential spin-offs, and creating new publicly traded companies, such as Special Purpose Acquisition Corporations (“SPACs”).

Results of Operations

Comparison of the Years Ended December 31,

2025 and 2024.

The following table provides certain selected

financial information for continuing operations for the periods presented:

December 31, 2024

Cost of goods sold

Marketing and Promotion

4 unchanged sentences

Research and Development

Repair and maintenance

Total operating expenses

4 unchanged sentences

Weighted average number of shares outstanding – basic and diluted

expenses relate to interest income, interest expense, listing expense and fair value gain/loss on derivative liability.

and Development Expenses

and development expenses for the year ended December 31, 2024, were $104,654 compared to $7,410 for the year ended December 31, 2023,

an increase of $97,244.

Research and Development related to the development of the Company’s intangible assets.

The increase in

R&D is due to the intangible assets acquired during fiscal 2024 and includes amortization of intangible assets of $82,556 during

the year ended December 31, 2024 compared to Nil during the year ended December 31, 2023.

and Promotion

and promotion expenses for the year ended December 31, 2024, were $292,522 compared to $256,450 for the year ended December 31, 2023,

an increase of $36,072.

The Company’s marketing and promotional efforts were consistent year of year.

and Administrative Expenses

and administrative expenses for the year ended December 31, 2024, were $1,092,576, compared to $347,653 for year ended December 31, 2023,

an increase of $744,923.

Approximately $400,000 of the increase is the result of directors’ and officers’ insurance for the

full 12 months of 2024 compared to only one month post IPO in 2023.

In addition, during 2024 the Company paid directors fees of $165,000

($55,000 each to its three independent directors) compared to Nil in 2023.

Other expenses relate to finance cost, interest income, interest expense,

dividend income, unrealized fair value gain/loss on investment, realized loss on sale of investments, fair value change on derivative

liabilities, gain on the termination of the intangible asset and fair value gain/loss on derivative liability, gain on extinguish of related

party debt, impairment on prepaid expense and loss on disposal of PP&E.

Revenue for the year ended December 31, 2025, was

$590,084 as compared to $nil for the year ended December 31, 2024, an increase of $590,084.

Revenue was generated by the Company’s

newly acquired subsidiaries.

Our revenue by category is as follows:

Pacific Sun – Sale of IT packaging

AGA – Machine work

Total Revenue

Cost of Revenue

Cost of revenue for the year ended December 31,

2025, was $404,770 as compared to $nil for the year ended December 31, 2024.

The increase in cost of revenue is directly attributed

to the increase in sales during the year ended December 31, 2025, compared to 2024.

The following is a breakdown of the components of

the cost of revenue:

For the year ended December 31, 2025

Pacific Sun – Sale of IT

AGA – Machine work

Cost of inventory

Sales commission

Assembly and manufacturing expense

Shipping and handling cost

Inventory write down and wastage

Total Cost of Revenue

Gross profit for the year ended December 31, 2025,

was $185,314, as compared to $nil for the year ended December 31, 2024, an increase of $185,314.

This represents an overall gross margin

percentage of 31.4% for the year ended December 31, 2025, compared to $nil in 2024.

The increase in gross profit and gross margin percentage

was primarily attributable to the inclusion of revenues generated from the newly acquired subsidiaries.

The following is a breakdown of gross profit percentage

Pacific Sun – Sale of IT packaging

AGA – Machine work

Overall Gross Profit Percentage

The gross margin percentage on the sale of IT

packaging is negatively impacted by the fair value adjustment to inventory recorded as part of the purchase price allocation.

This adjustment

is expensed to cost of revenue as inventory is sold.

Normalizing for this adjustment, the gross margin percentage on the sale of IT packaging

would have been 49.2%.

Research and Development Expenses

Research and development expenses for the year

ended December 31, 2025, were $147,010 compared to $104,654 for the year ended December 31, 2024, an increase of $42,356.

development related to the Company’s spending on clinical validation studies.

The increase in research and development was mainly

driven by the Company continuously working on its research project of EL-22 and the costs of its Type B pre-Investigational New Drug (“pre-IND”)

meeting with the U.S.

Food and Drug Administration.

Marketing and Promotion

Marketing and promotion expenses for the year

ended December 31, 2025, were $200,940 compared to $292,522 for the year ended December 31, 2024, a decrease of $91,582.

During the year

ended December 31, 2024, the Company engaged an investor relations agency under a $125,000 agreement signed on January 5, 2024, to support

external communications and investor engagement efforts.

No comparable agreement was entered into during the year ended December 31, 2025.

Office and Administrative Expenses

Office and administrative expenses for the year

ended December 31, 2025, were $2,238,660, compared to $1,092,576 for year ended December 31, 2024, an increase of $1,146,084.

was driven by higher business activity levels, general price increases, and a shift in cost responsibilities following the disposition

of the Company’s skincare business.

The newly acquired businesses contributed $508,291 to office and administrative expenses since

the acquisitions.

Consulting Fees

Consulting fees for the year ended December 31,

2025, were $1,769,505, compared to $1,367,273 for the year ended December 31, 2024, an increase of $402,232.

The Company’s CEO,

CFO and Chairman provide services in a consulting capacity.

During 2024, consulting fees to key management (excluding 2024 year-end bonuses)

increased by $177,233 to bring compensation in line with market rates for similar public companies.

In addition, the Company accrued

$350,000 in bonuses payable to key management following the successful recapitalization and restructuring of the business during Q3-Q4

The remaining increase in consulting fees relates to business advisory and strategy services acquired during 2024 that were not

present in 2023.

The Company’s Chief

Executive Officer, Chief Financial Officer, and Chairman provide services in a consulting capacity.

The increase was primarily driven

by bonus-related consulting expenses of $871,600 (2024 – $350,000), representing contractual bonuses approved by the Board of Directors

and the Compensation Committee.

The increases were partially offset by a decrease in external consulting services.

Professional Fees

Professional fees for the year ended December

31, 2025, was $1,423,021, compared to $563,242 for the year ended December 31, 2024, an increase of $859,779.

Professional fees comprise

Professional fees are comprised

of legal, audit and accounting services.

The increase during 2024, is primarily due to an increase in audit, legal and accounting services

as the company is now listed on the NASDAQ exchange.

relations for the year ended December 31, 2024, was $208,326, compared to $91,009 for the year ended December 31, 2023.

in investor relations spending is consistent with the Company’s growth strategy, which includes promotion to current and potential

investors as the company is now listed on the NASDAQ exchange.

and Capital Resources

accompanying consolidated financial statements have been prepared on a going concern basis, which implies the Company will continue to

realize its assets and discharge its liabilities in the normal course of business.

The continuation of the Company as a going concern

is dependent upon the continued financial support from its shareholders, the ability of the Company to obtain necessary equity financing

to continue operations, and ultimately the attainment of profitable operations.

As of December 31, 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 Company’s 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.

principal liquidity requirements are for working capital, capital expenditure and research and development.

We fund our liquidity requirements

primarily through cash on hand, cash flows from operations, the issuance of common, warrants and preferred stock, and the issuance of

The increase during 2025, was primarily due to an increase in audit, legal

and accounting services given the Company’s corporate restructuring, business acquisition due diligence, and financing efforts conducted

during the year ended December 31, 2025.

Investor Relations

Investor relations expenses for the year ended

December 31, 2025, were $253,333, compared to $208,326 for the year ended December 31, 2024, an increase of $45,007.

The increase is primarily

attributable to an increase in public relations and media coverage expenses during the year ended December 31, 2025 compared to the year

ended December 31, 2024.

Repairs and Maintenance

Repairs and maintenance expenses for the year

ended December 31, 2025, were $717,654, with no comparable expense in the year ended December 31, 2024.

Following the acquisition of AGA and certain assets of Indarg Engineering, the Company incurred cost on building maintenance, machine repair and recalibration

of equipment.

These costs were necessary to optimize operations and maintain the useful lives of equipment acquired in the acquisition.

Other income (expense)

Other income (expense) for the year ended December 31, 2025, amounted

to a net loss of $ 867,820, compared to net loss of $353,148 for the year ended December 31, 2024, representing an unfavorable variance

The variance was primarily attributable to $500,000 of impairment on prepaid expense, $179,479 of finance costs, $113,917

of realized losses on investments, and $216,043 of unrealized losses on investments recognized during 2025, whereas no comparable amounts

were recorded in the prior year and a decrease in fair value gain on derivative liabilities from $369,158 in the prior year to $214,167

in the current year.

In addition, the Company recognized a $32,432 loss on the disposal of property and equipment during the year.

unfavorable items were partially offset by several favorable changes compared to the prior year, including a $490,563 decrease in interest

expense to $244,634 in 2025 from $735,197 in 2024, $107,190 higher interest income, $15,550 of dividend income, a $129,613 gain on the

termination of an intangible asset, a $31,261 gain on extinguishment of related-party debt, and a $31,028 increase in other income.

Liquidity and Capital Resources

The accompanying consolidated financial statements

have been prepared on a going concern basis, which implies the Company will continue to realize its assets and discharge its liabilities

in the normal course of business.

The continuation of the Company as a going concern is dependent upon the continued financial support

from its shareholders, the ability of the Company to obtain necessary equity financing to continue operations, and ultimately the attainment

of profitable operations.

As of December 31, 2025 and 2024, the Company had a net working capital

of $2,928,959 and $4,251,867, respectively, and has an accumulated deficit of $21,017,440 and $13,269,627, respectively.

for the years ended December 31, 2025 and 2024, the Company incurred a net loss of $7,747,813 and $6,245,737, respectively and used $5,933,881

and $5,486,980, respectively of cash flows for operating activities.

These factors raise substantial doubt regarding the Company’s

ability to continue as a going concern.

These consolidated financial statements do not include any adjustments to the recoverability and

classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue

as a going concern.

Our principal liquidity requirements are for working

capital, capital expenditure and research and development.

We fund our liquidity requirements primarily through cash on hand and the issuance

of common and preferred stock.

As of December 31, 2025, we had cash of $5,402,333, with $3,984,453 as of December 31, 2024.

The Company expects an improvement in liquidity

and capital resources, including cash used in operations following the sale of the loss-making skincare business on January 16, 2025.

Cash flows used in discontinued operating and investing activities and assets and liabilities held for sale have been excluded from our

following table provides selected financial data as of December 31, 2024, and December 31, 2023, respectively (excluding assets and liabilities

held for sale).

and capital resources, including cash obtained from any sale of investment securities it currently owns.

Cash flows used in discontinued

operating and investing activities and assets and liabilities held for sale has been excluded from our analysis.

The Company may be paid

additional earn-out consideration in connection with the sale of its skincare business, consisting of potential payments for each year

ending on the anniversary of the closing date of the disposition during the five-year period following the closing equal to 5% of the

sales generated during such year from the existing products as of the closing and a one-time payment of $500,000 if the buyer achieves

$500,000 in revenue from sales of the existing hair and scalp products as of the closing on or before the 24-month anniversary of the

closing date of the disposition.

The Company plans to use the cash obtained from any sale of investment securities or earnout payment

for working capital.

The following table provides selected financial

data as of December 31, 2025, and December 31, 2024, respectively (excluding assets and liabilities held for sale).

December 31, 2025

3 unchanged sentences

Working capital

following table summarizes our cash flows from operating, investing and financing activities from continuing operations:

The following table summarizes our cash flows

from operating, investing and financing activities from continuing operations:

Year Ended December 31, 2025

3 unchanged sentences

$ (2,800,601 )

$ (3,001,949 )

Cash used in investing activities

$ (2,765,154 )

$ (2,163,750 )

Cash provided by financing activities

Flow from Operating Activities

the year ended December 31, 2024, net cash flows used in operating activities for continuing operations was $2,800,601 compared to $2,114,871

used during the year ended December 31, 2024, respectively, primarily due to net loss and timing of settlement of assets and liabilities.

Flows from Investing Activities

the year ended December 31, 2024, and 2023, we used $601,404 and $nil, respectively, in investing activities primarily related to the

acquisition of intangible assets of $462,320.

In addition, the Company participated in a private placement of a company in the U.S.

energy market with an investment of 139,084.

Flows from Financing Activities

the year ended December 31, 2024, we had net cash flow provided by financing activities of $6,757,500 compared to cash flow provided

by financing activities of $6,738,890 in 2023.

During 2024, and 2023, the Company raised $6,993,058 and $1,463,586, respectively, through

the issuance of common stock and common stock purchase warrants;

$914,442 and $Nil, respectively, through the issuance of Notes;

$Nil and $37,500, respectively, upon the exercise of stock options in exchange for common stock.

The cash provided by financing activities

during the year ended December 31, 2024, was partially offset by the repayment of Notes of $1,150,000.

In addition, during 2023 the Company

completed its IPO financing and raised net proceeds of $5,237,805.

Accounting Policies and Significant Judgments and Estimates

discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements, which

have been prepared in accordance with accounting principles generally accepted in the United States (“U.S.

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.

Company’s policy for intangible assets require 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.

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.

Currency Translation

Company’s functional and reporting currency is the U.S.

The functional currency of the Company’s Canadian subsidiary,

PMGC Research Inc.

(“PMGC Research”) is the Canadian dollar.

Monetary assets and liabilities denominated in foreign currencies

are translated using the exchange rate prevailing at the balance sheet date.

Non-monetary assets, liabilities, and items recorded in

income arising from transactions denominated in foreign currencies are translated at rates of exchange in effect at the date of the transaction.

Gains and losses arising on translation or settlement of foreign currency denominated transactions or balances are included in the determination

accounts of PMGC Research are translated to U.S.

Cash Flow from Operating Activities

For the year ended December 31, 2025, net cash

flows used in operating activities for continuing operations was $5,802,550 compared to $2,800,601 used during the year ended December

31, 2024, respectively, primarily due to net loss and timing of settlement of assets and liabilities.

Cash Flows from Investing Activities

During the year ended December 31, 2025, and 2024,

we used $2,765,154 and $601,404, respectively, in investing activities.

The increase was primarily driven by business acquisition activity

of $2,162,756, purchases of investments of $1,789,044, equipment purchases of $442,255, earnout payments of $114,969, and purchases of

intangible assets of $6,000.

These uses of cash were partially offset by $1,762,201 proceeds from the sale of investments and $127,300

related to the issuance of a promissory note.

Cash Flows from Financing Activities

During the year ended December 31, 2025, we

had net cash flow provided by financing activities of $10,116,738 compared to cash flow provided by financing activities of

$6,757,500 in 2024.

During 2025, the Company received $3,990,007 from the initial pre-paid purchase under its equity purchase

facility (ELOC), $1,672,103 from the issuance of common stock under its At-the-Market (“ATM”) sales agreement, and $1,245,306 from

a registered direct offering of common stock and prefunded warrants.

In addition, the Company received $1,698,058 from the exercise

of Series A warrants and $1,511,443 from the exercise of replacement warrants issued on January 27, 2025.

These inflows were

partially offset by $179 used for the repurchase of shares.

Critical Accounting Policies and Significant

Judgments and Estimates

This discussion and analysis of our financial

condition and results of operations is based on our consolidated financial statements, which have been prepared in accordance with accounting

principles generally accepted in the United States (“U.S.

The preparation of the consolidated financial statements

in conformity with U.S.

GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities

and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and

expenses during the reporting period.

The Company regularly evaluates estimates and assumptions related to revenue recognition, the collectability

of receivables, valuation of inventory, fair value of investments in securities, derivative liabilities and stock options, useful lives

and recoverability of long-lived assets, and deferred income tax asset valuation allowances.

The Company bases its estimates and assumptions

on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results

of which form the basis for making judgements about the carrying value of assets and liabilities and the accrual of costs and expenses

that are not readily apparent from other sources.

The actual results experienced by the Company may differ materially and adversely from

those estimates.

Estimates and assumptions are reviewed periodically, and the effects of revisions are reflected in the consolidated financial

statements in the period they are determined.

Business Combinations

The Company accounts for business combinations

using the acquisition method of accounting in accordance with ASC 805, Business Combinations.

Under this method, the purchase consideration

transferred is measured at fair value on the acquisition date and allocated to the identifiable assets acquired and liabilities assumed

based on their estimated fair values.

Any excess of the purchase consideration over the fair value of the identifiable net assets acquired

is recorded as goodwill.

Acquisition-related costs (such as legal, due

diligence, and advisory fees) are expensed as incurred and presented within general and administrative expenses in the consolidated statements

of operations.

Contingent consideration, if any, is recorded

at fair value on the acquisition date and subsequently remeasured at each reporting period, with changes in fair value recognized in earnings

in accordance with ASC 805-30-35 and ASC 450, Contingencies.

During the year ended December 31, 2025, the

Company completed three acquisitions—Pacific Sun Packaging Inc.

AGA Precision Systems LLC and certain assets of Indarg

Engineering, Inc.

—which were accounted for under ASC 805.

The initial purchase price allocations are preliminary and subject

to adjustment upon completion of final valuation analyses.

Foreign Currency Translation

The Company’s functional and reporting currency

The functional currency of the Company’s Canadian subsidiary, PMGC Research Inc.

(“PMGC Research”)

is the Canadian dollar.

Monetary assets and liabilities denominated in foreign currencies are translated using the exchange rate prevailing

at the balance sheet date.

Non-monetary assets, liabilities, and items recorded in income arising from transactions denominated in foreign

currencies are translated at rates of exchange in effect at the date of the transaction.

Gains and losses arising on translation or settlement

of foreign currency denominated transactions or balances are included in the determination of income.

The accounts of PMGC Research are translated to

dollars using the current rate method.

Accordingly, assets and liabilities are translated

dollars at the period-end exchange rate while revenues and expenses are translated at the average exchange rates during the

Related exchange gains and losses are included in a separate component of stockholders’ equity as accumulated other comprehensive

income (loss).

Share-Based Compensation

- 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.

- During June 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”)

2018-07, Compensation-Stock Compensation (Topic 718):

Accordingly, assets and liabilities are translated into U.S.

dollars at the period-end exchange

rate while revenues and expenses are translated at the average exchange rates during the period.

Related exchange gains and losses are

included in a separate component of stockholders’ equity as accumulated other comprehensive income (loss).

Revenue Recognition

Revenue is recognized in accordance with ASC 606,

Revenue from Contracts with Customers, when control of the promised goods or services is transferred to the customer, in an amount that

reflects the consideration the Company expects to receive.

For Pacific Sun Packaging Inc., revenue is recognized at a point in

time upon shipment or delivery, as control transfers to the customer at that stage.

For AGA Precision Systems LLC, which includes Indarg

Engineering, Inc., revenue from CNC machining and precision component manufacturing is recognized at a point in time when control of the

finished parts transfers to the customer.

Standard shipping terms are FOB shipping point, resulting in transfer of control upon shipment.

In limited delivery arrangements where AGA delivers parts to the customer’s dock, control transfers upon customer receipt.

Convertible debt and embedded derivative liabilities

Hybrid financial instruments with a convertible

debt host contract and embedded derivative liability conversion feature are bifurcated and accounted for separately.

The embedded derivative

liability is initially and subsequently measured at fair value in accordance with ASC 815-15 Derivatives and Hedging — Embedded

The convertible debt host contract is accounted for at amortized cost in accordance with ASC 470, Debt and Convertible Instruments.

Stock-Based Compensation

Employees - The Company accounts for share-based

compensation under the fair value method which requires all such compensation to employees, including the grant of employee stock options,

to be calculated based on its fair value at the measurement date (generally the grant date), and recognized in the consolidated statement

of operations over the requisite service period.

Nonemployees - During June 2018, the FASB

issued ASU 2018-07, Compensation-Stock Compensation (Topic 718):

Improvements to Nonemployee Share-Based Payment Accounting (“ASU

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.

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.

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.

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;

the expected dividend yield is assumed to be zero.

Off-Balance Sheet

do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial

condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditure or capital resources

that is material to investors.

April 5, 2012, the Jumpstart Our Business Startups Act (the “JOBS Act”) was signed into law.

The JOBS Act contains provisions

that, among other things, eases certain reporting requirements for qualifying public companies.

We will qualify as an “emerging

growth company” and under the JOBS Act will be allowed to comply with new or revised accounting pronouncements based on the effective

date for private (not publicly traded) companies.

We are electing to delay the adoption of new or revised accounting standards, and as

a result, we may not comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required

for non-emerging growth companies.

As a result, our financial statements may not be comparable to companies that comply with new or revised

accounting pronouncements as of public company effective dates.

Related Party Transactions

Corporate Governance Committee of our Board of Directors is required to approve all related party transactions.

All related party transactions

are made or entered into on terms that are no less favorable to use than can be obtained from unaffiliated third parties.

do not believe the impact of inflation on our Company is material.

are also exposed to inflation risk.

Inflationary factors, such as increases in labor costs, could impair our operating results.

we do not believe that inflation has had a material impact on our financial position or results of operations to date, a high rate of

inflation in the future may have an adverse effect on our ability to maintain current levels of gross margin and operating expenses.

risk is the risk of loss arising from adverse changes in market rates and prices.

Our market risk exposure is generally limited to those

risks that arise in the normal course of business, as we do not engage in speculative, non-operating transactions, nor do we

utilize financial instruments or derivative instruments for trading purposes.

Quantitative and Qualitative Disclosures about Market Risk.

are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information required

under this item.

2018-07”) to simplify the accounting for share-based payments to nonemployees by aligning it with the accounting for share-based

payments to employees.

Under the requirements of ASU 2018-07, the Company accounts for share-based compensation to non-employees under

the fair value method which requires all such compensation to be calculated based on the fair value at the measurement date (generally

the grant date) and recognized in the statement of operations over the requisite service period.

During the years ended December 31, 2025 and 2024,

the Company recorded $(19,160) and $97,167, respectively, in share-based compensation expense, of which $60,440 and $(79,600) and $93,449

and $3,718, respectively is included in office and administration and discontinued operations, respectively.

Within discontinued operations

for the years ended December 31, 2025 and 2024, $(73,768) and $(5,832), and ($599) and $4,317, respectively is included in office and

administration and research and development, respectively.

Determining the appropriate fair value model and

the related assumptions requires judgment.

During the year ended December 31, 2025 and the year ended 2024, the fair value of each option

grant was estimated using a Black-Scholes option-pricing model.

The expected volatility represents the historical

volatility of comparable publicly traded companies in similar industries, adjusted for variables such as stock price, market capitalization

and life cycle.

Due to limited historical data, the expected term for options granted is equal to the contractual life.

The risk-free

interest rate is based on a treasury instrument whose term is consistent with the expected life of stock options.

The Company has not

paid and does not anticipate paying cash dividends on its shares of common stock;

therefore, the expected dividend yield is assumed to

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements

that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues

or expenses, results of operations, liquidity, capital expenditure or capital resources that is material to investors.

On April 5, 2012, the Jumpstart Our Business Startups

Act (the “JOBS Act”) was signed into law.

The JOBS Act contains provisions that, among other things, eases certain reporting

requirements for qualifying public companies.

We will qualify as an “emerging growth company” and under the JOBS Act will

be allowed to comply with new or revised accounting pronouncements based on the effective date for private (not publicly traded) companies.

We are electing to delay the adoption of new or revised accounting standards, and as a result, we may not comply with new or revised accounting

standards on the relevant dates on which adoption of such standards is required for non-emerging growth companies.

As a result, our financial

statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective

Future Related Party Transactions

The Corporate Governance Committee of our

Board of Directors is required to approve all related party transactions.

All related party transactions are made or entered into on

terms that are no less favorable to use than can be obtained from unaffiliated third parties.

Impact of Inflation

We do not believe the impact of inflation on our

Company is material.

Inflation Risk

We are also exposed to inflation risk.

factors, such as increases in labor costs, could impair our operating results.

Although we do not believe that inflation has had a material

impact on our financial position or results of operations to date, a high rate of inflation in the future may have an adverse effect on

our ability to maintain current levels of gross margin and operating expenses.

Market risk is the risk of loss arising from adverse

changes in market rates and prices.

Our market risk exposure is generally limited to those risks that arise in the normal course of business,

as we do not engage in speculative, non-operating transactions, nor do we utilize financial instruments or derivative instruments

for trading purposes.

Quantitative and Qualitative Disclosures

about Market Risk.

We are a smaller reporting company as defined

by Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis