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Item 9A. Controls and Procedures

2026-03-30 compared with 2025-03-28 · 3654 added, 2097 removed, 346 unchanged (94% of the section changed)

This section is long enough that the comparison stopped early. What follows is partial, and the remainder is not necessarily unchanged.

Controls and Procedures.

of Disclosure Controls and Procedures

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.

Report on Internal Control over Financial Reporting

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.

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.

and that our receipts and expenditures are being made only in accordance with the authorization of our Board and management;

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.

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.

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.

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.

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:

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.

in Internal Controls over financial reporting

change in our internal control over financial reporting occurred during the fiscal year ended December 31, 2024, that has materially

Evaluation of Disclosure Controls and Procedures

Pursuant to Rule 13a-15(b) under the Exchange Act, the Company carried

out an evaluation, with the participation of the Company’s management, including the Company’s Chief Executive Officer (the

Company’s principal executive officer and principal financial and 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

Annual 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 the 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.

Internal control

over financial reporting includes policies and procedures that pertain to the maintenance of records that in reasonable detail accurately

and fairly reflect the transactions and dispositions of our assets;

provide reasonable assurance that transactions are recorded as necessary

to permit preparation of our financial statements in accordance with U.S.

GAAP, and that our receipts and expenditures are being made

only in accordance with the authorization of our Board and management;

and provide reasonable assurance regarding prevention or timely

detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on our financial statements.

Any system of internal control, no matter how

well designed and operated, can provide only reasonable, not absolute, assurance that the objectives of the system are met.

the inherent limitations in all internal control systems, no system of internal control over financial reporting can provide absolute

assurance that all control issues and instances of fraud, if any, within the Company have been detected.

Our management conducted an evaluation of the

effectiveness of our internal control over financial reporting as of December 31, 2025.

Based on this evaluation, management concluded

that our internal control over financial reporting was effective as of December 31, 2025.

Remediation of Previously Reported Material

As previously disclosed in our Annual Report on

Form 10-K for the fiscal year ended December 31, 2024, management identified a material weakness in our internal control over financial

reporting related to insufficiently designed and operating controls surrounding accounting policies and controls, including standardized

reconciliation schedules to ensure the Company’s books and records are maintained in accordance with GAAP.

During the fiscal year ended December 31, 2025,

the Company implemented remediation measures to address the previously identified material weakness, including hiring additional accounting

and finance personnel with the requisite knowledge, training and experience in U.S.

GAAP and public company reporting requirements, and

implementing standardized reconciliation procedures and enhanced review processes over the Company’s financial close and reporting cycle.

Based on management’s evaluation as of December

31, 2025, the Company has concluded that the previously reported material weakness has been remediated and that the Company’s internal

control over financial reporting is effective as of December 31, 2025.

Changes in Internal Controls over Financial

Other than the remediation measures described

above, no change in our internal control over financial reporting occurred during the fiscal year ended December 31, 2025, that has materially

affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Other Information.

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.

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.

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

Directors, Executive Officers and Corporate Governance.

following table sets forth certain information with respect to our directors, executive officers and significant employees as of March

During the year ended December 31, 2025, no director

or officer adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,”

as each term is defined in Item 408(a) of Regulation S-K.

The Company has adopted an insider trading policy

governing the purchase, sale, and/or other dispositions of the 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.

Disclosure Regarding Foreign Jurisdictions

that Prevent Inspections

Directors, Executive Officers and

Corporate Governance.

The following table sets forth certain information

with respect to our directors, executive officers and significant employees.

Executive Officers:

Graydon Bensler

Chief Executive Officer, Chief Financial Officer and

Braeden Lichti

Chairman of the Board

Non-Employee Chief Executive Officer, Chief Financial Officer and Director

Non-Executive Directors:

Braeden Lichti

Non-Employee, Non-Executive Chairman of the Board

Jeffrey Parry (1)(2)(3)

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Independent Director and Chair of the Audit Committee

of the Audit Committee.

of the Compensation Committee.

of the Nominating Committee.

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.

Bensler, CFA , Chief Executive Officer, Chief Financial Officer and Director

Bensler has served as our Chief Executive Officer since June 2024 and Chief Financial Officer since inception and a director since June

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.

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.

(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

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.

Bensler, CFA , Non-Employee Chief Executive Officer, Chief Financial Officer and Director

Bensler has served as our Chief Executive

Officer since June 2024 and Chief Financial Officer since inception and a director since June 9, 2020.

Bensler is a financial professional

and analyst with over eight years of experience in financial consulting and management for both private businesses and US/Canadian publicly

traded companies and is a CFA Charterholder (CFA).

Bensler is the founder and sole owner of GB Capital Ltd, a privately held holding

company he founded in 2019 and which company is engaged in capital markets advisory, financial consulting, and management.

Bensler co-founded an education technology curriculum management and scheduling company that was implemented in academic schools in Canada

and the United States.

From 2017 to 2019, Mr.

Bensler was 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.

capacity, Mr.

Bensler gained strong knowledge of the capital markets, public company compliance requirements, and regularly interfaced

with regulators, auditors, board and executive management.

Bensler was also a director of publicly traded Health Logic Interactive

(TSXv:CHIP) from 2020 to 2024.

Bensler was an account manager at a leading Canadian investor relations firm where he represented

publicly traded companies across a wide range of sectors and worked directly with investment banks, investment brokers and company executives

and directors.

During his tenure at this investor relations firm, Mr.

Bensler created and conveyed messaging about his clients’

strategic position in the market and successfully guided several companies through multiple financings.

From 2019 to 2021, Mr.

was a Senior Associate at Evans & Evans, a Canadian boutique investment banking firm where he led valuations and going public transactions

for Canadian and United States companies.

In this capacity, Mr.

Bensler gained strong knowledge of the capital markets, public company

compliance requirements, and regularly interfaced with regulators, auditors, board and executive management.

We believe that Mr.

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.

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.

Lichti , Chairman of the Board

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.

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.

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

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.

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 , Non-Employee, Non-Executive

Chairman of the Board

Braeden Lichti is the founder and Chief Executive

Officer of BWL Investments Ltd., a privately held holding corporation he established in 2016, and NorthStrive Companies, Inc., a U.S.

based investment, advisory and management services company he founded in 2021.

Lichti also serves as Chairman of Hydromer, Inc., a

global leader in surface modification and coating solutions, focusing on hydrophilic, thromboresistant and antimicrobial coatings for

medical devices and various industrial applications.

Established in 1980 and headquartered in Concord, North Carolina, Mr.

Lichti co-founded

PMGC Holdings Inc.

in 2020 and has served as its advisor and has been a principal stockholder since its formation.

We believe that Mr.

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.

Parry , Independent Director, Chair of the Nominating Committee and member of the of Audit Committee and Compensation Committee

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.

Lichti’s past experience as a company founder, director and advisor, and his extensive capital markets and executive experience

makes him a qualified director for our Company.

Jeffrey Parry , Independent Director,

Chair of the Nominating Committee and member of the of Audit Committee and Compensation Committee

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

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.

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.

Parry was the Chief Executive Officer of Nasdaq-listed Aries Maritime Transport Limited

and led a successful turn-around and sale to strategic investors.

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

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.

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.

Kovalyov , Independent Director, Chair of the Compensation Committee and member of the of Audit Committee and Nominating Committee

Kovalyov has acted as Chief Financial Officer and Treasurer of Marizyme, Inc.

His educational and professional experience in business,

his background and familiarity in investment banking, and his having served as a director of a company listed on Nasdaq makes him a qualified

director candidate for our Company.

George Kovalyov , Independent Director,

Chair of the Compensation Committee and member of the of Audit Committee and Nominating Committee

Kovalyov has acted as Chief Financial Officer

and Treasurer of Marizyme, Inc.

since December 2021.

Since November 2022, Mr.

has also been a director of DGTL Holdings Inc.

Previously he served as the chief operating officer and director of Health Logic Interactive

(“HLII”) from September 2020 to November 2021, and as HLII’s chief financial officer from December 2021 to September

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.

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 September 2018 to September

Kovalyov was VP of Finance and director of Phivida Holdings Inc., a brand of cannabidiol-infused foods, beverages and clinical

From October 2016 to September 2020, Mr.

Kovalyov was the principal owner of Schindler and Company,

an accounting consulting firm.

Kovalyov was the principal owner of Schindler and Company, an accounting consulting

Kovalyov is a chartered accountant and is a member of Chartered Professional Accountants of Canada.

Kovalyov is qualified to serve on the Board due to his extensive accounting and finance experience.

Daley , CPA Independent Director, Chair of the Audit Committee and member of the of Compensation Committee and Nominating Committee

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.

Daley has worked a variety of industries in both the United States and Canada.

Since July 2021,

Daley has served as Manager of Accounting at Anavex Life Sciences Corp.

AVXL), a clinical-stage biopharmaceutical company

based in New York, NY that is focused on developing treatments for debilitating neurodegenerative and neurodevelopmental diseases.

addition, from August 2021 to July 2022, she served as an independent director and audit committee chair to Vegano Foods (CSE:

during Vegano Food’s initial public offering in February 2022.

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

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.

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.

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.).

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.

MKNA) (April 2018 - April 2019) and Naked Brand

NAKD) (March 2018 - June 2018) until the completion of their prospective mergers in April 2019 and June 2018, respectively.

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.

MKNA) (April 2018 - April 2019) and Naked Brand Group Inc.

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.

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.

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.

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

Leadership Structure and Risk Oversight

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.

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.

Board is composed of a majority of “independent

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.

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.

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.

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

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.

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director cannot be considered independent if:

director is, or at any time during the past three (3) years was, an employee of the company;

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);

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);

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;

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.

such definitions, our Board has undertaken a review of the independence of each director.

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.

have established three committees under the board of directors:

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;

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.

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

committee’s members and functions are described below.

Our Audit Committee consists of Jeffrey Parry, George Kovalyov and Juliana Daley.

Daley is the chairman of our audit

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.

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:

the independent auditors and pre-approving all auditing and non-auditing services permitted to be performed by the independent auditors;

with the independent auditors any audit problems or difficulties and management’s response;

the annual audited financial statements with management and the independent auditors;

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;

and approving all proposed related party transactions;

management’s communication and implementation of the Company’s anti-fraud policy;

the Company’s cybersecurity mitigation measures and practices periodically;

separately and periodically with management and the independent auditors;

compliance with our code of business conduct and ethics, including reviewing the adequacy and effectiveness of our procedures to ensure

proper compliance.

Our Compensation Committee consists of Jeffrey Parry, George Kovalyov and Juliana Daley.

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.

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.

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.

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;

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.

Kovalyov is the Chairman of our Compensation Committee.

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:

and approving, or recommending to the board for its approval, the compensation for our chief executive officer and other executive officers;

and recommending to the shareholders for determination with respect to the compensation of our directors;

periodically and approving any incentive compensation or equity plans, programs or similar arrangements;

compensation consultant, legal counsel or other adviser only after taking into consideration all factors relevant to that person’s

independence from management.

Our Nomination Committee consists of Jeffrey Parry, George Kovalyov and Juliana Daley.

Parry is the chairman of our

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;

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 .

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.

Our Nomination Committee

consists of Jeffrey Parry, George Kovalyov and Juliana Daley.

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:

and recommending to the board nominees for election by the shareholders or appointment by the board;

annually with the board the current composition of the board with regards to characteristics such as independence, knowledge, skills,

experience and diversity;

recommendations on the frequency and structure of board meetings and monitoring the functioning of the committees of the board;

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.

Relationships

are no family relationships between any of our directors or executive officers.

Legal Proceedings

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.

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.

Trading Policy

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;

advising the Board periodically with regards to significant developments in the law and practice of corporate governance as well as our compliance with applicable laws and regulations, and making recommendations to the board on all matters of corporate governance and on any remedial action to be taken.

Family Relationships

There are no family relationships between any

of our directors or executive officers.

Certain Legal Proceedings

To our knowledge, no director, independent director,

or executive officer of the Company has been a party in any legal proceeding material to an evaluation of his ability or integrity during

the past ten years.

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

5 unchanged sentences

applicable exchange listing requirements.

Recovery Policy

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.

2023, we adopted an executive compensation recovery policy or “Clawback Policy” in compliance with Nasdaq rules.

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.

in Certain Legal Proceedings

our knowledge, none of our current directors or executive officers has, during the past 10 years:

convicted in a criminal proceeding or been subject to a pending criminal proceeding (excluding traffic violations and other minor offenses);

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

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;

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;

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;

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.

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.

applies to both equity-based and cash compensation awards.

The “excess compensation” is the difference between the actual

amount that was paid and the amount that would have been paid if the financial statements were prepared properly in the first instance.

Involvement in Certain Legal Proceedings

To our knowledge, none of our current directors

or executive officers has, during the past 10 years:

been convicted in a criminal proceeding or been subject to a pending criminal proceeding (excluding traffic violations and other minor offenses);

had any bankruptcy petition filed by or against the business or property of the person, or of any partnership, corporation or business association of which he was a general partner or executive officer, either at the time of the bankruptcy filing or within two (2) years prior to that time;

been subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction or federal or state authority, permanently or temporarily enjoining, barring, suspending or otherwise limiting, his or her involvement in any type of business, securities, futures, commodities, investment, banking, savings and loan, or insurance activities, or to be associated with persons engaged in any such activity;

been found by a court of competent jurisdiction in a civil action or by the SEC or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated;

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;

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.

Executive Compensation.

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.

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.

named executive officers (“Named Executive Officers” or “NEOs”) are or were, as applicable:

Bensler, Chief Executive Officer and Chief Financial Officer;

Plews, former Chief Executive Officer and President;

Buechler, former Chief Marketing Officer;

Kraneiss, former Chief Commercial Officer.

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.

of Directors and Named Executive Officers

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.

and Principal Position

Executive Officer, Chief Financial Officer and Director

and Former CEO and President

Chief Marketing Officer

Commercial Officer

On December 23, 2024, Jordan

Plews resigned as Director of the Company.

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

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

Arrangements with Named Executive Officers

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.

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

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.

We are an emerging growth company, as defined

in the JOBS Act.

As an emerging growth company, we will be exempt from certain requirements related to executive compensation, including,

but not limited to, the requirements to hold a nonbinding advisory vote on executive compensation and to provide information relating

to the ratio of total compensation of our Chief Executive Officer to the median of the annual total compensation of all of our employees,

each as required by the Investor Protection and Securities Reform Act of 2010, which is part of the Dodd-Frank Wall Street Reform and

Consumer Protection Act.

This section provides an overview of our executive

compensation programs, including a narrative description of the material factors necessary to understand the information disclosed in

the summary compensation table below.

Our named executive officers (“Named Executive

Officers” or “NEOs”) are:

Graydon Bensler, Chief Executive Officer and Chief Financial Officer.

The objective of our compensation program is to

provide a total compensation package to each NEO that will enable us to attract, motivate and retain outstanding individuals, align the

interests of our executive team with those of our equity holders, encourage individual and collective contributions to the successful

execution of our short- and long-term business strategies and reward NEOs for performance.

Compensation of Directors and Named Executive

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

Graydon Bensler

Chief Executive Officer, Chief Financial Officer and Director

Compensation Arrangements with Named Executive

Graydon Bensler

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 GB Capital Consulting Agreement”) with GB Capital Ltd, a British Colombia, Canada

corporation (“GB Capital”) wholly owned by Mr.

The Second Amended GB Capital Consulting Agreement amended and

restated the terms of that certain Amended and Restated Consulting Agreement between the Company and GB Capital for Non-Employee Chief

Executive Officer dated June 1, 2020 (the “Original GB Capital Consulting Agreement”).

The Original GB Capital 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 GB Capital Consulting Agreement, GB

Capital agreed to designate Mr.

Graydon Bensler, Director of GB Capital, to perform the Services (as defined in the Second Amended

GB Capital Consulting Agreement).

Pursuant to the terms of the Second Amended GB

Capital Consulting Agreement, as consideration for Mr.

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 GB Capital

Consulting Agreement, the Company would make the following payments to GB Capital (such payments, the Bensler Sign-on Bonuses”):

(i) a one-time bonus of $175,000, with (A) $100,000 of such bonus to be paid to GB Capital in cash and (B) $75,000 of such

bonus to be remitted to GB Capital in 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 stockholders.

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 “GB Capital 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”).

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:

The Company shall pay GB Capital $50,000 for each Company acquisition consummated, provided the target company of such acquisition has

avoidance of doubt, the first fiscal year for which the Company will consider whether GB Capital qualifies for the GB Capital Annual Bonus

is the fiscal year in which the Effective Date falls.

Pursuant to the Second Amended GB Capital Consulting Agreement, the Company shall

also pay GB Capital in the first fiscal quarter of 2026 a bonus in the amount of $60,000 if the Company has a positive adjusted Earnings

Before Interest, Taxes, Depreciation, and Amortization (“EBITDA”) in 2025.

Subject to the terms of the Second Amended GB Capital

Consulting Agreement, GB Capital is also entitled to each of the following bonus payments (collectively, the “GB Capital Milestone

Such GB Capital Milestone Bonuses are payable upon the occurrence of the following events, at which time the Company

shall remit the applicable Milestone Bonuses to GB Capital as follows:

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;

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);

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”:

(B) $150,000;

(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;

the Company shall pay GB Capital $300,000 each time the Company achieves a Market Valuation (as defined in the Second Amended GB Capital Consulting Agreement) of $50,000,000 and $100,000,000, provided that each of such Market Valuations continues for each at least 5 consecutive Trading Days (as defined in the Second Amended GB Capital Consulting Agreement).

Additionally, GB Capital may elect to accrue the

GB Capital Milestone Bonuses and convert the cash amount of the Bensler Milestone Bonus into shares of the 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.

On October 25, 2024, the Company entered

into the Amendment to the Second Amended GB Capital 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 stockholder approval.

On April 3, 2025, the Company entered into Amendment

2 to the Second Amended GB Capital Consulting Agreement, which amended and restated paragraph 1e of Exhibit B of the Second Amended

GB Capital Consulting Agreement, to include the following:

Milestone - based

Cash Bonuses .

Upon the occurrence of the following events, the Company shall remit the applicable cash bonuses to the Consultant as

set forth in this Section 1(e) and subject to the terms and conditions of this Section 1(e):

(i) The Company

shall pay the Consultant $50,000 for each Company acquisition consummated, provided the target company of such acquisition has $2,000,000

in annual revenue or more upon consummation of such acquisition;

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.

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”:

(ii) The Company

shall pay the Consultant $50,000 upon any closing of an equity or equity-linked financing of the Company which results in net proceeds

being raised in such financing of $3,000,000 in a fiscal quarter (the closing which qualifies the Consultant for such payment, the “Triggering

Equity Financing,” and such payment, the “Equity Financing Bonus”).

For the avoidance of doubt, the Consultant is entitled

only to a one-time payment of the Equity Financing Bonus $50,000 per fiscal quarter and the Company will not make further payments as

an Equity Financing Bonus in spite of the occurrence of any of the following events:

(A) the closing of any equity or equity-linked financings

subsequent to the Triggering Equity Financing in such fiscal quarter which result in proceeds of $3,000,000 to the Company;

(B) any closings

for the same equity financing round subsequent to the Triggering Equity Financing in such fiscal quarter which result in additional proceeds

of $3,000,000 or more to the Company.

(iii) If and when

the Company achieves each of the targeted EBITDA amounts in one fiscal quarter, as set forth in this Section 1(e)(iii) (each of such amounts,

“EBITDA Milestone”), the Company shall pay the Consultant a fee equal to 25% of the applicable EBITDA Milestone (such fee,

the “EBITDA Milestone Bonus”:

(B) $150,000;

1 unchanged sentence

(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

For the avoidance of doubt, the Consultant

may only receive a one-time payment of the EBITDA Milestone Bonus in each fiscal quarter, upon the Company’s achievement of the

applicable EBITDA Milestone, and the Company will not make further payments to the Consultant as the EBITDA Milestone Bonus even upon

achievement of an EBITDA Milestone in the same fiscal quarter which value exceeds the value of the first EBITDA Milestone the Consultant

has achieved in such fiscal quarter.

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).

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.

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.

September 2021, we entered into an employment contract with Dr.

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.

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.

to the terms and provisions of the agreement:

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.

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.

to the terms and provisions of the agreement:

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,

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.

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:

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

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.

June 20, 2024, we terminated this employment agreement.

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.

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.

Daley and Ms.

Muilenburg as our independent directors.

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.

Incentive Awards

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.

and Practices for Granting Certain Equity Awards

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.

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.

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.

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.

Compensation Plan Information

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.

(iv) Company shall

pay the Consultant $50,000 each time the Company achieves a Market Valuation (as defined below) of $5,000,000, $10,000,000, $15,000,000,

$20,000,000, and $25,000,000 (each of such payments, “Valuation Payment”);

provided that each of such Market Valuations

continue for each at least five (5) consecutive Trading Days (as defined below), and provided further that the Company may only

recover any erroneously awarded amounts in Valuation Payments for one (1) year following the date of such erroneous award.

(v) The Company

shall pay the Consultant $600,000 each time the Company achieves a Market Valuation of $50,000,000 and $100,000,000, provided that

each of such Market Valuations continues for each at least 5 consecutive Trading Days.

(vi) In any calendar

year, the Company shall remit the Consultant a one-time payment of $300,000 upon the Company’s achievement of its first positive

EBITDA of $2,000,000 for such calendar year.

(vii) The Board,

in its sole discretion, may award a cash or equity bonus payment (“Licensing Milestone Bonus”) to the Consultant upon the

Company or any of its Subsidiaries’ (as defined below) entry into a license agreement which provides for either:

(A) the Company

or Subsidiary’s license of any intellectual property rights of the Company or Subsidiary to another party, including the license

of intellectual property rights of the Company or Subsidiary to each other;

or (B) a third party’s license of intellectual property

rights to the Company or Subsidiary;

provided, however , that if the Board determines to award the Licensing Milestone Bonus to

the Consultant in the form of preferred stock, such preferred stock issuance is subject to the approval of the Company’s shareholders.

(viii) Notwithstanding

anything to the contrary in this Second A&R Agreement, the Consultant may elect to accrue the payments due to the Consultant under

Section 1(e) of this Exhibit B (each, a “Milestone Bonus”) convert the cash amount of the Milestone Bonus into shares of the

Company’s common stock or preferred stock.

In such event, the conversion ratio of the Milestone Bonus shall be determined by mutual

agreement between the Company and the Consultant, provided, however , that if the Consultant determines to receive the Milestone

Bonus payment in the form of preferred stock, the Milestone Bonus payment is subject to the approval of the Company’s shareholders.”

Capitalized terms used in the text quoted immediately

above have the meanings set forth in Amendment No.

2 to the Second Amended GB Capital Consulting Agreement.

Amendment No.

2 to the Second Amended GB Capital

Consulting Agreement further clarified that the equity grants made to GB Capital under Section 2 of Exhibit B of the GB Consulting Agreement,

if determined by the Board to be in the form of preferred stock, is subject to the approval of the Company’s shareholders.

Amendment No.

2 to the Second Amended GB Capital

Consulting Agreement also deleted Section 4a of the GB Consulting Agreement in its entirety.

The foregoing summary of Amendment No.

to the Second Amended GB Capital Consulting Agreement does not purport to be complete and is subject to and is qualified in its entirety

by a copy of Amendment No.

2 to the Second Amended GB Capital Consulting filed herein as Exhibit 10.9.

On August 12, 2025, the Company entered into Amendment

3 to the Second Amended GB Capital Consulting Agreement, which provided for the Company’s grant of a fully vested award in the

form of either:

(i) restricted stock units (“RSUs”), (ii) restricted stock, or (iii) cash (each, an “Acquisition Award”)

to GB Capital on the consummation of any acquisition of (i) an entity, (ii) assets, or (iii) capital stock by the Company or any Subsidiary

(as defined below).

The amount of the Acquisition Award will be calculated based on the total purchase price of the consummated acquisition,

regardless of whether or not such purchase price is paid in cash, stock, assumed debt, or other consideration (such purchase price, the

“Acquisition Value”), and will be determined as follows:

Acquisition Value from $0 to $5,000,000 – GB Capital is entitled to an Acquisition Award of 5% of the Acquisition Value;

Acquisition Value over $5,000,000 to $10,000,000 – GB Capital is entitled to an Acquisition Award of 6% of the Acquisition Value;

Acquisition Value over $10,000,000 to $20,000,000 – GB Capital is entitled to an Acquisition Award of 7% of the Acquisition Value;

Acquisition Value over $20,000,000 – GB Capital is entitled to an Acquisition Award of 8% of the Acquisition Value.

In addition to the determinations of Acquisition

Value set forth above, the Compensation Committee may, in its sole discretion, determine to award GB Capital an additional 1% of the applicable

percentage of the Acquisition Value if:

(i) the Board and/or Compensation Committee projects the applicable acquisition to be earnings

before interest, tax, depreciation, and amortization (EBITDA) or net income accretive within twelve (12) months of closing or (b) the

Compensation Committee deems the applicable acquisition as an advancement to the Company’s long-term growth objectives, competitive

positioning, and/or operational capabilities.

If GB Capital elects to receive its Acquisition

Award in the form of RSUs or restricted stock, the number of RSUs (“RSU Award Amount”) or restricted stock granted shall equal

(x) the dollar value of the Acquisition Award divided by (y) the trailing five (5) day volume-weighted average price (VWAP) of the Company’s

Common Stock ending on the trading day prior to the acquisition closing date (such RSU Award Amount rounded down to the nearest whole

The RSUs or restricted stock granted to GB Capital will be fully vested and shall not be subject to any further service or performance

Acquisition Awards may, at the Board’s discretion

and in compliance with applicable law, be issued directly to GB Capital or any other designated entity of GB Capital.

All such Acquisition

Awards shall be subject to applicable securities laws and the terms of the Company’s then-effective equity incentive plan or other

applicable grant policy.

“Person” means an

individual, a partnership, a limited liability company, a corporation, an association, a joint stock company, a trust, a joint venture,

an unincorporated organization, any other entity, or a governmental entity.

“Subsidiary” means, with

respect to any Person, any corporation, limited liability company, partnership, joint venture or other legal entity of which such Person

(either above or through or together with any other Subsidiary) owns, directly or indirectly, more than 50% of the stock or other equity

interests the holders of which are generally entitled to vote for the election of the board of directors or other governing body of such

Amendment No.

3 to the Second Amended GB Capital

Consulting Agreement also provided for the name change of the Second Amended GB Capital Consulting Agreement, going forward, to “Consulting

and Services Agreement for Non-Employee Chief Executive Officer.” Amendment No.

3 to the Second Amended GB Capital Consulting Agreement

is filed as Exhibit 10.17 herein.

On October 16, 2025,

the Company entered into Amendment No.

4 to the Consulting and Services Agreement for Non-Employee Chief Executive Officer (“Amendment

4 to the GB Capital Consulting Agreement”) with GB Capital.

Amendment No.

Consulting and Services Agreement for Non-Employee Chief Executive Officer between the Company and GB Capital (the “GB Capital Consulting

Agreement”) modified the terms of the GB Capital Consulting Agreement as follows:

Add terms to Section 3 to provide

for a monthly housing reimbursement of $8,000 to GB Capital solely for the purpose of facilitating its performance of services in Newport

Beach, California.

Amend and restate Section 5’s

provisions regarding GB Capital’s independent contractor relationship with the Company;

Amend and restate Section 6’s

provisions regarding GB Capital’s determination of the method, detail, and means of performing its services, subject to the results

required by the Company set forth in the GB Capital Consulting Agreement and applicable Statements of Work, if any;

Amend and restate subsection

6(b)’s provisions regarding GB Capital’s ineligibility for the Company’s employee benefits;

Amend and restate subsection

6(c)’s provisions regarding GB Capital’s tax responsibilities for compensation paid under the GB Capital Consulting Agreement;

Add subsection 6(d) to provide

for GB Capital’s express authorization to enter into contracts and make commitments on behalf of the Company, subject to any limitations

or approval requirements established by the Board or as otherwise provided in writing by the Company;

Add subsection 6(e) to provide

for GB Capital’s non-exclusive engagement as consultant under the GB Capital Consulting Agreement and permit GB Capital’s

to provide services to other clients and other clients and to engage in other business activities;

Add subsection 6(f) to state

that the GB Capital Consulting Agreement does not create an employment, agency, partnership, fiduciary, or joint venture relationship

between the Parties.

Additionally, Amendment

4 to the GB Capital Consulting Agreement replaces all references to “severance payment”, “Severance Payment”,

and “Severance Event”) in the GB Capital Consulting Agreement with “termination payment,” “Termination Payment,”

and “Termination Event,” respectively, on a nomenclature basis without changing the parties’ substantive rights or obligations.

Except as expressly amended

in Amendment No.

4 to the GB Capital Consulting Agreement, the GB Capital Consulting Agreement remains in full force and effect.

The foregoing

summary does not purport to be complete and is qualified in its entirety by reference to the full text of Amendment No.

4 to the GB Capital

Consulting Agreement, a copy of which is filed as Exhibit 10.28 herein.

Director Compensation

The Company pays each of its independent directors

$55,500 in compensation for their services to the Company as independent directors.

The Company’s current independent directors

are paid this annual compensation on a quarterly basis, or $13,875 at each fiscal quarter’s end.

We previously compensated our independent directors

for their services as directors through a mix of cash and stock options.

In addition to in-person attendance bonuses, we intend to reimburse

our non-employee directors for reasonable travel and out-of-pocket expenses incurred in connection with attending Board and Board committee

Equity Incentive Awards

The Company has historically granted stock options

to its employees, including its executive officers, under the Amended 2020 Equity Incentive Plan (“2020 Plan”).

On September 15, 2025 (the “2025 Plan Effective

Date”), the 2025 Plan became effective.

As of the 2025 Plan Effective Date, the 2025 Plan

superseded the 2020 Plan, and any shares of Common Stock underlying awards already made under the 2020 Plan will be issued from the 2025

On the Plan Effective Date, (i) outstanding awards made under the 2020 Plan will remain outstanding, and such awards will remain

subject to the original award terms;

and (ii) shares subject to any outstanding awards made under the 2020 Plan will be administered from

the share reserve of the 2025 Plan.

The 2025 Plan is filed herein as Exhibit 10.1.

The purpose of the 2025 Plan is to attract and retain the best available

personnel for positions of substantial responsibility, to provide additional incentive to employees, directors and consultants, and to

promote the success of our business.

The administrator of the 2025 Plan (the “Administrator”) may, in its sole discretion,

amend, alter, suspend or terminate the 2025 Plan, or any part thereof, at any time and for any reason.

We will obtain stockholder approval

of any 2025 Plan amendment to the extent necessary and desirable to comply with legal and regulatory requirements relating to the administration

of equity-based awards.

Unless earlier terminated by the Administrator, the 2025 Plan will terminate ten years after the 2025 Plan Effective

Any capitalized terms used in this “2025

Equity Incentive Plan” subsection and not otherwise defined herein have the meaning given to that term in the 2025 Plan.

Authorized Shares

Initially, the maximum number of shares of our

Common Stock that may be subject to awards under the 2025 Plan is 169,281, or 25% of the issued and outstanding shares of Common Stock

as of the 2025 Plan Effective Date.

Subject to adjustment upon dividends or other distributions, recapitalizations, stock splits, reorganizations,

merger, consolidations, split-ups, spin-offs, combinations, changes in control, repurchases or exchange of Shares or other securities

of the Company as provided in Section 12 of the 2025 Plan, the number of shares of Common Stock reserved and available for issuance under

the 2025 Plan will be (i) no less than twenty five percent (25%) of the shares of Common Stock issued and outstanding as of the 2025 Plan

Effective Date;

(ii) on January 1 of each calendar year after the 2025 Plan Effective Date, will automatically increase by an amount equal

to the lesser of:

(A) ten percent (10%) of the shares of Common Stock issued and outstanding as of January 1 of the applicable calendar

and (B) such lesser amount as determined by the Administrator, in its sole discretion.

Additionally, if an Award expires or becomes unexercisable

without having been exercised in full, is surrendered pursuant to an exchange program, or, with respect to restricted stock, is forfeited

to or repurchased by the Company due to the failure to vest, the unpurchased shares of Common Stock (or for Awards other than Options

the forfeited or repurchased Shares) which were subject thereto will become available for future grant or sale under the 2025 Plan (unless

the 2025 Plan has terminated).

Shares of Common Stock that have actually been issued under the 2025 Plan under any Award will not be returned

to the 2025 Plan and will not become available for future distribution under the 2025 Plan;

provided, however, that if shares of Common

Stock issued pursuant to Awards of Restricted Stock are repurchased by the Company or are forfeited to the Company due to the failure

to vest or upon certain events, such shares of Common Stock will become available for future grant under the 2025 Plan.

Shares of Common

Stock used to pay the exercise price of an Award or to satisfy the tax withholding obligations related to an Award will become available

for future grant or sale under the 2025 Plan.

To the extent an Award under the 2025 Plan is paid out in cash rather than shares of Common

Stock, such cash payment will not result in reducing the number of shares of Common Stock available for issuance under the 2025 Plan.

Notwithstanding the foregoing and, subject to adjustment as provided in Section 12, the maximum number of shares of Common Stock that

may be issued upon the exercise of Incentive Stock Options will equal the aggregate number of shares reserved and issuable under the 2025

Plan, plus, to the extent allowable under Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”), and the

Treasury Regulations promulgated under the Code, any shares of Common Stock that become available for issuance under the 2025 Plan pursuant

to Section 3(b) of the 2025 Plan (shares of Common Stock which were subject to Awards which have:

expired or becomes unexercisable without

having been exercised in full, surrendered pursuant to an exchange program, or with respect to restricted stock, is forfeited to or repurchased

by the Company due to the failure to vest, the unpurchased shares of Common Stock (or for Awards other than Options the forfeited or repurchased

Plan Administration

The 2025 Plan will be administered by (i) the

Compensation Committee or (ii) the Board, if the Compensation Committee does not exist, and in any event, the administrator of the 2025

Plan shall administer the 2025 Plan in compliance with Applicable Laws.

Subject to the provisions of the 2025 Plan, and in the case of

the Compensation Committee, subject to the specific duties delegated by the Board to the Compensation Committee, the Administrator will

have the authority, in its discretion:

(A) to determine the Fair Market Value;

(B) to select the Service Providers to whom Awards may

be granted under the 2025 Plan;

approve forms of Award Agreements for use under the 2025 Plan;

(E) to determine the terms and conditions, not inconsistent with the terms

of the 2025 Plan, of any Award granted under the 2025 Plan, of which terms and conditions include, but are not limited to, the exercise

price, the time or times when Awards may be exercised (which may be based on performance criteria), any vesting acceleration or waiver

of forfeiture restrictions, and any restriction or limitation regarding any Award or the Shares of Common Stock relating thereto, based

in each case on such factors as the Administrator will determine;

(F) to institute and determine the terms and conditions of an Exchange

(G) to construe and interpret the terms of the 2025 Plan and Awards granted pursuant to the 2025 Plan;

(H) to prescribe, amend

and rescind rules and regulations relating to the 2025 Plan, including rules and regulations relating to sub-plans established for the

purpose of satisfying applicable foreign laws or for qualifying for favorable tax treatment under applicable foreign laws;

(I) to modify

or amend each Award (subject to the amendment and termination provisions of the 2025 Plan), including but not limited to, the discretionary

authority to extend the post-termination exercisability period of Awards and to extend the maximum term of an Option (subject to the Option

term provisions set forth in the 2025 Plan;

(J) to allow Participants to satisfy withholding tax obligations in a manner prescribed in

Section 13 of the 2025 Plan;

(K) to authorize any person to execute on behalf of the Company any instrument required to effect the grant

of an Award previously granted by the Administrator;

(L) to allow a Participant to defer the receipt of the payment of cash or the delivery

of shares of Common Stock that otherwise would be due to such Participant under an Award;

and (M) to make all other determinations deemed

necessary or advisable for administering the 2025 Plan.

The Administrator’s decisions, determinations and interpretations will be

final and binding on all Participants and any other holders of Awards.

“Fair Market Value” means as of any

date, the value of Common Stock determined as follows:

if the Common Stock is listed on any established stock exchange or

a national market system, including without limitation The Nasdaq Global Select Market, The Nasdaq Global Market or The Nasdaq Capital

Market of The Nasdaq Stock Market LLC, its Fair Market Value will be the closing sales price for such stock (or the closing bid, if no

sales were reported) as quoted on such exchange or system on the day of determination, as reported in The Wall Street Journal or

such other source as the Administrator deems reliable;

if the Common Stock is regularly quoted by a recognized securities dealer but selling prices are not reported, the Fair Market Value of a Share will be the mean between the high bid and low asked prices for the Common Stock on the day of determination (or, if no bids and asks were reported on that date, as applicable, on the last trading date such bids and asks were reported), as reported in The Wall Street Journal or such other source as the Administrator deems reliable;

in the absence of an established market for the Common Stock, the Fair Market Value will be determined in good faith by the Administrator using one of the valuation methods set forth in Section 1.409A-1(b)(5)(iv)(B)(2) of the Treasury Regulation.

Such determination shall be conclusive and binding on all persons.

Under the 2025 Plan, Non-statutory Stock Options,

Restricted Stock, Restricted Stock Units and other equity awards granted may be granted to Service Providers.

Additionally, Incentive

Stock Options may be granted only to Employees.

Stock Options

Subject to the terms and provisions of the 2025

Plan, the Administrator, at any time and from time to time, may grant Options in such amounts as the Administrator, in its sole discretion,

will determine.

Each Award of an Option will be evidenced by an Award Agreement that will specify the exercise price, the term of the

Option, the number of shares of Common Stock subject to the Option, the exercise restrictions, if any, applicable to the Option, and such

other terms and conditions as the Administrator, in its sole discretion, will determine.

Each Option will be designated in the Award Agreement

as either an Incentive Stock Option or a Non-statutory Stock Option.

Notwithstanding such designation, however, to the extent that the

aggregate Fair Market Value of the shares of Common Stock with respect to which Incentive Stock Options are exercisable for the first

time by the Participant during any calendar year (under all plans of the Company and any Parent or Subsidiary) exceeds one hundred thousand

dollars ($100,000), such Options will be treated as Non-statutory Stock Options.

The term of each Option will be stated in the

Award Agreement;

provided, however, that the term will be no more than five (5) years from the date of grant thereof.

In the case of an

Incentive Stock Option granted to a Participant who, at the time the Incentive Stock Option is granted, owns stock representing more than

ten percent (10%) of the total combined voting power of all classes of stock of the Company or any Parent or Subsidiary, the term of the

Incentive Stock Option will be five (5) years from the date of grant or such shorter term as may be provided in the Award Agreement.

terms of outstanding Awards may be amended without shareholder approval to reduce the exercise price of outstanding Options, or to cancel

outstanding Options in exchange for cash, other Awards, or Options with an exercise price that is less than the exercise price of the

original Option, to the extent permitted by Applicable Law or the listing rules of Nasdaq.

The per share exercise price for the shares of

Common Stock to be issued pursuant to the exercise of an Option will be determined by the Administrator, but will be no less than one

hundred percent (100%) of the Fair Market Value per Share on the date of grant.

As to an Incentive Stock Option granted to an Employee

who owns stock representing more than ten percent (10%) of the voting power of all classes of stock of the Company or any Parent or Subsidiary,

the per share exercise price will be no less than one hundred ten percent (110%) of the Fair Market Value per Share on the date of grant.

Options may be granted with a per share exercise price of less than one hundred percent (100%) of the Fair Market Value per Share on the

date of grant pursuant to a transaction described in, and in a manner consistent with, Code Section 424(a).

At the time an Option is granted, the Administrator

will fix the period within which the Option may be exercised and will determine any conditions that must be satisfied before the Option

may be exercised.

The Administrator will determine the acceptable form of consideration for exercising an Option, including the method

In the case of an Incentive Stock Option, the Administrator will determine the acceptable form of consideration at the time

Such consideration may consist entirely of:

(iii) promissory note, to the extent permitted by Applicable

(iv) other Shares, provided that such Shares have a Fair Market Value on the date of surrender equal to the aggregate exercise price

of the Shares as to which such Option will be exercised and provided further that accepting such Shares will not result in any adverse

accounting consequences to the Company, as the Administrator determines in its sole discretion;

(v) consideration received by the Company

under cashless exercise program (whether through a broker or otherwise) implemented by the Company in connection with the 2025 Plan;

by net exercise;

(vii) such other consideration and method of payment for the issuance of Shares to the extent permitted by Applicable

or (viii) any combination of the foregoing methods of payment.

In making its determination as to the type of consideration to accept,

the Administrator will consider if acceptance of such consideration may be reasonably expected to benefit the Company.

Any Option granted under the 2025 Plan will be

exercisable according to the terms of the 2025 Plan and at such times and under such conditions as determined by the Administrator and

set forth in the Award Agreement.

An Option may not be exercised for a fraction of a share of Common Stock.

Restricted Stock

Subject to the terms and provisions of the 2025

Plan, the Administrator, at any time and from time to time, may grant Shares of Restricted Stock to Service Providers in such amounts

as the Administrator, in its sole discretion, will determine.

Each Award of Restricted Stock will be evidenced by an Award Agreement that

will specify the Period of Restriction, the number of Shares granted, and such other terms and conditions as the Administrator, in its

sole discretion, will determine.

Unless the Administrator determines otherwise, the Company as escrow agent will hold Shares of Restricted

Stock until the restrictions on such Shares have lapsed.

Except as provided in the 2025 Plan or as the Administrator determines, shares

of Restricted Stock may not be transferred until the end of the applicable Period of Restriction (as defined below).

The Administrator,

in its sole discretion, may impose such other restrictions on Shares of Restricted Stock as it may deem advisable or appropriate.

as otherwise provided in the 2025 Plan, Shares of Restricted Stock covered by each Restricted Stock grant made under the 2025 Plan will

be released from escrow as soon as practicable after the last day of the Period of Restriction or at such other time as the Administrator

may determine.

The Administrator, in its discretion, may accelerate the time at which any restrictions will lapse or be removed.

the Period of Restriction, Service Providers holding Shares of Restricted Stock granted under the 2025 Plan may exercise full voting rights

with respect to those Shares, unless the Administrator determines otherwise.

“Period of Restriction” means the

period during which the transfer of shares of Restricted Stock are subject to restrictions and therefore, the shares of Common Stock are

subject to a substantial risk of forfeiture.

Such restrictions may be based on the passage of time, the achievement of target levels of

performance, or the occurrence of other events as determined by the Administrator.

During the Period of Restriction, Service Providers

holding shares of Restricted Stock will be entitled to receive all dividends and other distributions paid with respect to such shares,

unless the Administrator provides otherwise.

If any such dividends or distributions are paid in shares of Common Stock, the shares of

Common Stock will be subject to the same restrictions on transferability and forfeitability as the shares of Restricted Stock with respect

to which they were paid.

On the date set forth in the Award Agreement, the Restricted Stock for which restrictions have not lapsed will

revert to the Company and again will become available for grant under the 2025 Plan.

Restricted Stock Units

Subject to the terms and provisions of the 2025

Plan, the Administrator, at any time and from time to time, may grant Restricted Stock Units to Service Providers in such amounts as the

Administrator, in its sole discretion, will determine.

Each Award of Restricted Stock Units will be evidenced by an Award Agreement that

will specify the terms, conditions, and restrictions (if any) related to the grant, including the number of Restricted Stock Units.

The Administrator will set vesting criteria in

its discretion, which, depending on the extent to which the criteria are met, will determine the number of Restricted Stock Units that

will be paid out to the Participant.

A Restricted Stock Unit Award may vest upon completion of a specified period of service with the

Company or a Subsidiary and/or based on the achievement of certain performance goals during the applicable performance period, as set

forth in the Participant’s Award Agreement.

If Restricted Stock Units vest based upon satisfaction of performance goals, then the

Administrator will:

(x) determine the nature, length and starting date of any performance period for the Restricted Stock Units;

(y) select the performance goals to be used to measure the performance;

and (z) determine what additional vesting conditions,

if any, should apply.

Upon meeting the applicable vesting criteria, the Participant will be entitled to receive a payout as determined

by the Administrator.

Notwithstanding the foregoing, at any time after the grant of Restricted Stock Units, the Administrator, in its

sole discretion, may reduce or waive any vesting criteria that must be met to receive a payout.

The Administrator may, in its sole discretion,

award dividend equivalents in connection with the grant of Restricted Stock Units that may be settled in cash, in Shares of equivalent

value, or in some combination thereof.

Payment of earned Restricted Stock Units will be made upon the date(s) determined by the Administrator

and set forth in the Award Agreement.

The Administrator, in its sole discretion, may only settle earned Restricted Stock Units in cash,

Shares, or a combination of both.

On the date set forth in the Award Agreement, all Shares underlying any unvested, unlapsed, unearned

Restricted Stock Units will be forfeited to the Company for future issuance.

Other forms of Awards valued in whole or in part

by reference to, or otherwise based on, Common Stock, including the appreciation in value thereof may be granted either alone or in addition

to the specified Awards provided for in the 2025 Plan.

Subject to the provisions of the 2025 Plan, the Board will have sole and complete

discretion to determine the persons to whom and the time or times at which such Other Awards will be granted, the number of shares of

Common Stock (or the cash equivalent thereof) to be granted pursuant to such other Awards and all other terms and conditions of such other

Non-transferability of Awards

Unless determined otherwise by the Administrator,

Awards may not be sold, pledged, assigned, hypothecated, or otherwise transferred in any manner other than by will or by the laws of descent

and distribution, and may be exercised, during the lifetime of the Participant, only by the Participant.

If the Administrator makes an

Award transferable, such Award may only be transferred (i) by will, (ii) by the laws of descent and distribution, or (iii) as permitted

by Rule 701 of the Securities Act of 1933, as amended (the “Securities Act”).

Certain Adjustments

In the event that any dividend or other distribution

(whether in the form of cash, shares of Common Stock, other securities, or other property), recapitalization, stock split, reverse stock

split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase, or exchange of shares of Common Stock or other

securities of the Company, or other change in the corporate structure of the Company affecting the shares of Common Stock occurs, the

Administrator, in order to prevent diminution or enlargement of the benefits or potential benefits intended to be made available under

the 2025 Plan, the Company will adjust the number and class of shares of Common Stock that is reserved and issuable under the 2025 Plan

and/or the number, class, and price of shares of Common Stock covered by each outstanding Award.

Dissolution or Liquidation

In the event of the proposed dissolution or liquidation

of the Company, the Administrator will notify each Participant as soon as practicable prior to the effective date of such proposed transaction.

To the extent it has not been previously exercised, an Award will terminate immediately prior to the consummation of such proposed action.

Merger or Change in Control

In the event of a merger or Change in Control

(as defined below), each outstanding Award will be treated as the Administrator determines (subject to the provisions of the following

paragraph) without a Participant’s consent including, without limitation, that:

(i) Awards will be assumed, or substantially equivalent

Awards will be substituted, by the acquiring or succeeding corporation (or an affiliate thereof) with appropriate adjustments as to the

number and kind of shares and prices;

(ii) upon written notice to a Participant, that the Participant’s Awards will terminate upon

or immediately prior to the consummation of such merger or Change in Control;

(iii) outstanding Awards will vest and become exercisable,

realizable, or payable, or restrictions applicable to an Award will lapse, in whole or in part prior to or upon consummation of such merger

or Change in Control, and, to the extent the Administrator determines, terminate upon or immediately prior to the effectiveness of such

merger or Change in Control;

(iv) (A) the termination of an Award in exchange for an amount of cash and/or property, if any, equal to

the amount that would have been attained upon the exercise of such Award or realization of the Participant’s rights as of the date

of the occurrence of the transaction (and, for the avoidance of doubt, if as of the date of the occurrence of the transaction the Administrator

determines in good faith that no amount would have been attained upon the exercise of such Award or realization of the Participant’s

rights, then such Award may be terminated by the Company without payment), or (B) the replacement of such Award with other rights or property

selected by the Administrator in its sole discretion;

or (v) any combination of the foregoing.

In taking any of the actions permitted

under this Section 12(c), the Administrator will not be obligated to treat all Awards, all Awards held by a Participant, or all Awards

of the same type, similarly.

In the event that the successor corporation does

not assume or substitute for the Award (or portion thereof), the Participant will fully vest in and have the right to exercise all of

his or her outstanding Options, including Shares as to which such Awards would not otherwise be vested or exercisable, all restrictions

on Restricted Stock will lapse, and, with respect to Awards with performance-based vesting, all performance goals or other vesting criteria

will be deemed achieved at one hundred percent (100%) of target levels and all other terms and conditions met.

In addition, if an Option

is not assumed or substituted in the event of a merger or Change in Control, the Administrator will notify the Participant in writing

or electronically that the Option will be exercisable for a period of time determined by the Administrator in its sole discretion, and

the Option will terminate upon the expiration of such period.

An Award will be considered assumed if, following

the merger or Change in Control, the Award confers the right to purchase or receive, for each Share subject to the Award immediately prior

to the merger or Change in Control, the consideration (whether stock, cash, or other securities or property) received in the merger or

Change in Control by holders of Common Stock for each Share held on the effective date of the transaction (and if holders were offered

a choice of consideration, the type of consideration chosen by the holders of a majority of the outstanding Shares);

provided, however,

that if such consideration received in the merger or Change in Control is not solely common stock of the successor corporation or its

Parent, the Administrator may, with the consent of the successor corporation, provide for the consideration to be received upon the exercise

of an Option, for each Share subject to such Award, to be solely common stock of the successor corporation or its Parent equal in fair

market value to the per share consideration received by holders of Common Stock in the merger or Change in Control.

Notwithstanding anything in Section 12(c) of the

2025 Plan to the contrary, an Award that vests, is earned or paid-out upon the satisfaction of one or more performance goals will not

be considered assumed if the Company or its successor modifies any of such performance goals without the Participant’s consent;

provided, however, a modification to such performance goals only to reflect the successor corporation’s post-Change in Control corporate

structure will not be deemed to invalidate an otherwise valid Award assumption.

Notwithstanding anything in Section 12(c) of the

2025 Plan to the contrary, if a payment under an Award Agreement is subject to Code Section 409A and if the change in control definition

contained in the Award Agreement does not comply with the definition of “change of control” for purposes of a distribution

under Code Section 409A, then any payment of an amount that is otherwise accelerated under this Section 12 will be delayed until the earliest

time that such payment would be permissible under Code Section 409A without triggering any penalties applicable under Code Section 409A.

“Change in Control” means any of the

following events:

A change in the ownership of the Company which occurs on the date that any one person, or more than one person acting as a group (“Person”), acquires ownership of the stock of the Company that, together with the stock held by such Person, constitutes more than 50% of the total voting power of the stock of the Company, except that any change in the ownership of the stock of the Company as a result of a private financing of the Company that is approved by the Board will not be considered a Change in Control;

If the Company has a class of securities registered pursuant to Section 12 of the Exchange Act, a change in the effective control of the Company which occurs on the date that a majority of members of the Board is replaced during any twelve (12) month period by Directors whose appointment or election is not endorsed by a majority of the members of the Board prior to the date of the appointment or election.

For purposes of this clause (ii), if any Person is considered to be in effective control of the Company, the acquisition of additional control of the Company by the same Person will not be considered a Change in Control;

A change in the ownership of a substantial portion of the Company’s assets which occurs on the date that any Person acquires (or has acquired during the twelve (12) month period ending on the date of the most recent acquisition by such person or persons) assets from the Company that have a total gross fair market value equal to or more than 50% of the total gross fair market value of all of the assets of the Company immediately prior to such acquisition or acquisitions.

For purposes of this subsection (iii), gross fair market value means the value of the assets of the Company, or the value of the assets being disposed of, determined without regard to any liabilities associated with such assets.

For purposes of the definition of Change in Control,

persons will be considered to be acting as a group if they are owners of a corporation that enters into a merger, consolidation, purchase

or acquisition of stock, or similar business transaction with the Company.

Notwithstanding the foregoing, a transaction will not be deemed

a Change in Control unless the transaction qualifies as a change in control event within the meaning of Code Section 409A, as it has been

and may be amended from time to time, and any proposed or final Treasury Regulations and Internal Revenue Service guidance that has been

promulgated or may be promulgated thereunder from time to time.

Further, and for the avoidance of doubt, a transaction will not constitute

a Change in Control if:

(i) its sole purpose is to change the jurisdiction of the Company’s incorporation;

or (ii) its sole purpose

is to create a holding company that will be owned in substantially the same proportions by the persons who held the Company’s securities

immediately before such transaction.

Treatment of Awards on Termination of Relationship

as a Service Provider

Unless otherwise provided by the Administrator,

if a Participant ceases to be a Service Provider, other than upon the Participant’s termination as the result of the Participant’s

death or Disability, any unvested portion of any applicable Awards will be forfeited and shares of Common Stock covered by any vested

portion of the applicable Awards that have not been issued to the Participant or its designees, as applicable, pursuant to the exercise

or settlement thereof during the period beginning on the date of cessation of the Participant as a Service Provider until three (3) months

thereafter, will revert to the 2025 Plan.

Notwithstanding the immediately preceding sentence, if the Service Provider is terminated for

Cause, any Award issued to such terminated Service Provider will be forfeited, regardless of any vested or unvested portion of such Award,

and in the case of such forfeiture, the Shares covered by the Award will revert to the 2025 Plan.

Unless otherwise provided by the Administrator,

if a Participant ceases to be a Service Provider as a result of the Participant’s Disability, (i) the vested portion of the Option

shall remain exercisable for the amount set forth in the Award Agreement (but in no event later than the expiration of the term of the

Option as set forth in the Award Agreement), and if no time is specified in the Award Agreement, the vested portion of the Option shall

remain exercisable for twelve (12) months following the Participant’s termination, and (ii) the unvested portion shall remain exercisable

for three (3) months following the Participant’s termination due to Disability, and after such three (3) months the Shares underlying

the unvested portion of the Option will be forfeited and revert to the 2025 Plan.

If after termination the Participant does not exercise

his or her Option within the time specified herein, the Option will terminate, and the Shares covered by such Option will revert to the

Unless otherwise provided by the Administrator,

if a Participant dies while a Service Provider, the Option may be exercised within such period of time as is specified in the Award Agreement

(but in no event later than the expiration of the term of such Option as set forth in the Award Agreement) to the extent that the Option

is vested on the date of death, by the Participant’s designated beneficiary, provided such beneficiary has been designated prior

to the Participant’s death in a form acceptable to the Administrator.

If no such beneficiary has been designated by the Participant,

then such Option may be exercised by the personal representative of the Participant’s estate or by the person(s) to whom the Option

is transferred pursuant to the Participant’s will or in accordance with the laws of descent and distribution.

In the absence of

a specified time in the Award Agreement, the Option shall remain exercisable for twelve (12) months following the Participant’s

Unless otherwise provided by the Administrator, if at the time of death Participant is not vested as to his or her entire

Option, the Shares covered by the unvested portion of the Option will immediately revert to the 2025 Plan.

If the Option is not so exercised

within the time specified herein, the Option will terminate, and the Shares covered by such Option will revert to the 2025 Plan.

Awards will be subject to any Company clawback

policy that the Company is required to adopt pursuant to the listing standards of any national securities exchange or association on which

the Company’s securities are listed or as is otherwise required by the Dodd-Frank Wall Street Reform and Consumer Protection Act

or other applicable laws.

The administrator also may specify in an award agreement that the participant’s rights, payments or benefits

with respect to an award will be subject to reduction, cancellation, forfeiture or recoupment upon the occurrence of certain specified

The Administrator may require a participant to forfeit, return or reimburse the Company all or a portion of the Award or shares

issued under the Award, any amounts paid under the Award and any payments or proceeds paid or provided upon disposition of the shares

issued under the Award in order to comply with such clawback policy or Applicable Laws.

Federal Income Tax Consequences

The 2025 Plan is, in part, is a qualified plan

for federal income tax purposes.

As such, the Company is entitled to (i) withhold and deduct from future wages of the Participant, or

make other arrangements for the collection of, all legally required amounts necessary to satisfy any and all federal, state and local

withholding and employment-related tax requirements attributable to a qualified stock option, including, without limitation, the grant,

exercise or vesting of, or payment of dividends with respect to, a qualified stock option or a disqualifying disposition of stock received

upon exercise of a qualified stock option, or (ii) require the Participant promptly to remit the amount of such withholding to the Company

before taking any action, including issuing any shares of Common Stock, with respect to a qualified stock option.

Amendment and Termination

The Board may at any time amend, alter, suspend

or terminate the 2025 Plan.

The Company shall obtain stockholder approval of any Plan amendment to the extent necessary and desirable

to comply with Applicable Laws.

Additionally, the Company shall obtain stockholder approval for each of the following:

(i) increases to

the shares of Common Stock reserved and issuable under the 2025 Plan other than as set forth in Section 3(c)(ii) to 3(c)(iii) of the 2025

Plan (evergreen and adjustment provisions of the 2025 Plan);

(ii) any changes to the applicable prices that a Participant may pay for

with regard to applicable Awards granted under the 2025 Plan, provided, however, that the terms of outstanding Awards may be amended without

shareholder approval to reduce the exercise price of outstanding Options, or to cancel outstanding Options in exchange for cash, other

Awards, or Options with an exercise price that is less than the exercise price of the original Option;

(iii) changes to the 2025 Plan

which would expand eligibility for Participant or potential Participants’ Awards;

(iv) changes to the 2025 Plan which would materially

increase Participants’ or potential Participants’ benefits available under the 2025 Plan;

and (v) changes to the 2025 Plan

which would expand the types of Awards provided under the 2025 Plan.

Notwithstanding anything to the contrary in the 2025 Plan, the terms

of outstanding Awards may be amended without shareholder approval to reduce the exercise price of outstanding Options, or to cancel outstanding

Options in exchange for cash, other Awards, or Options with an exercise price that is less than the exercise price of the original Option

to the extent permitted by applicable law or the listing rules of the applicable trading market.

No amendment, alteration, suspension or termination

of the 2025 Plan will impair the rights of any Participant, unless mutually agreed otherwise between the Participant and the Administrator,

which agreement must be in writing and signed by the Participant and the Company.

Termination of the 2025 Plan will not affect the Administrator’s

ability to exercise the powers granted to it under the 2025 Plan with respect to Awards granted under the 2025 Plan prior to the date

of such termination.

As of December 31, 2025, no options to purchase

shares of Common Stock under the Plan were outstanding, and 7,752 shares were available for future grant.

Each option granted under

the Plan will carry a term of no more than 10 years from the date of grant and the Plan will remain in effect until it is terminated by

The term and vesting periods for options granted under the Plan are determined by the Board.

The summary does not contain a

complete description of all provisions of the 2025 Plan and is qualified in its entirety by reference to the 2025 Plan, a copy of which

is filed as Exhibit 10.1 to this Annual Report.

Policies and Practices for Granting Certain Equity Awards

Our policies and practices regarding the granting

of equity awards are carefully designed to ensure compliance with applicable securities laws and to maintain the integrity of our executive

compensation program.

The Compensation Committee is responsible for the timing and terms of equity awards to executives and other eligible

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, 2025.

Plan Category

3 unchanged sentences

Equity compensation plans not approved by security holders

securities remaining available for future issuance under the Company’s 2020 Equity Incentive Plan (the “Plan”).

aggregate number of shares allocated and made available for issuance pursuant to stock options granted under the Plan shall not exceed

8,671 shares.

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:

of our executive officers and directors;

of our current directors and executive officers as a group;

person or entity, or group of persons or entities, known by us to own beneficially more than 5% of our Common Stock.

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.

Security Ownership of Certain Beneficial

Owners and Management and Related Stockholder Matters.

The following table sets forth certain information

regarding the ownership of the Company’s Common Stock and Series B Preferred Stock as of March 30, 2026 by:

(i) each director

and nominee for director;

(ii) each executive officer named in the Summary Compensation Table;

(iii) all executive officers

and directors of the Company as a group;

and (iv) all those known by the Company to be beneficial owners of more than five percent

(5%) of its Common Stock and Series B Preferred Stock.

We have determined beneficial ownership in accordance

with the rules and regulations of the SEC, and the information is not necessarily indicative of beneficial ownership for any other purpose.

In general, under these rules a beneficial owner of a security includes any person who, directly or indirectly, through any contract,

arrangement, understanding, relationship or otherwise has or shares voting power or investment power with respect to such security.

person is also deemed to be a beneficial owner of a security if that person has the right to acquire beneficial ownership of such security

within 60 days of March 30, 2026.

Except as indicated by the footnotes below, we believe, based on information furnished to us, that the

persons and entities named in the table below have sole voting and sole investment power with respect to all shares that they beneficially

own, subject to applicable community property laws.

Percentage ownership is based on 1,159,112 shares

of Common Stock outstanding as of March 26, 2025.

of Common Stock and 6,372,874 shares of outstanding Series B Preferred Stock as of March 30, 2026.

Number of Shares Beneficially Owned

Beneficial Ownership Percentages

Name and Address of Beneficial Owner (1)

Percentage of

5% or Greater Shareholders:

Directors, Named Executive Officers and Other Executive Officers:

Graydon Bensler, Chief Executive Officer, Chief Financial Officer and Director

Braeden Lichti, Chairman of the Board

Series B Preferred Stock

Percent of Common Stock

Percent of Series B Preferred Stock (2)

Percent of Voting Stock (2)

Officers and Directors

Braeden Lichti, Non-employee, Non-Executive Chairman of the Board

3,336,437 (4)

Graydon Bensler, Non-Employee Chief Executive Officer, Chief Financial Officer and Director

3,036,437 (6)

Jeffrey Parry, Director

2 unchanged sentences

All executive officers and directors as a group (5 persons)

less than one (1%) percent.

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.

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.

5%+ Stockholders of Series B Preferred Stock

Northstrive Companies Inc.

3,336,437 (4)

GB Capital Ltd (11)

3,036,437 (6)

5%+ Stockholders of Common Stock

Denotes less than one (1%) percent.

This shareholder is not a 5% or greater holder of Common Stock, only a 5% or greater holder of Series B Preferred Stock.

Unless otherwise indicated, the business address of each of the individuals is our address of c/o PMGC Inc., 120 Newport Center Drive, Newport Beach, CA 92660.

Rounded to the nearest tenth percent.

Consists of (i) 2 shares 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.

Lichti has sole voting and dipositive power over the shares, (iii)

591 shares of Common Stock held by BWL Holdings Ltd.

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.

Consists of (i) 30 shares of Common Stock and (ii) 29 shares of Common Stock

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.

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.

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.

Certain Relationships and Related Transactions, and Director Independence.

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.

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.

Company paid consulting fees of $391,333, $110,000, and $95,078 to GB Capital Ltd., a company controlled by Graydon Bensler, Chief Financial

Lichti has the right to acquire from us within 60 days of March 30, 2026 pursuant to the exercise of stock options previously granted under the Amended 2020 Equity Incentive Plan, (ii) 32 shares of Common Stock held by Northstrive Companies Inc., of which Mr.

Lichti has sole voting and dipositive power over the shares, and (iii) 1 share of Common Stock underlying warrants held by BWL Investments Ltd.

These shares of Series B Preferred Stock are held through Northstrive Companies Inc., a California corporation wholly owned by Braeden Lichti, the Company’s Non-employee, Non-Executive Chairman.

Lichti has sole voting and dispositive power over these shares.

Consists of (i) 8 shares of Common Stock held by GB Capital Ltd, of which Mr.

Bensler has sole voting and dipositive power over the shares and (ii) 2 shares of Common Stock that Mr.

Bensler has the right to acquire from us within 60 days of March 30, 2026 pursuant to the exercise of stock options previously granted under the Amended 2020 Equity Incentive Plan.

These shares of Series B Preferred Stock are held through GB Capital Ltd, a British Columbia, Canada corporation wholly owned by Graydon Bensler, the Company’s Non-employee Chief Executive Officer, Chief Financial Officer, and Director.

Bensler has sole voting and dispositive power over these shares.

Consists of (i) 1 share of Common Stock and (ii) 1 share of Common Stock that Mr.

Parry has the right to acquire from us within 60 days of March 30, 2026, pursuant to the exercise of stock options previously granted under the Amended 2020 Equity Incentive Plan.

Consists of (i) 1 share of Common Stock and (ii) 1 share of Common Stock that Ms.

Daley has the right to acquire from us within 60 days of March 30, 2026, pursuant to the exercise of stock options previously granted under the Amended 2020 Equity Incentive Plan.

Consists of (i) 42 shares of Common Stock beneficially owned by our directors and executive officers, (ii) 6 shares of Common Stock underlying outstanding options, exercisable within 60 days of March 30, 2026 and (iii) 1 share of Common Stock underlying warrants.

Northstrive Companies Inc.

is an entity wholly owned by Braeden Lichti, the Company’s Non-employee, Non-executive Chairman.

Lichti has sole voting and dispositive power over the shares of Series B Preferred Stock held by Northstrive Companies Inc.

GB Capital Ltd is an entity wholly owned by Graydon Bensler, the Company’s Non-employee Chief Executive Officer, Chief Financial Officer, and Director.

Bensler has sole voting and dispositive power over the shares of Series B Preferred Stock held by GB Capital Ltd.

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, 2024 to which we have been a party in which the amount involved exceeded or will exceed $109,308.19, which represents

1% of the average of our total assets amounts as of December 31, 2025 and 2024), and in which any of our directors, executive officers

or, to our knowledge, beneficial owners of more than 5% of our capital stock or any member of the immediate family of any of the foregoing

persons had or will have a direct or indirect material interest, other than equity and other compensation, termination, change in control

and other arrangements, which are described under “ Executive and Director Compensation .” We also describe below certain

other transactions with our directors, executive officers and stockholders.

GB Capital Ltd

The Company paid consulting fees of $412,000 and

$391,333 to GB Capital Ltd, a company controlled by Graydon Bensler, Chief Executive Officer, Chief Financial Officer and Director in

2025 and 2024, respectively.

The Company incurred consulting fees of $697,800

and $391,333 to GB Capital Ltd, a company wholly owned by Graydon Bensler, our current non-employee Chief Executive Officer, Chief Financial

Officer and Director in 2025 and 2024, respectively.

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.

15, 2022, these promissory notes and accrued interest were converted into Series A preferred shares and warrants as follows:

BWL Investments Ltd.

Tim Sayed, former director and Chief Medical Officer

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.

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

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.

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.

In the 2025 fiscal year, the Company paid GB Capital $262,000 in consulting fees

under GB Capital’s Consulting and Services Agreement for Non-Employee Chief Executive Officer.

As of December 31, 2025, the Company

has $285,800 due to GB Capital in contract performance bonus payments and has paid $150,000 to GB Capital in contract performance bonus

payments under GB Capital’s Consulting and Services Agreement for Non-Employee Chief Executive Officer.

On July 25, 2025, the

Company entered into the GB Capital Secondment Agreement with GB Capital, pursuant to which GB Capital agreed to second certain of its

employees (each, a “GB Capital Employee” and, collectively, the “GB Capital Employees”), on an exclusive basis,

to the Company from time to time to provide certain services in accordance with the terms of the GB Capital Secondment Agreement.

GB Capital Employees will remain employees of GB Capital during their respective periods of secondment (each, a “GB Capital Secondment

Period”) and will not be employees of the Company.

Under the GB Capital

Secondment Agreement, GB Capital shall pay each Employee’s salary, incentives, health and retirement benefits, and other applicable

compensation or benefits GB Capital Employee is entitled to as an employee of GB Capital.

As consideration for GB Capital making GB Capital

Employees available to provide services during the GB Capital Secondment Period, the Company shall reimburse GB Capital on a monthly basis

based on (i) an agreed hourly rate set forth in Exhibit A of the GB Capital Secondment Agreement, multiplied by (ii) actual hours worked

by the GB Capital Employee.

Except as otherwise set forth in the GB Capital Secondment Agreement, each party to the GB Capital Secondment

Agreement shall bear its own costs and expenses in connection with the GB Capital Secondment Agreement.

However, if any extraordinary

costs or expenses not contemplated by the GB Capital Agreement arise in connection with the GB Capital Agreement, including travel and

expenses, the Company will reimburse GB Capital for such costs and expenses, provided that (i) the Company provided its written consent

prior to GB Capital’s incurrence of such costs and expenses, and (ii) such costs and expenses are documented to the reasonable satisfaction

of the Company.

Pursuant to the terms

of the GB Capital Secondment Agreement, each GB Capital Employee will provide services to the Company as agreed between the parties up

to the number of hours per week specified in Exhibit A.

Further, each GB Capital Employee shall provide services at the Company’s

principal place of business or such other place as the parties may agree.

The Company has full and exclusive responsibility for each GB

Capital Employee’s actions performed in service to the Company during the GB Capital Secondment Period.

The Company may terminate

the services provided by any GB Capital Employee at any time by providing at least fifteen (15) days’ prior written notice of termination

to GB Capital, provided that the Company may terminate any GB Capital Employee’s secondment at any time, without advance notice,

in the event of the GB Capital Employee’s misconduct, violation of the Company’s policies, or any conduct that the Company

reasonably determines may be detrimental to the business or reputation of the Company.

Upon the termination of any GB Capital Employee’s

employment with GB Capital, any GB Capital Employee’s services to the Company will also terminate, and if such employment with GB

Capital is terminated, GB Capital shall provide notice of the same to the Company no later than the close of business on the same day

such termination becomes effective.

GB Capital may terminate the GB Capital Secondment Agreement by providing at least 90 days’

written notice of termination to the Company.

The Company may terminate the GB Capital Secondment Agreement by providing at least 30 days’

written notice of termination to GB Capital.

The GB Capital Secondment Agreement may be terminated by either party upon 10 days’

written notice if the other party breaches or is in default of any provision of the GB Capital Secondment Agreement and does not cure

such breach or default within such 10 day period, with such notice to be made and delivered to the addresses as provided by the applicable

The foregoing summary

of the GB Capital Secondment Agreement does not purport to be complete and is qualified in its entirety by reference to the full text

of the GB Capital Secondment Agreement, a copy of which is included as Exhibit 10.15 herein.

On October 16, 2025, the Company entered into

Amendment No.

1 to the GB Capital Secondment Agreement with GB Capital (“Amendment No.

1 to the GB Capital Secondment Agreement”).

Amendment No.

1 to the GB Capital Secondment Agreement amends the GB Capital Secondment Agreement as follows:

The effective date of the GB Capital Secondment Agreement was amended to October 16, 2025.

Section 4 of the GB Capital Secondment Agreement was amended and supplemented to state that the seconded employees of GB Capital (“GB Capital Seconded Employees”) are classified as exempt under applicable law and will be paid on a salary basis, while non-exempt GB Capital Seconded Employees will be paid hourly, with overtime in accordance with law.

Amendment No.

1 to the GB Capital Secondment Agreement also added terms to Section 4 providing for:

GB Capital Seconded Employees’s eligibility to participate in the Company’s group health plans on the same terms as similarly situated employees;

and GB Capital’s proposal of milestone-driven bonuses or incentive payments for GB Capital Seconded Employees, subject to the Company’s prior written approval.

Terms were added to Section 5 providing for:

(i) the Company’s reimbursement to GB Capital for all costs and expenses associated with any GB Capital Seconded Employee’s use of a company car in the course of providing services to the Company:

(ii) the Company’s reimbursement to GB Capital for reasonable costs and expenses incurred in providing office space for GB Capital Seconded Employees during the secondment period, including rent, utilities, and related overhead, to the extent such office space is used for the performance of services for the Company;

(iii) the Company’s provision of a mobile phone and/or reimbursement for certain costs associated with the phone if in performing the secondment, a mobile phone and/or associated service plan is reasonably required;

and (iv) the Company’s reimbursement to GB Capital for fees actually incurred in connection with the hiring and onboarding of GB Capital Seconded Employees.

Amendment No.

1 to the GB Capital Secondment Agreement replaced Exhibit A of the GB Capital Secondment Agreement with a new Exhibit A setting forth (i) approved GB Capital Seconded Employees;

and (ii) the Company’s payment of a fee equal to 30% of aggregate employment costs for all of the GB Capital Seconded Employees.

Any additions of employees beyond those set forth in Exhibit A requires prior review and approval by the Board.

Except as expressly amended by Amendment No.

to the GB Capital Secondment Agreement, all other terms and conditions of the GB Capital Secondment Agreement remain unchanged and in

full force and effect.

The foregoing summary of Amendment No.

1 to the GB Capital Secondment Agreement does not purport to be complete

and is qualified in its entirety by reference to the full text of Amendment No.

1 to the GB Capital Secondment Agreement, a copy of which

is filed as Exhibit 10.26 herein.

As of December 31, 2025, the Company has paid

GB Capital a total of $159,996 for management fees, bonuses and fees and reimbursements under the Secondment Agreement.

This amount includes

$31,755 in management fees and $128,241 in expense reimbursements.

The reimbursed expenses cover costs and bonuses for seconded GB Capital

employees working on the Company’s operations, reimbursements for third party recruiting and temporary staffing fees paid by GB

Capital and other personnel-related operating expenses required to operate the Company’s wholly owned subsidiaries.

Northstrive Companies Inc.

The Company incurred consulting fees of $764,600 and $365,900 to Northstrive

Companies Inc., a company wholly owned by our Non-Employee, Non-Executive Chairman, Braeden Lichti, in 2025 and 2024, respectively.

the fiscal year ending December 31, 2025, the Company has paid $328,800 to Northstrive in consulting fees under Northstrive’s Consulting

and Services Agreement for Non-Employee, Non-Executive Chairman, and has $285,800 due to Northstrive in bonus payments.

As of December

31, 2025, the Company has $285,800 due to Northstrive in bonus payments and has paid $150,000 to Northstrive in bonus payments under Northstrive’s

Consulting and Services Agreement for Non-Employee, Non-Executive Chairman.

As amended and agreed to on May 1, 2023,

and as effective on January 4, 2022, we entered into a consulting agreement (the “Northstrive Consulting Agreement”)

with Northstrive Companies Inc., a California corporation (“Northstrive”) owned and managed by Braeden Lichti.

the Northstrive Consulting Agreement, Northstrive is to assist us in a variety of business matters, including assistance in our overall

investor outreach and communications strategy, and advising us on becoming a “public” company.

As of December

31, 2025, the Company had $324,736 due to Northstrive.

We retained the option, but not the obligation to issue the amount of Compensation

due Northstrive in shares of our Common Stock equal to our series A preferred stock price at $1.34138 per share (pre 200:1 stock consolidation,

pre 1-for-7 reverse stock split, pre 1-for-3.5 reverse stock split) equal to the value of the Compensation due to Northstrive for services

provided through and up to March 31, 2023 and $3.00 per share (pre 200:1 stock consolidation, pre 1-for-7 split, and pre 1-for-3.5

On June 21, 2024, we entered into the Amended and Restated Consulting Agreement with Northstrive (the “First Amended

Northstrive Consulting Agreement”), pursuant to which Mr.

Lichti would serve as non-executive Chairman of the Company.

As consideration

for his services as non-executive Chairman, the Company agreed to pay Northstrive $16,000 per month.

For the fiscal year ended December 31,

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.

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

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:

2025, we paid Northstrive $328,800 under the Northstrive Consulting Agreement.

The First Amended Northstrive Consulting Agreement was

filed as Exhibit 10.13 in the Form S-1 filed with the SEC on February 12, 2025 and is incorporated herein by reference.

On October 25, 2024, the Company entered

into the Second Amended and Restated Consulting Agreement for Non-Executive Chairman (the “Second Amended Northstrive Companies

Consulting Agreement”) with Northstrive.

The Second Amended Northstrive Companies Consulting Agreement provided that, as consideration

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”),

2 unchanged sentences

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

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.

of the Lichti Annual Bonus is 125% or greater of the Lichti Annual Consultant Fee.

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:

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.

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”).

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

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.

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

The Second Amended Lichti Consulting Agreement is filed herein as Exhibit 10.20.

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

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.

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.

resignation from our Board effective February 1, 2023, and our desire to maintain Mr.

Litchi’s compensation as a valuable advisor

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

execution of the Second Amended Northstrive Companies Consulting Agreement, the Company would make the following payments to Northstrive

(such payments, the “Northstrive Sign-on Bonuses”):

(A) a one-time bonus of $175,000, with (I) $100,000 of such

bonus to be paid to Northstrive in cash and (II) $75,000 of such bonus to be remitted to Northstrive in 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 “Northstrive

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 Northstrive Annual Bonus is 125% or greater of the Lichti Annual Consultant

Subject to the terms of the Second Amended Northstrive

Companies Consulting Agreement, Northstrive is also entitled to each of the following bonus payments (collectively, the “Northstrive

Milestone Bonuses”).

Such Northstrive Milestone Bonuses are payable upon the occurrence of the following events, at which time the

Company shall remit the applicable Northstrive Milestone Bonuses to Northstrive as follows:

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.

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.

The Company shall pay Northstrive $75,000 each time the Company achieves a Market Valuation (as defined in the Second Amended Northstrive Companies Consulting Agreement) of $10,000,000, $20,000,000, $30,000,000, and $40,000,000 (each of such payments, “Northstrive Valuation Payment”), provided that each of such market valuations continue for each at least five (5) consecutive 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.

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 Northstrive Companies Consulting Agreement, Northstrive may elect to accrue the Northstrive Milestone Bonuses and

convert the cash amount of the Northstrive Milestone Bonus into shares of the Company’s common stock or preferred stock.

event, the conversion ratio of the Northstrive Milestone Bonus shall be determined by mutual agreement between the Company and Northstrive.

The Second Amended Northstrive Companies Consulting Agreement was filed as Exhibit 10.20 in the Form S-1 filed with the SEC on February 12,

2025 and is incorporated herein by reference.

On October 25, 2024, the Company entered

into the Amendment to the Second Amended Northstrive Companies 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 stockholder approval.

The Amendment

to the Second Amended Northstrive Companies Consulting Agreement is filed as Exhibit 10.22 in the Form S-1 filed with the SEC on

February 12, 2025 and is incorporated herein by reference.

For the fiscal year ended December 31, 2025, we paid Northstrive

$328,800 under the Second Amended Northstrive Companies Consulting Agreement.

On April 3, 2025, the Company entered into Amendment

2 to the Second Amended Northstrive Companies Consulting Agreement, which a mended and restated

paragraph 1d of Exhibit B of the Second Amended and Restated Northstrive Companies Consulting Agreement to include:

Milestone - based

Cash Bonuses .

Upon the occurrence of the following events, the Company shall remit the applicable cash bonuses to the Consultant as

set forth in this Section 1(d) and subject to the terms and conditions of this Section 1(d):

(i) The Company

shall pay the Consultant $150,000 for each Company acquisition consummated, provided the target company of such acquisition has $2,000,000

in annual revenue or more upon consummation of the acquisition;

(ii) The Company

shall pay the Consultant $50,000 upon any closing of an equity or equity-linked financing of the Company which results in net proceeds

being raised in such financing of $3,000,000 in a fiscal quarter (the closing which qualifies the Consultant for such payment, the “Triggering

Equity Financing,” and such payment, the “Equity Financing Bonus”).

For the avoidance of doubt, the Consultant is entitled

only to a one-time payment of the Equity Financing Bonus $50,000 per fiscal quarter and the Company will not make further payments as

an Equity Financing Bonus in spite of the occurrence of any of the following events:

(A) the closing of any equity or equity-linked financings

subsequent to the Triggering Equity Financing in such fiscal quarter which result in proceeds of $3,000,000 to the Company;

(B) any closings

for the same equity financing round subsequent to the Triggering Equity Financing in such fiscal quarter which result in additional proceeds

of $3,000,000 or more to the Company.

Company shall pay the Consultant $50,000 each time the Company achieves a Market Valuation (as defined below) of $5,000,000, $10,000,000,

$15,000,000, $20,000,000, and $25,000,000 (each of such payments, “Valuation Payment”);

provided that each of such

Market Valuations continue for each at least five (5) consecutive Trading Days (as defined below), and provided further that the

Company may only recover any erroneously awarded amounts in Valuation Payments for one (1) year following the date of such erroneous award.

(iv) The Company

shall pay the Consultant $600,000 each time the Company achieves a Market Valuation of $50,000,000 and $100,000,000;

provided that

each of such Market Valuations continues for each at least two (2) consecutive Trading Days.

(v) The Board,

in its sole discretion, may award a cash or equity bonus payment (“Licensing Milestone Bonus”) to the Consultant upon the

Company or any of its Subsidiaries’ (as defined below) entry into a license agreement which provides for (A) the Company or Subsidiary’s

license of any intellectual property rights of the Company or Subsidiary to another party, including the license of intellectual property

rights of the Company or Subsidiary to each other, or (B) a third party’s license of intellectual property rights to the Company

or Subsidiary;

provided, however , that if the Board determines to award the Licensing Milestone Bonus to the Consultant in the

form of preferred stock, such preferred stock issuance is subject to the approval of the Company’s shareholders.

means any corporation or other entity of which a majority of (i) the voting power of the voting equity securities or (ii) the outstanding

equity interests is owned, directly or indirectly, by the Company.”

(vi) Notwithstanding

anything to the contrary in this Second A&R Agreement, the Consultant may elect to accrue the payments due to the Consultant under

Section 1(d) of this Exhibit B (each, a “Milestone Bonus”) convert the cash amount of the Milestone Bonus into shares of the

Company’s common stock or preferred stock.

In such event, the conversion ratio of the Milestone Bonus shall be determined by mutual

agreement between the Company and the Consultant, provided, however , that if the Consultant determines to receive the Milestone

Bonus payment in the form of preferred stock, the Milestone Bonus payment is subject to the approval of the Company’s shareholders.”

Capitalized terms used in the text quoted immediately

above have the meanings set forth in Amendment No.

2 to the Second Amended Northstrive Companies Consulting Agreement.

The Second Amended

Northstrive Consulting Agreement further clarified that (the equity grants made to Northstrive under Section 2 of Exhibit B of the Northstrive

Consulting Agreement, if determined by the Board to be in the form of preferred stock, is subject to the approval of the Company’s

shareholders.

The foregoing summary of Amendment No.

2 to the Second Amended Northstrive Consulting Agreement does not purport to be complete

and is subject to and is qualified in its entirety by a copy of Amendment No.

2 to the Second Amended Northstrive Consulting Agreement,

filed as Exhibit 10.8 herein.

On August 12, 2025, the Company entered into Amendment

3 to the Second Amended Northstrive Consulting Agreement, which provided for the Company’s grant of Acquisition Awards (as defined

below) to Northstrive on the consummation of any acquisition of (i) an entity, (ii) assets, or (iii) capital stock by the Company or any

Subsidiary (as defined below).

The amount of the Acquisition Award will be calculated based on the total purchase price of the consummated

acquisition, regardless of whether or not such purchase price is paid in cash, stock, assumed debt, or other consideration (such purchase

price, the “Agreement Acquisition Value”), and will be determined as follows:

Agreement Acquisition Value from $0 to $5,000,000 – Northstrive is entitled to an Acquisition Award of 5% of the Northstrive Agreement Acquisition Value;

Agreement Acquisition Value over $5,000,000 to $10,000,000 – Northstrive is entitled to an Acquisition Award of 6% of the Northstrive Agreement Acquisition Value;

Agreement Acquisition Value over $10,000,000 to $20,000,000 – Northstrive is entitled to an Acquisition Award of 7% of the Northstrive Agreement Acquisition Value;

Agreement Acquisition Value over $20,000,000 - Northstrive is entitled to an Acquisition Award of 8% of the Northstrive Agreement Acquisition Value.

In addition to the determinations of Agreement

Acquisition Value set forth above, the Compensation Committee may, in its sole discretion, determine to award Northstrive an additional

1% of the applicable percentage of the Acquisition Value if:

(i) the Board and/or Compensation Committee projects the applicable acquisition

to be earnings before interest, tax, depreciation, and amortization (EBITDA) or net income accretive within twelve (12) months of closing

or (b) the Compensation Committee deems the applicable acquisition as an advancement to the Company’s long-term growth objectives,

competitive positioning, and/or operational capabilities.

If Northstrive elects to receive its Acquisition

Award in the form of RSUs or restricted stock, the number of RSUs (“RSU Award Amount”) or restricted stock granted shall equal

(x) the dollar value of the Acquisition Award divided by (y) the trailing five (5) day volume-weighted average price (VWAP) of the Company’s

common stock ending on the trading day prior to the acquisition closing date (such RSU Award Amount rounded down to the nearest whole

The RSUs or restricted stock granted to Northstrive will be fully vested and shall not be subject to any further service or performance

Amendment No.

3 to the Second Amended Northstrive

Consulting Agreement also provided for the name change of the Second Amended Northstrive Consulting Agreement, going forward, to “Consulting

and Services Agreement for Non-Employee, Non-Executive Chairman.” Amendment No.

3 to the Second Amended Northstrive Consulting Agreement

is filed as Exhibit 10.16 herein.

On October 16, 2025,

the Company entered into Amendment No.

4 to the Northstrive Consulting Agreement with Northstrive.

Amendment No.

Northstrive Consulting Agreement modified the terms of the Consulting and Services Agreement for Non-Employee, Non-Executive Chairman

between the Company and Northstrive dated October 25, 2024 as follows:

Amend subsection 1(a) to state

that NorthStrive’s the “Non-Executive Chairman” title is for consulting purposes only and does not confer officer,

employee, or director status on Northstrive.

Replace all references to “Severance

Payment” and “Severance Event” in Section 4 to “Termination Payment” and “Termination Event.”

Amend Section 4 to:

(i) additionally

provide that Northstrive is entitled to payment for all services performed and approved expenses incurred up to the effective date of

termination of the Northstrive Consulting Agreement, (ii) remove any references in Section 4 to the requirement that Northstrive execute

a separation agreement and release of claims as a condition to payment, and (iii) remove any language stating the Northstrive’s

unvested options will not accelerate on termination not for Cause.

Amend Section 6 to state that

Northstrive shall determine the method, details, and means of performing its services, subject only to the results required by the Company.

Amend and restate subsection

6(a) to provide that Northstrive is expressly authorized to enter into contracts and make commitments on behalf of the Company, subject

to any limitations or approval requirements established by the Board or as otherwise provided in writing by the Company.

Amend and restate subsection

6(b)’s provisions regarding Northstrive’s ineligibility for the Company’s employee benefits;

Amend and restate subsection

6(c)’s provisions regarding Northstrive’s tax responsibilities for compensation paid under the Northstrive Consulting Agreement;

Amend Section 7 to state that

Northstrive retains the right to provide services to others, subject to applicable noncompete/conflict provisions in the Northstrive

Consulting Agreement;

Add a new subsection 10(a)

to emphasize that Northsrive does not have an employment relationship, partnership, joint venture, fiduciary, or agency relationship

with the Company under the Northstrive Consulting Agreement.

Capitalized terms used

the description of Amendment No.

4 to the Northstrive Consulting Agreement in this Annual Report have the meanings set forth therein.

Except as expressly amended

in Amendment No.

4 to the Northstrive Consulting Agreement, the Northstrive Consulting Agreement remains in full force and effect.

foregoing summary does not purport to be complete and is qualified in its entirety by reference to the full text of Amendment No.

the Northstrive Consulting Agreement, a copy of which is filed as Exhibit 10.29 herein.

Secondment Agreement with Northstrive

On May 7, 2025, the Company

entered into a Secondment Agreement with Northstrive, pursuant to which Northstrive agreed to second certain of its employees (each, a

“Northstrive Employee” and, collectively, the “Northstrive Employees”) to the Company from time to time to provide

certain services in accordance with the terms of the Northstrive Secondment Agreement.

The Northstrive Employees will remain employees

of Northstrive during their respective periods of secondment (each, a “Northstrive Employee Secondment Period”) and will not

be employees of the Company.

Under the Northstrive Secondment Agreement, Northstrive shall pay each Northstrive Employee’s salary,

incentives, health and retirement benefits, and other applicable compensation or benefits Northstrive Employee is entitled to as an employee

of Northstrive.

As consideration for Northstrive making Northstrive Employees available to provide services during the Northstrive Employee

Secondment Period, the Company will reimburse Northstrive on a monthly basis based on (i) an agreed hourly rate set forth in the Secondment

Agreement, multiplied by (ii) actual hours worked by the Northstrive Employee.

Except as otherwise set forth in the Northstrive Secondment

Agreement, each party to the Northstrive Secondment Agreement shall bear its own costs and expenses in connection with the Northstrive

Secondment Agreement.

However, if any extraordinary costs or expenses not contemplated by the Northstrive Secondment Agreement arise in

connection with the Northstrive Secondment Agreement, including travel and expenses, the Company will reimburse Northstrive for such costs

and expenses, provided that (i) the Company provided its written consent prior to Northstrive’s incurrence of such costs and expenses,

and (ii) such costs and expenses are documented to the reasonable satisfaction of the Company.

Pursuant to the terms

of the Northstrive Secondment Agreement, each Northstrive Employee will provide services to the Company as agreed between the parties

up to the number of hours per week specified in the Northstrive Secondment Agreement.

Further, each Northstrive Employee shall provide

services at the Company’s principal place of business or such other place as the parties may agree.

The Company has full and exclusive

responsibility for each Northstrive Employee’s actions performed in service to the Company during the Northstrive Secondment Period.

The Company may terminate

the services provided by any Northstrive Employee at any time by providing at least fifteen (15) days’ prior written notice of termination

to Northstrive.

Upon the termination of any Northstrive Employee’s employment with Northstrive, any Northstrive Employee’s

services to the Company will also terminate, and if such employment with Northstrive is terminated, Northstrive shall provide notice of

the same to the Company.

Either party may terminate the Northstrive Secondment Agreement by providing at least 90 days’ written

notice of termination to the other party.

If a party is in breach or default of any provision of the Northstrive Secondment Agreement

and does not cure such breach or default within ten (10) days, the other party may terminate the Agreement upon ten (10) days’ written

notice to the other party, with such notice to be made pursuant to the terms of the Northstrive Secondment Agreement.

The Northstrive Secondment

Agreement contains customary provisions relating to confidentiality, indemnification, and limitations on liability.

The foregoing summary

of the Northstrive Secondment Agreement does not purport to be complete and is subject to and are qualified in their entirety by a copy

of the Northstrive Secondment Agreement, filed herein as Exhibit 10.11.

of December 31, 2025, the Company has paid NorthStrive a total of $382,707 for management fees, bonuses and fees and reimbursements under

the Secondment Agreement.

This amount includes $65,263 in management fees and $317,444 in expense reimbursements.

reimbursed expenses cover costs and bonuses for seconded NorthStrive employees working on the Company’s operations, reimbursements

for third party recruiting and temporary staffing fees paid by Northstrive, and other personnel-related operating expenses required to

operate the Company’s wholly owned subsidiaries.

On October 16, 2025,

the Company entered into Amendment No.

1 to the Northstrive Secondment Agreement with Northstrive.

Amendment No.

1 to the Northstrive Secondment

Agreement amends the Northstrive Secondment Agreement as follows:

The effective date of the Northstrive Secondment Agreement was amended to October 16, 2025.

Section 4 of the Northstrive Secondment Agreement was amended and supplemented to state that the Northstrive Seconded Employees are classified as exempt under applicable law and will be paid on a salary basis, while non-exempt Northstrive Seconded Employees will be paid hourly, with overtime in accordance with law.

Amendment No.

1 to the Northstrive Secondment Agreement also added terms to Section 4 providing for:

Northstrive Seconded Employees’ eligibility to participate in the Company’s group health plans on the same terms as similarly situated employees;

and Northstrive’s proposal of milestone-driven bonuses or incentive payments for Northstrive Seconded Employees, subject to the Company’s prior written approval.

On June 19, 2024, the Company entered into an

Unsecured Revolving Line of Credit Promissory Note (the “Revolving Note”) with NorthStrive Fund II LP, an entity owned and

controlled by Braeden Lichti.

The Revolving Note provided for a $200,000 unsecured line of credit to the Company with a maturity date

of June 19, 2025, and interest calculated at the rate of twenty percent (20.0%) per annum on the outstanding principal balance through

the maturity date.

Under the Revolving Note, the Company may prepay any outstanding balance of the Revolving Note at any time, provided

that interest due on the Revolving Note is simultaneously satisfied in full.

As of the date of this Proxy Statement, the Revolving

Note has been repaid in full.

The largest aggregate amount of principal outstanding in the last two (2) fiscal years was $200,000, and

the interest paid in that time was $40,000.

Other Agreements with Our Stockholders

Share Repurchases

On March 7, 2025, the Company entered into two

share buyback purchase agreements with two of its existing shareholders, pursuant to which the Company repurchased, in the aggregate,

11 shares of Common Stock (such share amount on a pre-adjusted basis and 4 on an as-adjusted basis) from such shareholders at a price

of $5.0617 per share (such dollar amount on a pre-adjusted basis and $13.00 on an as-adjusted basis).

These share repurchases were consummated

on the same date.

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.

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.

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

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:

Brenda Buechler, former Chief Marketing Officer

Christoph Kraneiss, former Chief Commercial Officer

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.

Daley and Ms.

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.

Agreements with Our Stockholders

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.

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.

These shareholders had initially approached the Company for the share repurchases.

18, 2025, the Company entered into a securities purchase agreement with an existing shareholder, pursuant to which the Company purchased

30 shares of Common Stock (such share amount on a pre-adjusted basis and 9 on a as-adjusted basis) from such shareholder at a purchase

price of $4.235 per share (such dollar amount on a pre-adjusted basis and $14.82 on an as-adjusted basis), and a warrant to purchase 36

shares of Common Stock (such share amount on a pre-adjusted basis and 11 on an as-adjusted basis) at an exercise price of $4,200.00 per

share (such dollar amount on a pre-adjusted basis and $14,700 on an as-adjusted basis), at a purchase price of $0.01 (such dollar amount

on a pre-adjusted basis and $0.035 on an as-adjusted basis).

The total purchase price of such common stock and the warrant was equal to

approximately $127.

The purchase of such Common Stock and warrant was consummated on the same date.

The shareholder had initially approached

the Company for the share repurchases and purchase of the warrant.

Registered Direct Offering

On March 21, 2025, the

Company entered into a securities purchase agreement (the “Securities Purchase Agreement”) with certain institutional investors

in connection with a registered direct offering for the offer and sale of 129,145 shares of

the Company’s Common Stock (such share amount on a pre-adjusted basis and 36,899 on an as-adjusted basis) and pre-funded warrants

to purchase 165,305 shares of Common Stock” (such share amount on a pre-adjusted basis and 47,230 on an as-adjusted basis),

in the aggregate (such offering, the “Registered Direct Offering”).

Pursuant to the Securities Purchase Agreement, the Company

also agreed to, amongst other things, adjustment terms in the Pre-Funded Warrants, issuance of the shares underlying the Pre-Funded Warrants

upon the exercise of the Pre-Funded Warrants, in accordance with the terms of the Pre-Funded Warrants, and the Parties agreed to customary

representations and warranties and agreements and indemnification rights and obligations.

The Pre-Funded Warrants have an exercise price

of $0.0001 per share and each Pre-Funded Warrant is exercisable for one share of Common Stock (the shares underlying the Pre-Funded Warrants,

the “Warrant Shares”).

A holder of the Pre-Funded Warrants (“Holder”) will not have the right to exercise any

portion of its Pre-Funded Warrants if the Holder, together with its affiliates, would beneficially own in excess of 4.99% (or, at the

election of the Holder, such limit may be increased to up to 9.99%) of the number of Common Stock outstanding immediately after giving

effect to such exercise.

The Pre-Funded Warrants will be immediately exercisable (subject to the aforementioned beneficial ownership limitation)

and may be exercised at any time until all of the Pre-Funded Warrants are exercised in full.

The Pre-Funded Warrant may be exercised,

in whole or in part, at such time by means of a cashless exercise, under which cashless exercise the Holder is entitled to receive a number

of Warrant Shares under the terms of the Pre-Funded Warrants.

The exercise price of the Pre-Funded Warrants is subject to adjustment for

stock splits, stock dividends, stock combinations, and similar capital transactions or such other event as further described in the Pre-Funded

As more fully described in the Securities Purchase Agreement, Holders are also entitled to acquire Purchase Rights (as defined

in the Pre-Funded Warrants) upon subsequent rights offerings conducted by the Company, are entitled to certain pro rata distributions,

and may be issued shares of Common Stock upon the occurrence of a Fundamental Transaction (as defined in the Pre-Funded Warrants).

shares of Common Stock, the Pre-Funded Warrants, and the Warrant Shares were offered pursuant to the (i) registration statement on Form

S-3 (File No.

333-284505) filed with the SEC on January 27, 2025 and declared effective by the SEC on February 7, 2025, and the (ii) prospectus

supplement filed with the SEC on March 24, 2025.

The Registered Direct

Offering was consummated on March 24, 2025.

The Company received net proceeds of approximately $1,245,305.76 from the Offering, after

deducting offering expenses payable by the Company, including placement agent fees, legal fees, and clearing fees.

The Company intends

to use the net proceeds from the Offering for general corporate purposes and potential acquisitions of operating companies, which companies

are yet to be identified at this time.

Director Independence

Daley, and Mr.

are each “independent” within the meaning of Nasdaq Rule 5605(b)(1).

Principal Accounting Fees and Services.

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.

The following table sets forth fees billed to

us by our independent auditor for the years ended December 31, 2025, and 2024, for (i) services rendered for the audit of our annual consolidated

financial statements and the review of our quarterly consolidated financial statements, (ii) services rendered that are reasonably related

to the performance of the audit or review of our consolidated financial statements that are not reported as audit fees, and (iii) services

rendered in connection with tax preparation, compliance, advice and assistance.

Audit-related fees

All other fees

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.

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.

Exhibits and Financial Statement Schedules.

following documents are filed as part of this report:

(1) Financial

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

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:

exhibits listed in the accompanying index to exhibits are filed or incorporated by reference as part of this Report.

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.

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.

The following documents are filed as part of this Annual Report:

Financial Statements:

The audited balance sheet of the Company as of

December 31, 2025, the related statements of operations and comprehensive loss, changes in stockholders’ equity and cash flows for

the year then ended, the footnotes thereto, and the report of HTL International, LLC, independent auditors, are filed herewith.

Financial Schedules:

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.

The exhibits listed in the accompanying index

to exhibits are filed or incorporated by reference as part of this Report.

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:

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;

apply standards of materiality that differ from those of a reasonable investor;

made only as of specified dates contained in the agreements and are subject to subsequent developments and changed circumstances.

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.

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;

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.

Exhibit Number

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).

2 unchanged sentences

(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)

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)

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)

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)

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)

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).

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).

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).

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).

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).

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).

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).

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).

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).

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).

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).

Exhibit Number

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).

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).

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).

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).

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).

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).

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).

Amended and Restated Certificate of Designations, Rights, and Preferences of Series B Preferred Stock (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K, filed with the SEC on February 27, 2025).

Certificate of Amendment to the Amended and Restated Certificate of Designations, Rights, and Preferences of Series B Preferred Stock (incorporated by reference to Exhibit 3.2 to the Current Report on Form 8-K, filed with the SEC on February 27, 2025).

Certificate of Amendment to Articles of Incorporation (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K, filed with the SEC on March 6, 2025).

Certificate of Amendment to Articles of Incorporation (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K, filed with the SEC on September 4, 2025).

Certificate of Amendment to Articles of Incorporation (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K, filed with the SEC on September 17, 2025).

2025 Equity Incentive Plan

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).

2 unchanged sentences

(incorporated by reference to Exhibit 10.1 to the Company’s Fork 8-K, filed with the SEC on March 3, 2025)

Form of Securities Purchase Agreement (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K, filed with the SEC on March 27, 2025).

Form of Placement Agency Agreement between the Company and Univest (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K, filed with the SEC on March 27, 2025).

Form of First Amendment to License Agreement between Northstrive Biosciences Inc.

and MOA Life Plus Co., Ltd (incorporated by reference to Exhibit 10.3 to the Current Report on Form 8-K, filed with the SEC on March 27, 2025).

Amendment No.

2 to Second Amended and Restated Consulting Agreement for Non-Executive Chairman between the Company and Northstrive Companies Inc.

(incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K, filed with the SEC on April 8, 2025).

Amendment No.

2 to Second Amended and Restated Consulting Agreement for Non-Employee Chief Executive Officer between the Company and GB Capital Ltd (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K, filed with the SEC on April 8, 2025).

Form of At-The-Market Issuance Sales Agreement between the Company and Univest (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K, filed with the SEC on April 24, 2025).

Secondment Agreement between the Company and Northstrive Companies Inc.

(incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K, filed with the SEC on May 13, 2025).

Second Amendment to License Agreement between Northstrive Biosciences Inc.

and MOA Life Plus Co., Ltd.

(incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K, filed with the SEC on May 16, 2025).+

Binding Term Sheet between Northstrive Biosciences Inc.

and Modulant Biosciences LLC (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K, filed with the SEC on May 16, 2025).+

Membership Interest Purchase Agreement by and between the Company, Jeffrey Uhrig, and AGA Precision Systems LLC (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K, filed with the SEC on July 22, 2025).

Secondment Agreement between the Company and GB Capital Ltd (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K, filed with the SEC on July 31, 2025).

Amendment No.

3 to Second Amended and Restated Consulting Agreement for Non-Executive Chairman between the Company and Northstrive Companies Inc.

(incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K, filed with the SEC on August 18, 2025).

Amendment No.

3 to Second Amended and Restated Consulting Agreement for Non-Employee Chief Executive Officer between the Company and GB Capital Ltd (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K, filed with the SEC on August 18, 2025).

Form of Warrant Inducement Agreement (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K, filed with the SEC on August 25, 2025).

Form of Securities Purchase Agreement dated September 23, 2025 (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K, filed with the SEC on September 29, 2025).

Form of Secured Pre-Paid Purchase (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K, filed with the SEC on September 29, 2025).

Form of Guaranty (incorporated by reference to Exhibit 10.3 to the Current Report on Form 8-K, filed with the SEC on September 29, 2025) .

Form of Security Agreement (incorporated by reference to Exhibit 10.4 to the Current Report on Form 8-K, filed with the SEC on September 29, 2025).

Form of Pledge Agreement (incorporated by reference to Exhibit 10.5 to the Current Report on Form 8-K, filed with the SEC on September 29, 2025).

Form of Placement Agency Agreement (incorporated by reference to Exhibit 10.6 to the Current Report on Form 8-K, filed with the SEC on September 29, 2025).

Stock Purchase Agreement dated July 7, 2025 (incorporated by reference to Exhibit 10.2 to the Quarterly Report on Form 10-Q, filed with the SEC on November 14, 2025).

Amendment No.

1 to the Secondment Agreement between the Company and GB Capital Ltd dated October 16, 2025 (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K, filed with the SEC on October 21, 2025).

Amendment No.

1 to the Secondment Agreement between the Company and Northstrive Companies Inc.

dated October 16, 2025 (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K, filed with the SEC on October 21, 2025).

Amendment No.

4 to the Consulting and Services Agreement for Non-Employee Chief Executive Officer dated October 16, 2025 between the Company and GB Capital (incorporated by reference to Exhibit 10.3 to the Current Report on Form 8-K, filed with the SEC on October 21, 2025).

Amendment No.

4 to the Consulting and Services Agreement for Non-Employee, Non-Executive Chairman dated October 16, 2025 between the Company and Northstrive (incorporated by reference to Exhibit 10.4 to the Current Report on Form 8-K, filed with the SEC on October 21, 2025).

Asset Purchase Agreement between AGA Precision Systems LLC and Indarg Engineering dated October 26, 2025 (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K, filed with the SEC on October 30, 2025).

Form of Note (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K, filed with the SEC on October 30, 2025).

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).

2 unchanged sentences

(incorporated by reference Exhibit 21.1 to the Company’s registration statement on Form S-1, filed with the SEC on February 11, 2025).

Consent of TPS Thayer.

Consent of HTL International, LLC.

4 unchanged sentences

Certification pursuant to 18 U.S.C.

Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Section 1350, as adopted pursuant to Section 906 of the

Sarbanes-Oxley Act of 2002.

Registrant’s Policy Related to Recovery of Erroneously Awarded Compensation

6 unchanged sentences

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.

contract or compensatory plan

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

FORM 10-K SUMMARY

1 unchanged sentence

in this Annual Report.

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.

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.

HOLDINGS INC.

Graydon Bensler

Chief Executive Officer and Chief Financial Officer

Executive Officer and Chief Financial Officer

(Principal Executive Officer and Principal

8 unchanged sentences

the capacities and on the dates indicated.

/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

Executive Officer, Chief Financial Officer and Director

Executive Officer and Principal Financial and Accounting Officer)

Braeden Lichti

/s/ Jeffrey Parry

March 27, 2025

of the Board of Directors

Jeffrey Parry

/s/ Juliana Daley

March 27, 2025

Juliana Daley

/s/ George Kovalyov

March 27, 2025

George Kovalyov

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Consolidated Financial Statements

Report of Independent Registered Public Accounting Firm (PCAOB ID 7000 ) F-3

Report of Independent Registered Public Accounting Firm (PCAOB ID:

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

Financial Statements of

Holdings Inc.

Consolidated Financial Statements of

PMGC Holdings Inc.

(formerly Elevai Labs Inc.)

the years ended

For the years ended

December 31, 2025 and 2024

in United States Dollars)

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING

To the Audit Committee and Stockholders of

(Expressed in United States Dollars)

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Audit Committee and Shareholders of

PMGC Holdings Inc.

Opinion on The Financial Statements

We have audited the accompanying consolidated balance

sheets of PMGC Holdings, Inc (formerly Elevai Labs, Inc) and subsidiaries (the "Company”) as of December 31, 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

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

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.

March 27, 2025

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING

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.

balance sheets of PMGC Holdings, Inc (formerly Elevai Labs, Inc) and subsidiaries (the “Company”) as of December 31, 2025 and

2024, and the related consolidated statements of operations and other comprehensive loss, changes in shareholders’ equity, and cash

flows for the years ended, December 31, 2025 and 2024, and the related notes (collectively referred to as “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the consolidated financial position of the Company

as of December 31, 2025 and 2024, and the results of its operations and its consolidated cash flows for the year ended December 31, 2025

and 2024, in accordance with accounting principles generally accepted in the United States of America.

Going Concern

1 unchanged sentence

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.

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.

26 unchanged sentences

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

/s/ HTL International, LLC

HTL International, LLC

We have served as PMGC Holdings, Inc’s auditor since 2024.

March 30, 2026

Holdings Inc.

HTL International, LLC

12 Greenway Plaza, Suite 1100, Houston, TX 77046

PMGC Holdings Inc.

(formerly Elevai Labs Inc.)

Balance Sheets

in United States dollar)

held for sale

Consolidated Balance Sheets

(Expressed in United States dollars)

Current Assets

in securities

held for sale – non-current

payable and accrued liabilities

to related parties

portion of consideration payable

held for sale

Receivables, net

Prepaids and deposits

Other receivables

Investment in securities- current

Assets held for sale

Total Current Assets

Operating lease right-of-use-assets

Investment in securities-noncurrent

Property and equipment, net

Intangibles, net

Current Liabilities

Consideration

held for sale – non-current

and Contingencies

Accounts payable and accrued liabilities

Due to related parties

Current portion of consideration payable

Current portion of operating lease liability

Derivative liabilities

Current portion of promissory notes payable

Convertible debt

Liabilities held for sale

Total Current Liabilities

Promissory notes payable

Operating lease liability

Deferred tax liabilities

Consideration payable

TOTAL LIABILITIES

Commitments and Contingencies

Preferred stock $ 0.0001 par value;

500,000,000 stock authorized:

Series B preferred stock, 6,372,874 and Nil shares issued and outstanding as of December 31, 2025, and December 31, 2024, respectively

Common stock, $ 0.0001 par value, 83,333,334 shares authorized;

438,987 and 12,384 shares issued and outstanding as of December 31, 2024 and 2023, respectively (1)

paid-in capital

other comprehensive income

LIABILITIES AND EQUITY

(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.

combined basis, this reflects retrospectively a reverse stock split of 1-for-1,400.

Refer to Note 1, “Organization and nature of

accompanying notes are an integral part of these consolidated financial statements

Holdings Inc.

80,699 and 5,226 shares issued and outstanding as of December 31, 2025, and December 31, 2024, respectively (1)

Additional paid-in capital

Accumulated other comprehensive income

Accumulated deficit

( 21,017,440 )

( 13,269,627 )

TOTAL LIABILITIES

(1) Reflects retrospectively the 1-for-200 reverse stock split that became effective on November 27, 2024, the 1-for-7 reverse stock split that became effective March 10, 2025, the 1 for 3.5 reverse stock split that became effective on September 2, 2025, the 1 for 4 reverse stock split that became effective on January 6, 2026, and the 1 for 6 reverse stock split that became effective on March 10, 2026.

On a combined basis, this reflects retrospectively a reverse stock split of 1-for-117,600.

Refer to Note 1, “Organization and nature of operations”

The accompanying notes are an integral part of

these consolidated financial statements

PMGC Holdings Inc.

(formerly Elevai Labs Inc.)

Statements of Operations and Comprehensive Loss

the years ended December 31, 2024 and 2023

in United States dollar)

Consolidated Statements of Operations and Comprehensive Loss

For the years ended December 31, 2025 and 2024

(Expressed in United States dollars)

Total revenue

Cost of Goods Sold

Operating expenses

Bad debt expense

Depreciation and amortization

Marketing and promotion

4 unchanged sentences

Research and development

Repairs and maintenance

Foreign exchange (gain) loss

2 unchanged sentences

Other income (expense)

Listing expense

Finance cost on ELOC

Change in fair value of derivative liabilities

Gain on the termination of intangible assets

Loss on disposal of PP&E

Gain on extinguishment of related-party debt

Interest income

Interest expense

Impairment on prepaid expense

Dividend income

Realized gain (loss) on investments

Unrealized gain (loss) on investments

Loss from continuing operations before tax

$ ( 7,749,768 )

( 4,016,714 )

Deferred tax expense

Net loss from continuing operations

Loss from discontinued operations (Note 4)

$ ( 7,780,740 )

( 4,016,714 )

Income (loss) from discontinued operations

( 2,229,023 )

Total net loss

( 7,747,813 )

( 6,245,737 )

Other comprehensive income (loss)

1 unchanged sentence

Total comprehensive loss

$ ( 7,749,815 )

( 6,246,276 )

Basic and diluted loss per share:

Continuing operations

$ ( 382.301 )

( 4,239.702 )

Discontinued operations

Weighted average shares outstanding (1)

(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.

( 2,352.767 )

Weighted average shares

outstanding (1)

On a combined basis, this reflects retrospectively a reverse stock split of 1-for-117,600.

Refer to Note 1, “Organization and nature of operations”

accompanying notes are an integral part of these consolidated financial statements

Holdings Inc.

The accompanying notes are an integral part of

these consolidated financial statements

PMGC Holdings Inc.

(formerly Elevai Labs Inc.)

Statements of Changes in Stockholders’ Equity

the years ended December 31, 2024 and 2023

in United States dollars)

preferred stock

Consolidated Statements of Changes in Stockholders’ Equity

For the years ended December 31, 2025 and 2024

(Expressed in United States dollars)

Preferred Stock

comprehensive

January 1, 2023 (1)

( 2,722,373 )

of stock options

of preferred shares on IPO

issued alongside IPO

issuance costs for IPO

loss for the year

( 4,301,517 )

translation adjustment

December 31, 2023 (1)

( 7,023,890 )

January 1, 2024 (1)

( 7,023,890 )

and issuable shares for acquisition of intangible assets

pursuant to public offering

pursuant to Securities Purchase Agreement

of Series B Warrants

loss for the year

( 6,245,737 )

translation adjustment

December 31, 2024 (1)

( 13,269,627 )

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.

Balance, January 1, 2024 (1)

Issued and issuable shares for acquisition of intangible assets

Issued pursuant to public offering

Issued pursuant to Securities Purchase Agreement

Exercise of Series B Warrants

Share-based compensation

Net loss for the year

Currency translation adjustment

Balance, December 31, 2024

Balance, January 1, 2025

Settlement of accrued bonus liability

Issued and issuable shares for acquisition of intangible assets

Exercise of Series A Warrants

Issued pursuant to the registered direct offering

Repurchase of shares and warrants

Round up shares due to reverse stock splits

Exercise of Pre-funded Warrants

Issuance of common shares under ATM program

Exercise of replacement warrants

Issuance of commitment shares of ELOC

Issuance of Pre-Delivery shares of ELOC

Issuance of common shares in settlement of the Initial Pre-Paid Purchase

Share-based compensation

Net loss for the year

Currency translation adjustment

Balance, December 31, 2025

On a combined basis, this reflects retrospectively a reverse stock split of 1-for-117,600.

Refer to Note 1, “Organization and nature of operations”

accompanying notes are an integral part of these consolidated financial statements

Holdings Inc.

The accompanying notes are an integral part of

these consolidated financial statement

PMGC Holdings Inc.

(formerly Elevai Labs Inc.)

Statements of Cash Flows

the years ended December 31, 2024 and 2023

in United States dollars)

Consolidated Statements of Cash Flows

For the years ended December 31, 2025 and 2024

(Expressed in United States dollars)

Operating activities

1 unchanged sentence

$ ( 6,245,737 )

Adjustments to reconcile net

loss to net cash used in operating activities:

Straight-line

in fair value of derivative liabilities

interest expense

costs for intangible assets

Changes in operating assets

and liabilities:

expenses and deposits

payable and accrued liabilities

to related parties

flows used in operating activities 1

Adjustments to reconcile net loss to net cash used in operating activities:

Bad debt expense

Depreciation and amortization

Finance cost on ELOC

Share-based compensation

Straight-line rent expense

Change in fair value of derivative liabilities

Non-cash interest expense

R&D costs for intangible assets

Gain on termination of intangible asset

Loss on sale of Skincare

Loss on disposal of PP&E

Gain on extinguishment of related-party debt

Realized loss on sale of investments

Unrealized loss on investments

Impairment on prepaid expense

Deferred tax expense

Changes in operating assets and liabilities:

Prepaid expenses and deposits

Accounts payable and accrued liabilities

Customer deposits

Due to related parties

Cash flows used in operating activities 1

$ ( 5,933,881 )

$ ( 5,486,980 )

Investing activities

Purchase of equipment

of intangible assets

of investments

flows used in investing activities 1

Purchase of intangible assets

Purchase of investments

( 1,789,044 )

proceeds from issuance of common stock and warrants

proceeds from issuance of Notes

Proceeds from sale of investments

Issuance of promissory note

Net cash paid in business combinations

( 2,162,756 )

Cash flows used in investing activities 1

$ ( 2,765,154 )

$ ( 610,564 )

Financing activities

Exercise of Series A warrants, net

Proceeds from the registered direct offering, net

Proceeds from issuance of common stock and warrants, net

Proceeds from issuance of Notes, net

Repayment of Notes

( 1,150,000 )

Exercise of stock options

from IPO, net

flows provided by financing activities

of exchange rate changes on cash

Repurchase of shares and warrants

Issuance of common stock under ATM agreement, net

Exercise of replacement warrants, net

Proceeds from the initial Pre-Paid Purchase of ELOC, net

Cash flows provided by financing activities

Effect of exchange rate changes on cash

Increase in cash

Cash, beginning of period

ending of period

cash flow information:

paid for interest

paid for taxes

Investing and Financing transactions:

Common stock issued and issuable

on acquisition of intangible asset

Conversion of preferred stock

to common stock

Derivative liability broker

warrants included in share issuance cost for IPO

Cash, beginning of year

Cash, ending of year

Supplemental cash flow information:

Cash paid for interest

Cash paid for taxes

Non-cash Investing and Financing transactions:

Common stock issued and issuable on acquisition of intangible asset

Shares received as proceeds for the sale of Skincare

Series B preferred shares issues to settle accrued bonus liability

Consideration payable settled through termination of the agreement

Commitment shares on the ELOC

Common stock issued to settle a portion of the ELOC

Settled of outstanding promissory note in business combination

1 Refer to Note 4 for disclosure of cash flows used in operating and investing activities of discontinued operations.

accompanying notes are an integral part of these consolidated financial statements

Holdings Inc.

The accompanying notes are an integral part of

these consolidated financial statements

PMGC Holdings Inc.

(formerly Elevai Labs Inc.)

to the Consolidated Financial Statements

the years ended December 31, 2024 and 2023

in United States dollars)

and nature of operations

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.”

April 29, 2024, PMGC Impasse Corp (“Skincare”) and Northstrive Biosciences Inc.

(“BioSciences”) were incorporated

under the laws of the state of Delaware.

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025 and 2024

(Expressed in United States dollars)

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

(formerly Elevai Research Inc) (“PMGC Research”), PMGC Impasse Corp (formerly Elevai Skincare Inc.), Northstrive Biosciences

(formerly Elevai Biosciences, Inc), PMGC Capital LLC, Pacific Sun Packaging Inc.(“Pacific Sun”) and AGA Precision Systems

LLC (“AGA”), are collectively referred to in these consolidated financial statements as “the Company.”

On April 29, 2024, PMGC Impasse Corp

(“Skincare”) and Northstrive Biosciences Inc.

(“BioSciences”) were incorporated under the laws of the state of

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.

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.

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

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).

Holdings Inc.

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 shares of common stock for every one new post reverse split share of common stock.

On March 10, 2025, the Company completed a second reverse stock split on a ratio of seven (7) shares of common stock for every one new

post second reverse split common stock.

On September 2, 2025, the Company completed a third reverse stock split of its common stock on

a ratio of 3.5 common stock for every one new post third reverse split common stock.

On January 6, 2026, the Company completed a fourth

reverse stock split of its common stock on a ratio of 4 common stock for every one new post fourth reverse split common stock.

10, 2026, the Company completed a fifth reverse stock split of its common stock on a ratio of 6 common stock for every one new post fourth

reverse split common stock.

All current and comparative references to the number of common stock, warrants, options, weighted average

number of common stock, and loss per share have been retrospectively adjusted to give effect to these reverse stock splits.

On a combined

basis, this reflects retrospectively a reverse stock split of 1-for-117,600.

On December 31, 2024, PMGC and Skincare

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

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

The sale of the skincare business

closed on January 16, 2025.

In accordance with Accounting Standards Codification (“ASC”) 205-20 “Discontinued Operations”,

the assets and liabilities and the results of operations of the skincare business have been presented in these consolidated financial

statements as assets and liabilities held for sale and discontinued operations.

The Company also retrospectively adjusted the audited

consolidated statement of operations and comprehensive loss for the three and year ended December 31, 2024, to reflect discontinued operations

separately from continuing operations (Note 4).

Prior to entering into the Asset Purchase

Agreement, the 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 its skincare business, the Company changed its principal business.

After this sale, PMGC became a diversified holding company that manages and grows its portfolio through strategic acquisitions, investments,

and development across various industries.

As part of its diversification and

growth strategy, the Company completed the following acquisitions during the fiscal year 2025:

July 7, 2025, the Company completed the acquisition of Pacific Sun Packaging Inc., a California-based

custom IT packaging company (Note 5).

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

company (Note 5).

PMGC Holdings Inc.

(formerly Elevai Labs Inc.)

to the Consolidated Financial Statements

the years ended December 31, 2024 and 2023

in United States dollars)

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.

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.

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025 and 2024

(Expressed in United States dollars)

October 26, 2025, the Company, through its wholly owned subsidiary AGA Precision Systems

LLC, acquired certain assets of Indarg Engineering, Inc., a California-based precision CNC

machining business (Note 5).

PMGC currently manages and operates

a diverse portfolio of wholly owned subsidiaries:

Northstrive BioSciences Inc.

– a biopharmaceutical company focusing on the development

and acquisition of cutting-edge aesthetic medicines and therapeutic products.

Our lead asset, EL-22, is leveraging a first-in-class

engineered probiotic approach to address obesity’s pressing issue of preserving muscle while on weight loss treatments, including

GLP-1 receptor agonists.

PMGC Research Inc.

– PMGC Research was based in Canada and dedicated to medical scientific

research and development efforts, utilizing Canadian research grants and partnering with leading Canadian Universities to push the

boundaries of innovation.

On November 12, 2025, PMGC Research was dissolved.

PMGC Capital LLC – a multi-strategy investment firm focused on direct investments, strategic

lending, and acquiring undervalued companies and assets across diverse markets.

Our mission is to identify and seize high-potential

opportunities, delivering sustainable growth and maximizing returns on capital.

Pacific Sun Packaging Inc.- a California-based custom IT packaging company providing innovative,

sustainable, and technology-driven packaging solutions to industrial and consumer markets.

AGA Precision Systems LLC.

- a California-based precision engineering and CNC machining company

specializing in the design and production of high-tolerance components for industrial and technology applications.

In October 2025,

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

AGA expands PMGC’s advanced manufacturing footprint

and enhances its capacity to deliver vertically integrated engineering and production solutions across multiple sectors.

Going Concern

These audited consolidated financial

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

liabilities in the normal course of business.

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

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

the attainment of profitable operations.

As of December 31, 2025 and 2024, the

8 unchanged sentences

should the Company be unable to continue as a going concern.

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.

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.

Holdings Inc.

The assessment of whether the going

concern assumption is appropriate requires management to take into account all available information about the future, which is at least,

but not limited to, twelve (12) months from the date the financial statements are issued.

The Company is aware that material uncertainties

related to events or conditions may cast substantial doubt upon the Company’s ability to continue as a going concern.

PMGC Holdings Inc.

(formerly Elevai Labs Inc.)

to the Consolidated Financial Statements

the years ended December 31, 2024 and 2023

in United States dollars)

of Significant Accounting Policies

of Presentation

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.

are expressed in U.S.

These consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries.

All intercompany accounts and transactions were eliminated upon consolidation.

summary of significant accounting policies of the Company is presented to assist in understanding the Company’s consolidated financial

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.

of Consolidation

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.

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.

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.

Currency Translation

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

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025 and 2024

(Expressed in United States dollars)

Management’s plans that alleviate

substantial doubt about the Company’s ability to continue as a going concern include:

(a) raising additional debt or equity financing

and (b) the acquisition of cash flow generating assets or businesses.

Although the Company has been successful in raising funds in the

past, and expects to do so in the future, there are no guarantees that it will be able to raise funds as anticipated.

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.

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 accounts of PMGC and its 100 % owned subsidiaries, PMGC Research (until dissolution on November 12, 2025), Skincare, BioSciences,

PMGC Capital, Pacific Sun and AGA.

All intercompany accounts, transactions and profits were eliminated in the consolidated financial

Use of Estimates

The preparation of the consolidated

financial statements in conformity with U.S.

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

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

amounts of revenues and expenses during the reporting period.

The Company regularly evaluates estimates and assumptions related to revenue

recognition, the collectability of receivables, valuation of inventory, fair value of derivative liabilities and stock options, useful

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

The Company bases its estimates and

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

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

and expenses that are not readily apparent from other sources.

The actual results experienced by the Company may differ materially and

adversely from those estimates.

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

consolidated financial statements in the period they are determined.

Emerging Growth Company

The Company is an “Emerging Growth

Company”, as defined in Section 2(a) of the Securities Act of 1933, as amended (the “Securities Act”), as modified

by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it has taken advantage of certain exemptions that

are not applicable to other public companies that are not emerging growth companies including, but not limited to, not being required

to comply with the independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced

disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements

of holding anon binding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously

PMGC Holdings Inc.

(formerly Elevai Labs Inc.)

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025 and 2024

(Expressed in United States dollars)

Further, Section 102(b) (1) of the

JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private

companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities

registered under the Exchange Act) are required to comply with the new or revised financial reporting standards.

The JOBS Act provides

that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth

companies but any such election to opt out is irrevocable.

The Company has elected not to opt

out of such extended transition period, which means that when a standard is issued or revised and it has different application dates

for public and private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private

companies adopt the new or revised standard.

Foreign Currency Translation

The Company’s functional and

reporting currency is the U.S.

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

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.

accounts of PMGC Research are translated to U.S.

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

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).

Holdings Inc.

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

dollars at the period-end

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

Related exchange gains and

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

Business Combinations

The Company accounts for business combinations

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

Under this method, the purchase consideration

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

based on their estimated fair values.

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

is recorded as goodwill.

Acquisition-related costs (such as

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

statements of operations.

Contingent consideration, if any, is

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

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

During the fiscal year of 2025, the

Company completed three acquisitions—Pacific Sun Packaging Inc., AGA Precision Systems LLC and Indarg Engineering Inc.—which

were accounted for under ASC 805.

The initial purchase price allocations are preliminary and subject to adjustment upon completion of

final valuation analyses (Note 5).

Goodwill and Intangible Assets

Goodwill arising from business

combinations represents the excess of the purchase price over the fair value of identifiable net assets acquired.

Goodwill is not

amortized but is tested for impairment annually or more frequently if events or circumstances indicate that the carrying amount may

not be recoverable, in accordance with ASC 350, Intangibles – Goodwill and Other.

PMGC Holdings Inc.

(formerly Elevai Labs Inc.)

to the Consolidated Financial Statements

the years ended December 31, 2024 and 2023

in United States dollars)

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).

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.

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

Other income (expense)

Net loss from continuing operations

Current Assets

Non-current assets

Current liabilities

Non-current liabilities

Total Liabilities

Operations, and Assets and Liabilities Held for Sale

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

(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.

Holdings Inc.

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025 and 2024

(Expressed in United States dollars)

Goodwill recognized from the 2025 acquisitions

primarily reflects expected synergies, operational efficiencies, workforce know-how, and future growth opportunities within the Company’s

manufacturing segment.

Identifiable intangible assets acquired

in business combinations are recorded at fair value as of the acquisition date and are amortized on a straight-line basis over their

estimated useful lives.

In accordance with ASC 730 “Research

and development costs”, an acquired in-process researched and development (“IPR&D”) intangible asset with an alternative

future use is capitalized, in accordance with ASC 350, and amortized over its useful life.

Although IPR&D assets are likely to be

finite-lived, amortization does not begin until the research and development projects are completed.

In accordance with the IPR&D

asset purchase agreement, the Company is required to meet development milestones starting with the initiation of a pre-clinical IND-enabling

study within 2 years of the acquisition date and ending with obtaining marketing approval from the FDA within 9 years of the acquisition

Management assesses impairment indicators at each reporting period end.

The Company’s current classes

and estimated useful lives of intangible assets are as follows:

Intangible asset Estimated useful life

Customer relationship 12 to 15 years

Brand 5 years

Backlog 1 year

License #2 – MOA IPR&D project not yet complete

Revenue Recognition

The Company recognizes revenue in accordance

with ASC 606, Revenue from Contracts with Customers, when control of promised goods or services is transferred to customers in

an amount that reflects the consideration to which the Company expects to be entitled.

The Company’s revenue is derived from (i)

the sale of standard IT packaging products through Pacific Sun Packaging Inc.

and (ii) CNC machining and precision manufacturing services

through AGA Precision Systems LLC.

Contracts with customers are generally established through customer purchase orders, which specify

product or service details, pricing, and payment terms, typically due within 30 to 60 days.

For both revenue streams, each contract

contains a single performance obligation, consisting of either the delivery of finished goods or the delivery of completed machined parts.

Activities such as design, setup, tooling, and production processes are not distinct and are considered inputs into a single combined

Accordingly, the entire transaction price, which is generally a fixed amount based on agreed-upon unit pricing and quantities,

is allocated to the single performance obligation.

The Company does not generally enter into arrangements with multiple performance obligations

or significant financing components.

Revenue is recognized at a point in time when control transfers to the customer, which is typically

upon shipment under FOB shipping point terms or, in limited cases, upon delivery where shipping terms require.

The Company evaluates whether it acts

as a principal or agent for each revenue stream.

For both packaging product sales and precision manufacturing services, the Company acts

as the principal because it controls the goods or services prior to transfer, bears inventory and production risk, and has primary responsibility

for fulfillment.

Accordingly, revenue is recognized on a gross basis.

AGA assesses variable consideration,

including expected returns, rejections, and credits, at contract inception and throughout the contract term in accordance with ASC 606.

Customers may reject non-conforming parts, which are typically reworked, replaced, or credited.

The Company estimates expected returns

based on historical experience and records a reduction of revenue, along with a corresponding refund liability and return asset, as applicable.

Such amounts have historically not been material.

AGA provides assurance-type warranties

that products conform to customer specifications.

These warranties do not represent separate performance obligations and are accounted

for under ASC 460.

The Company evaluates the need for a warranty reserve based on historical experience;

however, warranty-related costs

have not been material.

Warranty coverage is limited to defects in conformance and excludes misuse or modifications, and the Company’s

liability is limited to the contract amount.

Pacific Sun evaluates variable consideration,

including expected returns and credits, at contract inception and throughout the contract term in accordance with ASC 606.

may receive replacements or credits for defective or incorrect products;

however, general return rights are not provided.

estimates expected returns based on historical experience and records a reduction of revenue, along with a corresponding refund liability

and return asset, as applicable.

Such amounts have not been material for the periods presented.

PMGC Holdings Inc.

(formerly Elevai Labs Inc.)

to the Consolidated Financial Statements

the years ended December 31, 2024 and 2023

in United States dollars)

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.

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.

Company recognizes revenue when it satisfies a performance obligation by transferring control over a product to a customer.

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.

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

(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.

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.

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.

Holdings Inc.

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025 and 2024

(Expressed in United States dollars)

Pacific Sun does not provide formal

warranty programs.

Defective products are addressed through replacement or credit and are accounted for as variable consideration under

Related amounts have not been material for the periods presented.

Inventory entirely consists of IT

packaging purchased and sold by Pacific Sun as finished goods and parts for machining purchased by AGA as raw materials.

is stated at the lower cost or net realizable value.

Cost is determined using the First in First out (FIFO) method.

Net realizable

value is determined on the basis of anticipated sales proceeds less the estimated selling expenses.

To assess the need for an

allowance due to obsolescence or a decline in net realizable value, management evaluates inventory aging in conjunction with

expected future sales and compares the cost of inventory to its net realizable value.

If the carrying amount exceeds net realizable

an allowance is recorded to write down the inventory to its estimated net realizable value.

Investments in securities

Investments in securities include publicly

traded equity securities and a convertible debenture that is convertible at any time into publicly traded securities.

These investments

are classified as trading securities and are reported at fair value, with both realized and unrealized gains and losses recognized in

Publicly traded securities have readily determinable fair values and are measured in accordance with ASC 321 – Accounting

for Equity Interests.

The convertible debenture is measured at fair value under ASC 320 – Investments – Debt Securities.

Investments in securities also include

private company stock.

The Company has elected to account for investments in equity securities without readily determinable fair values

at cost minus impairment, if any, as permitted under ASC 321 “Investments – Equity Securities”.

However, if the Company

identifies observable price changes in orderly transactions for the identical or a similar investment of the same issuer, the Company

shall measure the investment in equity security at fair value as of the date that the observable transaction occurred.

At each reporting

period, the Company makes a qualitative assessment considering impairment indicators to evaluate whether each equity investment without

readily determinable fair value is impaired.

Impairment indicators include, but are not limited to, the following:

significant deterioration in the earnings performance, credit rating, asset quality, or business

prospects of the investee;

significant adverse change in the regulatory, economic, or technological environment of the

significant adverse change in the general market condition of either the geographical area

or the industry in which the investee operates;

bona fide offer to purchase, an offer by the investee to sell, or a completed auction process

for the same or similar investment for an amount less than the carrying amount of that investment;

that raise significant concerns about the investee’s ability to continue as a going concern,

such as negative cash flows from operations, working capital deficiencies, or noncompliance

with statutory capital requirements or debt covenants.

If equity security without a readily

determinable fair value is deemed to be impaired based on the qualitative factors, the Company will estimate the fair value of the investment

to determine the amount of the impairment loss, if any.

No impairment loss related to such securities was recognized during the

year ended December 31, 2025.

The cost of securities sold is determined

using the specific identification or average cost method.

Investments, including publicly traded shares and those that management intends

to convert into equity upon favorable market conditions, are classified as current assets on the consolidated balance sheet.

PMGC Holdings Inc.

(formerly Elevai Labs Inc.)

to the Consolidated Financial Statements

the years ended December 31, 2024 and 2023

in United States dollars)

and Development

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.

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.

of December 31, 2024 and 2023, the Company has not capitalized any development cost.

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

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

and Promotion

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.

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.

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025 and 2024

(Expressed in United States dollars)

Discontinued Operations, and Assets

and Liabilities Held for Sale

The Company classify long-lived assets,

or disposal groups comprised of assets and liabilities, as held for sale in the period in which the following six criteria are met, (i)

management, having the authority to approve the action, commits to a plan to sell the group of assets and liabilities;

(ii) the assets

and liabilities are available for immediate sale in its present condition, subject only to terms that are usual and customary;

an active program to locate a buyer and other actions required to complete the plan to sell have been initiated;

(iv) the sale is probable

and is expected to be completed within one year;

(v) the property is being actively marketed for sale at a price that is reasonable in

relation to its current fair value;

and (vi) actions necessary to complete the plan of sale indicate that it is unlikely that significant

changes to the plan will be made or that the plan will be withdrawn, in accordance with Accounting Standard Codification (“ASC”)

360, Property, Plant and Equipment.

A business classified as held for sale is recorded at the lower of its carrying amount or estimated

fair value less cost to sell.

If the carrying amount of the business exceeds its estimated fair value less cost to sell, a loss is recognized.

Assets and liabilities related to a business classified as held for sale are segregated in the current and prior balance sheets in the

period in which the business is classified as held for sale, resulting in changes to the presentation of certain prior period amounts.

The Company ceases depreciation and amortization on long-lived assets (or disposal groups) classified as held for sale and measures them

at the lower of carrying value or estimated fair value less cost to sell.

The Company reports the results of

operations of a business as discontinued operations if a disposal represents a strategic shift that has (or will have) a major effect

on the 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.

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

(3) the Company has the ability to use or sell the product or process, (4) the product or process will generate future economic

benefits, and (5) the costs can be reliably measured.

As of December 31, 2025 and 2024, the

Company has not capitalized any development cost.

Marketing and Promotion

Costs associated with marketing and

promoting the Company’s products are expensed when incurred.

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.

Holdings Inc.

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.

PMGC Holdings Inc.

(formerly Elevai Labs Inc.)

to the Consolidated Financial Statements

the years ended December 31, 2024 and 2023

in United States dollars)

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.

Company accounts for income taxes using the asset and liability method in accordance with ASC 740, “Income Taxes”.

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.

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.

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.

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

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.

Holdings Inc.

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025 and 2024

(Expressed in United States dollars)

ROU assets represent our right to use

an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease.

Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the

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

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

If the Company determines that such deferred tax assets will be recognized in the future in excess of the net recorded amount,

then the deferred tax asset valuation will be adjusted which would reduce the provision for income taxes.

Significant judgments and estimates

are required in the determination of the consolidated income tax expense.

As of December 31, 2025 and 2024, the Company recorded $ 30,972

deferred tax liabilities and $ nil , respectively.

In addition, the Company recorded $ 30,972 tax expense during the year ended December

The Company records uncertain tax provisions

in accordance with ASC 740 based on a two-step process whereby (1) a determination is made about whether it is more likely than not that

the tax positions will be sustained based on the technical merits of the position and (2) for those tax positions that meet the more

likely than not recognition threshold, the Company recognizes the largest amount of tax benefit that is more than 50 percent likely to

be realized upon ultimate settlement with the related tax authority.

As of December 31, 2025 and 2024, the

Company did not have any amounts recorded pertaining to uncertain tax positions.

The Company recognizes interest and penalties related

to uncertain tax positions in office and administrative expense.

The Company did not incur any penalties or interest during the years

ended December 31, 2025 and 2024.

Concentration of Credit Risk

Cash, receivables, other receivables

and refundable deposits are the only financial instruments that are potentially subject to credit risk.

The Company places its cash in

what it believes to be credit-worthy financial institutions.

Receivables relate to the timing differences in receiving proceeds from

sales transactions processed through on customers’ credit.

Refundable deposits relate to the Company’s security deposit on

lease agreements.

PMGC Holdings Inc.

(formerly Elevai Labs Inc.)

to the Consolidated Financial Statements

the years ended December 31, 2024 and 2023

in United States dollars)

and Uncertainties

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.

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025 and 2024

(Expressed in United States dollars)

Risks and Uncertainties

The Company is subject to risks from,

among other things, competition associated with the industry in general, regulatory environment, other risks associated with financing,

liquidity requirements, rapidly changing customer requirements, limited operating history, foreign currency exchange rates and the volatility

of public markets.

Contingencies

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.

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.

and Cash Equivalents

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 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.

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

Cash and Cash Equivalents

Cash includes cash on hand and cash

in demand deposits.

Cash equivalents include all highly liquid instruments with original maturities of three months or less.

As of December

31, 2025 and 2024, the Company did not hold any cash equivalents.

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

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.

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.

Holdings Inc.

As of December 31, 2025 and

2024, there was no allowance for credit losses related to receivables recorded.

During the year ended December 31, 2025, the Company

wrote off $ 55,380 of trade receivables deemed uncollectible.

PMGC Holdings Inc.

(formerly Elevai Labs Inc.)

to the Consolidated Financial Statements

the years ended December 31, 2024 and 2023

in United States dollars)

and Equipment

and equipment is stated at cost less accumulated depreciation.

Renewals and betterments that materially extend the life of assets are

Expenditures for maintenance and repairs are expensed as incurred.

Property and equipment is depreciated using the straight-line

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

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025 and 2024

(Expressed in United States dollars)

Property, Plant and Equipment

Property and equipment is stated at

cost less accumulated depreciation.

Renewals and betterments that materially extend the life of assets are capitalized.

Expenditure on

maintenance and repairs are expensed as incurred.

Property and equipment is depreciated using the straight-line method.

The estimated

useful lives of property and equipment are generally as follows:

Machinery equipment 7 -year straight-line

Furniture and office equipment 5 -year straight-line

Computers 3 -year straight-line

Company ceases to depreciate property and equipment on the date that it is reclassified to assets held for sale.

of Long-Lived Assets

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.

Leasehold improvement Depreciated over the shorter of the estimated useful life of the improvement or the remaining lease term

The Company ceases to depreciate property

and equipment on the date that it is reclassified to assets held for sale.

Impairment of Long-Lived Assets

The Company reviews long-lived assets

such as equipment for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.

If the total of the expected undiscounted future cash flows is less than the carrying value of the asset, a loss is recognized for the

excess of the carrying amount over the fair value of the asset.

The Company’s policy for long-lived

4 unchanged sentences

cost is unlikely, the capitalized cost is written off/impaired to the consolidated statement of operations.

Financial Instruments

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.

Stock Warrants

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.

Holdings Inc.

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

For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded

at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the consolidated statement

of operations.

For derivative instruments that qualify for equity classification under ASC 815-40 are recorded in stockholders’

equity at fair value on the issuance date and are not subsequently remeasured, unless reclassification is required due to changes in

facts and circumstances.

The Company reassesses the classification of derivative instruments at each reporting date.

The Company uses

the Black-Scholes or Binomial option-pricing model to value the derivative instruments at inception and subsequent valuation dates, generally

applying the Black-Scholes model for instruments with standard terms and the Binomial model for instruments that include more complex

features, such as variable settlement provisions, early exercise features, or path-dependent assumptions.

The classification of derivative

instruments, including whether such instruments should be recorded as liabilities or as equity, is reassessed at the end of each reporting

PMGC Holdings Inc.

(formerly Elevai Labs Inc.)

to the Consolidated Financial Statements

the years ended December 31, 2024 and 2023

in United States dollars)

Instruments and Fair Value Measurements

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”.

820, “Fair Value Measurements and Disclosures,” requires disclosure of the fair value of financial instruments held by the

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.

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025 and 2024

(Expressed in United States dollars)

Common Stock Warrants

The Company classifies as equity any

warrants that (i) require physical settlement or net-share settlement or (ii) provide the Company with a choice of net-cash settlement

or settlement in its own shares (physical settlement or net-share settlement).

The Company classifies as assets or liabilities any warrants

that (i) require net-cash settlement (including a requirement to net cash settle the contract if an event occurs and if that event is

outside the 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 (expenses) in the consolidated statements of operations

at each period end while such instruments remain outstanding.

Financial Instruments and Fair Value

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:

1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.

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.

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.

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.

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.

Holdings Inc.

Level 1 applies to assets or liabilities

for which there are quoted prices in active markets for identical assets or liabilities.

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 applies to assets or liabilities

for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the

assets or liabilities.

The Company’s financial instruments

consist of cash, trade and other receivables, investment in securities, accounts payable and accrued liabilities, amounts due to related

parties, consideration payable, promissory notes payable, convertible debt, and derivative liabilities.

Except for cash, investment in

securities, and derivative liabilities, the carrying amounts of the Company’s financial instruments approximate their fair values

due to their short-term nature.

Cash is measured and recognized at fair value based on Level 1 input for all periods presented.

in securities is measured and recognized at fair value based on Level 1, Level 2 and Level 3 inputs as at December 31, 2025.

liabilities are measured and recognized at fair value based on Level 3 inputs.

PMGC Holdings Inc.

(formerly Elevai Labs Inc.)

to the Consolidated Financial Statements

the years ended December 31, 2024 and 2023

in United States dollars)

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025 and 2024

(Expressed in United States dollars)

December 31, 2025:

Investment in securities

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.

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

Diluted EPS excludes all potential shares if their effect is anti-dilutive.

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.

- 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):

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.

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.

Holdings Inc.

Derivative liabilities

December 31, 2024:

Investment in securities

Derivative liabilities

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.

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 stock options and

warrants outstanding during the years ended December 31, 2025 and 2024, are considered potential common shares that could dilute earnings

per share but were not included in the diluted loss per share computation because their effect was antidilutive for the periods presented.

As a result, there is no difference between the computation of basic and diluted loss per shares for the periods presented.

Share-Based Compensation

Employees - The Company accounts

for share-based compensation under the fair value method which requires all such compensation to employees, including the grant of employee

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

statement of operations over the requisite service period.

Nonemployees - During June 2018,

the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2018-07, Compensation-Stock

Compensation (Topic 718):

Improvements to Nonemployee Share-Based Payment Accounting (“ASU 2018-07”) to simplify the accounting

for share-based payments to nonemployees by aligning it with the accounting for share-based payments to employees.

Under the requirements

of ASU 2018-07, the Company accounts for share-based compensation to non-employees under the fair value method which requires all such

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

of operations over the requisite service period.

During the years ended December 31,

2025 and 2024, the Company recorded $( 19,160 ) and $ 97,167 , respectively, in share-based compensation expense, of which $ 60,440 and $( 79,600 )

and $ 93,449 and $ 3,718 , respectively is included in office and administration and discontinued operations, respectively.

Within discontinued

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

office and administration and research and development, respectively.

PMGC Holdings Inc.

(formerly Elevai Labs Inc.)

to the Consolidated Financial Statements

the years ended December 31, 2024 and 2023

in United States dollars)

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.

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025 and 2024

(Expressed in United States dollars)

Determining the appropriate fair value

model and the related assumptions requires judgment.

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

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

The expected volatility represents

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

market capitalization and life cycle.

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

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.

for Freestanding Instruments Issued Together

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.

Adopted Accounting Standards

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.

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.

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.

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.

Holdings Inc.

therefore, the expected dividend

yield is assumed to be zero.

Convertible debentures

The Company accounts for convertible

debentures in accordance with ASC 470, Debt .

Convertible debentures are recorded at face value less unamortized issuance costs,

assuming the conversion feature does not meet the requirements for bifurcation.

If the conversion feature does not

meet the requirements to be classified as equity, it is bifurcated and accounted for separately as a derivative liability under ASC 815,

Derivatives and Hedging , and measured at fair value, with subsequent changes recognized in earnings.

If the conversion feature

meets the equity classification criteria, no separate accounting for the conversion feature is required, and the entire instrument is

classified as a liability.

Interest expense is recognized using

the effective interest method, which includes the amortization of any debt issuance costs and discounts or premiums.

Debt Modifications and Extinguishments

The Company evaluates modifications

to convertible debt instruments in accordance with ASC 470-50, Modifications and Extinguishments.

A modification is deemed to be substantial

present value of the cash flows under the terms of the modified debt differs by at least

10% from the present value of the remaining cash flows under the original debt terms, using

the original effective interest rate (the “10% Test”);

modification results in a change in the embedded conversion option that requires re-evaluation

under ASC 815.

If the modification is determined to

be substantial, the original debt is extinguished, and the modified instrument is accounted for as a new debt issuance.

The Company also assesses whether a

modification constitutes a troubled debt restructuring under ASC 470-60.

A restructuring is considered troubled if the Company is experiencing

financial difficulty and the creditor has granted a concession.

For modifications that are not substantial,

the Company accounts for the changes prospectively, adjusting the effective interest rate to reflect the revised cash flows.

In evaluating

convertible debt where the conversion option is bifurcated as a derivative liability before and after the modification, the 10 % cash

flow test is applied to the host debt instrument (without the conversion feature).

Any change in fair value of the bifurcated conversion

option is recognized in earnings.

PMGC Holdings Inc.

(formerly Elevai Labs Inc.)

to the Consolidated Financial Statements

the years ended December 31, 2024 and 2023

in United States dollars)

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.

November 2023, the FASB issued ASU No.

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025 and 2024

(Expressed in United States dollars)

New Accounting Standards

Recently Adopted Accounting Standards

In June 2022, the FASB issued ASU 2022-03,

ASC Subtopic 820 “Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions”.

The FASB is issuing

this Update (1) to clarify the guidance in Topic 820, Fair Value Measurement, when measuring the fair value of an equity security subject

to contractual restrictions that prohibit the sale of an equity security, (2) to amend a related illustrative example, and (3) to introduce

new disclosure requirements for equity securities subject to contractual sale restrictions that are measured at fair value in accordance

with Topic 820.

Stakeholders asserted that the language

in the illustrative example resulted in diversity in practice on whether the effects of a contractual restriction that prohibits the

sale of an equity security should be considered in measuring that equity 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.

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.

of this standard did not have a significant impact on the Company’s consolidated financial statements.

In November 2023, the FASB issued ASU

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.

Improvements to Reportable Segment Disclosures (“ASU 2023-07”), intended to improve

reportable segments disclosure requirements primarily through enhanced disclosures about significant segment expenses.

In December 2023, the FASB issued “ASU

2023-09—Income Taxes (Topic 740)—Improvements to Income Tax Disclosures” (“ASU 2023-09”) which amends the

Codification to enhance the transparency and decision usefulness of income tax disclosures.

ASU 2023-09 requires additional disaggregation

of the reconciliation between the statutory and effective tax rate for an entity and of income taxes paid, both of which are disclosures

required by current GAAP.

The amendments improve the transparency of income tax disclosures by requiring (1) consistent categories and

greater disaggregation of information in the rate reconciliation and (2) income taxes paid disaggregated by jurisdiction.

The amendments

in ASU 2023-09 apply to all entities that are subject to Topic 740, Income Taxes.

For public business entities, the amendments in ASU

2023-09 are effective for annual periods beginning after December 15, 2024.

The Company adopted the ASU prospectively for the period

ending December 31, 2025, the effect being only related to our disclosures with no impact on our results of operations or financial condition.

ASU 2023-07 includes a requirement

to disclose significant segment expenses that are regularly provided to the CODM and included within each reported measure of segment

profit or loss, the title and position of the CODM, an explanation of how the CODM uses the reported measure(s) of segment profit or

loss in assessing segment performance and deciding how to allocate resources, and all segments’ profit or loss and assets disclosures.

ASU 2023-07 is effective for all public companies for fiscal years beginning after December 15, 2023, and interim periods for the interim

period beginning on January 1, 2025.

Adoption of ASU 2023-07 did not have a material impact on the Company’s financial statement.

Issued Accounting Standards

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.

are no recently issued accounting standards which may have effect on the Company’s consolidated financial statements

and liabilities held for sale and Discontinued operations

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;

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 consolidated financial statement.

In November 2024, the FASB issued ASU

2024-03, Expense Disaggregation Disclosures (Subtopic 220-40), which requires enhanced disclosures of the nature and composition of certain

expense captions presented in the income statement, including inventory purchases, employee compensation, depreciation, and other significant

The Company adopted this guidance during the year ended December 31, 2025.

The adoption of this guidance did not have a material

impact on the Company’s consolidated financial statements but resulted in additional disclosures in the notes to the consolidated

financial statements.

PMGC Holdings Inc.

(formerly Elevai Labs Inc.)

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025 and 2024

(Expressed in United States dollars)

Recently Issued Accounting Standards

The Company assesses the adoption impacts

of recently issued, but not yet effective, accounting standards by the Financial Accounting Standards Board on the Company’s consolidated

financial statements.

There are no recently issued accounting

standards which may have effect on the Company’s consolidated financial statements.

Assets and liabilities held for sale and Discontinued operations

Pursuant to the Asset Purchase Agreement,

the Company agreed to sell its skincare business for (i) 1,267,040 shares of common stock of the buyer, having a market value of $ 728,550

at the closing of the agreement;

(ii) buyer’s assumption of certain liabilities;

$ 56,525 in cash.

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.

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:

of goods sold

and, (iii) $ 56,525 in cash, to be paid upon the

sale of specified inventory existing as of the consummation of this transaction (the “Closing”).

Following the Closing, which occurred

on January 16, 2025 (such date, the “Closing Date”), buyer will pay additional earn-out consideration for the sale, if and

when payable:

(a) buyer will pay, for each year ending on the anniversary of the Closing Date during the five-year period following the

Closing, an amount, if any, equal to 5 % of the sales generated during such year from the existing products as of the Closing;

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:

Cost of goods sold

Marketing and promotion

5 unchanged sentences

Foreign exchange (gain) loss

and entertainment

Travel and entertainment

Total expenses

Interest expense

from discontinued operations

Holdings Inc.

Loss on the sale of Skincare

Net income (loss) from discontinued operations

( 2,229,023 )

PMGC Holdings Inc.

(formerly Elevai Labs Inc.)

to the Consolidated Financial Statements

the years ended December 31, 2024 and 2023

in United States dollars)

following table summarizes the carrying amounts of major classes of assets and liabilities of discontinued operations as at December

31, 2024 and 2023:

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025 and 2024

(Expressed in United States dollars)

The following table summarizes the

carrying amounts of major classes of assets and liabilities of discontinued operations as at the Closing Date (January 16, 2025) and

December 31, 2024:

Receivables, net

1 unchanged sentence

Property and equipment

Total current

assets held for sale

Property and equipment

assets held for sale

Accounts payable and accrued

Right of use asset

Total assets held for sale

Accounts payable and accrued liabilities

Customer deposits

Total current

liabilities held for sale

assets and liabilities held for sale, net

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.

following represents the cash flows from operating and investing activities of discontinued operations for the years ended December 31,

2024 and 2023:

Lease liability

Total liabilities held for sale

Total assets and liabilities held for sale, net

The Company recorded a loss on sale

of discontinued operations of $ 39,676 .

The proceeds on sale, which was the fair value of the buyer shares received on Closing, amounted

to $ 728,550 , and the carrying amounts of the net assets and liabilities sold amounted to $ 768,226 .

The following represents the cash flows

from operating and investing activities of discontinued operations for the years ended December 31, 2025 and 2024:

December 31, 2025

December 31, 2024

Cashflows used

in operating activities

Cashflows used in operating activities

$ ( 131,331 )

$ ( 2,686,379 )

used in investing activities

Holdings Inc.

Cashflows used in investing activities

Business combinations

Pacific Sun Packaging Inc.

On July 7, 2025, the Company completed

the acquisition of 100 % of the outstanding shares of common stock of Pacific Sun Packaging Inc., a California corporation specializing

in custom antistatic and high-precision protective packaging for electronic and IT hardware components (“Pacific Sun”).

consideration for the acquisition, the Company paid cash of $ 1,020,700 and settled an outstanding promissory note of $ 128,294 .

also agreed to a contingent earn-out payable up to a maximum of $ 250,000 if sales during the 12-month period following the acquisition

equal or exceed $ 1,145,915 (the “Earn-out Target”).

The earn-out payable will be reduced on a proportional basis if the Earn-out

Target is not reached, with no amount payable if sales during the 12-month period following the acquisition are equal to or below $ 458,366 .

The contingent consideration was recognized

at fair value as of the acquisition date and is classified as a liability.

The fair value was estimated using a probability-weighted

discounted cash flow approach, incorporating management’s revenue projections and an estimated discount rate of approximately 11 %.

As of December 31, 2025, the estimated

fair value of the contingent consideration liability was $ 206,249 .

The Company remeasures the contingent consideration liability at each

reporting date.

Changes in the liability due to the passage of time are recognized as accretion expense, while other changes in fair

value, if any, are recognized in earnings.

For the year ended December 31, 2025, the Company recognized accretion expense of $ 10,178 .

PMGC Holdings Inc.

(formerly Elevai Labs Inc.)

to the Consolidated Financial Statements

the years ended December 31, 2024 and 2023

in United States dollars)

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.

of December 31, 2024 and 2023, prepaid and deposits consisted of the following:

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025 and 2024

(Expressed in United States dollars)

In connection with the acquisition,

the Company agreed to pay retention bonuses for past services to the remaining employees of the Company.

The working capital target of

the acquired business was set at $ 260,000 and the difference of $ 114,969 , as agreed between the parties, is accounted for as a working

capital adjustment as part of the total consideration.

The acquisition was accounted for under

ASC 805, Business Combinations, with PMGC Holdings Inc., identified as the acquirer.

The purchase price was allocated to

the acquired assets and assumed liabilities based on their estimated fair values as of the acquisition date, determined with assistance

from an independent valuation specialist.

The resulting allocation is summarized

Promissory note and interest

Sign on bonus

Earn out payment payable

Working capital adjustment

Total consideration

Net assets (liabilities) acquired of the Company:

Receivables, net

Prepaid expenses and deposits

Property and equipment

Intangible - customer relationships

Intangible – brand name

Accounts payable and accrued liabilities

Total net assets (liabilities)

Goodwill recognized primarily reflects

expected synergies from integrating Pacific Sun’s operations and workforce and is not expected to be deductible for tax purposes.

The results of Pacific Sun’s operations are included in the consolidated financial statements beginning July 7, 2025.

AGA Precision Systems LLC

On July 18, 2025, the Company acquired

100 percent of the membership interests of AGA Precision Systems LLC (“AGA”), for $ 650,000 in cash.

AGA is a California-based

high-tolerance CNC machining company serving the aerospace, defense, and industrial sectors.

The seller entered into a five-year non-compete

and non-solicitation agreement as part of the transaction.

The working capital target of the acquired business was set at $ nil and the

difference of $ 228,174 , as agreed between the parties, is accounted for as a working capital adjustment as part of the total consideration.

PMGC Holdings Inc.

(formerly Elevai Labs Inc.)

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025 and 2024

(Expressed in United States dollars)

The acquisition was accounted for as

a business combination under ASC 805, and the purchase price was allocated to the identifiable assets acquired and liabilities assumed

based on their estimated fair values as of the acquisition date, as determined by an independent valuation specialist.

The allocation

is summarized below:

Working capital adjustment

Total consideration

Net assets (liabilities) acquired of the Company:

Receivables, net

Prepaid expenses and deposits

Property and equipment

Intangible - Customer Relationships

Intangible - Backlog

Accounts payable and accrued liabilities

Total net assets (liabilities)

Goodwill represents the assembled workforce

and expected operating synergies and is not expected to be deductible for income tax purposes.

The results of AGA’s operations

are included in the consolidated financial statements beginning July 18, 2025.

Indarg Engineering, Inc.

On October 26, 2025, AGA Precision

Systems LLC, a wholly owned subsidiary of the Company, acquired substantially all of the operating assets of Indarg Engineering, Inc.,

a California-based provider of high-tolerance precision machining services, including CNC machining, prototyping, and quality inspection

for aerospace, defense, and industrial sectors.

The acquisition was accounted for as

a business combination under ASC 805, and the purchase price was allocated to the identifiable assets acquired and liabilities assumed

based on their estimated fair values as of the acquisition date, as determined by an independent valuation specialist.

The allocation

is summarized below:

Promissory note

Total consideration

Net assets (liabilities) acquired of the Company:

Prepaid expenses and deposits

Property and equipment

Intangible - Customer Relationships

Total net assets (liabilities)

PMGC Holdings Inc.

(formerly Elevai Labs Inc.)

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025 and 2024

(Expressed in United States dollars)

The aggregate purchase price for the

acquired business was $ 548,000 , of which $ 170,000 was satisfied through the issuance of a promissory note.

The promissory note bears

interest at 8 % per annum and is payable in equal quarterly installments over a two-year period.

As of December 31, 2025, the outstanding

principal balance of the promissory note was $ 170,000 .

No principal repayments had been made as of that date.

The note is presented as

current and non-current promissory notes payable on the consolidated balance sheet based on its contractual maturity terms.

Goodwill represents the value of the

assembled workforce, expected operating synergies, and other intangible benefits that do not qualify for separate recognition.

recognized from the acquisition is not expected to be deductible for income tax purposes.

The results of operations have been included

in the Company’s consolidated financial statements beginning October 26, 2025.

Short term loan receivable

On May 30, 2025, the Company entered

into a secured promissory note agreement with an individual, pursuant to which the Company loaned $ 127,300 to the borrower.

incurred interest at a variable rate equal to the U.S.

prime rate as published in the Wall Street Journal ( 7.5 %), with interest computed

on the basis of a 365 -day year and actual days elapsed.

The entire principal amount, together with accrued and unpaid interest, was due

and payable on or before September 30, 2025 .

On July 7, 2025, the outstanding principal

and accrued interest totaling $ 128,294 was fully settled through the transfer of a 10 % equity interest in Pacific Sun to the Company.

The loan settlement was effected as part of the Company’s acquisition of all outstanding equity interests of Pacific Sun Packaging

Receivables, net

As of December 31, 2025, and December

31, 2024, receivables consisted of trade receivables of $ 245,423 and $ Nil , respectively.

As of December 31, 2025, and December 31,

2024, the Company wrote off $ 55,380 of trade receivables deemed uncollectible and $ nil , respectively.

Prepaids and Deposits

As of December 31, 2025 and 2024, prepaid

and deposits consisted of the following:

Prepaid expenses

in securities

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 .

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.

During the year ended December 31, 2025, the

Company impaired a $ 500,000 payment made for contract manufacturing of human stem cells using and supporting preclinical research for

injectable exosomes.

The $ 500,000 was paid and initially capitalized as a prepaid expense.

Due to non-performance of the contracted services,

the entire prepaid amount was fully written off in the current period.

As of September 30, 2025, and December

31, 2024, inventory consisted of the following:

Finished goods

Raw materials

Cost of inventory recognized as expense

in cost of sales for the year ended December 31, 2025 and 2024, totaled $ 317,749 and $ nil , respectively.

As at December 31, 2025 and

December 31, 2024, the Company recorded an allowance for inventory of $ nil

PMGC Holdings Inc.

(formerly Elevai Labs Inc.)

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025 and 2024

(Expressed in United States dollars)

Investment in securities

The Company’s investments consist

of publicly traded equity securities, warrants and a convertible debenture.

These investments are reported under ASC 321 – Investments

in Equity Securities and ASC 320 – Investments – Debt Securities, as applicable.

The Company has classified the investments

as held for trading.

The following table summarizes the

changes in investments for the year ended December 31, 2025 and 2024:

Debenture and

Balance, December 31, 2023

currency translation

Balance, December 31, 2024

currency translation

Acquired in the sale of Skincare business

Proceeds on sale

( 1,762,201 )

Interest income

Conversion of debenture

Realized loss

Unrealized gain (loss)

Balance, December 31, 2025

The Company accounts for investments

in warrants as equity securities in accordance with ASC 321, Investments—Equity Securities, and measures such investments at fair

value, with changes in fair value recognized in earnings.

As of December 31, 2025, the Company held warrants with an estimated fair value

of approximately $ 48,111 .

The Company estimated fair value using an adjusted intrinsic value approach, calculated as the excess of the

underlying share price over the exercise price, multiplied by the number of warrants outstanding.

The Company determined that this approach

was appropriate as the warrants were in-the-money at the measurement date and the time value component was not considered significant.

The valuation was calibrated by applying

a discount, which was determined based on the cash paid to acquire the warrants relative to the implied intrinsic value at that date.

The Company considers the transaction price and underlying share price to represent observable market inputs, and no significant unobservable

inputs were used in the valuation at the reporting date.

Key inputs used in the valuation included:

● Underlying share price:

$ 8.08 per share (observable market input)

● Exercise price:

$ 3.00 per share

● Number of warrants:

26,041 (post reverse stock split)

Based on the nature of the valuation

inputs, the warrants are classified within Level 2 of the fair value hierarchy under ASC 820, Fair Value Measurement.

PMGC Holdings Inc.

(formerly Elevai Labs Inc.)

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025 and 2024

(Expressed in United States dollars)

Fair Value Measurement

The following table presents the Company’s financial

instruments measured at fair value on a recurring basis as of December 31, 2025 and 2024, in accordance with the fair value hierarchy

December 31, 2025

Equity securities

December 31, 2024

Equity securities

Property, plant and equipment

Furniture and office equipment

Leasehold improvement

Balance, December 31, 2023

Foreign currency translation

Balance, December 31, 2024

Business combinations

Foreign currency translation

Balance, December 31, 2025

Accumulated depreciation

Balance, December 31, 2023

currency translation

Foreign currency translation

Balance, December 31, 2024

currency translation

Foreign currency translation

Balance, December 31, 2025

2 unchanged sentences

December 31, 2025

Holdings Inc.

PMGC Holdings Inc.

(formerly Elevai Labs Inc.)

to the Consolidated Financial Statements

the years ended December 31, 2024 and 2023

in United States dollars)

assets and consideration payable

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”).

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025 and 2024

(Expressed in United States dollars)

Intangible assets, net

(IPR&D asset)

Customer relationship

Balance, December 31, 2024

Business combinations

Termination of agreement

Balance, December 31, 2025

Accumulated amortization:

Balance, December 31, 2024

Termination of agreement

Balance, December 31, 2025

Net book value:

December 31,2024

December 31, 2025

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:

The payments structure for License

#1 is as follows:

a) $ 50,000 payable upon executing the license (paid)

1 unchanged sentence

c) $ 600,000 payable on completion of technology transfer or two years from January 15, 2024, whichever comes first 1 .

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.

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

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 are required of either party.

The cost of License #1 was measured

at $ 861,452 , which is the fair value of the consideration payable on initial recognition, determined by discounting the future payments

using a market interest rate of 11.75 %.

PMGC Holdings Inc.

(formerly Elevai Labs Inc.)

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025 and 2024

(Expressed in United States dollars)

Consideration

payable – undiscounted

on initial recognition

Consideration payable – undiscounted

Discount on initial recognition

Fair value on initial recognition

Balance, December 31, 2024

Consideration payable –

Consideration

payable – non-current

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

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

Termination of agreement

Balance, December 31, 2025

As a result of the termination, the

Company derecognized the associated intangible asset and the related consideration payable, recognizing a gain of $ 129,613 in the consolidated

statements of operations for the year ended December 31, 2025.

On April 30, 2024, the Company entered

into an exclusive license agreement with a pharmaceutical company granting the Company rights to develop, manufacture, and commercialize

licensed products (the license granted under this license agreement, “License # 2”).

The Company has classified License #

2 as an IPR&D asset resulting in only the acquisition costs plus any transaction costs to be capitalized upon acquisition.

and development project associated with License # 2 is not yet complete and as a result the Company has not yet determined the useful

life of the IPR&D asset.

The Company paid consideration of $ 400,000

and 9 shares of common stock with a value of $ 492,850 to the pharmaceutical company.

The shares issued to the pharmaceutical company

are unregistered and subject to trading restrictions for six months from the issue date, resulting in a fair value discount adjustment

of $ 173,100 on the value of the shares of common stock issued to the pharmaceutical company.

The Company incurred transaction costs of

$ 12,320 in legal fees and $ 1,117,771 in shares of common stock paid to a consultant who assisted in acquiring License # 2.

of common stock to be issued to the consultant will be unregistered and subject to trading restrictions for a 1-year period from the

issue date of the first tranche resulting in a fair value discount adjustment of $ 599,863 on the value of the common shares issued to

1 unchanged sentence

The fair value adjustments were calculated using the Black-Scholes Option Pricing Model.

Holdings Inc.

(formerly Elevai Labs Inc.)

to the Consolidated Financial Statements

the years ended December 31, 2024 and 2023

in United States dollars)

Black-Scholes Option Pricing Model requires six basic data inputs:

2 unchanged sentences

Changes to these inputs could produce a significantly higher or lower fair value measurement.

following assumptions were used in the Black-Scholes option pricing model:

The following assumptions were used

in the Black-Scholes option pricing model:

Initial recognition –

Risk-free interest rate

2 unchanged sentences

0.5 - 1 years

Expected dividend

consultant is to receive 1,750 shares in the following tranches and all shares were earned (i.e.

Expected dividend rate

Expected volatility

PMGC Holdings Inc.

(formerly Elevai Labs Inc.)

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025 and 2024

(Expressed in United States dollars)

The consultant who assisted in acquiring

License # 2 is to receive 21 shares in the following tranches and all shares were earned (i.e.

fully vested) upon the Company’s

7 unchanged sentences

● February 2, 2025:

438 Shares (issued – Note 16)

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:

(IPR&D asset)

Balance, December 31, 2023

Balance, December 31, 2024

Balance, December 31, 2023

Balance, December 31, 2024

Book value – December 31, 2024

Holdings Inc.

5 shares (issued)

The cost of License # 2 IPR&D asset

is $ 2,023,097 , which is the fair value of the consideration paid on initial recognition.

On February 18, 2025, Northstrive Biosciences

submitted a pre-Investigational New Drug (“pre-IND”) meeting request to the U.S.

Food and Drug Administration (“FDA”)

for EL-22, a potential obesity therapy designed to promote fat loss and preserve muscle mass when used in combination with GLP-1 receptor

On March 21, 2025, the Company entered

into a first amendment to the exclusive license agreement covering License # 2, expanding the licensed fields in the exclusive license

agreement to include all uses in animal health, including all applications as a feed additive.

The Company paid $ 6,000 and issued 857

shares of common stock to the pharmaceutical company in consideration for entry into this first amendment to the exclusive license agreement

regarding License # 2.

The shares issued to the pharmaceutical

company are unregistered and subject to trading restrictions for six months from the issue date resulting in a fair value discount adjustment

of $ 15,624 on the value of the common stock issued to the pharmaceutical company.

The fair value adjustments were calculated using the

Black-Scholes Option Pricing Model.

The first amendment to the exclusive

license agreement did not result in a remeasurement of the intangible asset under ASC 350 – Intangibles – Goodwill and Other,

as it does not constitute a new acquisition or recognition event.

The Company will continue to monitor the asset for impairment indicators

consistent with U.S.

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

Expected life

Expected dividend rate

Expected volatility

PMGC Holdings Inc.

(formerly Elevai Labs Inc.)

to the Consolidated Financial Statements

the years ended December 31, 2024 and 2023

in United States dollars)

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.

Company expects to record a gain on derecognition of the intangible asset and consideration payable in fiscal 2025.

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.

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

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 .

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

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).

continuity of the Company’s common stock purchase derivative liability warrants is as follows:

December 31, 2022

Addition of new derivatives

in fair value of derivative liabilities

Outstanding, December 31,

in fair value of derivative liabilities

December 31, 2024

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

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.

Holdings Inc.

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025 and 2024

(Expressed in United States dollars)

On May 12, 2025, the Company entered

into a second amendment to an existing license agreement related to License # 2.

The second amendment to the license agreement clarified

the scope and terms of use within the animal health field.

Key changes included clarification that certain provisions regarding (i) the

exclusive license granted to the pharmaceutical company, (ii) milestone payment obligations of the Company, (iii) research and development

obligations of the Company, (iv) recording obligations of the Company, (v) development data provisions, (vi) regulatory responsibilities

of the Company, (vii) commercialization plan obligations of the Company, did not apply to licensing rights granted under the license

agreement as the rights applied to the animal health field.

The second amendment’s provisions also narrowed the Company’s

payment obligations as to royalty payments on direct sales and a proportion of amounts received from sublicensees, as the payment related

to the animal health field.

There was no cost associated with the second amendment.

As License #2 is an IPR&D intangible

asset, the Company is required to perform an annual impairment test.

In accordance with ASC 350 “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, 2025.

Customer relationship

In connection with the acquisition

of AGA Precision Systems, the Company recognized an intangible asset for customer relationships, representing the value associated with

the acquired customer base, including both contractual and non-contractual relationships, and the expected future economic benefits from

recurring business with such customers.

The customer relationships intangible asset was recorded at its estimated fair value as of the

acquisition date in accordance with ASC 805, Business Combinations.

The fair value of customer relationships was determined using an

income approach, specifically the multi-period excess earnings method (“MPEE”), which estimates the present value of cash

flows attributable solely to the existing customer base after deducting contributory asset charges for supporting assets.

Based on this

methodology, the fair value of customer relationships was determined to be approximately $ 182,300 at the acquisition.

The asset is amortized

on a straight-line basis over an estimated useful life of 12 years.

For the year ended December 31, 2025, the Company recognized amortization

expense of approximately $ 3,780 , resulting in a net carrying value of approximately $ 178,520 as of December 31, 2025.

The Company evaluated

the customer relationships intangible asset for impairment and determined that no impairment indicators were present as of December 31,

In connection with the acquisition

of Pacific Sun Packaging, the Company recognized an intangible asset for customer relationships, representing the value associated with

the acquired customer base, including both contractual and non-contractual relationships, and the expected future economic benefits from

recurring business with such customers.

The customer relationships intangible asset was recorded at its estimated fair value of approximately

$ 340,000 as of the acquisition date in accordance with ASC 805, Business Combinations.

The fair value of customer relationships was determined

using an income approach, specifically the MPEE, which estimates the present value of cash flows attributable solely to the existing

customer base after deducting contributory asset charges.

The asset is amortized on a straight-line basis over an estimated useful life

For the year ended December 31, 2025, the Company recognized amortization expense of approximately $ 11,007 , resulting in

a net carrying value of approximately $ 328,993 as of December 31, 2025.

The Company evaluated the customer relationships intangible asset

for impairment and determined that no impairment indicators were present as of December 31, 2025.

In connection with the acquisition

of Indarg Engineering, Inc.

, the Company recognized an intangible asset for customer relationships, representing the value associated

with the acquired customer base, including both contractual and non-contractual relationships, and the expected future economic benefits

from recurring business with such customers.

The customer relationships intangible asset was recorded at its estimated fair value of

approximately $ 160,000 as of the acquisition date in accordance with ASC 805, Business Combinations.

The fair value of customer relationships

was determined using an income approach, specifically the MPEE, based on projected cash flows attributable to existing customers, net

of contributory asset charges.

Key assumptions included a long-term revenue growth rate of approximately 2.7 %, an attrition rate of 12.0 %,

and a discount rate of approximately 16.2 % reflecting the risk profile of the asset.

The customer relationships intangible asset is amortized

on a straight-line basis over an estimated useful life of approximately 13.2 years, which reflects the period over which the asset is

expected to contribute to future cash flows.

For the year ended December 31, 2025, the Company recognized amortization expense of approximately

$ 2,159 , resulting in a net carrying value of approximately $ 157,841 as of December 31, 2025.

PMGC Holdings Inc.

(formerly Elevai Labs Inc.)

to the Consolidated Financial Statements

the years ended December 31, 2024 and 2023

in United States dollars)

following assumptions were used in the Black-Scholes option pricing model:

Risk-free interest

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025 and 2024

(Expressed in United States dollars)

The Company evaluated the customer

relationships intangible asset for impairment and determined that no impairment indicators were present as of December 31, 2025.

In connection with the acquisition

of Pacific Sun Packaging, the Company recognized an intangible asset for the Pacific Sun brand name, representing the value associated

with brand recognition, market presence, and customer awareness within the electronics packaging industry.

The brand intangible asset

was recorded at its estimated fair value of approximately $ 150,000 as of the acquisition date in accordance with ASC 805, Business Combinations.

The fair value of the brand was determined

using an income approach, specifically the relief-from-royalty (“RFR”) method, which estimates the present value of royalties

that the Company is deemed to avoid by owning the brand name rather than licensing it.

The valuation was based on projected revenues

attributable to the brand, an estimated royalty rate of approximately 3.5 % derived from comparable market transactions, and a discount

rate reflecting the risk profile of the asset.

The analysis also considered qualitative factors including the Company’s historical

brand development efforts, industry recognition, operating history, and expected future growth.

The brand is amortized on a straight-line

basis over an estimated useful life of 5 years, which reflects the period over which the asset is expected to contribute to future cash

For the year ended December 31, 2025, the Company recognized amortization expense of approximately $ 14,568 , resulting in a net

carrying value of approximately $ 135,432 as of December 31, 2025.

The Company evaluated the brand intangible asset for impairment and

determined that no impairment indicators were present as of December 31, 2025.

In connection with the AGA Precision

Systems, the Company recognized an intangible asset for backlog, representing confirmed customer purchase orders and contractual commitments

on hand as of the acquisition date that are expected to be fulfilled and recognized as revenue within a short period, generally within

the subsequent fiscal year.

Backlog is considered a finite-lived intangible asset and was recognized separately from customer relationships

to avoid double counting of economic benefits.

The fair value of backlog was determined using an income approach, which estimates the

earnings attributable to the fulfillment of existing orders, and was determined to be approximately $ 29,000 at the acquisition date.

Backlog is amortized over its expected realization period.

The asset is amortized on a straight-line basis over an estimated useful life

of one year .

For the year ended December 31, 2025, the Company recognized amortization expense of approximately $ 10,021 , resulting in

a net carrying value of approximately $ 18,979 as of December 31, 2025.

The Company evaluated the backlog intangible asset for impairment

and determined that no impairment indicators were present as of December 31, 2025.

Operating Leases

The Company’s subsidiaries, AGA

and Pacific Sun, entered into non-cancelable operating leases for the office and warehouse spaces occupied to operate its business.

The Pacific Sun lease was executed

on July 9, 2025, and the Company committed to monthly lease payments of $ 6,300 through June 30, 2026.

Thereafter, monthly payments increase

by 3 % each year starting on July 1, 2026.

The lease expires on June 30, 2030.

On October 20, 2025, the lease was modified to expand the

premises to the entire building.

The modification revised the monthly base rent and shifted the remaining term to commence payments on

January 1, 2026, and end on December 31, 2030.

Modified monthly base rent is $ 7,415 for 2026, increasing 3 % annually thereafter.

modification was accounted for as a lease remeasurement under ASC 842;

the lease liability and right-of-use asset were adjusted using

the incremental borrowing rate.

PMGC Holdings Inc.

(formerly Elevai Labs Inc.)

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025 and 2024

(Expressed in United States dollars)

The AGA lease was executed on July

19, 2025, and the Company committed to monthly lease payments of $ 18,905 through August 31, 2026.

Thereafter, monthly payments increase

to $ 22,020 starting on September 1, 2026 and increase by 3 % each year starting on September 1, 2027.

The lease expires on August 31,

The Company committed to paying common area maintenance cost which is currently $ 1,045 per month.

The Company used a discount rate of

8 %, as the incremental cost of borrowing, to calculate the present value of the future lease payments and the resulting operating lease

liabilities and right-of-use assets.

The Company recognized a total lease

cost related to its non-cancelable operating leases of $ 165,091 for the year ended December 31, 2025, included in office and administrative

The Company recognizes right-of-use

(“ROU”) assets and corresponding lease liabilities for operating leases in accordance with ASC 842, Leases.

ROU assets represent

the Company’s right to use underlying leased assets over the lease term and are initially measured at the amount of the lease liability,

adjusted for initial direct costs, prepaid lease payments, and lease incentives.

As of December 31, 2025, the Company’s

operating lease ROU assets had a carrying value of approximately $ 1,241,527 .

During the year ended December 31, 2025, additions to ROU

assets were approximately $ 1,280,137 , primarily related to a new lease for office space with an associated warehouse component.

modifications during the year resulted in an increase of approximately $ 82,147 to the ROU assets.

Amortization of ROU assets for the

year ended December 31, 2025 was approximately $ 120,757 , which is included in operating expenses, primarily within office and administrative.

The Company’s ROU assets relate primarily to office and warehouse facilities used in its operations.

As of December 31, 2025 and 2024, the

Company recorded a security deposit of $ 81,757 and $ nil , associated with these operating leases.

Future minimum lease payments under

the Company’s operating leases that have an initial non-cancelable lease term in excess of one year at December 31, 2025, are as

As at December 31, 2025

2030 and thereafter

Total future payments

imputed interest

Operating lease liabilities

Operating lease liabilities-current

Operating lease liabilities- non-current

Convertible debt under ELOC Agreement

On September 23, 2025, the Company

entered into a securities purchase agreement, establishing an equity line of credit of up to $ 20,000,000 through one or more secured

pre-paid purchases of the Company’s common stock (the “ELOC Agreement”).

Under the ELOC Agreement, the Company

may, from time to time, sell and issue common stock to the investor pursuant to individual pre-paid purchases, subject to the terms

and conditions of the ELOC Agreement.

The Company issued 2,363 shares of common stock to the investor as a commitment fee for the

first pre-paid purchase (Note 16).

The Company also issued 429 shares of common stock as pre-delivery shares for the first pre-paid

The investor may request the Company to issue and sell common stock to the investor as to the outstanding balance on the

first pre-paid purchase at a pre-delivery purchase price of $ 0.0001 per share, subject to an aggregate pre-delivery purchase cap of

$ 25,000 (Note 16).

When all of the Company’s obligations under the ELOC Agreement are settled and after the commitment period

has ended, the Company may repurchase any pre-delivery shares outstanding at a purchase price of $ 0.001 per share.

issuances under the first pre-paid purchase are subject to a 9.99 % beneficial ownership limitation.

PMGC Holdings Inc.

(formerly Elevai Labs Inc.)

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025 and 2024

(Expressed in United States dollars)

On September 26, 2025, the Company

consummated the first pre-paid purchase under the equity line of credit with a principal amount of $ 5,000,000 , bearing interest at 8.5 %

per annum and maturing three years from issuance (the “convertible debt”).

The instrument included an original-issue discount

of $ 425,000 and a $ 30,000 transaction expense allowance;

the initial purchase price received at closing was $ 4,545,000 , with net cash

proceeds of approximately $ 3,990,000 after placement and closing costs.

The principal and accrued interest

is convertible at any time during the three-year term at the option of the investor, in whole or in part, at a price that equals 88 %

of the lowest VWAP during the 10 trading days preceding the applicable measurement date.

If that calculated price is below the floor

price of $ 25.392 per share, the investor may elect to have the applicable purchase amount settled in cash rather than in shares.

The Company is accounting for the convertible

debt host contract under ASC 470-20 at amortized cost and has determined that the conversion option meets the definition of an embedded

derivative liability which is separately accounted for at fair value in accordance with ASC 815-15 Derivatives and Hedging — Embedded

Derivatives (Note 15).

During the month of December 2025,

the Company settled outstanding principal of $ $ 2,921,706 and accrued interest of $ 103,294 through the issuance of 49,693 shares of common

stock pursuant to eleven purchase notices totaling $ 3,025,000 .

In connection with these settlements, the Company derecognized $ 1,853,134

of the convertible debt host liability and $ 467,186 of the related derivative liability, with $ 2,320,320 recorded to common stock and

additional paid-in capital.

As of December 31, 2025, the remaining

derivative liability associated with the conversion feature was $ 418,412 (Note 15), and the remaining balance of the convertible debt

continues to be accounted for at amortized cost.

The outstanding principal as of December 31, 2025 was $ 2,078,294 and accrued interest

Subsequent to December 31, 2025, the

Company settled the remaining outstanding principal of $ 2,078,294 through the issuance of 67,735 shares of common stock pursuant to the

ELOC arrangement.

In connection with this settlement, the Company derecognized the remaining convertible debt host liability of $ 1,254,479

and the related derivative liability of $ 418,412 associated with the conversion feature, with the total amount recorded to common stock

and additional paid-in capital.

A continuity of the amortized cost

of the convertible debt host contract is as follows:

Balance, January 1, 2025

Fair value of embedded derivative liability

( 1,099,765 )

Allocation of original issue discount and issuance cost (1)

( 1,026,682 )

Expected life 1

2.32 – 3.90 years

3.32 – 4.90 years

Expected dividend rate

of December 31, 2024, the following warrants were outstanding:

Outstanding Expiry date 1 Weighted average exercise price ($)

Interest expense

Repayment through common stock

( 1,853,134 )

Balance, December 31, 2025

(1) Total original issuance discount and issuance cost amounted

to $ 1,316,180 , of which $ 1,026,682 were allocated to the amortized cost of the convertible debt and $ 289,498 were allocated to the derivative

liability and recorded as finance cost in the statement of operations.

PMGC Holdings Inc.

(formerly Elevai Labs Inc.)

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025 and 2024

(Expressed in United States dollars)

Derivative liabilities

Liability classified stock purchase

A continuity of the Company’s

common stock purchase derivative liability warrants is as follows:

Outstanding, December 31, 2023

Change in fair value of derivative liabilities

Outstanding, December 31, 2024

Change in fair value of derivative liabilities

Outstanding, December 31, 2025

We determined the derivative liabilities

to be a Level 3 fair value measurement and used the Black-Scholes Option Pricing Model to calculate the fair value as of initial recognition

and at subsequent period ends through December 31, 2024.

Given the exercise price of these warrants compared to the fair market value

of the Company’s shares, the value is deemed to be $ nil .

As of December 31, 2025, the following

liability classified stock purchase warrants were outstanding:

Outstanding Expiry date Weighted average

exercise price ($)

5 April 27, 2027 236,619.42

1 November 21, 2028 470,400

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.

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 .

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.

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.

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.

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.

Holdings Inc.

As of December 31, 2025 and 2024, the

weighted average life of derivative liability classified stock purchase warrants outstanding was 1.66 and 2.71 years, respectively.

Embedded derivative liabilities

The Company determined that the fair

value of embedded derivative liability separated from the convertible debt host contract, issued in connection with the ELOC Agreement

(Note 14), had an initial fair value of $ 1,099,765 , calculated on the initial recognition date of September 26, 2025.

The derivative

liability was remeasured at fair value as of September 30, 2025 using the Binomial option pricing model.

The estimated fair value at

September 30, 2025 was $ 976,432 .

Changes in fair value from initial recognition through September 30, 2025 recognized in the consolidated

statement of operations were $ 123,333 .

During the month of December 2025,

the Company issued common shares to partially settle the outstanding balance of the convertible debt under the ELOC Agreement.

In connection

with these settlements, the Company derecognized $ 467,186 of the derivative liability associated with the portion of the debt settled

The derivative liability was remeasured

at fair value as of December 31, 2025 using the Binomial option pricing model.

The estimated fair value at December 31, 2025 was $ 418,412 .

Changes in fair value from September 30, 2025 through December 31, 2025 recognized in the consolidated statement of operations were $ 90,834 .

PMGC Holdings Inc.

(formerly Elevai Labs Inc.)

to the Consolidated Financial Statements

the years ended December 31, 2024 and 2023

in United States dollars)

continuity of the Company’s Notes Payable during the year ended December 31, 2024 is as follows:

Outstanding, December 31,

Fair value of Notes issued

Transaction costs

Interest accretion

( 1,150,000 )

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025 and 2024

(Expressed in United States dollars)

We determined the derivative liability

to be a Level 3 fair value measurement and used a Binomial Option Pricing Model to calculate the fair value as of initial recognition

and through December 31, 2025.

The following assumptions were used in the Binomial Option Pricing Model:

Risk-free interest rate

Expected life

Expected dividend rate

Expected volatility

Exercise price

Number of steps

The following table presents the changes

in the Company’s Level 3 derivative liability for the year ended December 31, 2025:

Balance, September 26, 2025 (initial recognition)

Change in fair value

Derecognition upon settlement of convertible debt

Balance, December 31, 2025

Subsequent to December 31, 2025, the

Company settled the remaining outstanding principal of $ 2,078,294 through the issuance of 67,735 shares of common stock pursuant to the

ELOC arrangement.

In connection with this settlement, the Company derecognized the related derivative liability of $ 418,412 associated

with the conversion feature, with the total amount recorded to common stock and additional paid-in capital.

As of December 31, 2025, and December

31, 2024, the Company had 83,333,334 and 3,401,360 shares of common stock authorized, each having a par value of $ 0.0001 .

Issued and outstanding

As of December 31, 2025 and 2024, the

Company had 80,699 and 5,226 shares of common stock issued and outstanding, respectively.

Transactions during the year ended

December 31, 2025

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

On January 28, 2025, the Company entered

into and completed a warrant inducement transaction with the holders of its Series A Common Stock Purchase Warrants pursuant to a warrant

inducement agreement (“Series A Warrants”).

Under the warrant inducement agreement, the exercise price of the outstanding

Series A Warrants was reduced from $ 1,646.40 to $ 1,176 per share of common stock as an incentive for immediate exercise.

the holders exercised all outstanding Series A Warrants, and the Company issued 1,649 shares of common stock, generating gross proceeds

of $ 1,938,772 .

and outstanding

of December 31, 2024 and 2023, the Company had 438,987 and had 12,384 shares issued and outstanding, respectively (Note 1)

On February 2, 2025, the Company issued

6 shares of common stock to a consultant in relation to the acquisition of the License # 2 IPR&D asset.

On March 7, 2025, the Company repurchased

1 share of common stock from two existing shareholders at for total consideration of approximately $ 52 .

The shares were retired upon

PMGC Holdings Inc.

(formerly Elevai Labs Inc.)

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025 and 2024

(Expressed in United States dollars)

On March 10, 2025, the Company effected

a 1-for-7 reverse stock split of its issued and outstanding common stock.

As a result of the reverse stock split, every seven shares

of the Company’s common stock issued and outstanding were automatically combined into one share, with any fractional shares rounded

in accordance with the Company’s governing documents.

The reverse stock split did not change the number of authorized shares or

the par value of the common stock.

All share and per share amounts presented in the accompanying consolidated financial statements, including

earnings (loss) per share and weighted-average shares outstanding, have been retroactively adjusted to reflect the reverse stock split

for all periods presented.

In addition, all outstanding stock options, warrants, and other equity-linked instruments were proportionately

adjusted in accordance with their respective terms.

On March 18, 2025, the Company entered

into a securities purchase agreement with an existing investor to repurchase one (1) share of common stock and warrants to purchase 1

share of common stock at an exercise price of $ 352,800 per share.

The total consideration paid in the transaction was $ 127 .

The repurchased

shares and warrants were retired and cancelled.

The transaction was initiated by the existing investor.

On March 21, 2025, the Company entered

into a Securities Purchase Agreement between the Company and certain institutional investors with respect to a registered direct offering

for the offer and sale of 1,538 shares of common stock and 1,968 prefunded warrants for gross proceeds of $ 1,484,028 , with the issuance

cost of $ 238,722 .

On March 26, 2025, the Company entered

into a first amendment to the exclusive license agreement covering License # 2 (Note 12), expanding its rights to include the growing

animal health market.

The Company issued 858 shares of common stock in exchange for the expansion of its rights under License # 2.

On August 22, 2025, the Company entered

into warrant inducement agreements with certain existing common stock purchase warrant holders.

Under these warrant inducement agreements,

the exercise price of the outstanding replacement warrants was reduced from $ 270.48 to $ 169.26 per share of common stock as an incentive

for the existing warrant holders’ immediate exercise of their warrants.

As a result, these holders exercised all outstanding replacement

warrants, and the Company issued new common stock purchase warrants exercisable for an aggregate of 9,856 shares of common stock, generating

gross proceeds of $ 1,668,219 , with the issuance cost of $ 156,775 .

These warrant inducement transactions were consummated on August 25,

On September 2, 2025, the Company effected

a 1-for-3.5 reverse stock split of its issued and outstanding common stock.

Under the terms of the reverse stock split, each three and

one-half shares of common stock were combined into one share, with fractional shares treated in accordance with applicable provisions.

The reverse stock split did not affect the authorized number of shares or the par value per share.

All historical share and per share

data included in these consolidated financial statements have been retroactively restated to reflect the reverse stock split for all

periods presented.

Corresponding adjustments were made to outstanding equity awards, including stock options and warrants, to preserve

their economic value.

On September 23, 2025, in connection

with the ELOC Agreement, the Company issued 429 shares of common stock pre-delivery shares to the investor for total proceeds of $ 7 .

In addition, the Company issued 2,363 shares of common stock with a fair value of $ 306,180 , as a commitment fee and consideration under

the ELOC Agreement.

These shares were non-cash consideration and were accounted for as issuance cost allocated to the convertible debt

and derivative liability (Note 14).

During the year ended December 31,

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.

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.

August 2, 2024, the Company issued 929 shares as consideration for purchasers who entered into the Securities Purchase Agreement (Note

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.

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.

2025, the Company sold an aggregate of 7,827 shares of common stock under its at-the-market (ATM) equity offering program, generating

total gross proceeds of approximately $ 1,730,292 .

After deducting total commissions and fees of approximately $ 58,189 , net proceeds amounted

to approximately $ 1,672,103 .

The shares were issued in multiple tranches between April and August 2025, with sales prices ranging from

$ 54.24 to $ 81.36 per share.

PMGC Holdings Inc.

(formerly Elevai Labs Inc.)

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025 and 2024

(Expressed in United States dollars)

During the month of December 2025,

the Company issued an aggregate of 49,693 shares of common stock in settlement of amounts outstanding under its ELOC arrangement (Note

The shares were issued in multiple tranches between December 8, 2025 and December 31, 2025 pursuant to purchase notices delivered

under the ELOC agreement.

The shares issued settled outstanding principal of $ $ 2,921,706 and accrued interest of $ $ 103,294 .

Transactions during the year ended

December 31, 2024

On April 30, 2024, the Company issued

49 shares of common stock on acquisition of License # 2 and $ 492,945 was recognized in equity.

A total of $ nil was recognized in common

stock and the remainder of $ 492,945 to additional paid in capital (Note 12).

These shares are unregistered and restricted from trading

as disclosed in Note 12.

On May 3, 2024, the Company committed

to issue 21 fully vested shares of common stock, of which 6 shares of common stock were issued by December 31, 2024, for the acquisition

of License # 2.

A total of $ 1,117,832 was recognized in equity, of which $ nil was recognized in common stock and the remainder of $ 1,117,832

to additional paid in capital (Note 12).

These shares are unregistered and restricted from trading as disclosed in Note 12.

On August 2, 2024, the Company issued

11 shares of common stock as consideration for purchasers who entered into the Securities Purchase Agreement.

Transaction costs of $ 51,942

were associated with this share issuance.

A total of $ 325,819 was recognized in equity.

On September 24, 2024, the Company

issued 76 shares of common stock and 168 pre-funded warrants in lieu of shares of common stock, along with 435 common stock purchase

The purchasers had the option to elect to purchase pre-funded warrants in lieu of common stock in order to avoid exceeding

the Beneficial Ownership Limitation, which is 4.99 % (or 9.99 % upon election of the holder prior to the issuance of any warrants) of

the number of shares of common stock outstanding immediately after giving effect to the issuance of shares of common stock issuable

upon exercise of the warrant.

The pre-funded warrants had an exercise price of $ 11.76 , had no expiry date and had a cashless

exercise provision.

All pre-funded warrants were exercised by December 31, 2024.

The purchase price

of each share of common stock and accompanying warrants was $ 392 , and the purchase price of each pre-funded warrant and accompanying

warrants was equal to such price minus $ 0.14 .

The purchase price of each share of common stock

and accompanying warrants was $ 32,928 , and the purchase price of each pre-funded warrant and accompanying warrants was equal to such

price minus $ 11.76 .

Share issuance costs of $ 955,000 were associated with this offering.

A total of $ 7,045,000

was recognized in equity, of which $ 2 was recognized in common stock and the remainder of $ 7,044,998 to additional paid in capital.

Holdings Inc.

(formerly Elevai Labs Inc.)

to the Consolidated Financial Statements

the years ended December 31, 2024 and 2023

in United States dollars)

during the year ended December 31, 2023

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.

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.

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.

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.

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.

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.

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.

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.

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.

Holdings Inc.

A total of $ 7,045,000 was recognized in

equity, of which $ nil was recognized in common stock and all of $ 7,045,000 to additional paid in capital.

Preferred Stock

As of December 31, 2025, and December

31, 2024, the Company had 500,000,000 preferred stock authorized, respectively, of all preferred stock authorized, each share of preferred

stock having a par value of $ 0.0001 .

Of this amount, 300,000,000 and 50,000,000 shares were designated as Series B Preferred Stock as

of December 31, 2025 and 2024, respectively.

Issued and outstanding

As at December 31, 2025 and 2024, the

Company had 6,372,874 and nil shares of Series B Preferred Stock issued and outstanding.

Transactions during the year ended

December 31, 2025, and 2024

On March 26, 2025, at a special meeting

of the Company’s shareholders, the shareholders approved the issuance of 3,036,437 shares of non-trading, non-convertible Series

B Preferred Stock to GB Capital Ltd as a signing bonus pursuant to that certain Second Amended and Restated Consulting Agreement for

Non-Employee Chief Executive Officer between the Company and GB Capital Ltd, dated October 25, 2024, as amended;

and 3,336,437 shares

of non-trading, non-convertible Series B Preferred Stock to Northstrive Companies Inc as a signing bonus pursuant to that certain Second

Amended and Restated Consulting Agreement for Non-Executive Chairman between the Company and Northstrive Companies Inc., dated October

25, 2024, as amended.

The total issuances of Series B Preferred Stock approved by the shareholders at this meeting was 6,372,874 shares.

These bonuses to GB Capital Ltd and Northstrive Companies Inc.

in the form of Series B Preferred Stock represented bonuses of $ 75,000

to each entity pursuant to their respective agreements aforementioned in this paragraph.

These bonuses, totaling $ 150,000 , were accrued

and included due to related parties as of December 31, 2024.

PMGC Holdings Inc.

(formerly Elevai Labs Inc.)

to the Consolidated Financial Statements

the years ended December 31, 2024 and 2023

in United States dollars)

and outstanding

at December 31, 2024, and December 31, 2023, the Company had Nil preferred stock issued and outstanding.

during the years ended December 31, 2024 and 2023

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.

during the year ended December 31, 2024

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”).

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”).

Initial Exercise Date was October 30, 2024.

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025 and 2024

(Expressed in United States dollars)

Equity Warrants

Transactions during the

year ended December 31, 2025.

On January 28, 2025, in connection

with the warrant inducement agreement (see above) and the exercise of the Series A Warrants, the Company issued 1,649 replacement warrants

with an initial exercise price of $ 1,617.12 and a five-year term.

On April 29, 2025, the exercise price of the replacement warrants were

reset to the contractual floor price of $ 270.48 per share.

Following the adjustment, each of the five investors held 1,971 warrants,

resulting in a total of 9,856 replacement warrants outstanding at the adjusted exercise price, maintaining the aggregate exercise value

of $ 2,665,836 .

On March 18, 2025, the Company entered

into a securities purchase agreement with an existing investor to repurchase warrants to purchase 1 share of common stock at an exercise

price of $ 352,800 per share for a nominal amount.

On March 24, 2025, the Company consummated

a registered direct offering with institutional investors, issuing 1,538 shares of common stock and 1,969 pre-funded warrants.

The pre-funded

warrants are immediately exercisable at an exercise price of $ 0.0084 per share, subject to a beneficial ownership limitation of 4.99 %,

which may be increased to 9.99 % at the holder’s election.

On April 14, 2025, all 1,968 pre-funded

warrants issued in connection with the Company’s registered direct offering consummated on March 24, 2025 were fully exercised

for shares of common stock, at an exercise price of $ 0.0084 per share.

On August 22, 2025, the Company

entered into a warrant inducement agreement with existing warrant holders to amend and reprice their outstanding common stock

purchase warrants and issue new common stock purchase warrants to the existing warrant holders.

These holders’ existing

warrants were repriced from $ 270.48 to $ 169.20 per share, and holders agreed to exercise those repriced warrants in exchange for

9,856 new unregistered warrants with an exercise price of $ 169.26 per share.

The transaction closed on August 25, 2025, generating

gross proceeds of $ 1,668,219 with the issuance cost of $ 156,775 .

Transactions during the year ended

December 31, 2024

On September 24, 2024, with each of

the 243 shares of common stock or pre-funded warrants issued on the same date, he Company also issued one Series A Warrant (the “Series

A Warrants”) and one Series B Warrant (the “Series B Warrants”).

The Series A Warrants will be exercisable beginning

on the date of completion of the requisite waiting period following the filing of the Information Statement related to the approval by

the stockholders of the Company (the “Initial Exercise Date” or “Shareholder Approval Date”) of the issuance

of shares upon exercise of the Warrants, among other things (the “Shareholder Approval”).

The Initial Exercise Date was October

The Series B Warrants will be exercisable beginning on the Shareholder Approval Date.

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.

exercise price of the Series A and Series B Warrants shall be $ 532 , subject to adjustments, including the following:

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:

the lowest daily volume-weighted

average price (“VWAP”) during the 10-day period following the Initial Exercise Date (the “Reset Period”);

(ii) the floor price in effect as of the Reset Date, being a price equal to $ 78.40 (the “Floor Price”).

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.

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.

Holdings Inc.

(formerly Elevai Labs Inc.)

to the Consolidated Financial Statements

the years ended December 31, 2024 and 2023

in United States dollars)

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.

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.

Series B Warrants were exercised using the alternative cashless exercise resulting in the issuance of 403,275 common shares.

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.

during the year ended December 31, 2023

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.

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.

Holdings Inc.

The Series A Warrants will expire on

the five-year anniversary of the Initial Exercise Date and the Series B Warrants will expire on the two and one-half-year anniversary

of the Initial Exercise Date.

The exercise price of the Series A and Series B Warrants shall be $ 44,688 , subject to adjustments.

On September 24, 2024, the Company

issued 12 placement agent warrants to the placement agent in connection with the financing that closed on the same date (the “Placement

Agent Warrants”).

These Placement Agent Warrants have an exercise price of $ 39,504 and shall expire three and a half years from

As these warrants are accounted for as equity warrants, they have no net impact on the consolidated statement of changes in

stockholders’ equity.

PMGC Holdings Inc.

(formerly Elevai Labs Inc.)

to the Consolidated Financial Statements

the years ended December 31, 2024 and 2023

in United States dollars)

of December 31, 2024, the following equity warrants were outstanding:

Outstanding Expiry date Weighted average

exercise price ($)

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025 and 2024

(Expressed in United States dollars)

As of December 31, 2025, the following

equity warrants were outstanding:

Outstanding Expiry date Weighted average exercise price ($)

2 August 28, 2026 352,800

1 March 12, 2027 352,800

138,485 October 30, 2029 78.40

12 March 24, 2028 39,504

139,978 88.67

of December 31, 2024, and December 31, 2023, the weighted average life of equity warrants outstanding was 4.82 and 2.81 years, respectively.

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.

during the year ended December 31, 2024

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.

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.

9,855 August 25, 2030 158.88

As of December 31, 2025 and 2024, the

weighted average life of equity warrants outstanding was 4.65 and 4.90 years, respectively.

Stock Options

The Company has a stock option plan

included in the Company’s 2025 Equity Incentive Plan (the “Plan”) where the Board of Directors or any of its committees

can grant Incentive Stock Options, Nonstatutory Stock Options, and Restricted Stock to employees, advisors and directors of the Company.

As of December 31, 2025 and 2024, the aggregate number of shares allocated and made available for issuance pursuant to stock options

granted under the Plan shall not exceed 7,752 shares.

The Plan shall remain in effect until it is terminated by the Board of Directors.

Transactions during the

year ended December 31, 2025

There was no stock option activity

during the year ended December 31, 2025.

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

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.

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

Holdings Inc.

(formerly Elevai Labs Inc.)

to the Consolidated Financial Statements

the years ended December 31, 2024 and 2023

in United States dollars)

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

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.

following assumptions were used in the Black-Scholes option pricing model:

Risk-free interest rate

Transactions during the year ended

December 31, 2024

In January 2024, the Company granted

1 stock option with a contractual life of ten years and an exercise price of $ 588,000 per common stock.

The stock option was valued at

$ 16,178 using the Black-Scholes Option Pricing Model.

The options vest 25 % on the first anniversary of the grant date and the remaining

75 % vest evenly over 36 months thereafter.

On March 6, 2024, the Company granted

1 stock option with a contractual life of ten years and an exercise price of $ 117,600 per common stock.

These stock options were valued

at $ 52,845 using the Black-Scholes Option Pricing Model.

The options vest 25 % on the first anniversary of the grant date and the remaining

75 % vest evenly over 36 months thereafter.

The continuity of stock options for

the years ended December 31, 2025 and 2024 is summarized below:

Outstanding, December 31, 2023

Outstanding, December 31, 2024

Forfeited/Cancelled

( 243,040.00 )

( 70,560.00 )

Expected life

Expected dividend

Expected volatility

continuity of stock options for the years ended December 31, 2024 and 2023 is summarized below:

average exercise

December 31, 2022

Outstanding, December 31, 2025

December 31, 2024

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:

PMGC Holdings Inc.

(formerly Elevai Labs Inc.)

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025 and 2024

(Expressed in United States dollars)

As of December 31, 2025, the following

options were outstanding, entitling the holders thereof the right to purchase one common stock for each option held as follows:

Outstanding Vested Expiry date Weighted average

exercise price ($)

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

2 2 08-Feb-31 70,560

1 1 30-Sep-32 157,584

1 1 30-Sep-32 588,000

1 1 1-May-33 588,000

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

Holdings Inc.

(formerly Elevai Labs Inc.)

to the Consolidated Financial Statements

the years ended December 31, 2024 and 2023

in United States dollars)

of December 31, 2024 and 2023, the weighted average life of stock options outstanding was 6.88 years and 7.84 years, respectively.

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.

Party Transactions

parties consist of the following individuals and corporations:

Lichti, Non-executive Chairman

Plews, Former Director (resigned December 23, 2024) and CEO of Skincare and BioSciences (resigned

1 1 5-Mar-34 117,600

As of December 31, 2025, and December

31, 2024, the weighted average life of stock options outstanding was 5.98 years and 6.88 years, respectively.

With the sale of the Company’s

skincare business on January 16, 2025, 2 vested stock options with a weighted average exercise price of $ 70,560 have been cancelled on

April 16, 2025, after the 90 -day exercise window following termination of employment with the Company.

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)

Bensler, CFO, CEO and Director

Sayed, Former Chief Medical Officer and Former Director (resigned August 1, 2024)

Buechler, Former Chief Marketing Officer (effective June 20, 2024)

Kraneiss, Former Chief Commercial Officer (effective June 20, 2024)

Parry, Director (appointed June 1, 2023)

Daley, Director (appointed June 1, 2023)

Muilenburg, Former Director (appointed June 1, 2023, resigned February 29, 2024)

Kovalyov, Director (appointed March 1, 2024)

Capital Ltd., controlled by Graydon Bensler

Bio Consulting LLC, controlled by Jordan Plews

Investments Ltd., controlled by Braeden Lichti

● Northstrive

Companies Inc., controlled by Braeden Lichti

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.

Holdings Inc.

Graydon Bensler, non-employee CFO, CEO and Director

Tim Sayed, Former Chief Medical Officer and Former Director (resigned August 1, 2024)

Brenda Buechler, Former Chief Marketing Officer (termination effective June 20, 2024)

Christoph Kraneiss, Former Chief Commercial Officer (termination effective June 20, 2024)

Jeffrey Parry, Director (appointed June 1, 2023)

Julie Daley, Director (appointed June 1, 2023)

Crystal Muilenburg, Former Director (appointed June 1, 2023, resigned February 29, 2024)

George Kovalyov, Director (appointed March 1, 2024)

GB Capital Ltd., controlled by Graydon Bensler

JP Bio Consulting LLC, controlled by Jordan Plews

BWL Investments Ltd., controlled by Braeden Lichti

Northstrive Companies Inc., controlled by Braeden Lichti

Mystic Marine Advisors, controlled by Jeffrey Parry

Key management personnel include those

persons having authority and responsibility for planning, directing, and controlling the activities of the Company as a whole.

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.

PMGC Holdings Inc.

(formerly Elevai Labs Inc.)

to the Consolidated Financial Statements

the years ended December 31, 2024 and 2023

in United States dollars)

attributed to key management personnel are summarized as follows:

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025 and 2024

(Expressed in United States dollars)

Remuneration attributed to key management

personnel are summarized as follows:

Consulting fees

Management fees

Director fees

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.

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.

Buechler, Former Chief Marketing Officer, earned a Salary of $ 132,807 and $ 212,913 , respectively during the year ended December 31, 2024

Kraneiss, Former Chief Commercial Officer, earned a Salary of $ 122,818 and $ 197,398 , respectively during the year ended December, 2024

2024, the Company paid director fees of $ 55,000 to each of non-executive directors for a total of $ 165,000 .

the year ended December 31, 2024, and 2023, the Company issued the following stock options to related parties:

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.

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.

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.

Share-based compensation

During the year ended December 31,

The Company incurred consulting fees

and contracted performance bonuses of $ 697,800 (December 31, 2024 - $ 391,333 ) to GB Capital Ltd., a company controlled by Graydon Bensler,

CEO, CFO and Director.

The Company incurred consulting fees

and contracted performance bonuses of $ $ 764,600 (December 31, 2024 - $ 365,900 ) to Northstrive Companies Inc., a company controlled by

the Company’s Chairman and former President.

The Company incurred director’s

fees of $ 55,500 (December 31, 2024 – $ 55,000 ) to George Kovalyov, a director of the Company.

The Company incurred director’s

fees of $ 55,570 (December 31, 2024 – $ 55,000 ) to Julie Daley, a director of the Company.

The Company incurred director’s

fees of $ 55,500 (December 31, 2024 – $ 55,000 ) to Mystic Marine Advisors, LLC, a company owned and controlled by Jeffrey Parry,

a director of the Company.

The Company incurred management fees

of $ 31,755 (December 31, 2024 - $ nil ) to GB Capital Ltd., a company controlled by Graydon Bensler, CEO, CFO and Director, under a Secondment

Agreement for management services.

The Company incurred management fees

of $ 124,163 (December 31, 2024 - $ nil ) to Northstrive Companies Inc., a company controlled by the Company’s Chairman and former

President, under a Secondment Agreement for management services.

Jordan Plews, Former Director and former

CEO of Skincare and BioSciences, earned a Salary of $ 26,228 and $ 283,549 respectively during the year ended December 31, 2025 and 2024.

Brenda Buechler, Former Chief Marketing

Officer, earned a Salary of $ nil and $ 132,807 , respectively during the year ended December 31, 2025 and 2024.

Christoph Kraneiss, Former Chief Commercial

Officer, earned a Salary of $ nil and $ 122,818 , respectively during the year ended December, 2025 and 2024.

During the year ended December 31,

2025, and 2024, the Company issued the following stock options to related parties:

On March 1, 2024, the Company

granted 4 stock options to directors of the company with a contractual life of 10 years and exercise price of $ 19,600 per share of

common stock.

These stock options were valued at $ 45,986 using the Black-Scholes Option Pricing Model.

vest 25 % on the first anniversary of the grant date and the remaining 75 % vest evenly over 36 months thereafter.

Holdings Inc.

The options vest 25 % on the

first anniversary of the grant date and the remaining 75 % vest evenly over 36 months thereafter.

PMGC Holdings Inc.

(formerly Elevai Labs Inc.)

to the Consolidated Financial Statements

the years ended December 31, 2024 and 2023

in United States dollars)

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:

stock options

Braeden Lichti,

Non-executive Chairman

Graydon Bensler, CEO, CFO

Jordan Plews, Former Director

and former CEO of Skincare and BioSciences

Tim Sayed, Former Chief Medical

Officer and Former Director 1

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025 and 2024

(Expressed in United States dollars)

Details of the fair value of the options granted

to each individual and the related expense recorded for the years ended December 31, 2025 and 2024 are as follows:

Braeden Lichti, Non-executive Chairman

Graydon Bensler, CEO, CFO and Director

Jordan Plews, Former Director and former CEO of Skincare and BioSciences 2

Tim Sayed, Former Chief Medical Officer and Former Director 1

Jeffrey Parry, Director

Julie Daley, Director

Crystal Muilenburg, Former

Crystal Muilenburg, Former Director 1

George Kovalyov, Director

Brenda Buechler, Former Chief

Marketing Officer 1

Kraneiss, Former Chief Commercial Officer 1

options of related parties were forfeited in during the year ended December 31, 2024.

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.

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.

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.

following are the components of income before income tax reflected in the Consolidated Statement of Operations and Comprehensive Loss

Brenda Buechler, Former Chief Marketing Officer 1

Christoph Kraneiss, Former Chief Commercial Officer 1

1 5 options of related parties were forfeited or cancelled during the year ended December 31, 2024

2 1 option of Jordan Plews were cancelled during the year ended December 31, 2025

As of December 31, 2025 and 2024, the

Company had $ 642,925 and $ 227,749 , respectively due to companies controlled by Braeden Lichti, of which $ 642,925 and $ 227,749 respectively

is unsecured, non-interest bearing and are due on demand.

As of December 31, 2025, the Company

had $ 342,077 (December 31, 2024 - $ 179,655 ) due to GB Capital Ltd.

controlled by Graydon Bensler, CEO, CFO and Director, and $ Nil and

$ 15,127 (December 31, 2024 - $ 11,813 and $ Nil ) due to Jordan Plews, Former Director and Former CEO of Skincare and BioSciences, and Jeffrey

Parry, Director, respectively, for expenses incurred on behalf of the Company.

As of December 31, 2025, the Company

recorded accrued director fees payable to related parties of $ 32,765 , including $ 13,890 payable to Julie Daley (December 31, 2024- $ Nil )

and $ 18,875 (December 31, 2024- $ Nil ) payable to George Kovalyov.

These balances are unsecured, non-interest bearing, and due on demand.

These amounts are unsecured, non-interest

bearing and are due on demand.

During the years ended December 31,

2025 and 2024, there is $ Nil and $ 30,972 current and deferred income tax expense, respectively, reflected in the Statement of Operations

and Comprehensive Loss.

The components of loss from continuing

operations before provision for income taxes for the years ended December 31, 2025 and 2024 consist of the following:

Year Ended December 31,

( 8,353,923 )

( 6,051,077 )

( 7,756,096 )

( 6,245,737 )

PMGC Holdings Inc.

(formerly Elevai Labs Inc.)

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025 and 2024

of Loss Before Income Tax

(Expressed in United States dollars)

There were no cash income taxes paid

(refunded) during the years ended December 31, 2025 or 2024.

The components of income tax expense

from continuing operations for the years ended December 31, 2025 and 2024 are as follows:

Year Ended December 31,

Current Taxes

Total Current Taxes

Deferred Taxes

Total Deferred Taxes

Total Tax Expense / (Benefit)

A reconciliation of the U.S.

statutory income tax rate to the Company’s effective continuing operations income tax rate is as follows:

Rate Reconciliation

As at December 31, 2025

Income Taxes at Statutory Rates

( 1,628,780 )

State Income Tax, Net of Federal Effect *

Foreign Tax Effects

Foreign Rate Differential

Permanent Items

Write off deferrals due to dissolution

Change in Valuation Allowance

Effects of Changes in Tax Laws or Rates

Effects of Cross-Border Tax Laws

Changes in Valuation Allowance

Non-taxable or Non-deductible Items

Permanent Items

Changes in Unrecognized Tax Benefits

Provision for income taxes

* The state that contributed to the majority (greater than 50%) of the tax effect in this category for the year ended December 31, 2025 was California.

PMGC Holdings Inc.

(formerly Elevai Labs Inc.)

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025 and 2024

(Expressed in United States dollars)

As previously disclosed prior to the

adoption of ASU 2023-09, the difference between the provision (benefit) for income taxes and the amount computed by applying the U.S.

federal income tax rate for the year ended December 31, 2024 is as follows:

Net loss before income tax

( 6,245,737 )

Effective tax rate

Expected recovery

income tax at federal statutory rate

( 1,740,687 )

State Income Tax, Net of Federal Benefits

Share-based compensation

4 unchanged sentences

Tax expense (recovery)

Holdings Inc.

The components of the Company’s deferred

tax assets and liabilities related to continuing operations at December 31, 2025 and 2024, consisted of:

Deferred tax assets:

Net operating loss carry forward

Lease Liability

Accruals and reserves

( 5,542,874 )

( 3,322,654 )

Valuation allowance

Total deferred tax assets

Deferred tax liabilities:

Right of Use asset

Total deferred tax liabilities

Net deferred tax assets

The Company has evaluated the positive

and negative evidence bearing upon its ability to realize its deferred tax assets, which are composed principally of net operating loss

carry forwards.

Management has considered the Company’s history of cumulative net losses incurred since inception and has concluded

that it is more likely than not that the Company will not realize the benefits of its federal and state net deferred tax assets.

a full valuation allowance has been established against the net deferred tax assets as of December 31, 2025 and 2024.

The Company reevaluates

the positive and negative evidence at each reporting period.

During the year ended December 31, 2025, the valuation allowance increased

by approximately 2.1 million.

At December 31, 2025, the Company had

federal and state net operating loss carryforwards of $ 17.7 million and $ 16.9 million, respectively.

The federal net operating loss

carryforwards were generated post January 1, 2018 and will carryforward indefinitely but are subject to an 80 % taxable income limitation

when utilized.

The state net operating loss carryforwards will begin to expire in 2040.

The utilization of net operating

losses and tax credit carryforwards may be subject to an annual limitation as a result of ownership changes that have occurred

previously or may occur in the future.

Under Sections 382 and 383 of the Internal Revenue Code (the Code), a corporation that

undergoes and ownership change may be subject to limitations on its ability to utilize its pre-change net operating losses and other

tax attributes otherwise available to offset future taxable income or tax liability.

An ownership change is defined as a cumulative

change of 50% or more in the ownership positions of certain stockholders during a rolling 3-year period.

The Company has not

completed a formal study to determine if any ownership changes within the meaning of Code Section 382 and 383 have occurred.

ownership change has occurred, the Company’s ability to use its net operating losses or tax credit carryforwards may be

restricted, which could require the Company to pay federal or state income taxes earlier than would be required if such limitations

were not in effect.

PMGC Holdings Inc.

(formerly Elevai Labs Inc.)

to the Consolidated Financial Statements

the years ended December 31, 2024 and 2023

in United States dollars)

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

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.

and Contingencies

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.

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.

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.

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.

February 2, 2025, the Company issued 438 shares to a consultant in relation to the acquisition of the License #2 IPR&D asset (Note

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).

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.

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

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.

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025 and 2024

(Expressed in United States dollars)

The Company recognizes the financial

statement benefit of a tax position only when it determines that the position is more likely than not to be sustained upon examination

by the relevant taxing authority.

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 9A. Controls and Procedures