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YoY shift: Neutral
Year-over-year tone shift - average net-tone change across Risk Factors and MD&A vs the prior 10-K. This filing is -0.10pp more bearish than last year's.
Why YoY instead of absolute: the LM lexicon has ~6.6× more negative words than positive (legal/risk-disclosure language is heavy on hedging), so every 10-K reads bearish on raw tone. Year-over-year change strips that bias and surfaces the actual shift in management's framing.
Tone shift by section
The two components the gauge averages: how Risk Factors and MD&A each shifted in net tone versus last year's 10-K. The headline above is their average, so a green needle over a soft section just means the other section carried it.
Risk Factors
-0.24pp
Flat
Net-tone change vs last year's 10-K.
MD&A
+0.03pp
Flat
Net-tone change vs last year's 10-K.
Per-snippet highlights
Sentence-level sentiment highlighting with category and subcategory filters is coming once the snippet-scoring pipeline lands. For now, dig into the actual section text on the Sections tab.
Language change vs prior 10-K
Risk Factors (Item 1A) - words with the biggest YoY frequency increase
Negative rising
claims+6
impairment+6
adversely+5
decline+4
difficulties+4
Positive rising
able+2
achievement+2
advances+2
profitable+2
satisfactorily+2
Risk Factors (Item 1A)
12,988 words
Item 1A. Risk Factors.
An investment in our securities involves a high degree of risk. You should carefully consider the risks and uncertainties described below, together with all of the other information contained in this Annual Report, including our consolidated financial statements and the related notes thereto, before deciding to invest in our securities. The risks and uncertainties described below are not the only ones we face. Additional risks and uncertainties that we are unaware of, or that we currently believe are not material, may also become important factors that adversely affect our business. If any of the following risks actually occur, our business, financial condition, results of operations and prospects could be materially and adversely affected. In that event, the market price of our Common Stock could decline, and you could lose part or all of your investment.
RISKS RELATED TO OUR FINANCIAL CONDITION AND CAPITAL STRUCTURE
Our financial statements have been prepared on a going-concern basis and our continued operations are in doubt.
The uncertainty about our ability to continue in operation is based on our continuing from operation, limited revenue and limited working capital, among other things which existed as of year-end December 31, 2025 and December 31, 2025. As of December 31, 2025 and December 31, 2024, the Company had net working capital of $2,928,959 and $4,251,867, respectively, and has an accumulated of $21,017,440 and $13,269,627, respectively. Included in the accumulated are net of $7,747,813 for the year ended December 31, 2025 and $6,245,737 for the year ended December 31, 2024. Given all of these facts, we are dependent on obtaining funding from operations and the sale of debt or equity to continue as a going . The financial statements do not include any adjustments relating to the recoverability of assets and classification of liabilities that might be necessary should we be to continue as a going .
Language change vs prior 10-K
MD&A (Item 7) - words with the biggest YoY frequency increase
Negative rising
loss+5
closing+5
losses+2
termination+2
impairment+2
Positive rising
gain+6
opportunities+1
favorable+1
innovative+1
enhances+1
MD&A (Item 7)
4,536 words
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operation.
The information set forth in this section contains certain “forward-looking statements”, including, among others (i) expected changes in our revenue and profitability, (ii) prospective business opportunities and (iii) our strategy for financing our business. Forward-looking statements are statements other than historical information or statements of current condition. Some forward-looking statements may be identified by use of terms such as “believes”, “anticipates”, “intends” or “expects”. These forward-looking statements relate to our plans, liquidity, ability to complete financing and purchase capital expenditures, growth of our business including entering into future agreements with companies, and plans to successfully develop and obtain approval to market our product. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs.
Although we believe that our expectations with respect to the forward-looking statements are based upon reasonable assumptions within the bounds of our knowledge of our business and operations, in light of the risks and uncertainties inherent in all future projections, the inclusion of forward-looking statements in this Annual Report should not be regarded as a representation by us or any other person that our objectives or plans will be .
Our ability to continue as a going concern depends on the success of any future offering and receipt of additional funds through debt or equity financing and our operations. In the event we are unable to obtain such funding, we may have to delay, reduce or eliminate certain of our planned operations, including some of our research and development and/or clinical validation studies to demonstrate aesthetic improvement, reduce overall overhead expense, or divest assets. This in turn may have an adverse effect on our ability to realize the value of our assets. If we are unable to continue as a going concern, you may lose all or part of your investment.
We have a history of net losses, and we may not be able to achieve or maintain profitability in the future.
We have incurred net losses each year since our inception, and we may not be able to achieve or maintain profitability in the future. We incurred net losses of $7,747,813 and $6,245,737 for the years ended December 31, 2025 and 2024, respectively. Our expenses will likely increase in the future and may be more costly than we expect and may not result in increased revenue or growth in our business. These offerings may require significant capital investments and recurring costs, maintenance, depreciation, asset life and asset replacement costs, and if we are not able to maintain sufficient levels of utilization of such assets or such offerings are otherwise not successful, our investments may not generate sufficient returns and our financial condition may be adversely affected. Any failure to increase our revenue sufficiently to keep pace with our investments and other expenses could prevent us from achieving or maintaining profitability or positive cash flow on a consistent basis. If we are unable to successfully address these risks and challenges as we encounter them, our business, financial condition, results of operations and prospects could be adversely affected. If we are unable to generate adequate revenue growth and manage our expenses, we may continue to incur significant losses in the future and may not be able to achieve or maintain profitability.
Our operating cash consumption significantly exceeds our revenue, and we may not be able to fund our operations without continued access to the capital markets.
Our current level of operating cash consumption materially exceeds our revenue and is not sustainable without continued infusions of external capital. If we are unable to substantially increase revenue from our operating subsidiaries, achieve returns on capital through PMGC Capital, or continue to access debt and equity financing, we may be unable to fund our operations. There can be no assurance that we will be able to reduce our operating cash burn to a level that can be sustained by our operating revenue within any particular timeframe, if at all.
We will need additional capital to conduct our operations and develop our products and businesses, and our ability to obtain the necessary funding is uncertain.
We have used, and expect to continue to use, a significant amount of cash to finance our operations, and we need to obtain significant additional capital resources in order to develop our businesses and products going forward. We may not be successful in maintaining our normal operating cash flow and the timing of our capital expenditures may not result in cash flows sufficient to sustain our operations through the next twelve months. If financing is not sufficient and additional financing is not available or available only on terms that are detrimental to our long-term survival, it could have a major adverse effect on our ability to pursue our business strategy, clinical research and product development programs, and could ultimately affect our ability to continue to function. The timing and degree of any future capital requirements and our ability to meet such capital requirements in a timely manner, on favorable terms or at all will depend on many factors, including:
the accuracy of the assumptions underlying our estimates for capital needs;
the success and growth of our acquired operating subsidiaries;
scientific progress in our research and development programs at Northstrive Biosciences;
the magnitude and scope of our acquisition strategy and our ability to identify, negotiate, finance and integrate target companies;
the costs involved in preparing, filing, prosecuting, maintaining, defending and enforcing patent claims;
the performance of PMGC Capital’s investment portfolio;
the number and type of pipeline products that we pursue; and
the development of major widespread events, including the possibility of a recession in the U.S. and globally, market volatility, geopolitical conflict, tariffs, trade restrictions and other events which could impact us and third parties on which we depend.
Additional financing through strategic collaborations, public or private equity or debt financings or other financing sources may not be available on acceptable terms, or at all. Additional equity financing could result in significant dilution to our stockholders, and any debt financings will likely involve covenants restricting our business activities. Further, if we obtain additional funds through arrangements with collaborative partners, these arrangements may require us to relinquish rights to some of our technologies, products or pipeline assets that we might otherwise seek to develop and commercialize on our own. If sufficient capital is not available, we may be required to delay, reduce the scope of or eliminate one or more of our business initiatives, research or product development programs, or planned acquisitions, any of which could have a material adverse effect on our financial condition or business prospects.
Our existing equity purchase facility may result in substantial dilution to our existing stockholders and may place downward pressure on the price of our Common Stock.
We have entered into an equity purchase facility with Streeterville Capital, LLC (“Streeterville”), as disclosed in previous SEC filings, pursuant to which we may consummate one or more secured pre-paid purchases of our Common Stock, and we have consummated multiple pre-paid purchases thereunder. Under these arrangements, the outstanding principal and accrued interest is convertible at the option of the investor at a price that reflects a discount to the volume-weighted average price of our Common Stock during a specified look-back period, subject to a floor price. We have issued, and expect to continue to issue, significant numbers of shares of Common Stock in settlement of amounts outstanding under these arrangements.
The conversion mechanics for the pre-paid purchases under the equity purchase facility, which allow conversion at a discount to market price, may create significant downward pressure on the trading price of our Common Stock. As the stock price declines, additional shares may be required to settle the same dollar amount of debt, potentially creating a cycle of increasing dilution and declining stock price. These dynamics could materially and adversely affect the market price of our Common Stock, the ability of existing stockholders to sell their shares at favorable prices, and our ability to raise additional capital on acceptable terms. The settlement and potential conversion of outstanding and future instruments under the equity line of credit into shares of Common Stock will result in further dilution to our existing stockholders, and the magnitude of such dilution will depend on market conditions at the time of conversion.
Our equity interests in our key subsidiaries and the assets of those subsidiaries are pledged as collateral under our equity purchase facility with Streeterville, and a default on our obligations pursuant to such facility could result in the loss of our operating businesses.
In connection with our equity purchase facility with Streeterville, we entered into a Security Agreement and a Pledge Agreement, pursuant to which we pledged, as collateral, (i) 100% of the equity interests (membership interests and stock, respectively) in our wholly-owned subsidiaries, AGA Precision Systems and Pacific Sun Packaging, and (ii) substantially all of the assets of these subsidiaries. Streeterville holds a first-position security interest in this collateral (subordinate only to certain permitted liens). If we default on our obligations under such agreements, Streeterville is entitled to seize the pledged equity interests or the assets of the subsidiaries. This may result in the loss of one or more of our primary operating businesses, which would have a material adverse effect on our financial condition and ability to continue operations.
We have conducted multiple reverse stock splits in a short period of time, which may adversely affect the market price of our Common Stock and investor confidence.
Since November 2024, we have completed multiple reverse stock splits of our Common Stock. Reverse stock splits may be viewed negatively by investors and analysts as an indication of financial difficulty or poor stock performance. There can be no assurance that the market price of our Common Stock following any reverse stock split will remain at a level proportional to the prices prior to the reverse stock split. The repeated use of reverse stock splits may diminish investor confidence, reduce trading liquidity, and adversely affect our ability to attract and retain investors. If we are unable to maintain compliance with the Nasdaq listing requirements, including the minimum bid price rule, we may be required to undertake further reverse stock splits in the future, which could result in additional negative market perception and further dilution on a per-share basis for investors who acquired shares prior to such splits.
If we fail to generate sufficient cash flow from our operations, we will be unable to continue to develop and commercialize our products and grow our businesses.
We expect capital outlays and operating expenditures to increase over the next several years as we expand our operations, pursue acquisitions, and conduct research and development and manufacturing activities. However, our present and future funding requirements will depend on many factors, including, among other things:
the level of research and development investment required to maintain and improve our competitive position;
the success of product sales and service revenue at our operating subsidiaries and related collections;
the returns on capital deployed by PMGC Capital;
our need or decision to acquire or license complementary businesses, products or technologies;
costs relating to the expansion of our workforce, management and operational support across multiple subsidiaries;
competing technological and market developments; and
costs relating to changes in regulatory policies or laws that affect our operations.
As a result of these factors, we may need to raise additional funds, and we cannot be certain that such funds will be available to us on acceptable terms when needed, if at all. If we cannot raise funds on acceptable terms, we may not be able to expand our operations, develop new products, take advantage of future opportunities or respond to competitive pressures or unanticipated business requirements.
We may need, but be unable, to obtain additional funding on satisfactory terms, which could dilute our stockholders or impose burdensome financial restrictions on our business.
We have relied upon cash from financing activities. In the future, we hope to rely on revenues generated from operations to fund the cash requirements of our activities. However, there can be no assurance that we will be able to generate any significant cash from our operating activities in the future. Future financing may not be available on a timely basis, in sufficient amounts or on terms acceptable to us, if at all. Any debt financing or other financing of securities senior to the Common Stock will likely include financial and other covenants that will restrict our flexibility. Any failure to comply with these covenants would have a material adverse effect on our business, prospects, financial condition and results of operations because we could lose our existing sources of funding and impair our ability to secure new sources of funding.
We may be unable to realize the expected value from the divestiture of our Elevai Skincare business, including earn-out payments.
In connection with the divestiture of our Elevai Skincare business, the purchase consideration included potential earn-out payments contingent upon the buyer achieving certain revenue milestones over specified periods following the closing. There can be no assurance that the buyer will achieve these milestones or that we will receive any earn-out payments. If the buyer’s business underperforms, experiences operational difficulties, or ceases operations, we may receive little or no additional consideration beyond the amounts received at closing. Additionally, shares of the buyer’s common stock received as consideration may have limited liquidity and their value may decline.
Changes in tax laws or regulations could adversely affect our business and financial results.
We are subject to U.S. federal, state and local tax laws, which are complex and subject to change. Changes in tax laws, regulations, or interpretations thereof, including changes resulting from new legislation, could increase our tax obligations, reduce the value of our deferred tax assets, or otherwise adversely affect our financial condition and results of operations. In addition, tax authorities may disagree with our tax positions or the manner in which we allocate income and deductions among our subsidiaries, which could result in additional tax liabilities, interest and penalties.
RISKS RELATED TO OUR HOLDING COMPANY STRUCTURE AND ACQUISITION STRATEGY
Our diversified holding company structure may make our business more complex and difficult to manage.
We operate as a diversified holding company with subsidiaries across multiple industries, including biotechnology, precision manufacturing, specialty packaging, and investment activities. This structure increases the complexity of our operations, financial reporting, internal controls, and management oversight. Each of our subsidiaries operates in distinct markets with unique regulatory requirements, competitive dynamics, and capital needs.
Managing multiple disparate businesses requires broad management expertise, robust financial and operational reporting systems, and the ability to allocate capital and personnel effectively across unrelated industries. Our management team is small, and the breadth of our operations may strain our resources. If we are unable to effectively manage this complexity, our business, financial condition, and results of operations could be adversely affected.
Our results depend on our ability to allocate capital effectively across our subsidiaries and investments.
Our business model relies on deploying capital across multiple subsidiaries and investment opportunities. Our ability to generate returns depends on management’s judgment in allocating capital among competing opportunities, including acquisitions, internal investments, strategic initiatives, and investments through PMGC Capital.
There can be no assurance that our capital allocation decisions will achievedesired returns. Capital deployed into underperforming subsidiaries or unsuccessful investments represents an opportunity cost and may result in impairment charges. Misallocation of capital could materially adversely affect our financial condition and long-term shareholder value.
We may not realize anticipated benefits from operating as a platform of multiple businesses.
We may not achieve expected operational, strategic, or financial benefits from managing multiple subsidiaries under a single corporate structure. Our subsidiaries may operate independently with limited synergies, and the costs associated with maintaining a diversified platform—including corporate overhead, compliance costs, management attention and reporting requirements—may outweigh the benefits. If the anticipated advantages of our holding company structure do not materialize, our financial condition and results of operations could be adversely affected.
Our growth strategy depends on acquisitions, which involve significant risks and uncertainties.
A core element of our business strategy is to grow through the acquisition of operating companies and assets. We have completed multiple acquisitions and intend to continue pursuing additional acquisitions. These transactions involve numerous risks, including:
difficulties in identifying suitable targets at reasonable valuations;
failure to accurately assess the value, prospects, strengths and weaknesses of acquisition candidates;
inability to negotiate favorable terms or obtain financing for acquisitions;
failure to complete transactions after expending significant time and resources on due diligence;
difficulties in integrating acquired businesses, operations, technologies, systems and personnel;
assumption of unknown or undisclosed liabilities, including potential legal, regulatory, tax, environmental or contractual obligations;
disruption to our existing business and diversion of management attention;
loss of key employees, customers or suppliers of acquired businesses;
potential impairment of acquired goodwill and intangible assets;
dilution to existing stockholders from equity issued as acquisition consideration or to finance acquisitions; and
increased debt and associated covenants and restrictions.
Acquired businesses may not perform as expected and may require significantly more capital than anticipated. Failure to successfully identify, execute, finance or integrate acquisitions could materially adversely affect our business, financial condition, and results of operations.
Potential business combinations could require significant management attention, prove difficult to integrate, and adversely affect our operating results.
Business combinations generally involve a number of additional difficulties and risks to our business, including failure to integrate management information systems, personnel, research and development and marketing, operations, sales and support; disruption of our ongoing business and diversion of management’s attention from other business matters; potential loss of the acquired company’s customers; failure to further develop or integrate the acquired company’s products or technology successfully; unanticipated costs and liabilities; and other accounting consequences.
In addition, we may not realize benefits from any business combination we may undertake in the future. If we fail to successfully integrate such businesses, or the products and technologies associated with such business combinations into our Company, the revenue and operating results of the combined company could be adversely affected. Any integration process would require significant time and resources, and we may not be able to manage the process successfully. We may not successfully evaluate, integrate or utilize the acquired technology and product lines or accurately forecast the financial impact of a combination.
The purchase price allocations for our acquisitions may be preliminary and subject to adjustment, which could materially affect our reported financial results.
In connection with our acquisitions, the initial purchase price allocations may be preliminary and subject to adjustment as we finalize our valuations of identifiable assets acquired and liabilities assumed. Adjustments to preliminary purchase price allocations during the measurement period could result in changes to the carrying values of acquired assets and liabilities, including goodwill, intangible assets, property and equipment, and deferred tax liabilities. Such adjustments could materially affect our consolidated balance sheet, results of operations and financial condition in future periods.
We have recorded goodwill on our consolidated balance sheet that may be subject to impairment, which could adversely affect our financial results.
We have recorded goodwill arising from our acquisitions. Goodwill is not amortized but is subject to annual impairment testing, or more frequently if events or changes in circumstances indicate that the carrying value may not be recoverable. Factors that could trigger an impairment review include, among others, a significant decline in expected future cash flows of an acquired business, deterioration of market conditions, loss of key customers, underperformance relative to projected financial results, and a sustained decline in the market price of our Common Stock. If any of our reporting units fail to achieve projected results or if market conditions deteriorate, we may be required to record a non-cash goodwill impairment charge, which could have a material adverse effect on our reported financial results and the market price of our Common Stock.
Earn-out and contingent consideration arrangements may result in disputes or financial obligations that adversely affect our results.
Certain of our acquisition agreements include earn-out or contingent consideration provisions that are payable based on the achievement of specified financial milestones by the acquired businesses. If acquired businesses achieve the applicable performance thresholds, we will be required to make additional payments that will increase the overall cost of the acquisitions and reduce our available cash. Conversely, disagreements with sellers regarding the measurement or achievement of earn-out targets could result in disputes, litigation or strained relationships with key personnel who remain involved in the acquired businesses. Changes in fair value of contingent consideration are recognized in earnings and may cause volatility in our reported results of operations.
We depend on the founders and key employees of our acquired businesses, and their departure could adversely affect the performance of those businesses.
Our recently acquired subsidiaries have historically been operated by their founders and small teams with deep customer relationships, specialized technical knowledge and institutional know-how. The success of these businesses following acquisition depends in significant part on our ability to retain and motivate these individuals during the transition period and beyond. If the former owners or other key employees of our acquired businesses depart or become disengaged, we may experience disruptions to operations, loss of customer relationships, loss of critical technical expertise, and a decline in the performance of these businesses, any of which could materially adversely affect our revenue and results of operations.
RISKS RELATED TO OUR OPERATING SUBSIDIARIES
Risks Related to Northstrive Biosciences Inc. (Biotechnology)
Our biotechnology subsidiary, Northstrive Biosciences, is at an early stage of product development, and we may not develop products that can be successfully commercialized.
Northstrive Biosciences is at an early stage of product development. As of the date of this Annual Report, we have not commercialized any therapeutic products. Our lead asset, EL-22, has completed a Phase 1 clinical trial in South Korea but has not yet been tested in human subjects in the United States. Our second asset, EL-32, is in the preclinical stage. A key element of our growth strategy depends on our ability to develop and advance these product candidates through clinical trials, obtain regulatory approvals, and ultimately commercialize products, which may take many years and may never occur. We may not be able to successfully commercialize or synthesize any of our product candidates at a scale that is profitable. Our product candidates may prove to have undesirable and unintended side effects or other characteristics adversely affecting their safety, efficacy or cost effectiveness that could prevent or limit their use.
Because our future commercial success with respect to our Licensed Products (as defined below) depends on gaining regulatory approval, we cannot generate therapeutic revenue without obtaining such approvals.
Our long-term success and generation of revenue with respect to the Licensed Products will depend upon the successful development of these product candidates from our research and development activities. Product development is very expensive and involves a high degree of risk. Only a small number of research and development programs result in the commercialization of a product. The process for obtaining regulatory approval to market product candidates is expensive, usually takes many years, and can vary substantially based on the type, complexity, and novelty of the product candidates involved. Our ability to generate revenue from the Licensed Products would be adversely affected if we are delayed or unable to successfully develop our products.
We cannot guarantee that any marketing application for our product candidates will be approved. If we do not obtain regulatory approval of our products or we are significantly delayed or limited in doing so, we cannot generate therapeutic revenue, and we may need to significantly curtail operations related to Northstrive Biosciences.
(“Field” means (a) all prophylactic and therapeutic uses in humans, including but not limited to the prevention and treatment of muscular (including, but not limited to, Duchenne muscular dystrophy and sarcopenia), obesity, metabolic, renal, cardiovascular, psychological, psychiatric, neurologic, and endocrine conditions in humans; and (b) all uses in animal health, including all applications as a feed additive.
“Licensed Products” means any therapeutic product or course of treatment, in the Field comprising one or more Compound(s) including any Improvement(s) thereto. Capitalized terms in this definition not defined herein have the meanings set forth in the License Agreement between the Company and MOA Life Plus Co., Ltd (“MOA”) dated April 30, 2024, as amended, and as assigned to Northstrive Biosciences on February 28, 2025).
The development and acquisition of therapeutic product candidates could expose us to significant legal and regulatory risks.
Our acquisition and development of innovative therapeutic product candidates, specifically with our lead asset, EL-22, could expose us to significant legal and regulatory risks. The development and commercialization of therapeutic product candidates, including EL-22, are subject to extensive regulation by the FDA and other regulatory authorities. The regulations govern all aspects of product development, including pre-clinical studies, clinical trials, manufacturing and marketing. Any failure to comply with the regulations might result in significant delays in product development, approval and commercialization or suspension or termination of clinical trials. Any non-compliance could lead to enforcement actions, including warning letters, fines, injunctions and withdrawal of marketing approvals.
The ability to proceed with human clinical trials for our product candidates is contingent upon receiving FDA clearance of our eventual IND submission. If the FDA requires us to provide extensive additional data to demonstrate safety and efficacy, including without limitation generating additional preclinical data, conducting further toxicology or pharmacology studies or addressing unforeseen issues, we may face significant delays or be unable to proceed as planned. In addition, as one of the first companies pursuing an oral myostatin formulation combined with GLP-1 receptor agonists, we may encounter heightened regulatory scrutiny. Regulators may impose unexpected conditions, mandate more extensive trials or request additional safety and efficacy data, all of which could increase our costs and delay timelines.
If we are unable to successfully complete preclinical testing and clinical trials of the Licensed Products or experience significant delays in doing so, our business will be materially harmed.
We expect to invest material efforts and financial resources in the development of the Licensed Products. Our ability to generate product revenues from our therapeutic candidates, which we do not expect will occur for many years, if ever, will depend heavily on the successful development and eventual commercialization of the Licensed Products.
The commercial success of the Licensed Products will depend on several factors, including successful completion of preclinical studies and clinical trials; receipt of marketing and pricing approvals from regulatory authorities; obtaining and maintaining patent and trade secret protection for the Licensed Products; establishing and maintaining manufacturing relationships with third parties or establishing our own manufacturing capability; and commercializing our products, if and when approved, whether alone or in collaboration with others.
If we do not achieve one or more of these factors in a timely manner or at all, we could experience significant delays or an inability to successfully complete development of, or to successfully commercialize, the Licensed Products, which would materially harm our business. Most pharmaceutical products that do overcome the long odds of drug development and achieve commercialization still do not recoup their cost of capital.
The Licensed Products may cause adverse effects or have other properties that could delay or prevent their regulatory approval or limit the scope of any approved label or market acceptance.
Adverse events or seriousadverse events that may be observed during clinical trials of the Licensed Products could cause us, other reviewing entities, clinical trial sites or regulatory authorities to interrupt, delay or halt such trials and could cause denial of regulatory approval. Serious or unexpected side effects caused by an approved product could result in significant negative consequences, including regulatory withdrawal of approval, mandatory labelling changes, additional clinical trials, removal from the marketplace, patient litigation, and reputational damage. These events could prevent us or our partners from achieving or maintaining market acceptance of the affected product and could substantially increase the costs of commercializing the Licensed Products.
We license from a third party the rights to our therapeutic product candidates and are therefore subject to the risk that we lose this license after investing substantial resources.
Under the License Agreement with MOA, MOA granted Northstrive Biosciences an exclusive license to commercialize under certain of MOA’s patent rights concerning two Licensed Products: (i) a clinical stage engineered probiotic expressing myostatin (EL-22) and (ii) a preclinical engineered probiotic expressing dual myostatin & activin-A antigens (EL-32). If MOA terminates the License Agreement under the terms thereunder, including, amongst other things, if we breach our obligations under the License Agreement, or the license expires before we can successfully commercialize a product candidate, our investment in research, development, and commercialization efforts for such product candidate(s) would be lost. Additionally, if we or MOA fail to adequately protect the related intellectual property rights relating to the Licensed Products, we may not realize the perceived or potential benefits of the License Agreement.
Our products under development could be rendered obsolete by technological or other medical advances.
Our products under development may be rendered obsolete or uneconomical by our competitors’ products or technological advances or those advances within other markets that may better or more inexpensively address the conditions that our products are designed to address. Biotechnology is rapidly developing and could undergo significant change in the future. Several key companies are actively developing GLP-1 drugs for obesity and complementary treatments to address associated conditions such as muscle wasting, and research and discoveries by other bioengineering, pharmaceutical or other companies may render our technologies or potential products uneconomical or result in products superior to those we develop.
Since we rely on third parties to conduct, supervise and monitor pre-clinical and clinical trials, their failure to perform satisfactorily may materially harm our business.
We rely on contract research organizations (“CROs”) and other third parties to ensure the proper and timely conduct of our pre-clinical and clinical trials for the Licensed Products. While we have agreements governing the activities of such CROs and other third parties, we cannot guarantee the actual performance of these CROs and third parties. Nevertheless, we will be responsible for ensuring that each of our clinical trials is conducted in accordance with its protocol, and that all legal, regulatory and scientific standards are met. Our reliance on CROs and other third parties does not relieve us of our regulatory responsibilities.
If we or our CROs fail to comply with cGCPs, which are the ethical, scientific, and quality standards established by the FDA and the International Council for Harmonisation of Technical Requirements for Pharmaceuticals for Human Use for the design, conduct, performance, monitoring, auditing, recording, analysis, and reporting of clinical trials, the clinical data generated in our clinical trials may be deemed unreliable and the FDA or other regulators may require us to perform additional clinical trials before approving any marketing applications. If our CROs do not successfully carry out their contractual duties or obligations, fail to meet expected deadlines, or if the quality or accuracy of the clinical data they obtain is compromised, our clinical trials may be extended, delayed or terminated, and we may not obtain regulatory approval for our product candidates.
Because third parties may be developing competitive products without our knowledge, we may later learn that competitive products are superior to the Licensed Products.
We face potential competition from companies that may be developing competitive products that are superior to one or more of the Licensed Products. If in the future we learn of the existence of one or more competitive products, we may be required to cease our development efforts for a product candidate, cause a partner to terminate its support of a product candidate, or cause a potential partner to terminate discussions about a potential license. Any of these events may occur after we have expended substantial amounts in connection with the clinical research of one or more product candidates.
Our therapeutic products may be expensive to manufacture, and they may not be profitable if we are unable to control the costs to manufacture them.
Our therapeutic products may be significantly more expensive to manufacture than other products currently on the market. We hope to substantially reduce manufacturing costs through process improvements, development of new methods, increases in manufacturing scale and outsourcing to experienced manufacturers. If we are not able to make these improvements, our profit margins may be significantly less than those of competitive products. In addition, we may not be able to charge a high enough price for any product we develop, even if they are safe and effective, to make a profit. If we are unable to realize significant profits from our pipeline products, our business will be materially and adversely impacted.
Risks Related to Pacific Sun Packaging, Inc. (Specialty Packaging)
Pacific Sun Packaging operates in a competitive industry and may face pricing pressure from larger competitors.
The packaging industry is highly competitive and includes large multinational packaging companies as well as smaller specialized providers.
Pacific Sun Packaging competes primarily on the basis of specialization in component-level IT hardware packaging, custom engineering capabilities, and reputation for reliability. Larger competitors may have significantly greater financial, manufacturing, marketing and distribution resources. If competitors offer comparable products at lower prices or invest in technologies that render our packaging solutions less competitive, Pacific Sun’s revenue and margins could be adversely affected.
Pacific Sun Packaging’s revenue depends on the IT hardware industry, which is subject to cyclical and secular changes.
Pacific Sun Packaging designs and supplies custom-engineered protective packaging for IT hardware components, including CPUs, memory modules, SSDs, HDDs, and fiber-optic transceivers. Demand for Pacific Sun’s products is driven by activity levels in the semiconductor, data center, and networking equipment supply chains. These industries are subject to cyclical downturns, shifts in technology, and changes in end-market demand. A decline in IT hardware production, changes in component form factors that reduce the need for specialized packaging, or a shift to packaging solutions that do not require Pacific Sun’s products could materially and adversely affect Pacific Sun’s revenue and results of operations.
Pacific Sun Packaging is dependent on a limited number of suppliers for raw materials and components.
A significant portion of Pacific Sun’s inventory purchases are concentrated among a limited number of key suppliers. Although we believe that alternative suppliers are available, a disruption in supply from one or more of these key suppliers, or a significant increase in the cost of raw materials, could adversely affect Pacific Sun’s ability to fulfill customer orders on a timely basis and at acceptable margins.
Risks Related to AGA Precision Systems LLC (Precision Manufacturing)
AGA Precision Systems operates in industries subject to stringent regulatory requirements, including International Traffic in Arms Regulations.
AGA Precision Systems operates in industries subject to export control laws and regulations, including the ITAR. AGA is ITAR-registered and maintains AS9100 certification, reflecting the stringent quality and regulatory requirements of its aerospace and defense customers. Compliance with these regulations is complex and costly. Any failure to comply could result in significant penalties, loss of export privileges, reputational harm, restrictions on our ability to conduct business with certain customers, including U.S. government and defense contractors, and potential debarment from government contracting. Changes in export control regulations, trade restrictions, tariffs, or international sanctions could also adversely affect AGA’s ability to conduct business and serve its customers.
Maintaining and renewing industry certifications, including AS9100, is critical to AGA’s ability to serve its customers.
AGA Precision Systems holds AS9100 certification, which is required or strongly preferred by many aerospace and defense customers. Loss of or failure to renew this certification, or failure to meet evolving certification standards, could result in the loss of existing customers, inability to bid on new contracts, and reputational damage. The certification process requires ongoing compliance with quality management standards, investment in systems and personnel, and periodic audits. There can be no assurance that AGA will maintain its certifications at all times, and any lapse could have a material adverse effect on AGA’s revenue and competitive position.
AGA Precision Systems has incurred, and may continue to incur, significant repair and maintenance costs, and the condition of its equipment may require ongoing capital investment.
Following the acquisitions of AGA Precision Systems and certain assets of Indarg Engineering, Inc., we incurred significant costs related to building maintenance, machine repair and recalibration of equipment. These costs were necessary to optimize operations and maintain the useful lives of acquired equipment. There can be no assurance that additional significant repair, maintenance or capital expenditure costs will not be required in the future. If the acquired equipment requires replacement or further significant investment, our results of operations and cash flows could be adversely affected.
AGA Precision Systems has historically operated without a formal sales and marketing function, which may limit its growth.
AGA Precision Systems has historically grown via referrals and repeat orders without a formalized sales or marketing department. While we believe there is opportunity to augment growth via more proactive business development, we cannot assure you that investments in sales and marketing efforts will result in meaningful revenue growth. If we are unable to expand AGA’s customer base beyond its existing network of relationships, AGA’s growth may be limited and its financial performance may be adversely impacted.
Risks Related to All Operating Subsidiaries
Our operations across multiple industries expose us to diverse and potentially conflicting market risks.
We operate in multiple industries, including biotechnology, aerospace and defense manufacturing, specialty packaging, and financial investments. These industries are subject to different economic cycles, regulatory frameworks, and competitive pressures. Adverse developments in any one sector may not be offset by performance in other segments, and the diversification of our operations may not mitigate overall risk as expected. A downturn affecting one or more of our operating sectors could have a disproportionate impact on our consolidated results.
We may be subject to liability for workplace safety and employment-related claims across our operating subsidiaries.
Our manufacturing subsidiaries operate facilities that involve the use of heavy machinery, hazardous materials, and industrial processes that present inherent risks of workplace accidents and injuries. We are subject to federal, state and local occupational safety and health laws and regulations, including those administered by the Occupational Safety and Health Administration ( “OSHA”). Failure to comply with these requirements could result in fines, penalties, work stoppages, or litigation. In addition, employment-related claims, including claims related to wages, benefits, discrimination, harassment, wrongfultermination, or misclassification of employees or independent contractors, could result in significant legal costs and liabilities. We rely in part on employees seconded from entities controlled by our Chief Executive Officer and Chairman pursuant to the Company’s secondment agreements with each, and the classification and treatment of these individuals could be subject to challenge by regulatory authorities.
Our insurance coverage may be inadequate to protect us against all potential losses and liabilities.
We maintain insurance coverage that we believe is customary for businesses of our size and type; however, there can be no assurance that our insurance will be sufficient to cover all potential claims, liabilities or losses, including product liability, property damage, business interruption, cybersecurity incidents, environmental liabilities, and professional liability. Certain types of losses may be uninsurable or may only be insurable at prohibitive cost. If we incur losses or liabilities that exceed or are not covered by our insurance, our financial condition and results of operations could be materially adversely affected.
A portion of our revenue may be derived from a limited number of customers.
Certain of our subsidiaries may depend on a limited number of key customers or contracts. The loss of one or more significant customers, a reduction in orders, or unfavorable changes in the terms of business with these customers could materially adversely affect our revenue and operating results. Our recently acquired subsidiaries, Pacific Sun Packaging and AGA, are in the early stages of operating under PMGC’s ownership, and customer relationships established by prior owners may not transfer smoothly or be maintained over time.
Disruptions in supply chains or manufacturing operations could adversely affect our business.
Our manufacturing and packaging operations depend on the availability of raw materials, components, and third-party services. Disruptions in supply chains, including those caused by geopolitical events, inflation, tariffs, trade restrictions, natural disasters, pandemics, labor disputes, supplier insolvency or supplier concentration, could increase costs, delay production and impair our ability to fulfill customer orders. If we are unable to maintain adequate supply chain resilience across our operating subsidiaries, our revenue, margins and customer relationships could be adversely affected.
A disruption in our operations could have an adverse effect on our business.
Our operations, including those of our subsidiaries, third-party suppliers and distribution partners, are subject to the risks inherent in manufacturing and distribution activities, including industrial accidents, environmental events, strikes and other labor disputes, disruptions in information systems, product quality control, safety and licensing requirements and other regulatory issues, as well as natural disasters, pandemics or other public health emergencies, acts of terrorism and other external factors beyond our control. The loss of, or damage to, any of our operating facilities or those of our key suppliers may have an adverse effect on our business, financial condition, results of operations and prospects.
To sustain our growth, we will need to increase the size of our organization, and we may encounter difficulties managing growth across multiple subsidiaries.
If we are able to successfully grow our operating subsidiaries and execute additional acquisitions, we may experience significant growth in the number of our employees and the scope of our operations across disparate industries. The resulting growth will place significant demands on our financial, managerial and operational resources. We may not be able to accurately forecast the number of employees required, the timing of their hire or the associated costs of expansion. Our success will depend on the ability of our executive officers and senior management to implement and improve operational, information management and financial control systems across multiple businesses and to expand, train and manage our employee base. Our inability to manage growth effectively may cause our operating costs to grow faster than anticipated and adversely affect our results of operations.
RISKS RELATED TO OUR INVESTMENT ACTIVITIES (PMGC CAPITAL)
PMGC Capital LLC may be deemed an “investment company” under the Investment Company Act of 1940, which could impose significant regulatory burdens.
PMGC Capital LLC is a multi-strategy investment firm engaged in investing, lending and pursuing diversified investment opportunities. If we are deemed to be an investment company under the Investment Company Act of 1940, as amended (the “1940 Act”), we would become subject to extensive regulation, which could impose significant compliance costs and operational restrictions. Under the 1940 Act, a company may be deemed to be an investment company if more than 40% of its total assets (exclusive of cash and U.S. government securities) consist of “investment securities.” We must ensure that we do not exceed this threshold. If we fail to maintain our exclusion from the 1940 Act, we could be required to register as an investment company, which would impose significant limitations on our capital structure, affiliate transactions and other aspects of our business, or we could be required to restructure our operations or divest certain assets. Any such outcome could materially adversely affect our business, financial condition, and operations.
PMGC Capital’s investment activities subject us to market risk, and we may incur losses on our investment portfolio.
Through PMGC Capital, we hold investments in publicly traded equity securities, private company stock, and convertible debentures. These investments are subject to market risk, including fluctuations in the market prices of publicly traded securities, credit risk associated with debt instruments, and liquidity risk associated with private company investments. We have in the past recognized, and may in the future recognize, realized and unrealized losses on our investment portfolio. There can be no assurance that our investments will appreciate in value or that we will not incur additional losses. Poor investment performance may adversely affect our financial results and our ability to fund operations.
RISKS RELATED TO REGULATORY, LEGAL AND INTELLECTUAL PROPERTY MATTERS
We may become subject to litigation, regulatory proceedings, or governmental investigations that could be costly and time-consuming.
From time to time, we may be subject to legal proceedings, claims, disputes, regulatory inquiries, or governmental investigations arising in the ordinary course of business or otherwise. Such matters may include contract disputes, employment claims, intellectual property disputes, product liability claims, stockholder litigation, regulatory enforcement actions, or claims arising from our acquisitions or divestitures. Litigation and regulatory proceedings are inherently uncertain, and adverse outcomes could result in significant monetary damages, injunctive relief, penalties, or restrictions on our business activities. Even if we prevail, the costs of defendingagainst such claims may be substantial and could divert management’s attention from our business operations.
We are subject to anti-corruption, anti-bribery, and similar laws, and non-compliance could expose us to significant penalties.
We are subject to the U.S. Foreign Corrupt Practices Act, and other anti-corruption and anti-bribery laws and regulations. As we expand our operations, pursue international business relationships, and engage third-party consultants, distributors and partners, our exposure to these laws increases. Any violation or allegedviolation could result in significant criminal and civil penalties, sanctions, and reputational harm. Our policies and procedures designed to promote compliance with these laws may not be effective in preventing all violations by our employees, consultants, agents, or business partners.
Changes in U.S. trade policy, tariffs, and international relations could adversely affect our supply chain and cost structure.
Our manufacturing and packaging operations depend on materials and components that may be sourced domestically or internationally. Changes in U.S. trade policy, including the imposition or escalation of tariffs, export controls, sanctions, or trade restrictions, could increase our costs, disrupt our supply chains, or limit our ability to serve certain customers. AGA Precision Systems operates in the aerospace and defense sector, which is particularly sensitive to changes in government policy, defense spending priorities, and international relations. Adverse changes in any of these areas could materially affect our revenue and profitability.
If we fail to protect or enforce our intellectual property, others could compete against us more directly and we may not be able to compete effectively in our market.
Our success depends in part on our ability to protect our intellectual property rights. We rely on a combination of trademarks, trade secrets, confidential proprietary information, domains, patent rights and other intellectual property rights to protect our intellectual property. We also rely on patent applications licensed by us for the Licensed Products which we are contractually obligated to file, prosecute and maintain under our License Agreement with MOA. Patent protection is limited in time, and we may be unsuccessful in developing and commercializing a product before a patent expires and the underlying technology becomes available for commercialization by competitors, in which case our investment of substantial time and resources towards the applicable product or product candidate could be lost without the realization of the benefits we anticipated.
Certain of our technology may not be subject to protection through patents, which leaves us vulnerable to theft of our technology.
Certain parts of our know-how and technology are not patentable or are trade secrets. To protect our proprietary position in such know-how and technology, we have entered and intend to require all employees, consultants, advisors and collaborators to enter into confidentiality and invention ownership agreements with us. These agreements may not provide meaningful protection for our trade secrets, know-how or other proprietary information in the event of any unauthorized use or disclosure. In the absence of patent protection, competitors who independently develop substantially equivalent technology may harm our business. If we cannot adequately protect or enforce our intellectual property rights, we may not be able to adequately compete, and our business and prospects could be adversely affected.
We may not be able to protect our proprietary technology, which may harm our ability to operate profitably.
The molecular biology and bioprocessing industries place considerable importance on obtaining patent and trade secret protection for new technologies, products and processes. Our success will depend, to a substantial degree, on our ability to obtain and enforce patent protection for our products, preserve any trade secrets and operate without infringing the proprietary rights of others. We cannot assure you that we will succeed in obtaining any patents or obtain them in a timely manner; that the use of our technology will not infringe on the proprietary rights of others; that patent applications relating to our product candidates will result in the issuance of any patents; that we will be successful in monitoring, enforcing or otherwise protecting our patents or other intellectual property rights; or that patents will not be issued to other parties which may be infringed by our potential products or technologies.
Patents held by other persons may result in infringementclaimsagainst us that are costly to defend and which may limit our ability to use disputed technologies.
A number of biotechnology and other companies, universities and research institutions have filed patent applications or have been issued patents relating to technologies potentially relevant to or required by our expected products. If third party patents or patent applications contain claimsinfringed by either our licensed technology or other technology required to make and use our potential products and such claims are ultimately determined to be valid, we might not be able to obtain licenses to these patents at a reasonable cost, if at all, or be able to develop or obtain alternative technology. Patent litigation is very expensive and could consume substantial resources and create significant uncertainties.
If our trademarks and trade names are not adequately protected, we may not be able to build name recognition in our target markets.
Our registered or unregistered trademarks or trade names may be challenged, infringed, circumvented, declared generic or determined to be infringing on other marks. We may not be able to protect our rights in these trademarks and trade names, which we need in order to build name recognition with potential partners or customers in our target markets. If we are unable to establish name recognition based on our trademarks and trade names, our business may be adversely affected.
If we infringe or are alleged to infringe intellectual property rights of third parties, our business could be harmed.
Our research, development and commercialization activities may infringe or otherwise violate or be alleged to infringe or otherwise violate patents owned or controlled by other parties. These third parties could bring claimsagainst us that would cause us to incur substantial expenses and, if successful, could cause us to pay substantial damages or be forced to stop or delay research, development, manufacturing or sales of the applicable product or product candidate.
We may need to license additional intellectual property from third parties in the future, and such licenses may not be available on commercially reasonable terms.
A third party may hold intellectual property, including patent rights, that are important or necessary to the development of our future products. It may be necessary for us to use the patented or proprietary technology of third parties to commercialize our prospective products, in which case we would be required to obtain a license from these third parties. Failure to obtain such licenses on commercially reasonable terms may limit or eliminate our ability to develop or commercialize our future product candidates, which may have a negative impact on our business and results of operations.
A recall or suspension of sale of our products, or the discovery of serious safety issues, could have a significant negative impact on us.
The FDA and comparable agencies of other countries regulate certain of our products. The FDA and equivalent foreign regulatory authorities have the authority to require the recall or suspension, either temporarily or permanently, of commercialized products in the event that a product has a reasonable probability of causing a seriousadverse health risk due to adulteration or misbranding. Recalls, suspensions or other notices relating to any products that we distribute would divert managerial and financial resources and have an adverse effect on our reputation, financial condition and operating results.
Regulations governing our products could harm our business.
Certain of our products are or will be subject to extensive government regulation by numerous federal, state and local government agencies and authorities. Many of these laws and regulations involve a high level of subjectivity, are subject to interpretation, and vary significantly from market to market. These laws and regulations can have several impacts on our business, including delays or prohibitions in introducing or selling a product in one or more markets; limitations on the claims we can make regarding our products; and delays, expenses and potential product reformulations associated with compliance.
Government regulations relating to marketing and advertising may restrict, inhibit or delay our ability to sell our products.
If our products are marketed outside of their intended use, regulatory agencies such as the FDA or the FTC may investigate our marketing practices. Government authorities may regulate advertising and product claims regarding the benefits of our products, and enforcement actions could require us to revise our marketing materials, amend our claims or stop selling certain products, which could harm our business.
We may incur product liability claims that could harm our business, and past product liability claims relating to our previously divested Elevai Skincare products could still adversely affect our business.
We may be subject to various product liability claims related to the products we sell or develop. Product liability claims could increase our costs, cause negative publicity, and adversely affect our business and financial results. Although we maintain general liability insurance, this insurance may not fully cover potential liabilities.
In addition, even though we completed the divestiture of our Elevai Skincare business in January 2025, we may still be subject to liability for past product claims related to those products. Prior to the divestiture, we marketed and sold skincare products, and claims related to those products—including adverse reactions, product contamination, or labeling inaccuracies—could result in legal action against us. We cannot assure you that the indemnification provisions in the asset sale agreement will fully protect us from such liabilities. In connection with the divestiture, we also provided certain representations, warranties and indemnification obligations. Claims under these provisions could arise if post-sale issues emerge, such as regulatory non-compliance, product defects, or third-party intellectual property claims. If such claims are asserted and indemnification is required, we could incur substantial financial obligations.
We may not have sufficient product liability insurance, which may leave us vulnerable to future claims we will be unable to satisfy.
The development, testing, manufacturing, marketing and sale of our products entail an inherent risk of product liability claims. We currently have a limited amount of product liability insurance, which may not be adequate to meet potential product liability claims. Adequate insurance coverage may not be available in the future on acceptable terms, if at all. Whether or not a product liability insurance policy is obtained or maintained in the future, any product liability claim could harm our business or financial condition.
Our employees, independent contractors, consultants, distributors, vendors and strategic partners may engage in misconduct or improper activities.
We are exposed to the risk that our employees, independent contractors, consultants, distributors, vendors, strategic partners and other individuals or entities with whom we have arrangements may engage in unethical, fraudulent or illegal activity. It is not always possible to identify and determisconduct by these parties, and the precautions we take to detect and prevent these activities may not be effective. If such actions are instituted against us, those actions could result in government investigations, legal proceedings, the imposition of significant fines or other sanctions, which could adversely affect our ability to operate our business and our results of operations.
If we, or our third-party manufacturers fail to comply with environmental laws and regulations, we could become subject to fines or penalties.
Our research and development activities and our third-party manufacturers’ and suppliers’ activities involve the controlled storage, use and disposal of hazardous materials and other hazardous compounds. We and our manufacturers and suppliers are subject to laws and regulations governing the use, manufacture, storage, handling and disposal of these hazardous materials. We cannot eliminate the risk of contamination, which could cause an interruption of our business operations and environmental damage resulting in costly clean-up and liabilities.
If our third-party suppliers, logistics providers, and manufacturers do not comply with ethical business practices or applicable laws, our reputation and business could be harmed.
Our reputation and our customers’ willingness to purchase our products and services depend in part on our suppliers’, manufacturers’, and service providers’ compliance with ethical employment practices and all legal and regulatory requirements relating to the conduct of their businesses. We do not exercise control over our third-party service providers and cannot guarantee their compliance with ethical and lawful business practices.
The divestiture of our Elevai Skincare business could negatively impact our operations and strategic positioning.
In January 2025, we completed the divestiture of our Elevai Skincare business as part of our strategic realignment. While this divestiture allows us to focus on our core businesses, it may result in operational and strategic challenges, including adverse market perception, loss of diversification, and potential unforeseen expenses or liabilities related to the transition. If we fail to manage this transition effectively, our financial condition, results of operations and future growth prospects could be adversely affected.
RISKS RELATED TO OUR MANAGEMENT AND GOVERNANCE
Our corporate governance documents and Nevada law may have anti-takeover effects that could discourage, delay, or prevent a change in control.
Provisions of our articles of incorporation, bylaws, and Nevada law may have the effect of discouraging, delaying, or preventing a merger, acquisition, tender offer, or other change in control of the Company that stockholders might consider favorable, including transactions in which stockholders might receive a premium over the then-current market price of our Common Stock. These provisions include the authority of the Board to issue preferred stock with rights, preferences, and privileges determined by the Board without stockholder approval, advance notice requirements for stockholder proposals and director nominations, and other provisions of Nevada corporate law that may limit the ability of stockholders to effect a change in control. These provisions may frustrate or prevent any attempt by stockholders to replace or remove our current management.
If we lose key personnel or are unable to attract and retain qualified personnel, we may be unable to execute our business plan.
We have a limited number of employees. Our Chief Executive Officer serves in a non-employee capacity pursuant to his consulting agreement with the Company. Our success depends on our continued ability to attract, retain and motivate highly qualified management, business development, and operational personnel. Our success depends in large part on the efforts and abilities of our Chief Executive Officer and Chief Financial Officer, Graydon Bensler, as well as other members of our senior management. Finding replacements for key individuals could be difficult, may take an extended period of time and could significantly impede the achievement of our business objectives.
Graydon Bensler serves as both our Chief Executive Officer and Chief Financial Officer, which presents governance risks and limitations.
Our Chief Executive Officer, Graydon Bensler, currently also serves as our Chief Financial Officer. While this dual role reduces costs, it concentrates significant authority and responsibility in a single individual and may limit the segregation of duties and independent oversight over financial reporting that would be provided by separate individuals in these roles. This concentration may increase the risk of errors or irregularities in financial reporting going undetected and may be viewed negatively by investors, analysts and regulatory bodies. Such perception may adversely impact our financial performance and/or business.
Significant related-party transactions with entities controlled by our executive officers and directors may present conflicts of interest.
The Company has entered into consulting agreements and secondment agreements with entities controlled by our Non-Employee Chief Executive Officer and our Non-Employee, Non-Executive Chairman, pursuant to which the Company pays significant consulting fees, contracted performance bonuses, management fees, and reimbursements to such entities. Compensation to such entities under the terms of such agreements include milestone-based bonuses, acquisition-based bonuses, and market capitalization-based bonuses. These compensation arrangements create potential conflicts of interest between the personal financial interests of our executive officers and directors and the interests of the Company and its stockholders. The milestone-based and acquisition-based bonus arrangements may incentivize management to pursue transactions that trigger bonus payments, even if such transactions are not in the best long-term interests of stockholders. Although our Audit Committee reviews and approves related-party transactions, there can be no assurance that these transactions are or will be on terms as favorable to the Company as those that could be obtained from unaffiliated third parties.
We may be unable to accurately forecast revenue and appropriately plan our expenses.
Forecasts may be particularly challenging given our recently acquired subsidiaries, early-stage biotechnology programs, and ongoing acquisition strategy. We base our expense levels and investment plans on our estimates of revenue and gross margin. However, we cannot be sure that historical growth rates or trends of our acquired businesses are meaningful predictors of future performance, particularly under PMGC ownership. If our assumptions prove to be wrong, we may spend more than anticipated or may generate lower revenue than expected, either of which could have an adverse effect on our business, financial condition, results of operations and prospects.
We have a limited operating history at our current scale and with our current business model, which may make it difficult to evaluate our business and future prospects.
We began commercial operations in 2020 as a skincare development company, divested our skincare business in January 2025, and completed our first operating acquisitions in mid-2025. As a result, we have an extremely limited history of operating as a diversified holding company and an even more limited history of generating revenue from our current operating subsidiaries. Any evaluation of our business and prospects must be considered in light of this limited operating history, which may not be indicative of future performance. Because of our limited operating history in our current form, we face increased risks, uncertainties, expenses, and difficulties.
We have previously identified a material weakness in our internal control over financial reporting, and there can be no assurance that additional material weaknesses will not be identified in the future.
As disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, our management previously identified a material weakness in our internal control over financial reporting. During the fiscal year ended December 31, 2025, we implemented remediation measures, including the hiring of additional accounting and finance personnel and the implementation of standardized reconciliation procedures and enhanced review processes. Based on management ’s evaluation as of December 31, 2025, the Company has concluded that the previously reported material weakness has been remediated. However, there can be no assurance that our remediation efforts will remain effective or that additional material weaknesses or significant deficiencies will not be identified in the future, particularly as we integrate newly acquired subsidiaries into our financial reporting processes. If we identify additional material weaknesses or significant deficiencies, we could be subject to sanctions or investigations by Nasdaq, the SEC or other regulatory authorities, investor perceptions of our Company may suffer and cause a decline in the market price of our Common Stock. Any failure of our internal control over financial reporting may have a material adverse effect on our stated results of operations and harm our reputation.
The requirements of being a public company may strain our resources, divert management’s attention and affect our results of operations.
As a public company in the United States, we face increased legal, accounting, administrative and other costs and expenses. We are subject to the reporting requirements of the Exchange Act and the Sarbanes-Oxley Act of 2002. Section 404 of the Sarbanes-Oxley Act requires that our management report on the effectiveness of our internal controls structure and procedures for financial reporting. Compliance with these requirements diverts internal resources and management attention. If we fail to maintain compliance, we could be subject to sanctions or investigations. We may need to hire additional employees with public accounting and disclosure experience, which will increase costs. These increased costs will require us to divert money that we could otherwise use to develop our business.
If we cannot maintain our Company culture or focus on our mission as we grow, our success and competitive position may be harmed.
We believe our culture and mission have been key contributors to our success to date. Any failure to preserve our culture or focus on our mission could negatively affect our ability to retain and recruit personnel, which is critical to our growth. As we grow across multiple industries through acquisitions and develop the infrastructure of a public company, we may find it difficult to maintain a cohesive corporate culture.
RISKS RELATED TO OUR DEPENDENCE ON THIRD PARTIES
We depend on our collaborators to help us develop and test our proposed products, and our ability to develop and commercialize products may be impaired or delayed if collaborations are unsuccessful.
Our strategy for the development, testing and commercialization of our proposed products may require entering into collaborations with corporate partners, licensors, licensees and others. We may then be dependent upon the subsequent success of these other parties in performing their respective responsibilities and the continued cooperation of our partners. Our potential collaborators may not cooperate with us or perform their obligations under our agreements with them. We cannot control the amount and timing of our collaborators’ resources that will be devoted to our research and development activities. Should collaboratorsfail to conduct activities in a timely manner, or at all, expected product pipeline timelines may be delayed. If we do not achieve milestones set forth in the agreements, or if our collaboratorsbreach or terminate their collaborative agreements with us, our business may be materially harmed.
Our reliance on non-employee consultants, third-party vendors, and operational contractors may lead to delays in development of our proposed products and operation of our businesses.
We rely extensively on third parties for critical operational and strategic functions, including through secondment agreements with entities controlled by our Chief Executive Officer and Chairman. These individuals and entities are not our employees and may have commitments to other entities that limit their availability to us. We have limited control over the activities of these service providers and can expect only limited amounts of their time to be dedicated to our business objectives. If key consultants or contractors become unavailable or fail to perform satisfactorily, our operations and development activities could be materially delayed.
Certain market opportunity data and forecasts in this Annual Report were obtained from third-party sources and were not independently verified by us.
This Annual Report contains certain data and information that we obtained from various government and private entity publications and reports. While we believe the data and information is reliable, we have not independently verified them. There is no guarantee that any particular number or percentage of market participants covered by our market opportunity estimates will purchase our products or generate any particular level of revenue for us. Even if the markets in which we compete meet the size estimates and growth forecasts included in this Annual Report, our business may fail to grow at all or at the rate we anticipate.
We or our third-party vendors may experience network or system failures, cybersecurity attacks, or other technology risks.
Our ability to operate uninterrupted depends upon the performance of our internal network, systems and related infrastructure, and those of our third-party vendors. Our systems and those of our third-party vendors may be vulnerable to computer viruses and other malware, physical or electronic security breaches, natural disasters, and similar disruptions. Although we have not experienced any material security breaches, we cannot be certain that our defensive measures will be sufficient to defendagainst all current and future methods of attack.
Any actual or perceived security breach may lead to loss of customer confidence, regulatory scrutiny, compromise of intellectual property, costlylitigation, fines and penalties, and reputational damage. A security breach could occur and persist for an extended period without detection, increasing the costs and consequences of such a breach.
Our business may be negatively impacted by cybersecurity threats and other security threats and disruptions.
Because our business relies on proprietary technology and computer systems, we face security threats, including threats to our information technology infrastructure, attempts to gain access to our proprietary or confidential information, and physical security threats. Cybersecurity threats are persistent, evolve quickly and include computer viruses, attempts to access information, denial of service and other electronic security breaches. A security breach or other significant disruption could disrupt operations, result in unauthorized access to or release of proprietary information, delay clinical studies, subject us to claims and regulatory actions, and damage our reputation.
RISKS RELATED TO THE OWNERSHIP OF OUR SECURITIES
Our Common Stock may be affected by limited trading volume and price fluctuations, which could adversely impact the value of our Common Stock.
Our Common Stock has experienced and is likely to experience in the future significant price and volume fluctuations, which could adversely affect the market prices of our common stock without regard to our operating performance. In addition, factors such as quarterly fluctuations in our financial results, changes in the overall economy or the condition of the financial markets, announcements of acquisitions, and changes in investor sentiment could cause the market prices of our common stock to fluctuate substantially. These fluctuations may also cause short sellers to periodically enter the market. We cannot predict the actions of market participants and, therefore, can offer no assurances that the market for our common stock will be stable or appreciate over time.
We have a significant number of shares of Series B Preferred Stock outstanding with voting rights that may dilute the voting power of Common Stock holders.
As of the date of this Annual Report, we have shares of Series B Preferred Stock outstanding that carry voting rights. The voting power of our Series B Preferred Stock and Common Stock is concentrated in a small group of holders, mainly in entities controlled by our Chief Executive Officer and Chairman. This concentration of voting power may discourage potential acquirers and reduce the market price of our Common Stock. It also limits the ability of other stockholders to influence corporate matters, including but not limited to the election of directors, changes to the Company’s governance documents, the expansion of employee equity or option pool, any merger, consolidation, sale of all or substantially all of our assets, and other major actions requiring stockholder approval.
Our Common Stock may be subject to significant volatility due to limited public float and market conditions.
Our Common Stock may experience significant price volatility due to limited trading volume, concentrated ownership, and market conditions affecting small-cap or microcap companies. This volatility may be unrelated to our operating performance and could result in substantial losses for investors.
We may not be able to continue to satisfy listing requirements of Nasdaq to maintain a listing of our Common Stock.
Our Common Stock is currently listed on Nasdaq and we must meet certain financial and liquidity criteria to maintain such listing. Our Common Stock may be delisted if we fail to meet Nasdaq’s continued listing requirements. We have previously received notices from Nasdaq regarding non-compliance with listing requirements and have utilized reverse stock splits to regain compliance. There can be no assurance that we will maintain compliance with the Nasdaq continued listing requirements in the future.
If our Common Stock is delisted, it may be more difficult to buy or sell them or to obtain accurate quotations, and the price of the shares of Common Stock may suffer a material decline. Delisting may also impair our ability to raise capital. In addition, our Board may determine that the cost of maintaining our listing on a national securities exchange outweighs the benefits of such listing.
Changes to Nasdaq listing requirements, including potential minimum market capitalization requirements, could adversely affect our continued listing.
Nasdaq periodically reviews and may revise its continued listing standards, including requirements relating to minimum bid price, stockholders’ equity, market value of listed securities, and market capitalization. Any changes to these requirements, including potential increases in minimum market capitalization thresholds, may make it more difficult for us to maintain compliance. If we are unable to meet applicable listing standards, our Common Stock may be subject to delisting, which may adversely affect liquidity, market price, and our ability to raise capital.
We currently do not intend to declare dividends on our Common Stock in the foreseeable future and, as a result, your returns on your investment may depend solely on the appreciation of our common stock.
We currently do not expect to declare any dividends on our Common Stock in the foreseeable future. Instead, we anticipate that all of our earnings in the foreseeable future will be used to provide working capital, support our operations and finance the growth and development of our business. Any determination to declare or pay dividends in the future will be at the discretion of our Board, subject to applicable laws and dependent upon a number of factors, including our earnings, capital requirements and overall financial conditions. In addition, terms of any future debt or preferred securities may further restrict our ability to pay dividends on our Common Stock. Accordingly, your only opportunity to achieve a return on your investment in our Common Stock may be if the market price of our Common Stock appreciates and you sell your shares at a profit. The market price for our Common Stock may never exceed, and may fall below, the price that you pay for such Common Stock.
An investment in our securities is speculative and there can be no assurance of any return on any such investment.
An investment in our securities is speculative and there can be no assurance that investors will obtain any return on their investment. Investors may be subject to substantial risks involved in an investment in the Company, including the risk of losing their entire investment.
If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, our stock price and trading volume could decline.
The trading market for our Common Stock will depend in part on the research and reports that securities or industry analysts publish about us or our business. If one or more analysts downgrade our stock or publish inaccurate or unfavorable research about our business, our stock price would likely decline. If analysts cease coverage of our Company or fail to publish reports on us regularly, demand for our stock could decrease, which might cause our stock price and trading volume to decline.
If there is no active public market for our Common Stock, you may be unable to sell your shares at or above your purchase price.
Although our Common Stock is listed on Nasdaq, an active trading market for our shares may not be sustained. You may be unable to sell your shares quickly or at the market price if trading in shares of our common stock is not active. An inactive market may also impair our ability to raise capital by selling shares and may impair our ability to enter into strategic partnerships or acquire companies using our shares as consideration.
We may be subject to securities litigation, which is expensive and could divert our management’s attention.
The market price of our securities may be volatile, and in the past companies that have experienced volatility in the market price of their securities have been subject to securities class action litigation. We may be the target of this type of litigation in the future. Securities litigationagainst us may result in substantial costs and divert our management’s attention from other business concerns.
Future issuances of our Common Stock or securities convertible into or exercisable for our Common Stock could cause the market price of our Common Stock to decline and result in additional dilution to our stockholders.
We may issue additional shares of Common Stock, warrants, options, or other equity-linked securities in connection with future financings, acquisitions, equity incentive plans, or the settlement of outstanding obligations. The issuance of additional shares of Common Stock, or securities convertible into or exercisable for shares of Common Stock, will dilute the ownership interest of existing common stockholders and could depress the market price of our Common Stock. Sales of substantial amounts of our Common Stock in the public market, or the perception that such sales could occur, could also adversely affect the market price of our Common Stock.
IN ADDITION TO THE ABOVE RISKS, BUSINESSES ARE OFTEN SUBJECT TO RISKS NOT FORESEEN OR FULLY APPRECIATED BY MANAGEMENT. IN REVIEWING THIS FILING, POTENTIAL INVESTORS SHOULD KEEP IN MIND THAT OTHER POSSIBLE RISKS MAY ADVERSELY IMPACT OUR BUSINESS OPERATIONS AND THE VALUE OF OUR SECURITIES.
achieved
We assume no obligation to update these forward-looking statements to reflect actual results or changes in factors or assumptions affecting forward-looking statements.
Our revenues and results of operations could differ materially from those projected in the forward-looking statements as a result of numerous factors, including, but not limited to, the following: the risk of significant natural disaster, the inability of our company to insure against certain risks, inflationary and deflationary conditions and cycles, currency exchange rates, and changing government regulations domestically and internationally affecting our products and businesses.
You should read the following discussion and analysis in conjunction with the Financial Statements and Notes attached hereto, and the other financial data appearing elsewhere in this Annual Report.
US Dollars are denoted herein by “USD”, “$” and “dollars”.
Organization and Overview of Operations
On December 31, 2024, the Company entered into an asset purchase agreement (the “Asset Purchase Agreement”) with an unrelated third party, pursuant to which the Company agreed to sell, and the unrelated third party agreed to purchase, the Company’s skincare business. The sale of the skincare business was consummated on January 16, 2025.
Prior to entering into the Asset Purchase Agreement, the Company’s principal business was operating a skincare development company engaged in the design, manufacture, and marketing of skincare products in the skincare industry. After the sale of the skincare business, the Company changed its principal business. PMGC Holdings Inc. is a diversified holding company that manages and grows its portfolio through strategic acquisitions, investments, and development across various industries.
As part of its diversification and growth strategy, the Company completed the following acquisitions during the third quarter of 2025:
On July 7, 2025, the Company completed the acquisition of Pacific Sun Packaging Inc., a California-based custom IT packaging company.
On July 18, 2025, the Company acquired AGA Precision Systems LLC, a California-based CNC machining company.
On October 26, 2025, the Company, through its wholly owned subsidiary AGA Precision Systems LLC, acquired certain assets of Indarg Engineering, Inc., a California-based precision CNC machining business.
The Company manages and operates a diverse portfolio of wholly owned subsidiaries, as of December 31, 2025:
NorthStrive BioSciences Inc. – Biosciences is a biopharmaceutical company focusing on the development and acquisition of cutting-edge aesthetic medicines and therapeutic products. This company’s lead asset, EL-22, is leveraging a first-in-class engineered probiotic approach to address obesity’s pressing issue of preserving muscle while on weight loss treatments, including GLP-1 receptor agonists. For more information, please visit www.northstrivebio.com.
PMGC Research Inc. – PMGC Research was based in Canada and dedicated to medical scientific research and development efforts, utilizing Canadian research grants and partnering with leading Canadian Universities, with aims of pushing the boundaries of innovation. On November 12, 2025, PMGC Research was dissolved.
PMGC Capital LLC – PMGC Capital is a multi-strategy investment firm focused on direct investments, strategic lending, and acquiring undervalued companies and assets across diverse markets. This company’s mission is to identify and seize high-potential opportunities, delivering sustainable growth and maximizing returns on capital.
Pacific Sun Packaging Inc . – Pacific Sun is a California-based custom IT packaging company providing innovative, sustainable, and technology-driven packaging solutions to industrial and consumer markets.
AGA Precision Systems LLC. – AGA is a California-based precision engineering and CNC machining company specializing in the design and production of high-tolerance components for industrial and technology applications. In October 2025, AGA acquired substantially all the operating assets of Indarg Engineering, Inc. AGA expands PMGC’s advanced manufacturing footprint and enhances its capacity to deliver vertically integrated engineering and production solutions across multiple sectors.
Outlook
Management’s Plans
Over the next twelve months, we intend to focus on:
Increasing revenue by achievingsuccessful returns on capital through PMGC Capital LLC, our multi-strategy investment vehicle, by acquiring and managing undervalued assets, public and private investments, and structured financing opportunities.
Establishing new wholly owned subsidiaries to develop and commercialize newly acquired or licensed assets across various industries.
Utilizing clinical validation studies to strengthen the commercial potential and scientific credibility of our portfolio companies’ technologies.
Advancing clinical development to progress NorthStrive Biosciences, Inc.’s clinical assets toward Investigational New Drug (IND) applications.
Pursuing additional acquisitions of operating business-to-business companies with positive EBITDA.
Evaluating potential opportunities such as out licensing our biotechnology applications, potential spin-offs, and creating new publicly traded companies, such as Special Purpose Acquisition Corporations (“SPACs”).
Results of Operations
Comparison of the Years Ended December 31, 2025 and 2024.
The following table provides certain selected financial information for continuing operations for the periods presented:
Year Ended
December 31,
Year Ended
December 31, 2024
Change
Revenue
Cost of goods sold
Gross profit
Marketing and Promotion
Consulting Fees
Office and Administration
Professional Fees
Investor Relations
Research and Development
Repair and maintenance
Total operating expenses
Other income (expense) 1
Net loss from continuing operations
Basic and dilutive loss per common share – continuing operations
Weighted average number of shares outstanding – basic and diluted
Other expenses relate to finance cost, interest income, interest expense, dividend income, unrealized fair value gain/loss on investment, realized loss on sale of investments, fair value change on derivative liabilities, gain on the termination of the intangible asset and fair value gain/loss on derivative liability, gain on extinguish of related party debt, impairment on prepaid expense and loss on disposal of PP&E.
Revenue
Revenue for the year ended December 31, 2025, was $590,084 as compared to $nil for the year ended December 31, 2024, an increase of $590,084. Revenue was generated by the Company’s newly acquired subsidiaries.
Our revenue by category is as follows:
For the
year Ended
December 31,
Pacific Sun – Sale of IT packaging
AGA – Machine work
Total Revenue
Cost of Revenue
Cost of revenue for the year ended December 31, 2025, was $404,770 as compared to $nil for the year ended December 31, 2024.
The increase in cost of revenue is directly attributed to the increase in sales during the year ended December 31, 2025, compared to 2024. The following is a breakdown of the components of the cost of revenue:
For the year ended December 31, 2025
Pacific Sun – Sale of IT
packaging
AGA – Machine work
Total
Cost of inventory
Sales commission
Assembly and manufacturing expense
Shipping and handling cost
Inventory write down and wastage
Total Cost of Revenue
Gross Profit
Gross profit for the year ended December 31, 2025, was $185,314, as compared to $nil for the year ended December 31, 2024, an increase of $185,314. This represents an overall gross margin percentage of 31.4% for the year ended December 31, 2025, compared to $nil in 2024. The increase in gross profit and gross margin percentage was primarily attributable to the inclusion of revenues generated from the newly acquired subsidiaries.
The following is a breakdown of gross profit percentage by category:
For the
year Ended
December 31,
Pacific Sun – Sale of IT packaging
AGA – Machine work
Overall Gross Profit Percentage
The gross margin percentage on the sale of IT packaging is negatively impacted by the fair value adjustment to inventory recorded as part of the purchase price allocation. This adjustment is expensed to cost of revenue as inventory is sold. Normalizing for this adjustment, the gross margin percentage on the sale of IT packaging would have been 49.2%.
Research and Development Expenses
Research and development expenses for the year ended December 31, 2025, were $147,010 compared to $104,654 for the year ended December 31, 2024, an increase of $42,356. Research and development related to the Company’s spending on clinical validation studies. The increase in research and development was mainly driven by the Company continuously working on its research project of EL-22 and the costs of its Type B pre-Investigational New Drug (“pre-IND”) meeting with the U.S. Food and Drug Administration.
Marketing and Promotion
Marketing and promotion expenses for the year ended December 31, 2025, were $200,940 compared to $292,522 for the year ended December 31, 2024, a decrease of $91,582. During the year ended December 31, 2024, the Company engaged an investor relations agency under a $125,000 agreement signed on January 5, 2024, to support external communications and investor engagement efforts. No comparable agreement was entered into during the year ended December 31, 2025.
Office and Administrative Expenses
Office and administrative expenses for the year ended December 31, 2025, were $2,238,660, compared to $1,092,576 for year ended December 31, 2024, an increase of $1,146,084. The increase was driven by higher business activity levels, general price increases, and a shift in cost responsibilities following the disposition of the Company’s skincare business. The newly acquired businesses contributed $508,291 to office and administrative expenses since the acquisitions.
Consulting Fees
Consulting fees for the year ended December 31, 2025, were $1,769,505, compared to $1,367,273 for the year ended December 31, 2024, an increase of $402,232. The Company’s Chief Executive Officer, Chief Financial Officer, and Chairman provide services in a consulting capacity. The increase was primarily driven by bonus-related consulting expenses of $871,600 (2024 – $350,000), representing contractual bonuses approved by the Board of Directors and the Compensation Committee. The increases were partially offset by a decrease in external consulting services.
Professional Fees
Professional fees for the year ended December 31, 2025, was $1,423,021, compared to $563,242 for the year ended December 31, 2024, an increase of $859,779. Professional fees are comprised of legal, audit and accounting services. The increase during 2025, was primarily due to an increase in audit, legal and accounting services given the Company’s corporate restructuring, business acquisition due diligence, and financing efforts conducted during the year ended December 31, 2025.
Investor Relations
Investor relations expenses for the year ended December 31, 2025, were $253,333, compared to $208,326 for the year ended December 31, 2024, an increase of $45,007. The increase is primarily attributable to an increase in public relations and media coverage expenses during the year ended December 31, 2025 compared to the year ended December 31, 2024.
Repairs and Maintenance
Repairs and maintenance expenses for the year ended December 31, 2025, were $717,654, with no comparable expense in the year ended December 31, 2024. Following the acquisition of AGA and certain assets of Indarg Engineering, the Company incurred cost on building maintenance, machine repair and recalibration of equipment. These costs were necessary to optimize operations and maintain the useful lives of equipment acquired in the acquisition.
Other income (expense)
Other income (expense) for the year ended December 31, 2025, amounted to a net loss of $ 867,820, compared to net loss of $353,148 for the year ended December 31, 2024, representing an unfavorable variance of $514,672. The variance was primarily attributable to $500,000 of impairment on prepaid expense, $179,479 of finance costs, $113,917 of realized losses on investments, and $216,043 of unrealized losses on investments recognized during 2025, whereas no comparable amounts were recorded in the prior year and a decrease in fair value gain on derivative liabilities from $369,158 in the prior year to $214,167 in the current year. In addition, the Company recognized a $32,432 loss on the disposal of property and equipment during the year. These unfavorable items were partially offset by several favorable changes compared to the prior year, including a $490,563 decrease in interest expense to $244,634 in 2025 from $735,197 in 2024, $107,190 higher interest income, $15,550 of dividend income, a $129,613 gain on the termination of an intangible asset, a $31,261 gain on extinguishment of related-party debt, and a $31,028 increase in other income.
Liquidity and Capital Resources
The accompanying consolidated financial statements have been prepared on a going concern basis, which implies the Company will continue to realize its assets and discharge its liabilities in the normal course of business. The continuation of the Company as a going concern is dependent upon the continued financial support from its shareholders, the ability of the Company to obtain necessary equity financing to continue operations, and ultimately the attainment of profitable operations.
As of December 31, 2025 and 2024, the Company had a net working capital of $2,928,959 and $4,251,867, respectively, and has an accumulated deficit of $21,017,440 and $13,269,627, respectively. Furthermore, for the years ended December 31, 2025 and 2024, the Company incurred a net loss of $7,747,813 and $6,245,737, respectively and used $5,933,881 and $5,486,980, respectively of cash flows for operating activities. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern. These consolidated financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.
Our principal liquidity requirements are for working capital, capital expenditure and research and development. We fund our liquidity requirements primarily through cash on hand and the issuance of common and preferred stock. As of December 31, 2025, we had cash of $5,402,333, with $3,984,453 as of December 31, 2024.
The Company expects an improvement in liquidity and capital resources, including cash obtained from any sale of investment securities it currently owns. Cash flows used in discontinued operating and investing activities and assets and liabilities held for sale has been excluded from our analysis. The Company may be paid additional earn-out consideration in connection with the sale of its skincare business, consisting of potential payments for each year ending on the anniversary of the closing date of the disposition during the five-year period following the closing equal to 5% of the sales generated during such year from the existing products as of the closing and a one-time payment of $500,000 if the buyer achieves $500,000 in revenue from sales of the existing hair and scalp products as of the closing on or before the 24-month anniversary of the closing date of the disposition. The Company plans to use the cash obtained from any sale of investment securities or earnout payment for working capital.
The following table provides selected financial data as of December 31, 2025, and December 31, 2024, respectively (excluding assets and liabilities held for sale).
December 31, 2025
December 31, 2024
Change
Current assets
Current liabilities
Working capital
The following table summarizes our cash flows from operating, investing and financing activities from continuing operations:
Year Ended December 31, 2025
Year Ended December 31, 2024
Change
Cash used in operating activities
Cash used in investing activities
Cash provided by financing activities
Cash Flow from Operating Activities
For the year ended December 31, 2025, net cash flows used in operating activities for continuing operations was $5,802,550 compared to $2,800,601 used during the year ended December 31, 2024, respectively, primarily due to net loss and timing of settlement of assets and liabilities.
Cash Flows from Investing Activities
During the year ended December 31, 2025, and 2024, we used $2,765,154 and $601,404, respectively, in investing activities. The increase was primarily driven by business acquisition activity of $2,162,756, purchases of investments of $1,789,044, equipment purchases of $442,255, earnout payments of $114,969, and purchases of intangible assets of $6,000. These uses of cash were partially offset by $1,762,201 proceeds from the sale of investments and $127,300 related to the issuance of a promissory note.
Cash Flows from Financing Activities
During the year ended December 31, 2025, we had net cash flow provided by financing activities of $10,116,738 compared to cash flow provided by financing activities of $6,757,500 in 2024. During 2025, the Company received $3,990,007 from the initial pre-paid purchase under its equity purchase facility (ELOC), $1,672,103 from the issuance of common stock under its At-the-Market (“ATM”) sales agreement, and $1,245,306 from a registered direct offering of common stock and prefunded warrants. In addition, the Company received $1,698,058 from the exercise of Series A warrants and $1,511,443 from the exercise of replacement warrants issued on January 27, 2025. These inflows were partially offset by $179 used for the repurchase of shares.
Critical Accounting Policies and Significant Judgments and Estimates
This discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”). The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company regularly evaluates estimates and assumptions related to revenue recognition, the collectability of receivables, valuation of inventory, fair value of investments in securities, derivative liabilities and stock options, useful lives and recoverability of long-lived assets, and deferred income tax asset valuation allowances. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgements about the carrying value of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from those estimates. Estimates and assumptions are reviewed periodically, and the effects of revisions are reflected in the consolidated financial statements in the period they are determined.
Business Combinations
The Company accounts for business combinations using the acquisition method of accounting in accordance with ASC 805, Business Combinations. Under this method, the purchase consideration transferred is measured at fair value on the acquisition date and allocated to the identifiable assets acquired and liabilities assumed based on their estimated fair values. Any excess of the purchase consideration over the fair value of the identifiable net assets acquired is recorded as goodwill.
Acquisition-related costs (such as legal, due diligence, and advisory fees) are expensed as incurred and presented within general and administrative expenses in the consolidated statements of operations.
Contingent consideration, if any, is recorded at fair value on the acquisition date and subsequently remeasured at each reporting period, with changes in fair value recognized in earnings in accordance with ASC 805-30-35 and ASC 450, Contingencies.
During the year ended December 31, 2025, the Company completed three acquisitions—Pacific Sun Packaging Inc. AGA Precision Systems LLC and certain assets of Indarg Engineering, Inc. —which were accounted for under ASC 805. The initial purchase price allocations are preliminary and subject to adjustment upon completion of final valuation analyses.
Foreign Currency Translation
The Company’s functional and reporting currency is the U.S. dollar. The functional currency of the Company’s Canadian subsidiary, PMGC Research Inc. (“PMGC Research”) is the Canadian dollar. Monetary assets and liabilities denominated in foreign currencies are translated using the exchange rate prevailing at the balance sheet date. Non-monetary assets, liabilities, and items recorded in income arising from transactions denominated in foreign currencies are translated at rates of exchange in effect at the date of the transaction. Gains and losses arising on translation or settlement of foreign currency denominated transactions or balances are included in the determination of income.
The accounts of PMGC Research are translated to U.S. dollars using the current rate method. Accordingly, assets and liabilities are translated into U.S. dollars at the period-end exchange rate while revenues and expenses are translated at the average exchange rates during the period. Related exchange gains and losses are included in a separate component of stockholders’ equity as accumulated other comprehensive income (loss).
Revenue Recognition
Revenue is recognized in accordance with ASC 606, Revenue from Contracts with Customers, when control of the promised goods or services is transferred to the customer, in an amount that reflects the consideration the Company expects to receive.
For Pacific Sun Packaging Inc., revenue is recognized at a point in time upon shipment or delivery, as control transfers to the customer at that stage. For AGA Precision Systems LLC, which includes Indarg Engineering, Inc., revenue from CNC machining and precision component manufacturing is recognized at a point in time when control of the finished parts transfers to the customer. Standard shipping terms are FOB shipping point, resulting in transfer of control upon shipment. In limited delivery arrangements where AGA delivers parts to the customer’s dock, control transfers upon customer receipt.
Convertible debt and embedded derivative liabilities
Hybrid financial instruments with a convertible debt host contract and embedded derivative liability conversion feature are bifurcated and accounted for separately. The embedded derivative liability is initially and subsequently measured at fair value in accordance with ASC 815-15 Derivatives and Hedging — Embedded Derivatives. The convertible debt host contract is accounted for at amortized cost in accordance with ASC 470, Debt and Convertible Instruments.
Stock-Based Compensation
Employees - The Company accounts for share-based compensation under the fair value method which requires all such compensation to employees, including the grant of employee stock options, to be calculated based on its fair value at the measurement date (generally the grant date), and recognized in the consolidated statement of operations over the requisite service period.
Nonemployees - During June 2018, the FASB issued ASU 2018-07, Compensation-Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting (“ASU 2018-07”) to simplify the accounting for share-based payments to nonemployees by aligning it with the accounting for share-based payments to employees. Under the requirements of ASU 2018-07, the Company accounts for share-based compensation to non-employees under the fair value method which requires all such compensation to be calculated based on the fair value at the measurement date (generally the grant date) and recognized in the statement of operations over the requisite service period.
During the years ended December 31, 2025 and 2024, the Company recorded $(19,160) and $97,167, respectively, in share-based compensation expense, of which $60,440 and $(79,600) and $93,449 and $3,718, respectively is included in office and administration and discontinued operations, respectively. Within discontinued operations for the years ended December 31, 2025 and 2024, $(73,768) and $(5,832), and ($599) and $4,317, respectively is included in office and administration and research and development, respectively.
Determining the appropriate fair value model and the related assumptions requires judgment. During the year ended December 31, 2025 and the year ended 2024, the fair value of each option grant was estimated using a Black-Scholes option-pricing model.
The expected volatility represents the historical volatility of comparable publicly traded companies in similar industries, adjusted for variables such as stock price, market capitalization and life cycle. Due to limited historical data, the expected term for options granted is equal to the contractual life. The risk-free interest rate is based on a treasury instrument whose term is consistent with the expected life of stock options. The Company has not paid and does not anticipate paying cash dividends on its shares of common stock; therefore, the expected dividend yield is assumed to be zero.
Off-Balance Sheet Arrangements
We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditure or capital resources that is material to investors.
JOBS Act
On April 5, 2012, the Jumpstart Our Business Startups Act (the “JOBS Act”) was signed into law. The JOBS Act contains provisions that, among other things, eases certain reporting requirements for qualifying public companies. We will qualify as an “emerging growth company” and under the JOBS Act will be allowed to comply with new or revised accounting pronouncements based on the effective date for private (not publicly traded) companies. We are electing to delay the adoption of new or revised accounting standards, and as a result, we may not comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for non-emerging growth companies. As a result, our financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates.
Future Related Party Transactions
The Corporate Governance Committee of our Board of Directors is required to approve all related party transactions. All related party transactions are made or entered into on terms that are no less favorable to use than can be obtained from unaffiliated third parties.
Impact of Inflation
We do not believe the impact of inflation on our Company is material.
Inflation Risk
We are also exposed to inflation risk. Inflationary factors, such as increases in labor costs, could impair our operating results. Although we do not believe that inflation has had a material impact on our financial position or results of operations to date, a high rate of inflation in the future may have an adverse effect on our ability to maintain current levels of gross margin and operating expenses.
Market Risk
Market risk is the risk of loss arising from adverse changes in market rates and prices. Our market risk exposure is generally limited to those risks that arise in the normal course of business, as we do not engage in speculative, non-operating transactions, nor do we utilize financial instruments or derivative instruments for trading purposes.
