UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
For
The Quarterly Period Ended
OR
Commission
File Number:
(Exact name of registrant as specified in its charter)
| (State of incorporation) | (I.R.S. Employer Identification No.) |
(Address of principal executive office) (Zip code)
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
| The |
Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934, as amended, during the preceding 12 months (or for such shorter period than the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days.
Indicate
by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule
405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant
was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☐ | Accelerated filer | ☐ |
| ☒ | Smaller reporting company | ||
| Emerging growth company |
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
As of August 14, 2026, there were
PMGC Holdings Inc. Quarterly Report on Form 10-Q
TABLE OF CONTENTS
| PART I - FINANCIAL INFORMATION | 1 | ||
| Item 1. | Financial Statements | 1 | |
| Notes to Unaudited Condensed Consolidated Financial Statements | 8 | ||
| Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 31 | |
| Item 3. | Quantitative and Qualitative Disclosure About Market Risk | 42 | |
| Item 4. | Controls and Procedures | 42 | |
| PART II - OTHER INFORMATION | 43 | ||
| Item 1. | Legal Proceedings | 43 | |
| Item 1A. | Risk Factors | 43 | |
| Item 2. | Recent Sales of Unregistered Securities; Use of Proceeds and Issuer Purchases of Equity Securities | 43 | |
| Item 3. | Defaults Upon Senior Securities | 43 | |
| Item 4. | Mine Safety Disclosures | 43 | |
| Item 5. | Other Information | 43 | |
| Item 6. | Exhibits | 44 | |
| SIGNATURES | 45 | ||
i
Forward-Looking Statements
This Quarterly Report on Form 10-Q (this “Quarterly Report”) of PMGC Holdings Inc. (“we,” “us,” “our,” “PMGC” and the “Company”) contains statements that constitute “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Any statements that are not statements of historical facts may be deemed to be forward-looking statements. These statements appear in several different places in this Quarterly Report and, in some cases, can be identified by words such as “anticipates,” “estimates,” “projects,” “expects,” “contemplates,” “intends,” “believes,” “plans,” “may,” “will” or their negatives or other comparable words, although not all forward-looking statements contain these identifying words. Forward-looking statements in this Quarterly Report may include, but are not limited to, statements and/or information related to: our financial performance and projections; our business prospects and opportunities; our business strategy and future operations; the projection of timing and delivery of products in the future; projected costs; expected production capacity; expectations regarding demand and acceptance of our products; estimated costs of research and development to develop new pipeline products; trends in the market in which we operate; the plans and objectives of management; our liquidity and capital requirements, including cash flows and uses of cash; trends relating to our industry; and plans relating to our current products.
We have based these forward-looking statements on our current expectations about future events on information that is available as of the date of this Quarterly Report, and any forward-looking statements made by us speak only as of the date on which they are made. While we believe these expectations are reasonable, such forward-looking statements are inherently subject to risks and uncertainties, many of which are beyond our control. Our actual future results may differ materially from those discussed or implied in our forward-looking statements for various reasons, including, our ability to change the direction of the Company; our ability to keep pace with new technology and changing market needs; our capital needs, and the competitive environment of our business. Additional factors that could contribute to such differences include, but are not limited to:
| ● | general economic and business conditions, including changes in interest rates; |
| ● | prices of other competitive products, costs associated with research and development of our products and other economic conditions; |
| ● | the effect of an outbreak of disease or similar public health threat, such as any future outbreak of COVID-19 on our business (natural phenomena, including the lingering effects of the COVID-19 pandemic); |
| ● | the impact of political unrest, natural disasters or other crises, terrorist acts, acts of war and/or military operations, and our ability to maintain or broaden our business relationships and develop new relationships with strategic alliances, suppliers, customers, distributors or otherwise; |
| ● | breaches in data security, failure of information security systems, cyber-attacks or other security or privacy-related incidents affecting us or our suppliers; |
| ● | the ability of our information technology systems or information security systems to operate effectively; |
| ● | actions by government authorities, including changes in government regulation; |
| ● | uncertainties associated with legal proceedings; |
| ● | changes in the size of the medical aesthetics, cosmetics and biotechnology market; |
| ● | future decisions by management in response to changing conditions; |
| ● | disruption of supply or shortage of raw materials; |
| ● | the unavailability, reduction or elimination of government and economic incentives; |
| ● | failure to manage future growth effectively; and |
| ● | the other risks and uncertainties detailed from time to time in our filings with the U.S. Securities and Exchange Commission (“SEC”), including, but not limited to, those described under “Risk Factors” in Part I, Item 1A of the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, filed with the SEC on March 30, 2026 (the “Form 10-K”). |
Although management has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended. There is no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such forward-looking statements. Accordingly, readers should not place undue reliance on forward-looking statements. These cautionary remarks expressly qualify, in their entirety, all forward-looking statements attributable to us or persons acting on our behalf. We do not undertake to update any forward-looking statements to reflect actual results, changes in assumptions or changes in other factors affecting such statements, except as, and to the extent required by, applicable securities laws.
ii
PART I - FINANCIAL INFORMATION
Item 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
Condensed Consolidated Financial Statements of
PMGC Holdings Inc.
For the six months ended June 30, 2026, and 2025
(Unaudited - Expressed in United States Dollars)
1
PMGC Holdings Inc.
Condensed Consolidated Balance Sheets
(Unaudited - Expressed in United States dollars)
| As of: | June 30, 2026 | December 31, 2025 | ||||||
| ASSETS | ||||||||
| Current Assets | ||||||||
| Cash | $ | $ | ||||||
| Receivables, net | ||||||||
| Other receivables | ||||||||
| Prepaids and deposits | ||||||||
| Inventory | ||||||||
| Investment in securities- current | ||||||||
| Total Current Assets | ||||||||
| Operating lease right-of-use-assets | ||||||||
| Property and equipment, net | ||||||||
| Intangibles, net | ||||||||
| Goodwill | ||||||||
| TOTAL ASSETS | $ | $ | ||||||
| LIABILITIES | ||||||||
| Current Liabilities | ||||||||
| Accounts payable and accrued liabilities | $ | $ | ||||||
| Due to related parties | ||||||||
| Current portion of consideration payable | ||||||||
| Current portion of operating lease liability | ||||||||
| Current portion of equipment financing payable | ||||||||
| Derivative liabilities | ||||||||
| Current portion of promissory notes payable | ||||||||
| Convertible debt | ||||||||
| Total Current Liabilities | ||||||||
| Promissory notes payable | ||||||||
| Operating lease liability | ||||||||
| Equipment financing payable | ||||||||
| Deferred tax liabilities | ||||||||
| TOTAL LIABILITIES | $ | $ | ||||||
| Commitments and Contingencies | ||||||||
EQUITY | ||||||||
| Preferred stock $ | ||||||||
| Series B preferred stock, | ||||||||
| Common stock, $ | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated other comprehensive income | ( | ) | ||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| TOTAL EQUITY | ||||||||
| TOTAL LIABILITIES AND EQUITY | $ | $ | ||||||
| (1) | Reflects the 1-for-3.5 reverse stock split that became effective on September 2, 2025, the 1-for-4 reverse stock split that became effective on January 6, 2026, and the 1-for-6 reverse stock split that became effective on March 10, 2026. On a combined basis, this reflects retrospectively a reverse stock split of 1-for-84 |
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements
2
PMGC Holdings Inc.
Condensed Consolidated Statements of Operations and Comprehensive Loss
For the three months and six months ended June 30, 2026 and June 30, 2025
(Unaudited - Expressed in United States dollars)
| Three months ended June 30, 2026 | Three months ended June 30, 2025 | Six months ended June 30, 2026 | Six months ended June 30, 2025 | |||||||||||||
| Revenue | $ | |||||||||||||||
| Total revenue | ||||||||||||||||
| Cost of Goods Sold | ||||||||||||||||
| Gross margin | $ | |||||||||||||||
| Operating expenses | ||||||||||||||||
| Bad debt expense | ||||||||||||||||
| Depreciation and amortization | ||||||||||||||||
| Marketing and promotion | ||||||||||||||||
| Consulting fees | ||||||||||||||||
| Office and administrative | ||||||||||||||||
| Professional fees | ||||||||||||||||
| Investor relations | ||||||||||||||||
| Research and development | ||||||||||||||||
| Repairs and maintenance | ||||||||||||||||
| Foreign exchange (gain) loss | ( | ) | ( | ) | ||||||||||||
| Travel and entertainment | ||||||||||||||||
| Total operating expenses | $ | |||||||||||||||
| Other income (expense) | ||||||||||||||||
| Finance cost | ( | ) | ( | ) | ||||||||||||
| Change in fair value of derivative liabilities | ||||||||||||||||
| Dividend income | ||||||||||||||||
| Gain on the termination of the intangible asset | ||||||||||||||||
| Interest income | ||||||||||||||||
| Interest expense | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Realized gain (loss) on investments | ( | ) | ||||||||||||||
| Unrealized gain (loss) on investments | ( | ) | ||||||||||||||
| Gain(loss) on disposal of PP&E | ( | ) | ||||||||||||||
| Other income | ||||||||||||||||
| Net loss from continuing operations | $ | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
| Net income (loss) from discontinued operations (Note 4) | ( | ) | ||||||||||||||
| Total net loss | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other comprehensive income (loss) | ||||||||||||||||
| Currency translation adjustment | ( | ) | ( | ) | ||||||||||||
| Total comprehensive loss | $ | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
| Basic and diluted loss per share | ||||||||||||||||
| Continuing operations | $ | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
| Discontinued operations | $ | ( | ) | |||||||||||||
| Weighted average shares outstanding(1) | ||||||||||||||||
| (1) |
3
PMGC Holdings Inc.
Condensed Consolidated Statements of Changes in Stockholders’ Equity
For the three months ended June 30, 2026, and 2025
(Unaudited - Expressed in United States dollars)
| Common Stock | Series B Preferred Stock | Additional | Accumulated other | |||||||||||||||||||||||||||||
| Number of shares | Amount | Number of shares | Amount | paid-in capital | Accumulated deficit | comprehensive income | Total | |||||||||||||||||||||||||
| # | $ | # | $ | $ | $ | $ | $ | |||||||||||||||||||||||||
| Balance, April 1, 2025 | ( | ) | ( | ) | ||||||||||||||||||||||||||||
| Issued and issuable shares for acquisition of intangible assets | ||||||||||||||||||||||||||||||||
| Exercise of Pre-funded Warrants | ||||||||||||||||||||||||||||||||
| Issuance of common shares under ATM program | ||||||||||||||||||||||||||||||||
| Share-based compensation | - | - | ||||||||||||||||||||||||||||||
| Net loss for the period | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||
| Currency translation adjustment | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||
| Balance, June 30, 2025 | ( | ) | ( | ) | ||||||||||||||||||||||||||||
| Balance, April 1, 2026 | ( | ) | ||||||||||||||||||||||||||||||
| Issuance of common shares in the partial settlement of Pre-Paid Purchases | ||||||||||||||||||||||||||||||||
| Issuance of registered shares | ||||||||||||||||||||||||||||||||
| Share-based compensation | - | - | ||||||||||||||||||||||||||||||
| Net loss for the period | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||
| Balance, June 30, 2026 | ( | ) | ||||||||||||||||||||||||||||||
4
PMGC Holdings Inc.
Condensed Consolidated Statements of Changes in Stockholders’ Equity
For the six months ended June 30, 2026, and 2025
(Unaudited - Expressed in United States dollars)
| Common Stock | Series B Preferred Stock | Additional | Accumulated other | |||||||||||||||||||||||||||||
| Number of shares | Amount | Number of shares | Amount | paid-in capital | Accumulated deficit | comprehensive income | Total | |||||||||||||||||||||||||
| # | $ | # | $ | $ | $ | $ | $ | |||||||||||||||||||||||||
| Balance, January 1, 2025 | ( | ) | ( | ) | ||||||||||||||||||||||||||||
| Settlement of accrued bonus liability | ||||||||||||||||||||||||||||||||
| Issued and issuable shares for acquisition of intangible assets | ||||||||||||||||||||||||||||||||
| Exercise of Series A Warrants | ||||||||||||||||||||||||||||||||
| Issued pursuant to the registered direct offering | ||||||||||||||||||||||||||||||||
| Repurchase of shares | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||
| Round up shares due to reverse stock splits | - | |||||||||||||||||||||||||||||||
| Exercise of Pre-funded Warrants | - | |||||||||||||||||||||||||||||||
| Issuance of common shares under ATM program | ||||||||||||||||||||||||||||||||
| Share-based compensation | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||
| Net loss for the period | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||
| Currency translation adjustment | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||
| Balance, June 30, 2025 | ( | ) | ( | ) | ||||||||||||||||||||||||||||
| Balance, January 1, 2026 | ( | ) | ( | ) | ||||||||||||||||||||||||||||
| Reverse stock split effect | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||
| Issuance of common shares in the partial settlement of the Pre-Paid Purchases | ||||||||||||||||||||||||||||||||
| Issuance of registered shares | ||||||||||||||||||||||||||||||||
| Share-based compensation | - | - | ||||||||||||||||||||||||||||||
| Net loss for the period | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||
| Currency translation adjustment | - | - | ||||||||||||||||||||||||||||||
| Balance, June 30, 2026 | ( | ) | | |||||||||||||||||||||||||||||
| (1) | Reflects the 1-for-3.5 reverse stock split that became effective on September 2, 2025, the 1-for-4 reverse stock split that became effective on January 6, 2026, and the 1-for-6 reverse stock split that became effective on March 10, 2026. On a combined basis, this reflects retrospectively a reverse stock split of 1-for-84. |
5
PMGC Holdings Inc.
Condensed Consolidated Statements of Cash Flows
For the six months ended June 30, 2026, and 2025
(Unaudited - Expressed in United States dollars)
| June 30, 2026 | June 30, 2025 | |||||||
| Operating activities | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Bad debt expense | ||||||||
| Depreciation and amortization | ||||||||
| Finance cost | ||||||||
| Share-based compensation | ( | ) | ||||||
| Straight-line rent expense | ( | ) | ||||||
| Change in fair value of derivative liabilities | ( | ) | ||||||
| Non-cash interest expense | ||||||||
| Research and development costs for intangible assets | ||||||||
| Gain on termination of intangible asset | ( | ) | ||||||
| Loss on the sale of Skincare | ||||||||
| Loss on disposal of PP&E | ||||||||
| Realized loss (gain) on sale of investments | ( | ) | ||||||
| Unrealized loss(gain) on investments | ( | ) | ( | ) | ||||
| Changes in operating assets and liabilities: | ||||||||
| Receivables and other receivables | ( | ) | ||||||
| Prepaid expenses and deposits | ( | ) | ||||||
| Inventory | ( | ) | ||||||
| Accounts payable and accrued liabilities | ( | ) | ||||||
| Customer deposits | ( | ) | ||||||
| Due to related parties | ( | ) | ( | ) | ||||
| Cash flows used in operating activities1 | $ | ( | ) | $ | ( | ) | ||
| Investing activities | ||||||||
| Purchase of investments | ( | ) | ( | ) | ||||
| Proceeds from sale of investments | ||||||||
| Purchase of equipment | ( | ) | ||||||
| Acquisition of businesses, net of cash acquired | ( | ) | ||||||
| Issuance of promissory note | ( | ) | ||||||
| Purchase of intangible assets | ( | ) | ||||||
| Cash flows used in investing activities1 | $ | ( | ) | $ | ( | ) | ||
| Financing activities | ||||||||
| Exercise of Series A warrants | ||||||||
| Proceeds from the issuance of common stock and warrants | ||||||||
| Share issuance costs | ( | ) | ||||||
| Repurchase of shares and warrants | ( | ) | ||||||
| Issuance of common shares under ATM agreement | ||||||||
| Repayment towards promissory note | ( | ) | ||||||
| Equipment financing proceeds | ||||||||
| Repayment towards equipment financing | ( | ) | ||||||
| Proceeds from the Pre-Paid Purchases of Equity Purchase Facility (“ELOC”), net | ||||||||
| Proceeds from issuance of registered shares | ||||||||
| Cash flows provided by financing activities | $ | $ | ||||||
| Effect of exchange rate changes on cash | ( | ) | ||||||
| Increase in cash | ||||||||
| Cash, beginning of period | ||||||||
| Cash, ending of period | $ | $ | ||||||
6
PMGC Holdings Inc.
Condensed Consolidated Statements of Cash Flows
For the six months ended June 30, 2026, and 2025
(Unaudited - Expressed in United States dollars)
| Supplemental cash flow information: | ||||||||
| Cash paid for interest | $ | $ | ||||||
| Cash paid for taxes | ||||||||
| Non-cash Investing and Financing transactions: | ||||||||
| Common stock issued and issuable on acquisition of intangible asset | ||||||||
| Shares received as proceeds for the sale of Skincare | ||||||||
| Series B preferred shares issues to settle accrued bonus liability | ||||||||
| Consideration payable settled through termination of the agreement | ||||||||
| Common stock issued to settle a portion of the ELOC | ||||||||
| 1 |
7
| 1. | Organization and nature of operations |
PMGC Holdings Inc. (formerly Elevai
Labs Inc.) (“PMGC”) was incorporated under the laws of the State of Delaware on
As part of its diversification and growth strategy, the Company completed the following acquisitions during the six months ended June 30, 2026:
| ● | On February 2, 2026, the Company completed the acquisition of SVM Machining, Inc., a California-based precision machining and aerospace manufacturing company (Note 5). | |
| ● | On May 11, 2026, the Company completed the acquisition of A&B Aerospace, Inc., a California-based precision machining company serving aerospace customers (Note 5). |
On April 2, 2026, the Company announced the formation of a new wholly owned subsidiary, NorthStrive Defense Tech LLC (“NorthStrive Defense Tech”). NorthStrive Defense Tech was established to operate in the defense technology sector, with an initial focus on drone technology, autonomous systems, and next-generation unmanned defense solutions. The Company intends for NorthStrive Defense Tech to serve as a platform to identify, acquire, license, and commercialize advanced defense technologies through acquisitions, licensing arrangements, strategic partnerships, and other commercialization pathways. The Company expects to leverage its existing operating subsidiaries, including AGA Precision Systems LLC and SVM Machining, Inc., which operate within the aerospace, defense, and space sectors, to support potential commercialization opportunities.
NorthStrive Sponsor I LLC (the “Sponsor”)
is a wholly owned subsidiary of PMGC. The Sponsor acts as sponsor of NorthStrive Acquisition Corp I (“NorthStrive Acquisition”),
a special purpose acquisition company incorporated as an exempted company with limited liability under the laws of the Cayman Islands
with effect from April 27, 2026, and formed for the purpose of effecting a merger, share exchange, asset acquisition, share purchase,
reorganization or similar business combination with one or more businesses. PMGC holds a
PMGC currently manages and operates a diverse portfolio of wholly owned subsidiaries:
| ● | NorthStrive BioSciences Inc. – a biopharmaceutical company focusing on the development and acquisition of cutting-edge aesthetic medicines and therapeutic products. Our lead asset, EL-22, is leveraging a first-in-class engineered probiotic approach to address obesity’s pressing issue of preserving muscle while on weight loss treatments, including GLP-1 receptor agonists. |
8
| ● | PMGC Capital – a multi-strategy investment firm focused on direct investments, strategic lending, and acquiring undervalued companies and assets across diverse markets. Our mission is to identify and seize high-potential opportunities, delivering sustainable growth and maximizing returns on capital. |
| ● | ELAB Opportunity - a wholly owned Utah subsidiary which was formed to facilitate and hold assets related to the Company’s secured pre-paid purchase and financing collateral arrangements. ELAB Opportunity supports the Company’s strategic financing structure and related treasury activities. |
| ● | Pacific Sun- a California-based custom IT packaging company providing innovative, sustainable, and technology-driven packaging solutions to industrial and consumer markets. |
| ● | AGA - 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. |
| ● | SVM - a California-based precision machining and aerospace manufacturing company specializing in high-precision components and complex machining solutions for aerospace, defense, and industrial applications. SVM enhances PMGC’s advanced manufacturing capabilities and expands the Company’s footprint in the aerospace and defense sectors. |
| ● |
NorthStrive Defense Tech - a wholly owned subsidiary focused on defense technology, including drone technology, autonomous systems, and next-generation unmanned defense solutions. NorthStrive Defense Tech was formed to identify, acquire, license, and commercialize advanced defense technologies.
| |
| ● |
A&B - a California-based precision machining company producing high-tolerance machined components and assemblies for aerospace customers. A&B further extends PMGC’s aerospace manufacturing capacity and its qualification and certification base.
| |
| ● | NorthStrive Sponsor I - a wholly owned subsidiary that acts as the sponsor of NorthStrive Acquisition Corp I, a special purpose acquisition company. The Sponsor was formed to hold the Company’s sponsor interest in, and to fund the formation and offering costs of, that special purpose acquisition company. | |
| ● | NorthStrive Acquisition Corp I - a special purpose acquisition company incorporated as an exempted company with limited liability under the laws of the Cayman Islands with effect from April 27, 2026, formed for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses. |
9
| 2. | Going Concern |
These unaudited condensed consolidated financial statements have been prepared on a going concern basis, which implies the Company will continue to realize its assets and discharge its liabilities in the normal course of business. The continuation of the Company as a going concern is dependent upon the continued financial support from its shareholders and the ability of the Company to obtain necessary equity financing to continue operations, and ultimately the attainment of profitable operations.
As of June 30, 2026, and December 31, 2025, the Company had net working
capital of $
The assessment of whether the going concern assumption is appropriate requires management to take into account all available information about the future, which is at least, but not limited to, twelve (12) months from the date the financial statements are issued. The Company is aware that material uncertainties related to events or conditions may cast substantial doubt upon the Company’s ability to continue as a going concern.
Management’s plans that alleviate substantial doubt about the Company’s ability to continue as a going concern include: (a) raising additional debt or equity financing and (b) the acquisition of cash flow generating assets or businesses. Although the Company has been successful in raising funds in the past, and expects to do so in the future, there are no guarantees that it will be able to raise funds as anticipated.
10
| 3. | Summary of Significant Accounting Policies |
Basis of Presentation
These unaudited condensed consolidated financial statements have been prepared in accordance with rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) and generally accepted accounting principles in the United States (“U.S. GAAP”) for interim financial information and are expressed in United States dollars. Accordingly, the unaudited condensed consolidated financial statements do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, we have included all adjustments considered necessary for a fair presentation and such adjustments are of a normal recurring nature. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements for the years ended December 31, 2025, and 2024. The results of operations for the six months ended June 30, 2026 are not necessarily indicative of the results to be expected for the full fiscal year ending December 31, 2026.
Principles of Consolidation
The unaudited condensed consolidated financial statements include the
accounts of PMGC and its
Use of Estimates
The preparation of the unaudited condensed 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 unaudited condensed consolidated financial statements in the period they are determined.
Foreign Currency Translation
The Company’s functional and reporting currency is the U.S. dollar. The functional currency of PMGC Research is the Canadian dollar. Monetary assets and liabilities denominated in foreign currencies are translated using the exchange rate prevailing at the balance sheet date. Non-monetary assets, liabilities, and items recorded in income arising from transactions denominated in foreign currencies are translated at rates of exchange in effect at the date of the transaction. Gains and losses arising on translation or settlement of foreign currency denominated transactions or balances are included in the determination of income.
The accounts of PMGC Research are translated to U.S. dollars using the current rate method. Accordingly, assets and liabilities are translated into U.S. dollars at the period-end exchange rate while revenues and expenses are translated at the average exchange rates during the period. Related exchange gains and losses are included in a separate component of stockholders’ equity as accumulated other comprehensive income (loss).
There have been no material changes to the Company’s significant accounting policies as disclosed in our Form 10-K for the year ended December 31, 2025, filed with the SEC on March 30, 2026.
11
New Accounting Standards
Recently Adopted Accounting Standards
In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”), intended to improve reportable segments disclosure requirements primarily through enhanced disclosures about significant segment expenses.
In December 2023, the FASB issued “ASU 2023-09—Income Taxes (Topic 740)—Improvements to Income Tax Disclosures” (“ASU 2023-09”) which amends the Codification to enhance the transparency and decision usefulness of income tax disclosures. ASU 2023-09 requires additional disaggregation of the reconciliation between the statutory and effective tax rate for an entity and of income taxes paid, both of which are disclosures required by current GAAP. The amendments improve the transparency of income tax disclosures by requiring (1) consistent categories and greater disaggregation of information in the rate reconciliation and (2) income taxes paid disaggregated by jurisdiction. The amendments in ASU 2023-09 apply to all entities that are subject to Topic 740, Income Taxes. For public business entities, the amendments in ASU 2023-09 are effective for annual periods beginning after December 15, 2024. The Company adopted the ASU prospectively for the period ending December 31, 2025, the effect being only related to our disclosures with no impact on our results of operations or financial condition.
ASU 2023-07 includes a requirement to disclose significant segment expenses that are regularly provided to the CODM and included within each reported measure of segment profit or loss, the title and position of the CODM, an explanation of how the CODM uses the reported measure(s) of segment profit or loss in assessing segment performance and deciding how to allocate resources, and all segments’ profit or loss and assets disclosures. ASU 2023-07 is effective for all public companies for fiscal years beginning after December 15, 2023, and interim periods for the interim period beginning on January 1, 2025. Adoption of ASU 2023-07 did not have a material impact on the Company’s consolidated financial statement.
In November 2024, the FASB issued ASU 2024-03, Expense Disaggregation Disclosures (Subtopic 220-40), which requires enhanced disclosures of nature and composition of certain expense captions presented in the income statement, including inventory purchases, employee compensation, depreciation, and other significant expenses. The Company adopted this guidance during the year ended December 31, 2025. The adoption of this guidance did not have a material impact on the Company’s consolidated financial statements but resulted in additional disclosures in the notes to the consolidated financial statements.
Recently Issued Accounting Standards
The Company assesses the adoption impacts of recently issued, but not yet effective, accounting standards by the Financial Accounting Standards Board on the Company’s unaudited condensed consolidated financial statements.
There are no recently issued accounting standards which may have effect on the Company’s unaudited condensed consolidated financial statements
| 4. | Assets and liabilities held for sale and Discontinued operations |
Pursuant to an Asset Purchase Agreement
with an unrelated third party, dated December 31, 2024, the Company agreed to sell its skincare business for (i)
12
Following
the closing which occurred on January 16, 2025 (the “Closing” or “Closing Date”), buyer will pay additional earn-out
consideration for the sale, if and when payable: (a) buyer will pay, for each year ending on the anniversary of the Closing Date during
the five-year period following the Closing, an amount, if any, equal to
The following table summarizes the major line items for the skincare business that are included in loss from discontinued operations, net of taxes in the consolidated statements of operations:
| Three months ended June 30, 2026 | Three months ended June 30, 2025 | Six months ended June 30, 2026 | Six months ended June 30, 2025 | |||||||||||||
| Revenue | $ | $ | $ | $ | ||||||||||||
| Cost of goods sold | ||||||||||||||||
| Gross profit | $ | $ | $ | $ | ||||||||||||
| Expenses | ||||||||||||||||
| Depreciation | ||||||||||||||||
| Marketing and promotion | ||||||||||||||||
| Consulting fees | ||||||||||||||||
| Office and administrative | ||||||||||||||||
| Professional fees | ||||||||||||||||
| Investor relations | ||||||||||||||||
| Research and development | ||||||||||||||||
| Foreign exchange (gain) loss | ||||||||||||||||
| Travel and entertainment | ||||||||||||||||
| Total expenses | $ | $ | $ | $ | ||||||||||||
| Other income (expense) | ||||||||||||||||
| Other income | ||||||||||||||||
| Interest expense | ||||||||||||||||
| Loss on the sale of Skincare | ( | ) | ||||||||||||||
| Net income (loss) from discontinued operations | $ | $ | $ | $ | ( | ) | ||||||||||
The
Company recorded a loss on sale of discontinued operations of $
The following represents the cash flows from operating and investing activities of discontinued operations for the six months ended June 30, 2026 and 2025:
| June 30, 2026 | June 30, 2025 | |||||||
| Cashflows used in operating activities | $ | $ | ( | ) | ||||
| Cashflows used in investing activities | ||||||||
13
| 5. | Business combinations |
Pacific Sun Packaging Inc.
On
July 7, 2025, the Company completed the acquisition of
The
acquisition included contingent consideration with a maximum potential payment of $
The
contingent consideration was recognized at fair value as of the acquisition date and is classified as a liability. The fair value was
estimated using a probability-weighted discounted cash flow approach, incorporating management’s revenue projections and an estimated
discount rate of approximately
As of June 30, 2026, the estimated fair value of the contingent consideration
liability was $
AGA
On July 18, 2025, the Company acquired
Indarg Engineering, Inc.
On October 26, 2025, AGA acquired substantially all of the operating assets of Indarg Engineering, Inc. The transaction was accounted for as a business combination under ASC 805. Refer to Note 5 in the Form 10-K for the year ended December 31, 2025 for further details, including the purchase price allocation.
As part of the acquisition, the Company
issued a promissory note with a principal amount of $
SVM
On February 2, 2026, the Company completed
the acquisition of
The
contingent consideration is based on SVM’s 2026 revenue performance and has a maximum payout of $
14
The following table summarizes the fair value of consideration transferred and the preliminary allocation of the purchase price to the assets acquired and liabilities assumed:
| Cash | $ | |||
| Target cash balance delivered with the company | ||||
| Working capital adjustment | ||||
| Indemnification holdback | ||||
| Earnout payable | ||||
| Total consideration | $ | |||
| Net assets (liabilities) acquired of the Company: | ||||
| Cash | $ | |||
| Receivables, net | ||||
| Inventory | ||||
| Property and equipment | ||||
| Intangible - customer relationships | ||||
| Intangible – brand name | ||||
| Intangible- backlog | ||||
| Intangible- intellectual properties and certifications | ||||
| Accounts payable and accrued liabilities | ( | ) | ||
| Lease liability | ( | ) | ||
| Total net assets (liabilities) | $ | |||
| Goodwill | $ |
Goodwill recognized primarily reflects expected synergies from integrating SVM’s operations and workforce and is not expected to be deductible for tax purposes. The results of SVM’s operations are included in the consolidated financial statements beginning February 2, 2026.
A&B Aerospace, Inc.
On May 11, 2026, the Company completed
the acquisition of
The purchase price allocation is provisional. The final adjustment amount contemplated by the stock purchase agreement had not been determined as of June 30, 2026, and the Company is continuing to evaluate the fair values assigned to the assets acquired and the liabilities assumed. Measurement period adjustments, if any, will be recognized within one year of the acquisition date.
15
The following table summarizes the fair value of consideration transferred and the preliminary allocation of the purchase price to the assets acquired and liabilities assumed:
| Cash paid at closing | $ | |||
| Indemnification holdback | ||||
| Net working capital adjustment | ||||
| Total consideration | $ | |||
| Net assets (liabilities) acquired of the Company: | ||||
| Cash | $ | |||
| Receivables, net | ||||
| Inventory | ||||
| Prepaid expenses and deposits | ||||
| Property and equipment | ||||
| Intangible assets | ||||
| Accounts payable and accrued liabilities | ( | ) | ||
| Notes payable assumed | ( | ) | ||
| Total net assets (liabilities) | $ | |||
| Goodwill | $ |
Goodwill recognized primarily reflects expected synergies from integrating A&B’s operations, its assembled workforce and its qualification and certification base, and is not expected to be deductible for tax purposes. The results of A&B’s operations are included in the consolidated financial statements beginning May 11, 2026.
| 6. | Receivables |
As of June 30, 2026, and December 31, 2025, receivables consisted of
trade receivables of and $
| 7. | Prepaids and Deposits |
As of June 30, 2026, and December 31, 2025, prepaid and deposits consisted of the following:
| June 30, 2026 | December 31, 2025 | |||||||
| Prepaid expenses | $ | $ | ||||||
| Deposits | ||||||||
| $ | $ | |||||||
16
| 8. | Inventory |
As of June 30, 2026, and December 31, 2025, inventory consisted of the following:
| June 30, 2026 | December 31, 2025 | |||||||
| Finished goods | $ | $ | ||||||
| Work in progress | ||||||||
| Raw materials | ||||||||
| $ | $ | |||||||
Cost of inventory recognized as expense in cost of sales for the three
months ended June 30, 2026 and 2025, totaled $
| 9. | Investment in securities |
The Company’s investments consist of publicly traded equity securities, warrants and a convertible debenture. These investments are reported under ASC 321 – Investments in Equity Securities and ASC 320 – Investments – Debt Securities, as applicable. The Company has classified the investments as held for trading.
The following table summarizes the changes in investments for the six months ended June 30, 2026:
| Public Company Investments | Private Company Investment | Convertible Debenture and Warrants | Total | |||||||||||||
| Balance, December 31, 2025 | $ | |||||||||||||||
| Purchases | $ | |||||||||||||||
| Proceeds on sale | ( | ) | ( | ) | ||||||||||||
| Warrant exercise | ( | ) | ||||||||||||||
| Realized gain | ||||||||||||||||
| Unrealized gain | ||||||||||||||||
| Balance, June 30, 2026 | $ | |||||||||||||||
The Company accounts for investments in warrants as equity securities in accordance with ASC 321, Investments—Equity Securities, and measures such investments at fair value, with changes in fair value recognized in earnings.
Fair Value Measurement
The following table presents the Company’s financial instruments measured at fair value on a recurring basis as of June 30, 2026 and December 31, 2025, in accordance with the fair value hierarchy of ASC 820, Fair Value Measurement (“ASC 820”). which defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC 820 establishes a three-level hierarchy for inputs used in measuring fair value:
| ● | Level 1: Quoted prices in active markets for identical assets or liabilities. | |
| ● | Level 2: Observable inputs other than Level 1, either directly or indirectly. | |
| ● | Level 3: Unobservable inputs, used when observable inputs are not available. |
The Company measures certain financial instruments at fair value on a recurring basis. When observable market data is available, such inputs are used to measure fair value. When observable inputs are not available, the Company applies valuation techniques which require management to develop significant estimates and assumptions.
Certain non-financial assets, including goodwill, intangible assets and long-lived assets, are measured at fair value on a non-recurring basis when indicators of impairment exist.
| June 30, 2026 | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
| Equity securities | $ | |||||||||||||||
| Total | $ | |||||||||||||||
| December 31, 2025 | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
| Equity securities | $ | |||||||||||||||
| Warrants | ||||||||||||||||
| Total | $ | |||||||||||||||
17
| 10. | Property, plant and equipment |
| Computers | Machinery & Equipment | Furniture and office equipment | Leasehold improvement | Total | ||||||||||||||||
| Cost | ||||||||||||||||||||
| Balance, December 31, 2025 | $ | $ | ||||||||||||||||||
| Business combinations | ||||||||||||||||||||
| Additions | ||||||||||||||||||||
| Disposal | ( | ) | ( | ) | ||||||||||||||||
| Balance, June 30, 2026 | $ | |||||||||||||||||||
| Accumulated depreciation | ||||||||||||||||||||
| Balance, December 31, 2025 | $ | |||||||||||||||||||
| Depreciation | ||||||||||||||||||||
| Disposal | ( | ) | ( | ) | ||||||||||||||||
| Balance, June 30, 2026 | $ | |||||||||||||||||||
| Net book value | ||||||||||||||||||||
| December 31, 2025 | $ | |||||||||||||||||||
| June 30, 2026 | $ | |||||||||||||||||||
| 11. | Intangible assets, net |
License # 2 (IPR&D | Customer relationship | Brand | Backlog | Intellectual properties, certifications and other | Total | |||||||||||||||||||
| Cost: | ||||||||||||||||||||||||
| Balance, December 31, 2025 | $ | |||||||||||||||||||||||
| Additions | ||||||||||||||||||||||||
| Business combinations | ||||||||||||||||||||||||
| Balance, June 30, 2026 | $ | |||||||||||||||||||||||
| Accumulated amortization: | ||||||||||||||||||||||||
| Balance, December 31, 2025 | $ | |||||||||||||||||||||||
| Amortization | ||||||||||||||||||||||||
| Balance, June 30, 2026 | $ | |||||||||||||||||||||||
| Net book value: | ||||||||||||||||||||||||
| December 31, 2025 | $ | |||||||||||||||||||||||
| June 30, 2026 | ||||||||||||||||||||||||
18
License #2:
| 12. | Equipment financing |
In October 2025, the Company’s subsidiary, AGA, entered into an equipment finance agreement with U.S. Bank Equipment Finance to finance the purchase of certain manufacturing equipment and the equipment is pledged as collateral under the financing arrangement.
The total cost of the financed equipment
was approximately $
Monthly payments for the equipment financing
loan are $
As of June 30, 2026, the outstanding principal balance under the equipment
financing loan was $
| As at June 30, 2026 | Loan payments ($) | |||
| 2026 (remaining six months) | ||||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| 2030 | ||||
| Total future payments | $ | |||
| Less: imputed interest | ( | ) | ||
| Outstanding principal balance | $ | |||
| Current portion | $ | |||
| Non-current portion | $ | |||
| 13. | Operating Leases |
The Company’s subsidiaries, AGA, Pacific Sun, SVM and A&B entered into non-cancelable operating leases for the office and warehouse spaces occupied to operate its business.
The
Pacific Sun lease was executed on July 9, 2025, and the Company committed to monthly lease payments of $
19
The
AGA lease was executed on July 19, 2025, and the Company committed to monthly lease payments of $
The
SVM lease commenced on February 2, 2026, and the Company committed to monthly base lease payments of $
The A&B lease was signed on May 21, 2026 and commenced on June
1, 2026, with monthly base rent of $
The
Company used a discount rate of
The
Company recognized a total lease cost related to its non-cancelable operating leases of $
The Company recognizes right-of-use (“ROU”) assets and corresponding lease liabilities for operating leases in accordance with ASC 842, Leases. ROU assets represent the Company’s right to use underlying leased assets over the lease term and are initially measured at the amount of the lease liability, adjusted for initial direct costs, prepaid lease payments, and lease incentives.
As
of June 30, 2026, the Company’s operating lease ROU assets had a carrying value of $
As
of June 30, 2026 and December 31, 2025, the Company recorded a security deposit of $
Future minimum lease payments under the Company’s operating leases that have an initial non-cancelable lease term in excess of one year at June 30, 2026, are as follows:
| As at June 30, 2026 | Lease payments ($) | |||
| 2026 | ||||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| 2030 and thereafter | ||||
| Total future payments | $ | |||
| Less: imputed interest | ( | ) | ||
| Operating lease liabilities | $ | |||
| Operating lease liabilities-current | $ | |||
| Operating lease liabilities- non-current | $ | |||
20
| 14. | Convertible debt under ELOC Agreements |
On September 23, 2025, the Company entered
into a securities purchase agreement, establishing an equity line of credit of up to $
On April 16, 2026, the Company entered
into a second securities purchase agreement, establishing a further equity line of credit with an aggregate commitment amount of up to
$
The Company is accounting for the convertible debt host contracts under ASC 470-20, , Debt with Conversion and Other Options, at amortized cost and has determined that the conversion options meets the definition of an embedded derivative liability which is separately accounted for at fair value in accordance with ASC 815-15 Derivatives and Hedging — Embedded Derivatives (Note 15).
A continuity of the amortized cost of the convertible debt hosts contract are as follows:
| First ELOC Agreement | Second ELOC Agreement | Total | ||||||||||
| Balance, January 1, 2026 | $ | $ | $ | |||||||||
| Principal | ||||||||||||
| Fair value of embedded derivative liability | ( | ) | ( | ) | ( | ) | ||||||
| Allocation of original issue discount and issuance cost (1) | ( | ) | ( | ) | ( | ) | ||||||
| Accretion | ||||||||||||
| Interest expense | ||||||||||||
| Repayment through common stock | ( | ) | ( | ) | ( | ) | ||||||
| Balance, June 30, 2026 | $ | $ | $ | |||||||||
| (1) |
21
| 15. | Derivative liabilities |
Liability classified stock purchase warrants
As of June 30, 2026, the following liability classified stock purchase warrants were outstanding:
| Outstanding | Expiry date | Weighted average exercise price ($) | ||||||
As of June 30, 2026 and December 31, 2025, the weighted average life
of derivative liability classified stock purchase warrants outstanding was
Embedded derivative liabilities
The Company determined that the conversion features embedded in the secured pre-paid purchase instruments issued in connection with the ELOC arrangements were required to be separated from the convertible debt host contracts and accounted for as derivative liabilities. The derivative liabilities were initially recognized at fair value and are remeasured at fair value at each reporting date, with changes in fair value recognized in the condensed consolidated statement of operations.
During the six months ended June 30,
2026, the Company recognized additional derivative liabilities of $
22
The following table summarizes the activity in the Company’s embedded derivative liabilities during the six months ended June 30, 2026:
| Amount | ||||
| Balance, January 1, 2026 | $ | |||
| Addition | ||||
| Change in fair value | ( | ) | ||
| Derecognition upon settlement of convertible debt | ( | ) | ||
| Balance, June 30, 2026 | $ | |||
| 16. | Equity |
Common Stock
Authorized
As of June 30, 2026, and December 31, 2025, the Company had
Issued and outstanding
As of June 30, 2026, and December 31, 2025, the Company had
Transactions during the six months ended June 30, 2026
During the six months ended June 30,
2026, the Company issued an aggregate of
In addition, on April 17, 2026 the
Company issued
Transactions during the six months ended June 30, 2025
On
January 28, 2025, the Company entered into and completed a warrant inducement transaction with the holders of its Series A Common Stock
Purchase Warrants pursuant to a warrant inducement agreement (“Series A Warrants”). Under the warrant inducement agreement,
the exercise price of the outstanding Series A Warrants was reduced from $
On February 2, 2025, the Company issued
On March 7, 2025, the Company repurchased
23
On March 18, 2025, the Company entered into a securities purchase agreement
with an existing investor to repurchase one (1) share of common stock and a warrant to purchase one (1) share of common stock at an exercise
price of $
On
March 21, 2025, the Company entered into a Securities Purchase Agreement between the Company and certain institutional investors with
respect to a registered direct offering for the offer and sale of
On March 26, 2025, the Company entered
into a first amendment to the exclusive license agreement covering License # 2 (Note 12), expanding its rights to include the growing
animal health market. The Company issued
During the six months ended June 30,
2025, the Company sold an aggregate of
Preferred Stock
Authorized
As of June 30, 2026, and December 31, 2025, the Company had
Issued and outstanding
As
at June 30, 2026, and December 31, 2025, the Company had
Transactions during the six months ended June 30, 2026, and 2025
On March 26, 2025, at a special meeting of the shareholders, the shareholders
approved the issuance of
Equity Warrants
Transactions during the six months ended June 30, 2026.
There was no equity warrants activity during the six months ended June 30, 2026.
24
Transactions during the six months ended June 30, 2025.
On
January 28, 2025, in connection with the warrant inducement agreement (see above) and the exercise of the Series A Warrants, the Company
issued
As noted above, on March 18, 2025, the Company entered into a securities
purchase agreement with an existing investor to repurchase one (1) share of common stock and a warrant to purchase 1 share of common stock
at an exercise price of $
On
March 24, 2025, the Company consummated a registered direct offering with institutional investors, issuing
As of June 30, 2026, the following equity warrants were outstanding:
| Outstanding | Expiry date | Weighted average exercise price ($) | ||||||
As
of June 30, 2026, and December 31, 2025, the weighted average life of equity warrants outstanding was
Stock Options
The
Company has a stock option plan included in the Company’s 2025 Equity Incentive Plan (the “Plan”) where the Board of
Directors or any of its committees can grant Incentive Stock Options, Nonstatutory Stock Options, and Restricted Stock to employees,
advisors and directors of the Company. As of June 30, 2026, the aggregate number of shares reserved for issuance pursuant to awards granted
under the Plan was
Transactions during the six-month ended June 30, 2026
On
June 1, 2026, the Company granted
Transactions during the six-month ended June 30, 2025
There was no stock option activity during the six months ended June 30, 2025.
25
The continuity of stock options for the six months ended June 30, 2026, and December 31, 2025, is summarized below:
| Number of stock options | Weighted average exercise price | |||||||
| Outstanding, December 31, 2025 | ||||||||
| Granted | ||||||||
| Forfeited | ||||||||
| Exercised | ||||||||
| Outstanding, June 30, 2026 | ||||||||
As of June 30, 2026, the following options were outstanding, entitling the holders thereof the right to purchase one common stock for each option held as follows:
| Outstanding | Vested | Expiry date | Weighted average exercise price ($) | |||||||||
As
of June 30, 2026, and December 31, 2025, the weighted average life of stock options outstanding was
Compensation cost for the June 1, 2026 grant is recognized on a graded-vesting basis, with each monthly tranche expensed over its respective vesting period.
For
the six months ended June 30, 2026, the Company recognized share-based compensation of $
| 17. | Related Party Transactions |
Related parties consist of the following individuals and corporations:
| ● | Braeden Lichti, Non-executive, Non-employee Chairman |
| ● | Jordan Plews, Former Director (resigned December 23, 2024) and CEO of Skincare and BioSciences (resigned January 16, 2025) |
| ● | Graydon Bensler, Non-employee CFO, CEO and Director |
| ● | Jeffrey Parry, Director (appointed June 1, 2023) |
| ● | Julie Daley, Director (appointed June 1, 2023) |
| ● | George Kovalyov, Director (appointed March 1, 2024) |
| ● | GB Capital Ltd., controlled by Graydon Bensler |
| ● | JP Bio Consulting LLC, controlled by Jordan Plews |
| ● | BWL Investments Ltd., controlled by Braeden Lichti |
| ● | NorthStrive Companies Inc., controlled by Braeden Lichti |
| ● | Mystic Marine Advisors, controlled by Jeffrey Parry |
26
Key
management personnel include those persons having authority and responsibility for planning, directing, and controlling the activities
of the Company as a whole. The Company has determined that key management personnel consist of members of the Company’s Board of
Directors, corporate officers, and individuals with more than
Remuneration attributed to key management personnel are summarized as follows:
| Three months ended June 30, 2026 | Three months ended June 30, 2025 | Six months ended June 30, 2026 | Six months ended June 30, 2025 | |||||||||||||
| Consulting fees | $ | $ | $ | $ | ||||||||||||
| Management fees | ||||||||||||||||
| Director fees | ||||||||||||||||
| Bonus | ||||||||||||||||
| Salaries | ||||||||||||||||
| Share-based compensation | ||||||||||||||||
| $ | $ | $ | $ | |||||||||||||
During the six months ended June 30, 2026:
The Company incurred consulting fees
and contracted performance bonuses of $
The Company incurred consulting fees
and contracted performance bonuses of $
The Company incurred director’s
fees of $
The Company incurred director’s
fees of $
During the six months ended June 30,
2026, the Company reimbursed health insurance costs, for the benefit of Graydon Bensler, of $
27
The
Company incurred director’s fees of $
The
Company incurred management fees of $
The
Company incurred management fees of $
Jordan
Plews, Former Director and former CEO of Skincare and BioSciences, earned a salary of $ and $
During
the six months ended June 30, 2026, the Company granted
Details of the fair value, as calculated on the grant date, to each related party in the current and prior periods, and the related expense recorded for the six months ended June 30, 2026, and 2025 are as follows:
| Six Months Ended June 30, 2026 | Six Months Ended June 30, 2025 | Grant date fair value | ||||||||||
| Braeden Lichti, Non-executive Chairman | $ | $ | $ | |||||||||
| Graydon Bensler, CEO, CFO and Director | ||||||||||||
| Jordan Plews, Former Director and former CEO of Skincare and BioSciences2 | ||||||||||||
| Jeffrey Parry, Director | ||||||||||||
| Julie Daley, Director | ||||||||||||
| George Kovalyov, Director | ||||||||||||
| $ | $ | $ | ||||||||||
As of June 30, 2026 and December 31, 2025, the Company had $
As of June 30, 2026, the Company had $
28
As
of June 30, 2026, the Company recorded accrued director fees payable to related parties of $
These amounts are unsecured, non-interest bearing and are due on demand.
| 18. | Commitments and Contingencies |
There were commitments as of June 30, 2026, and December 31, 2025, or during the periods then ended.
As of June 30, 2026, the Company had an ongoing dispute that arose in the normal course of business and mediation discussions are ongoing. It is not yet possible to predict the likelihood of an unfavorable outcome, or the amount or range of potential loss.
| 19. | Concentrations |
Customers
For
the six months ended June 30, 2026, the Company had 1 key customer that represented approximately
The six months 2026 | ||||
| Customer 1 | % | |||
| % | ||||
Suppliers
During
the six months ended June 30, 2026, the Company had 1 key supplier that represented approximately
| The six months Ended June 30, 2026 | ||||
| Supplier 1 | % | |||
| % | ||||
The Company continually evaluates the performance of its suppliers and the availability of alternatives to substitute or supplement its inventory production supply chain. The Company believes that a breakdown in supply from one of its key suppliers would be overcome in a short amount of time given the availability of alternatives.
29
| 20. | Reportable Segments and Geographic Areas |
The
Company’s continuing operations consist of
The following is a summary of the Company’s operations for the six months ended June 30, 2026, and assets and liabilities as of June 30, 2026, split between reportable segments:
| Corporate, Treasury and Biosciences | IT Packaging Solutions | Precision Engineering and Machining | Total | |||||||||||||
| Revenue | $ | $ | $ | $ | ||||||||||||
| Cost of sales | $ | $ | $ | $ | ||||||||||||
| Gross profit | $ | $ | $ | $ | ||||||||||||
| Expenses | $ | $ | $ | $ | ||||||||||||
| Other income (expense) | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | ||||||
| Net loss from continuing operations | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Current Assets | $ | $ | $ | $ | ||||||||||||
| Non-current assets | $ | $ | $ | $ | ||||||||||||
| Total Assets | $ | $ | $ | $ | ||||||||||||
| Current liabilities | $ | $ | $ | $ | ||||||||||||
| Non-current liabilities | $ | $ | $ | $ | ||||||||||||
| Total Liabilities | $ | $ | $ | $ | ||||||||||||
| Total Equity | $ | $ | $ | $ | ||||||||||||
All of the Company’s revenue is generated with customers located in the United States. The majority of the Company’s continuing operations are conducted from and its assets are located in the United States. PMGC Research, the Company’s Canadian subsidiary, was located in Canada and provided limited operational support and research.
| 21. | Subsequent Events |
Management has evaluated events subsequent to the six months ended June 30, 2026, up through August 13, 2026, for transactions and other events that may require adjustment of and/or disclosure in the consolidated financial statements.
Subsequent to June 30, 2026, the Company
issued
On July 2, 2026, AGA Precision Systems LLC and A&B Aerospace, Inc., both wholly owned subsidiaries of the Company, entered into a merger agreement pursuant to which AGA merged into A&B, with A&B continuing as the surviving entity. All membership interests in AGA were cancelled without consideration and all outstanding shares of A&B remain outstanding and unaffected. The merger was approved by the Company’s Board of Directors, acting as the sole shareholder of A&B and the sole member of AGA, and the effect and effective date of the merger are as prescribed by California law. As both entities are wholly owned subsidiaries of the Company, the merger has no effect on the consolidated financial statements.
On
July 24, 2026, NorthStrive Acquisition Corp I, in which the Company holds a
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
You should read the following discussion and analysis of our financial condition and results of operations together with our unaudited condensed consolidated financial statements and the notes to those statements included elsewhere in this Quarterly Report and the audited consolidated financial statements and the other information set forth in our Annual Report on Form 10-K for the year ended December 31, 2025, filed with the U.S. Securities and Exchange Commission on March 30, 2026.
Forward-Looking Statements
This Quarterly Report includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended, (the “Exchange Act”) that are not historical facts and involve risks and uncertainties that could cause actual results to differ materially from those expected and projected. All statements, other than statements of historical fact included in this Quarterly Report including, without limitation, statements in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” regarding the Company’s financial position, business strategy and the plans and objectives of management for future operations, are forward-looking statements. Words such as “expect,” “believe,” “anticipate,” “intend,” “estimate,” “seek” and variations and similar words and expressions are intended to identify such forward-looking statements. Such forward-looking statements relate to future events or future performance, but reflect management’s current beliefs, based on information currently available. A number of factors could cause actual events, performance or results to differ materially from the events, performance and results discussed in the forward-looking statements. For information identifying important factors that could cause actual results to differ materially from those anticipated in the forward-looking statements, please refer to the Risk Factors section of the Company’s registration statement on Form S-1 filed with the U.S. Securities and Exchange Commission (the “SEC”). The Company’s securities filings can be accessed on the EDGAR section of the SEC’s website at www.sec.gov. Except as expressly required by applicable securities law, the Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.
Organization and Overview of Operations
PMGC currently manages and operates a diverse portfolio of wholly owned subsidiaries:
| ● | NorthStrive BioSciences Inc. (“NorthStrive Bio”) – a biopharmaceutical company focusing on the development and acquisition of cutting-edge aesthetic medicines and therapeutic products. Our lead asset, EL-22, is leveraging a first-in-class engineered probiotic approach to address obesity’s pressing issue of preserving muscle while on weight loss treatments, including GLP-1 receptor agonists. |
| ● | PMGC Capital LLC – a multi-strategy investment firm focused on direct investments, strategic lending, and acquiring undervalued companies and assets across diverse markets. Our mission is to identify and seize high-potential opportunities, delivering sustainable growth and maximizing returns on capital. |
| ● | ELAB Opportunity Holdings LLC - a wholly owned Utah subsidiary - was formed to facilitate and hold assets related to the Company’s secured pre-paid purchase and financing collateral arrangements. ELAB Opportunity supports the Company’s strategic financing structure and related treasury activities. |
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| ● | Pacific Sun Packaging Inc. (“Pacific Sun”) - 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”) - 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. On July 2, 2026, subsequent to the reporting period, AGA merged into A&B Aerospace, Inc., another wholly owned subsidiary of the Company, with A&B continuing as the surviving entity. |
| ● | SVM Machining, Inc. (“SVM”) - a California-based precision machining and aerospace manufacturing company specializing in high-precision components and complex machining solutions for aerospace, defense, and industrial applications. SVM enhances PMGC’s advanced manufacturing capabilities and expands the Company’s footprint in the aerospace and defense sectors. |
| ● | NorthStrive Defense Tech LLC - a wholly owned subsidiary focused on defense technology, including drone technology, autonomous systems, and next-generation unmanned defense solutions. NorthStrive Defense Tech was formed to identify, acquire, license, and commercialize advanced defense technologies. | |
| ● | A&B Aerospace, Inc. (“A&B”) - a California-based precision machining company producing high-tolerance machined components and assemblies for aerospace customers. A&B further extends PMGC’s aerospace manufacturing capacity and its qualification and certification base. A&B was acquired on May 11, 2026 (Note 5). On July 2, 2026, subsequent to the reporting period, AGA Precision Systems LLC merged into A&B, with A&B continuing as the surviving entity. | |
| ● | NorthStrive Sponsor I LLC - a wholly owned subsidiary that acts as the sponsor of NorthStrive Acquisition Corp I, a special purpose acquisition company. The Sponsor was formed to hold the Company’s sponsor interest in, and to fund the formation and offering costs of, that special purpose acquisition company. | |
| ● | NorthStrive Acquisition Corp I - a special purpose acquisition company incorporated as an exempted company with limited liability under the laws of the Cayman Islands with effect from April 27, 2026, formed for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses. PMGC holds a 51% interest in NorthStrive Acquisition Corp I; the remaining 49% interest is held by others. |
Outlook
Management’s Plans
Over the next twelve months, we intend to focus on:
| ● | Increasing revenue by achieving successful returns on capital through PMGC Capital LLC, our multi-strategy investment vehicle, by acquiring and managing undervalued assets, public and private investments, and structured financing opportunities. | |
| ● | Establishing new wholly owned subsidiaries to develop and commercialize newly acquired or licensed assets across various industries. | |
| ● | Utilizing clinical validation studies to strengthen the commercial potential and scientific credibility of our portfolio companies’ technologies. | |
| ● | Advancing clinical development to progress NorthStrive Biosciences’ 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”) |
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Results of Operations
Comparison of the six months ended June 30, 2026 and 2025.
The following table provides certain selected financial information for continuing operations for the periods presented and does not include activity from the skincare business of the Company:
| Six Months Ended June 30, 2026 | Six Months Ended June 30, 2025 | Change | ||||||||||
| Revenue | $ | 1,988,604 | $ | - | $ | 1,988,604 | ||||||
| Cost of goods sold | $ | 1,372,439 | $ | - | $ | 1,372,439 | ||||||
| Gross margin | $ | 616,165 | $ | - | $ | 616,165 | ||||||
| Consulting Fees | $ | 2,435,215 | $ | 745,902 | $ | 1,689,313 | ||||||
| Office and Administration | $ | 2,987,056 | $ | 528,870 | $ | 2,458,186 | ||||||
| Professional Fees | $ | 1,144,579 | $ | 550,643 | $ | 593,936 | ||||||
| Investor Relations | $ | 45,398 | $ | 116,777 | $ | (71,379 | ) | |||||
| Research and Development | $ | 357,280 | $ | 99,108 | $ | 258,172 | ||||||
| Marketing and Promotion | $ | 59,767 | $ | 117,923 | $ | (58,156 | ) | |||||
| Repairs and Maintenance | $ | 112,647 | $ | - | $ | 112,647 | ||||||
| Travel and Entertainment | $ | 171,778 | $ | 55,411 | $ | 116,367 | ||||||
| Foreign Exchange (Gain) Loss | $ | 20,580 | $ | (497 | ) | $ | 21,077 | |||||
| Bad Debt Expense | $ | 1,567 | $ | - | $ | 1,567 | ||||||
| Total operating expenses | $ | 7,776,548 | $ | 2,215,242 | $ | 5,561,306 | ||||||
| Other income (expense)1 | $ | (785,349 | ) | $ | 54,941 | $ | (840,290 | ) | ||||
| Net loss from continuing operation | $ | (7,945,732 | ) | $ | (2,160,301 | ) | $ | (5,785,431 | ) | |||
| Basic and dilutive loss per common share- continuing operations | $ | (2.973 | ) | $ | (202.484 | ) | $ | 199.51 | ||||
| Weighted average number of shares outstanding – basic and diluted | 2,672,745 | 10,669 | ||||||||||
| 1 | Other income (expense) relates to finance cost, interest income, interest expense, dividend income, unrealized fair value gain/loss on investments, realized gain/loss on sale of investments, fair value change on derivative liabilities, gain on the termination of the intangible asset, gain and loss on disposal of PP&E, and other income. |
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Revenue
Revenue for the six months ended June 30, 2026, was $1,988,604 as compared to $nil for the six months ended June 30, 2025, an increase of $1,988,604. Revenue was generated by the Company’s newly acquired subsidiaries — Pacific Sun Packaging, AGA Precision Systems, SVM Machining and A&B Aerospace — none of which formed part of the Company in the comparative period, when the Company had no continuing revenue-generating operations following the disposal of the skincare business.
Our revenue by category is as follows:
| For the six months ended June 30, 2026 | ||||
| Pacific Sun – Sale of IT packaging | $ | 364,567 | ||
| AGA – Machine work | 496,645 | |||
| SVM-Machine work | 832,104 | |||
| A&B – Aerospace components | 295,288 | |||
| Total Revenue | $ | 1,988,604 | ||
Cost of Revenue
Cost of revenue for the six months ended June 30, 2026, was $1,372,439 as compared to $nil for the six months ended June 30, 2025
The increase in cost of revenue is directly attributed to the revenue recognized by the newly acquired manufacturing subsidiaries during the six months ended June 30, 2026, compared to 2025. The following is a breakdown of the components of the cost of revenue:
| For the six months ended June 30, 2026 | Pacific Sun – Sale of IT packaging | AGA – Machine work | SVM – Machine work | A&B – Aerospace components | Total | |||||||||||||||
| Cost of inventory | $ | 132,884 | $ | 344,109 | $ | 602,451 | $ | 226,300 | $ | 1,305,744 | ||||||||||
| Sales commission | 10,361 | - | - | - | 10,361 | |||||||||||||||
| Assembly and manufacturing expense | 4,216 | - | - | - | 4,216 | |||||||||||||||
| Shipping and handling cost | 45,607 | 164 | 7,963 | 3,007 | 56,741 | |||||||||||||||
| Inventory write down and wastage | (4,623 | ) | - | - | - | (4,623 | ) | |||||||||||||
| Total Cost of Revenue | $ | 188,445 | $ | 344,273 | $ | 610,414 | $ | 229,307 | $ | 1,372,439 | ||||||||||
Gross Profit
Gross profit for the six months ended June 30, 2026, was $616,165, as compared to $nil for the six months ended June 30, 2025, an increase of $616,165. This represents an overall gross margin percentage of 30.98% for the six months ended June 30, 2026, compared to $nil in 2025. The increase in gross profit and gross margin percentage was primarily attributable to the inclusion of revenues generated from the newly acquired subsidiaries.
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The following is a breakdown of gross profit percentage by category:
| For the six months ended June 30, 2026 | ||||
| Pacific Sun – Sale of IT packaging | 48.31 | % | ||
| AGA – Machine work | 30.68 | % | ||
| SVM-Machine work | 26.64 | % | ||
| A&B – Aerospace components | 22.34 | % | ||
| Overall Gross Profit Percentage | 30.98 | % | ||
Research and Development Expenses
Research and development expenses for the six months ended June 30, 2026, were $357,280 compared to $99,108 for the six months ended June 30, 2025, an increase of $258,172. Research and development relates to the Company’s spending on clinical validation studies and product development. The increase is primarily attributable to research and professional services provided by INmune Bio Inc. to NorthStrive BioSciences at $12,000 per month, the continued advancement of the EL-22 research program, and development activity at the newly acquired subsidiaries, none of which were part of the Company in the comparative period.
Office and Administrative Expenses
Office and administrative expenses for the six months ended June 30, 2026 were $2,987,056, compared to $528,870 for the six months ended June 30, 2025, an increase of $2,458,186. The increase was primarily due to higher corporate activity at PMGC Holdings, including the costs of the Company’s financing initiatives and the management and integration of the newly acquired businesses, which drove general office and administrative costs to $2,405,949 from $458,639. Rent expense increased to $398,346 from $33,627, reflecting the leased premises of Pacific Sun, AGA, SVM and A&B Aerospace, none of which were part of the Company in the comparative period. Share-based compensation included in office and administration increased to $182,761 from $36,604, principally in respect of the options granted on June 1, 2026.
Consulting Fees
Consulting fees for the six months ended June 30, 2026 were $2,435,215, compared to $745,902 for the six months ended June 30, 2025, an increase of $1,689,313. 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 $2,082,415, compared to $300,000 in the prior-year period, 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 six months ended June 30, 2026 were $1,144,579, compared to $550,643 for the six months ended June 30, 2025, an increase of $593,936. The increase was primarily due to higher legal fees of $510,892 (2025 – $291,933) incurred on the acquisitions completed during the period, the equity line of credit financings and intellectual property matters; higher audit fees of $183,005 (2025 – $113,500) and accounting and tax fees of $93,937 (2025 – $61,856) reflecting the increased level of compliance activity; and $300,618 (2025 – $nil) of acquisition-related professional services, including staff placement fees, valuation fees, IT contracting, ISO management services and business transition consulting. This increase was partially offset by lower filing fees of $56,127 (2025 – $83,354).
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Investor Relations
Investor relations expenses for the six months ended June 30, 2026 were $45,398, compared to $116,777 for the six months ended June 30, 2025, a decrease of $71,379. The decrease was primarily due to the reduction in the NASDAQ listing fee to $4,666 per month from $7,166 per month, together with the absence of certain investor relations costs incurred in the prior-year period, including $36,142 related to Broadridge and $10,000 related to Investor Hub.
Marketing and Promotion
Marketing and promotion expenses for the six months ended June 30, 2026 were $59,767, compared to $117,923 for the six months ended June 30, 2025, a decrease of $58,156. The decrease is attributable to the absence of comparable marketing agreements in the current period; the comparative period included two $125,000 promotional agreements that were not renewed.
Repairs and Maintenance
Repairs and maintenance expenses for the six months ended June 30, 2026 were $112,647, compared to $nil for the six months ended June 30, 2025. The increase reflects repairs and maintenance on the plant and machinery of the newly acquired manufacturing subsidiaries. The Company held no manufacturing assets in the comparative period.
Travel and Entertainment
Travel and entertainment expenses for the six months ended June 30, 2026 were $171,778, compared to $55,411 for the six months ended June 30, 2025, an increase of $116,367. The increase is due to a higher volume of business travel during the current period, primarily related to the acquisitions completed and the financing activities undertaken.
Other income (expense)
Other income (expense) for the six months ended June 30, 2026 was a net expense of $785,349, compared to net income of $54,941 for the six months ended June 30, 2025, an unfavorable variance of $840,290. The variance was primarily due to interest expense of $1,056,411 (2025 – $10,476), representing accretion of discount and contractual interest on the convertible debt host under the pre-paid purchases issued under the Company’s two equity line of credit facilities together with interest on the equipment financing obligations; finance costs of $620,909 (2025 – $nil) representing the original issue discount and transaction costs allocated to the bifurcated derivatives on those pre-paid purchases; and a loss on disposal of property and equipment of $63,345 (2025 – $nil). The unfavorable variance was partially offset by a fair value gain on derivative liabilities of $701,920 (2025 – $nil), a realized gain on investments of $86,392, compared to a realized loss of $371,494 in the prior-year period, and higher interest income of $146,080 (2025 – $65,383) earned on the substantially higher cash balances held following the financings. The prior-year period also included a $129,613 gain on the termination of an intangible asset and an unrealized gain on investments of $238,899, compared to $5,322 in the current period.
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Comparison of the three months ended June 30, 2026 and 2025.
The following table provides certain selected financial information for continuing operations for the periods presented and does not include activity from the skincare business of the Company:
| Three Months Ended June 30, 2026 | Three Months Ended June 30, 2025 | Change | ||||||||||
| Revenue | $ | 1,306,610 | $ | - | $ | 1,306,610 | ||||||
| Cost of goods sold | $ | 920,919 | $ | - | $ | 920,919 | ||||||
| Gross margin | $ | 385,691 | $ | - | $ | 385,691 | ||||||
| Consulting Fees | $ | 1,225,200 | $ | 198,345 | $ | 1,026,855 | ||||||
| Office and Administration | $ | 1,605,320 | $ | 319,839 | $ | 1,285,481 | ||||||
| Professional Fees | $ | 552,556 | $ | 284,175 | $ | 268,381 | ||||||
| Investor Relations | $ | 29,265 | $ | 46,827 | $ | (17,562 | ) | |||||
| Research and Development | $ | 310,219 | $ | 66,675 | $ | 243,544 | ||||||
| Depreciation and Amortization | $ | 281,237 | $ | 20 | $ | 281,217 | ||||||
| Marketing and Promotion | $ | 25,403 | $ | 82,329 | $ | (56,926 | ) | |||||
| Repairs and Maintenance | $ | 111,233 | $ | - | $ | 111,233 | ||||||
| Travel and Entertainment | $ | 63,437 | $ | 16,191 | $ | 47,246 | ||||||
| Foreign Exchange (Gain) Loss | $ | 9,030 | $ | (883 | ) | $ | 9,913 | |||||
| Total operating expenses | $ | 4,212,900 | $ | 1,013,518 | $ | 3,199,382 | ||||||
| Other income (expense)1 | $ | 868,237 | $ | 434,028 | $ | 434,209 | ||||||
| Net loss from continuing operation | $ | (2,958,972 | ) | $ | (579,490 | ) | $ | (2,379,482 | ) | |||
| Basic and dilutive loss per common share- continuing operations | $ | (0.607 | ) | $ | (39.138 | ) | $ | 38.532 | ||||
| Weighted average number of shares outstanding – basic and diluted | 4,876,498 | 14,806 | ||||||||||
| 1 | Other income (expense) relates to finance cost, interest income, interest expense, dividend income, unrealized fair value gain/loss on investments, realized gain/loss on sale of investments, fair value change on derivative liabilities, gain and loss on disposal of PP&E, and other income. |
Revenue, Cost of Revenue and Gross Margin
Refer to the analysis under the six months ended June 30, 2026 above.
Research and Development Expenses
Research and development expenses for the three months ended June 30, 2026 were $310,219, compared to $66,675 for the three months ended June 30, 2025, an increase of $243,544. The increase is primarily attributable to research and professional services provided by INmune Bio Inc. to NorthStrive BioSciences at $12,000 per month, together with development activity at the newly acquired subsidiaries.
Office and Administrative Expenses
Office and administrative expenses for the three months ended June 30, 2026 were $1,605,320, compared to $319,839 for the three months ended June 30, 2025, an increase of $1,285,481. The increase was primarily due to higher corporate activity at PMGC Holdings, including the costs of the financing initiatives and the management and integration of the newly acquired businesses, which drove general office and administrative costs to $1,243,205 from $296,806. Rent expense increased to $187,570 from $7,191, reflecting the leased premises of the newly acquired subsidiaries, including the A&B Aerospace facility taken on during the quarter. Share-based compensation included in office and administration increased to $174,545 from $15,842.
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Consulting Fees
Consulting fees for the three months ended June 30, 2026 were $1,225,200, compared to $198,345 for the three months ended June 30, 2025, an increase of $1,026,855. The Company’s Chief Executive Officer, Chief Financial Officer, and Chairman provide services in a consulting capacity. The increase was primarily attributable to bonus-related consulting expenses of $1,050,000 (2025 – $nil), 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 three months ended June 30, 2026 were $552,556, compared to $284,175 for the three months ended June 30, 2025, an increase of $268,381. The increase was primarily due to higher legal fees of $254,379 (2025 – $154,816) incurred on the A&B Aerospace acquisition, the new equity line of credit facility and intellectual property matters; higher audit fees of $82,000 (2025 – $53,500); and $157,330 (2025 – $nil) of acquisition-related professional services, including staff placement fees, valuation fees and business transition consulting. These increases were partially offset by lower accounting and tax fees of $33,920 (2025 – $61,856).
Investor Relations
Investor relations expenses for the three months ended June 30, 2026 were $29,265, compared to $46,827 for the three months ended June 30, 2025, a decrease of $17,562. The decrease is primarily attributable to the reduction in the NASDAQ listing fee to $4,666 per month from $7,166 per month in the comparative quarter.
Marketing and Promotion
Marketing and promotion expenses for the three months ended June 30, 2026 were $25,403, compared to $82,329 for the three months ended June 30, 2025, a decrease of $56,926. The decrease is attributable to the absence in the current quarter of the promotional agreements incurred in the comparative quarter, which were not renewed.
Repairs and Maintenance
Repairs and maintenance expenses for the three months ended June 30, 2026 were $111,233, compared to $nil for the three months ended June 30, 2025. The increase reflects repairs and maintenance on the plant and machinery of the newly acquired manufacturing subsidiaries.
Travel and Entertainment
Travel and entertainment expenses for the three months ended June 30, 2026 were $63,437, compared to $16,191 for the three months ended June 30, 2025, an increase of $47,246. The increase is due to a higher volume of business travel in the current quarter, primarily related to the A&B Aerospace acquisition and the equity line of credit financing.
Other income (expense)
Other income (expense) for the three months ended June 30, 2026 was net income of $868,237, compared to net income of $434,028 for the three months ended June 30, 2025, a favorable variance of $434,209. The favorable variance was primarily due to a fair value gain on derivative liabilities of $1,383,046 (2025 – $nil), partially offset by interest expense of $582,241 (2025 – $2), comprising accretion of discount and contractual interest on the convertible debt host under the pre-paid purchases together with interest on the equipment financing obligations; finance costs of $58,987 (2025 – $nil) on Secured Pre-Paid Purchase #1 issued in April 2026 under the new $40 million equity line of credit facility; and an unrealized loss on investments of $32,265, compared to an unrealized gain of $299,303 in the comparative quarter. These items were partially offset by interest income of $83,159 (2025 – $36,527) and a realized gain on investments of $63,241 (2025 – $95,184).
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Liquidity and Capital Resources
The accompanying condensed 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 June 30, 2026, we had cash of $18,141,758 and as of December 31, 2025, we had cash of $5,402,333. The increase between December 31, 2025 and June 30, 2026 was attributable to cash provided by financing activities exceeding cash used in operating and investing activities. As of June 30, 2026 and December 31, 2025, the Company had a net working capital of $5,504,403 and $2,928,959, respectively, and has an accumulated deficit of $28,926,081 and $21,017,440, respectively. Furthermore, for the six months ended June 30, 2026, and 2025, the Company incurred a net loss of $7,908,641 and $2,170,810, respectively and used $4,967,374 and $2,693,714, respectively of cash flows for operating activities. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern. The accompanying condensed consolidated financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. The Company believes it will have sufficient funds for at least the next 12 months from the issuance date of the unaudited condensed consolidated financial statements.
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.
Management’s plans that alleviate substantial doubt about the Company’s ability to continue as a going concern include: (a) raising additional debt or equity financing and (b) the acquisition of cash flow generating assets or businesses. Although the Company has been successful in raising funds in the past, and expects to do so in the future, there are no guarantees that it will be able to raise funds as anticipated.
The following table provides selected financial data as of June 30, 2026, and December 31, 2025, respectively
| June 30, 2026 | December 31, 2025 | Change | ||||||||||
| Current assets | $ | 20,832,950 | $ | 6,871,255 | $ | 13,961,695 | ||||||
| Current liabilities | $ | 15,328,547 | $ | 3,942,296 | $ | 11,386,251 | ||||||
| Working capital | $ | 5,504,403 | $ | 2,928,959 | $ | 2,575,444 | ||||||
The following table summarizes our cash flows from operating, investing and financing activities from continuing operations:
| Six Months Ended June 30, 2026 | Six Months Ended June 30, 2025 | Change | ||||||||||
| Cash used in operating activities | $ | (4,967,374 | ) | $ | (2,693,714 | ) | $ | (2,273,660 | ) | |||
| Cash used in investing activities | $ | (6,168,540 | ) | $ | (18,479 | ) | $ | (6,150,061 | ) | |||
| Cash provided by financing activities | $ | 23,873,000 | $ | 4,410,768 | $ | 19,462,232 | ||||||
Cash Flow from Operating Activities
For the six months ended June 30, 2026, net cash flows used in operating activities was $4,967,374 compared to $2,693,714 used during the six months ended June 30, 2025, respectively, primarily due to the net loss for the period and the timing of settlement of assets and liabilities.
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Cash Flows from Investing Activities
During the six months ended June 30, 2026, net cash used in investing activities was $6,168,540, compared to $18,479 for the same period in 2025. The increase was primarily driven by the Company’s acquisition of SVM for cash consideration of $2,019,909, the acquisition of A&B Aerospace for cash consideration of $3,826,283, purchases of investment securities through PMGC Capital, and purchases of property and equipment, partially offset by cash proceeds from the sale of investments. In comparison, investing activities during the six months ended June 30, 2025 were limited, with no business acquisitions; the Company made strategic investments in publicly traded companies of $995,100 and advanced $127,300 under a short-term promissory note, offset by proceeds from the sale of investments of $1,109,921.
Cash Flows from Financing Activities
During the six months ended June 30, 2026, net cash provided by financing activities was $23,873,000, compared to $4,410,768 for the same period in 2025. The increase was primarily attributable to net cash proceeds of approximately $14.09 million from the second, third and fourth Pre-Paid Purchases under the Company’s $20 million equity line of credit facility, a further $9.73 million from the first Pre-Paid Purchase and the concurrent sale of registered shares under the new $40 million facility entered into on April 16, 2026, and $353,468 of equipment financing proceeds.
These inflows were partially offset by the settlement in full of the promissory notes payable on April 16, 2026 and repayments made toward the equipment financing loan during the period. During the six months ended June 30, 2025, financing activities consisted primarily of $1,245,306 in proceeds from the issuance of common stock and pre-funded warrants, $1,698,058 in proceeds from the exercise of Series A warrants and $1,467,583 from the sale of common shares under the At-the-Market share sales agreement.
Critical Accounting Policies and Significant Judgments and Estimates
This discussion and analysis of our financial condition and results of operations is based on our condensed 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 condensed 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.
The Company’s policy for intangible assets require judgement in determining whether the present value of future expected economic benefits exceeds capitalized costs. The policy requires management to make certain estimates and assumptions about future economic benefits related to its operations. Estimates and assumptions may change if new information becomes available. If information becomes available suggesting that the recovery of capitalized cost is unlikely, the capitalized cost is written off/impaired to the consolidated statement of operations.
The assessment of whether the going concern assumption is appropriate requires management to take into account all available information about the future, which is at least, but not limited to, 12 months from the date the financial statements are issued. The Company is aware that material uncertainties related to events or conditions may cast substantial doubt upon the Company’s ability to continue as a going concern.
Foreign Currency Translation
The Company’s functional and reporting currency is the U.S. 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.
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.
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Nonemployees - During June 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2018-07, Compensation-Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting (“ASU 2018-07”) to simplify the accounting for share-based payments to nonemployees by aligning it with the accounting for share-based payments to employees. Under the requirements of ASU 2018-07, the Company accounts for share-based compensation to non-employees under the fair value method which requires all such compensation to be calculated based on the fair value at the measurement date (generally the grant date) and recognized in the statement of operations over the requisite service period.
During the six months ended June 30, 2026 and 2025, the Company recorded $182,761 and ($42,996), respectively, in share-based compensation expense, of which $182,761 and $36,604, is included in office and administration and $nil and ($79,600), respectively, is included in discontinued operations. Within discontinued operations for the six months ended June 30, 2025, ($73,768) and ($5,832) is included in office and administration and research and development, respectively. Share-based compensation recognized in the current period relates principally to the 1,125,692 options granted on June 1, 2026 at an exercise price of $1.77, having a grant-date fair value of $1,520,085 and vesting monthly over 36 tranches.
Determining the appropriate fair value model and the related assumptions requires judgment. During the six months ended June 30, 2026 and the year ended 2025, 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 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.
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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Pursuant to Item 305(e) of Regulation S-K (§ 229.305(e)), the Company is not required to provide the information required by this Item as it is a “smaller reporting company,” as defined by Rule 229.10(f)(1).
ITEM 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) at the end of the period covered by this Quarterly Report.
Based on this evaluation, the Chief Executive Officer and Chief Financial Officer concluded that, as of the end of the period covered by this Quarterly Report, our disclosure controls and procedures (as defined in § 240.13a-15(e) or 240.15d-15(e) of Regulation S-K) were effective to provide reasonable assurance that the information required to be disclosed by us in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information (i) is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosures and (ii) is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.
We recognize that any controls system, no matter how well designed and operated, can provide only reasonable assurance of achieving its objectives, and our management necessarily applies its judgment in evaluating the benefits of possible controls and procedures relative to their costs.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting during the period covered by this Quarterly Report that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act).
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PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
We are not currently a party to any pending legal proceedings that we believe will have a material adverse effect on our business or financial conditions. We may, however, be subject to various claims and legal actions arising in the ordinary course of business from time to time.
ITEM 1A. RISK FACTORS
As a smaller reporting company, we are not required to make disclosures under this item.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
(a) There have been no sales of unregistered equity securities which took place in the fiscal quarter beginning on April 1, 2026 to June 30, 2026 that we have not previously disclosed in a Current Report on Form 8-K filed with the SEC.
(b) Not applicable.
(c) There were no repurchases of our Common Stock in the fiscal quarter ended June 30, 2026.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
ITEM 5. OTHER INFORMATION
(a) Not applicable.
(b) Not applicable.
(c)
During the fiscal quarter ended June 30, 2026, none of the Company’s directors or officers (as defined in Rule 16a-1(f) under the Exchange
Act)
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Item 6. Exhibits
The following exhibits are filed as part of, or incorporated by reference into, this Quarterly Report.
EXHIBIT INDEX
| # | Management contract or compensatory plan. |
| * | The schedules, exhibits or similar attachments have been omitted from this filing pursuant to Item 601(b)(2) of Regulation S-K. The Company will furnish copies of any schedules, exhibits, or similar attachments to the SEC upon request. Certain portions of this exhibit have been redacted. |
| + | Portions of this exhibit have been redacted. |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| PMGC Holdings Inc. | ||
| Date: August 14, 2026 | By: | /s/ Graydon Bensler |
| Name: | Graydon Bensler | |
| Title: | Chief Executive Officer and Chief Financial Officer | |
| (Principal Executive, Accounting and Financial Officer) | ||
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