Quarterly Report for Quarter Ending June 30, 2025 (Form 10-Q)

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, 2024, filed with the U.S. Securities and Exchange Commission on March 28, 2025.

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

On December 31, 2024, the Company entered into an asset purchase agreement (the "Asset Purchase Agreement") with an unrelated third party, pursuant to which the Company agreed to sell, and the unrelated third party agreed to purchase, the Company's skincare business. The sale of the skincare business was consummated on January 16, 2025.

Prior to entering into the Asset Purchase Agreement, the Company's principal business was operating a skincare development company engaged in the design, manufacture, and marketing of skincare products in the skincare industry. After the sale of the skincare business, the Company changed its principal business. PMGC Holdings Inc. is a diversified holding company that manages and grows its portfolio through strategic acquisitions, investments, and development across various industries. The Company currently manages and operates a diverse portfolio of three wholly owned subsidiaries:

●

NorthStrive BioSciences Inc. - Biosciences is a biopharmaceutical company focusing on the development and acquisition of cutting-edge aesthetic medicines and therapeutic products. This company's lead asset, EL-22, is leveraging a first-in-class engineered probiotic approach to address obesity's pressing issue of preserving muscle while on weight loss treatments, including GLP-1 receptor agonists. For more information, please visit www.northstrivebio.com.

●

PMGC Research Inc. - PMGC Research is based in Canada and is currently dedicated to medical scientific research and development efforts. This company utilizes Canadian research grants and partnering with leading Canadian Universities, with aims of pushing the boundaries of innovation.

●

PMGC Capital LLC - PMGC Capital is a multi-strategy investment firm focused on direct investments, strategic lending, and acquiring undervalued companies and assets across diverse markets. This company's mission is to identify and seize high-potential opportunities, delivering sustainable growth and maximizing returns on capital.

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, Inc.'s clinical assets toward Investigational New Drug (IND) applications.

●

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

●

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

Results of Operations

Comparison of the six months ended June 30, 2025 to the six months ended June 30, 2024

In January 2025, the Company sold its skincare business, which had previously contributed to the financial results of the Company. The financial results of the disposed operations from January 1, 2025 until January 16, 2025 have been classified as discontinued operations. 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, 2025				Six Months Ended June 30, 2024				Change
Marketing and Promotion		$	117,923			$	265,113			$	(147,190	)
Consulting Fees		$	745,902			$	558,316			$	187,586
Office and Administration		$	528,870			$	280,800			$	248,070
Professional Fees		$	550,643			$	91,996			$	458,647
Investor Relations		$	116,777			$	97,565			$	19,212
Research and Development		$	99,108			$	55,553			$	43,555
Total operating expenses		$	2,215,242			$	1,356,216			$	859,026
Other income (expense)1		$	54,941			$	259,184			$	(204,243	)
Net loss from continuing operation		$	(2,160,301	)		$	(1,097,032	)		$	(1,063,269	)
Basic and dilutive loss per common share- continuing operations		$	(2.411	)		$	(86.215	)		$	83.805
Weighted average number of shares outstanding - basic and diluted			896,149				12,724

1

Other expenses relate to interest income, interest expense, unrealized fair value gain/loss on investment, realized loss on sale of investments, gain on the termination of the intangible asset and fair value gain/loss on derivative liability.

Research and Development Expenses

Research and development expenses for the six months ended June 30, 2025, were $99,108, compared to $55,553 for the six months ended June 30, 2024, an increase of $43,555. Research and Development related to the Company's spending on clinical validation studies. The increase in research and development was mainly driven by the Company continuously working on its research project of EL-22 and the costs of its Type B pre-Investigational New Drug ("pre-IND") meeting with the U.S. Food and Drug Administration.

Marketing and Promotion

Marketing and promotion expenses for the six months ended June 30, 2025 were $117,923, compared to $265,113 for the six months ended June 30, 2024, a decrease of $147,190. During the six months ended June 30, 2024, the Company engaged an investor relations agency, under a $125,000 agreement signed on January 5, 2024, to support external communications and investor engagement efforts. No comparable agreement was entered into during the six months ended June 30, 2025.

Office and Administrative Expenses

Office and Administration expenses for the six months ended June 30, 2025 were $528,870, compared to $280,800 for the six months ended June 30, 2024, an increase of $248,070. The increase was driven by higher business activity levels, general price increases, and a shift in cost responsibilities following the disposition of the Company's skincare business.

Consulting Fees

Consulting fees for the six months ended June 30, 2025 were $745,902, compared to $558,316 for the six months ended June 30, 2024, an increase of $187,586. 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 $300,000 (2024 - $27,072), 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, 2025 were $550,643, compared to $91,996 for the six months ended June 30, 2024, an increase of $458,647. Professional fees comprise of legal, audit and accounting services. The increase during 2025, was primarily due to an increase in audit, legal and accounting services given the Company's corporate restructuring, business acquisition due diligence, and financing efforts conducted during the six months ended June 30, 2025 compared to the six months ended June 30, 2024.

Investor Relations

Investor relations expenses for the six months ended June 30, 2025 were $116,777, compared to $97,565 for the six months ended June 30, 2024, an increase of $19,212. The increase is primarily attributable to an increase in public relations and media coverage expenses during the first six months.

Other income (expense)

Other income (expense) for the six months ended June 30, 2025 amounted to a net income of $54,941, compared to net income of $259,184 for the six months ended June 30, 2024, representing an unfavorable variance of $204,243. The variance was primarily driven by a realized loss on investments of $371,494 in the six months ended June 30, 2025, whereas no such losses were recognized in the prior period. Additionally, the comparative period included a $301,803 fair value gain on derivative liabilities, which did not recur in the current quarter. Partially offsetting these declines, the Company recognized a $129,613 gain on the termination of an intangible asset, an unrealized gain of $238,899 on investments and an interest income of $65,383, compared to only $150 in the prior year. Interest expense also declined to $10,474 from $42,769, reflecting lower financing costs during the six months ended June 30, 2025.

Comparison of the three months ended June 30, 2025 to the three months ended June 30, 2025

In January 2025, the Company sold its skincare business, which had previously contributed to the financial results of the Company. 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, 2025				Three Months Ended June 30, 2024				Change
Marketing and Promotion		$	82,329			$	133,597			$	(51,268	)
Consulting Fees		$	198,345			$	179,843			$	18,502
Office and Administration		$	319,839			$	148,341			$	171,498
Professional Fees		$	284,175			$	48,706			$	235,469
Investor Relations		$	46,827			$	5,987			$	40,840
Research and Development		$	66,675			$	34,824			$	31,851
Total operating expenses		$	1,013,518			$	556,242			$	457,276
Other income (expense)1		$	434,028			$	3,331			$	430,697
Net loss from continuing operation		$	(579,490	)		$	(552,911	)		$	(26,579	)
Basic and dilutive loss per common share- continuing operations		$	(0.466	)		$	(42.303	)		$	41.837
Weighted average number of shares outstanding - basic and diluted			1,243,720				13,070

1

Other expenses relate to interest income, interest expense, unrealized fair value gain/loss on investment, realized loss on sale of investments, and fair value gain/loss on derivative liability.

Research and Development Expenses

Research and development expenses for the three months ended June 30, 2025 were $66,675, compared to $34,824 for the three months ended June 30, 2024, an increase of $31,851. Research and Development related to the Company's spending on clinical validation studies. The increase in research and development is mainly driven by the company continuously working on the research project of EL-22 and the costs of the Type B pre-Investigational New Drug ("pre-IND") meeting with the U.S. Food and Drug Administration.

Marketing and Promotion

Marketing and promotion expenses for the three months ended June 30, 2025 were $82,329, compared to $133,597 for the three months ended June 30, 2024, a decrease of $51,268. During 2024, the Company engaged an investor relations agency under a $125,000 agreement signed on April 26, 2024, to support external communications and investor engagement efforts. No comparable agreement was entered into during the three months ended June 30, 2025.

Office and Administrative Expenses

Office and Administration expenses for the three months ended June 30, 2025 were $319,839, compared to $148,341 for the three months ended June 30, 2024, an increase of $171,498. The increase was driven by higher business activity levels, general price increases, and a shift in cost responsibilities following the disposition of the skincare business.

Consulting Fees

Consulting fees for the three months ended June 30, 2025, were $198,345, compared to $179,843 for the three months ended June 30, 2024, an increase of $18,502. The Company's Chief Executive Officer, Chief Financial Officer, and Chairman provide services in a consulting capacity.. The increase was primarily driven by higher fees under the GB Capital and Northstrive agreements. These increases were partially offset by lower external consulting expenses, as no comparable services were incurred during the current period.

Professional Fees

Professional fees for the three months ended June 30, 2025, totaled $284,175, an increase of $235,469 compared to $48,706 for the same period in 2024. Professional fees comprise of legal, audit and accounting services. The increase during 2025, is primarily due to an increase in audit, legal and accounting services given the corporate restructuring, business acquisition due diligence, and financing efforts conducted compared to 2024.

Investor Relations

Investor relations expenses for the three months ended June 30, 2025 were $46,827, compared to $5,987 for the three months ended June 30, 2024, representing an increase of $40,840. The increase is primarily attributable to an increase in public relations and media coverage expenses during the current quarter.

Other income (expense)

Other income (expense) for the three months ended June 30, 2025 resulted in net income of $434,028, compared to $3,331 for the same period in 2024, representing a favorable variance of $430,697. The increase was primarily attributable to a realized gain on investments of $95,184, an unrealized gain of $299,303 on investments, and interest income of $36,527 recognized in the current period, none of which were recorded in the comparative period. Additionally, the comparative period included $23,597 in interest expense, which did not recur in the current quarter. These increases were partially offset by a $26,864 gain on derivative liabilities recognized in the comparative period.

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, 2025, we had cash of $5,682,628 and as of December 31, 2024, we had cash of $3,984,453. The increase between December 31, 2024 and June 30, 2025 was attributable to cash provided by financing activities exceeding cash used in operating and investing activities. As of June 30, 2025 and December 31, 2024, the Company had a net working capital of $6,976,543 and $4,251,867, respectively, and has an accumulated deficit of $15,440,437 and $13,269,627, respectively. Furthermore, for the six months ended June 30, 2025, and 2024, the Company incurred a net loss of $2,170,810 and $2,809,741, respectively, and used $2,693,714 and $3,104,757, 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 has sufficient funds to continue current operations for at least the next 12 months from the issuance date of the unaudited condensed consolidated financial statements. The Company may seek to raise additional capital to accelerate the execution of management's plans as disclosed above.

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.

The Company expects an improvement in liquidity and capital resources, including cash obtained from any sale of investment securities it currently owns. Cash flows used in discontinued operating and investing activities and assets and liabilities held for sale has been excluded from our analysis. The Company may be paid additional earn-out consideration in connection with the sale of its skincare business, consisting of potential payments for each year ending on the anniversary of the closing date of the disposition during the five-year period following the closing equal to 5% of the sales generated during such year from the existing products as of the closing and a one-time payment of $500,000 if the buyer achieves $500,000 in revenue from sales of the existing hair and scalp products as of the closing on or before the 24-month anniversary of the closing date of the disposition. The Company plans to use the cash obtained from any sale of investment securities or earnout payment for working capital.

The following table provides selected financial data as of June 30, 2025, and December 31, 2024, respectively (excluding assets and liabilities held for sale).

		June 30, 2025				December 31, 2024				Change
Current assets		$	7,302,844			$	4,858,193			$	2,444,651
Current liabilities		$	326,301			$	1,250,218			$	(923,917	)
Working capital		$	6,976,543			$	3,607,975			$	3,368,568

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

		Six Months Ended June 30, 2025				Six Months Ended June 30, 2024				Change
Cash used in operating activities		$	(2,518,947	)		$	(1,191,850	)		$	(1,327,097	)
Cash used in investing activities		$	(18,479	)		$	(112,320	)		$	93,841
Cash provided by financing activities		$	4,410,768			$	-			$	4,410,768

Cash Flow from Operating Activities

For the six months ended June 30, 2025, net cash flows used in operating activities was $2,518,947, compared to $1,191,850 used during the six months ended June 30, 2024, primarily due to net loss and timing of settlement of assets and liabilities.

Cash Flows from Investing Activities

During the six months ended June 30, 2025 and 2024, we used $18,479 and $112,320, respectively, in investing activities. In 2025, the Company made strategic investments in publicly traded companies of $995,100 and advanced $127,300 under a short-term promissory note agreement. These outflows were offset by proceeds from the sale of investments of $1,109,921. In addition, the Company paid $6,000 towards the purchase of intangible assets, compared to $112,320 during the six-months ended June 30, 2024.

Cash Flows from Financing Activities

During the six months ended June 30, 2025, we had cash flow provided by financing activities of $4,410,768, compared to $Nil in the six months ended June 30, 2024. During the six months ended June 30, 2025, the Company raised $1,245,306 through the issuance of common stock and prefunded warrants, $1,698,058 through the exercise of Series A warrants and $1,467,583 through the sale of shares of common stock pursuant to that certain At-the-Market Sales Issuance 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. The functional currency of the Company's Canadian subsidiary, PMGC Research Inc. ("PMGC Research") is the Canadian dollar. Monetary assets and liabilities denominated in foreign currencies are translated using the exchange rate prevailing at the balance sheet date. Non-monetary assets, liabilities, and items recorded in income arising from transactions denominated in foreign currencies are translated at rates of exchange in effect at the date of the transaction. Gains and losses arising on translation or settlement of foreign currency denominated transactions or balances are included in the determination of income.

The accounts of PMGC Research are translated to U.S. dollars using the current rate method. Accordingly, assets and liabilities are translated into U.S. dollars at the period-end exchange rate while revenues and expenses are translated at the average exchange rates during the period. Related exchange gains and losses are included in a separate component of stockholders' equity as accumulated other comprehensive income (loss).

Stock-Based Compensation

Employees - The Company accounts for share-based compensation under the fair value method which requires all such compensation to employees, including the grant of employee stock options, to be calculated based on its fair value at the measurement date (generally the grant date), and recognized in the consolidated statement of operations over the requisite service period.

Nonemployees - During June 2018, the 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, 2025 and 2024, the Company recorded ($42,996) and $10,484, respectively, in share-based compensation expense, of which $36,604 and ($79,600), and $31,781 and ($21,297), respectively, is included in office and administration and discontinued operations, respectively. Within discontinued operations for six months ended June 30, 2025 and 2024, ($73,768) and ($5,832), and ($23,876) and $2,579, respectively is included in office and administration and research and development, respectively.

Determining the appropriate fair value model and the related assumptions requires judgment. During the six months ended June 30, 2025 and the year ended 2024, the fair value of each option grant was estimated using a Black-Scholes option-pricing model.

The expected volatility represents the historical volatility of comparable publicly traded companies in similar industries, adjusted for variables such as stock price, market capitalization and life cycle. Due to limited historical data, the expected term for options granted is equal to the contractual life. The risk-free interest rate is based on a treasury instrument whose term is consistent with the expected life of stock options. The Company has not paid and does not anticipate paying cash dividends on its shares of common stock; therefore, the expected dividend yield is assumed to be zero.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditure or capital resources that is material to investors.

JOBS Act

On April 5, 2012, the Jumpstart Our Business Startups Act (the "JOBS Act") was signed into law. The JOBS Act contains provisions that, among other things, eases certain reporting requirements for qualifying public companies. We will qualify as an "emerging growth company" and under the JOBS Act will be allowed to comply with new or revised accounting pronouncements based on the effective date for private (not publicly traded) companies. We are electing to delay the adoption of new or revised accounting standards, and as a result, we may not comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for non-emerging growth companies. As a result, our financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates.

Future Related Party Transactions

The Corporate Governance Committee of our Board of Directors is required to approve all related party transactions. All related party transactions are made or entered into on terms that are no less favorable to use than can be obtained from unaffiliated third parties.

Impact of Inflation

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

Inflation Risk

We are also exposed to inflation risk. Inflationary factors, such as increases in labor costs, could impair our operating results. Although we do not believe that inflation has had a material impact on our financial position or results of operations to date, a high rate of inflation in the future may have an adverse effect on our ability to maintain current levels of gross margin and operating expenses.

Market Risk

Market risk is the risk of loss arising from adverse changes in market rates and prices. Our market risk exposure is generally limited to those risks that arise in the normal course of business, as we do not engage in speculative, non-operating transactions, nor do we utilize financial instruments or derivative instruments for trading purposes.