EX-99.2 3 ea022793801ex99-2_pmgc.htm UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF INCOME FOR THE FISCAL YEARS ENDED DECEMBER 31, 2023 AND 2022 AND FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2024

Exhibit 99.2

 

PMGC HOLDINGS INC. AND SUBSIDIARIES

UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS

 

On December 31, 2024, PMGC Holdings Inc. (“PMGC”, formerly known as Elevai Labs Inc.), and Elevai Skincare, Inc., a wholly owned subsidiary of PMGC (together, the “Seller”), entered into an Asset Purchase Agreement with Carmell Corporation (the “Buyer”), pursuant to which the Seller agreed to sell its skincare and healthcare business to the Buyer (the “Sale”), for (i) shares of common stock of the Buyer, having a market value of $1,075,463; (ii) Buyer’s assumption of certain liabilities of the Seller; and, (iii) $56,525 in cash.

 

Following the Closing, Buyer will pay additional earn-out consideration for the Sale, if and when payable: (a) Buyer will pay to Seller, for each year ending on the anniversary of the date of the Closing (the “Closing Date”) during the five-year period following the Closing, an amount, if any, equal to 5% of the Net Sales (as defined in the Asset Purchase Agreement) of Buyer generated during such year from Seller’s existing products as of the Closing; and (b) Buyer will pay to Seller a one-time payment of $500,000 if Buyer achieves $500,000 in net revenue from sales of the Seller’s existing hair and scalp products as of the Closing on or before the 24-month anniversary of the Closing Date.

 

The unaudited pro forma consolidated financial statements were derived from the Company’s historical consolidated financial statements for the respective periods. The unaudited pro forma consolidated balance sheet as of September 30, 2024 gives effect to the Sale as if it had occurred on September 30, 2024. The unaudited pro forma consolidated financial statements of operations for the years ended December 31, 2023, and 2022, and for the nine months ended September 30, 2024 give effect to the Sale as if it had occurred on January 1, 2022.

 

The unaudited pro forma adjustments are based on available information and certain assumptions that we believe are reasonable as of the date of this Current Report on Form 8-K. Assumptions underlying the pro forma adjustments related to the Sale are described in the accompanying notes. The pro forma adjustments reflected herein are based on management’s expectations regarding the Sale. The unaudited pro forma consolidated financial statements are presented for illustrative purposes only and do not purport to indicate the results of operations of future periods or the results of operations that actually would have been realized had the Sale been executed on the dates for the periods presented.

 

The unaudited pro forma consolidated financial statements should be read in conjunction with the audited December 31, 2023 consolidated financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K filed on March 29, 2024 and the unaudited September 30, 2024 consolidated financial statements contained in the Company’s Quarterly Report on Form 10-Q filed on November 14, 2024.

 

 

 

 

PMGC HOLDINGS INC. AND SUBSIDIARIES

UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET

As of September 30, 2024

 

As of:  Historical   Transaction
accounting
adjustment –
Sale		   Pro forma 
ASSETS            
Current Assets            
Cash  $6,425,670   $56,525(a)  $6,482,195 
Receivables, net   27,887    (16,889)(b)   10,998 
Prepaids and deposits   787,848    (111,064)(b)   676,784 
Inventory, net   986,421    (986,421)(b)   - 
Investment in securities   -    1,075,463(c)   1,075,463 
Total Current Assets   8,227,826    17,614    8,245,440 
                
Deposit   -    -    - 
Property and equipment, net   52,528    (51,235)(b)   1,293 
Intangibles, net   2,823,530    -    2,823,530 
Operating lease right-of-use asset   101,471    (101,471)(b)   - 
TOTAL ASSETS  $11,205,355   $(135,092)  $11,070,263 
LIABILITIES               
Current Liabilities               
Accounts payable and accrued liabilities  $1,216,191   $(771,693)(b)  $444,498 
Customer deposits   39,583    (39,583)(b)   - 
Due to related parties   419,457    -    419,457 
Current portion of consideration payable   350,000    -    350,000 
Current portion of lease liability   103,309    (103,309)(b)   - 
Derivative liabilities   1,882    -    1,882 
Total Current Liabilities   2,130,422    (914,585)   1,215,837 
                
Consideration payable   519,711    -    519,711 
Operating lease liability   -    -    - 
TOTAL LIABILIITES  $2,650,133   $(914,585)  $1,735,548 
                
Commitments and Contingencies               
                
EQUITY               
Common stock, $0.0001 par value, 300,000,000 shares authorized; 246,880 and 86,648 shares issued and outstanding as of September 30, 2024, and December 31, 2023, respectively   4,938    -    4,938 
Additional paid-in capital   19,884,944    -    19,884,944 
Accumulated other comprehensive income   228    -    228 
Accumulated deficit   (11,334,888)   779,493(d)   (10,555,395)
TOTAL EQUITY   8,555,222    779,493    9,334,715 
TOTAL LIABILITIES AND EQUITY  $11,205,355   $(135,092)  $11,070,263 

 

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PMGC HOLDINGS INC. AND SUBSIDIARIES

UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS

Nine Months Ended September 30, 2024

 

   Historical   Transaction accounting
adjustments – Sale		   Pro forma 
       (i)   (ii)     
Revenue  $1,747,570   $(1,747,570)  $87,379   $87,379 
Cost of sales   468,763    (468,763)   -    - 
Gross profit  $1,278,807   $(1,278,807)  $87,379   $87,379 
                     
Expenses                    
Depreciation and amortization   7,779    (7,367)   -    412 
Marketing and promotion   1,209,041    (932,671)   -    276,370 
Consulting fees   817,030    (32,610)   -    784,420 
Office and administrative   2,096,372    (1,716,437)   -    379,935 
Professional fees   587,954    (321,522)   -    266,432 
Investor relations   141,484    (7,056)   -    134,428 
Research and development   268,786    (209,136)   -    59,650 
Foreign exchange (gain) loss   1,660    (673)   -    987 
Travel and entertainment   160,612    (149,359)   -    11,253 
Total Expenses  $5,290,718   $(3,376,831)  $-   $1,913,887 
                     
Net loss before other income (expense)  $(4,011,911)  $2,098,024    87,379   $(1,826,508)
                     
Other income (expense)                    
Change in fair value of derivative liabilities   367,277    -    -    367,277 
Interest expense   (702,675)   18,099    -    (684,576)
Interest income   245    -    -    245 
Other income   36,066    (36,066)   -    - 
Net loss  $(4,310,998)  $2,080,057   $87,379   $(2,143,562)
                     
Other comprehensive income (loss)                    
Currency translation adjustment   26    -    -    26 
Total comprehensive loss  $(4,310,972)  $2,080,057   $87,379   $(2,143,536)
                     
Basic and diluted loss per share  $(45.13)            $(22.44)
Weighted average shares outstanding   95,526              95,526 

 

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PMGC HOLDINGS INC. AND SUBSIDIARIES

UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS

Year Ended December 31, 2023

 

   Historical   Transaction accounting adjustments – Sale   Pro forma 
       (i)   (ii)     
Revenue  $1,712,595   $(1,712,595)  $85,630   $85,630 
Cost of sales   578,015    (578,015)   -    - 
Gross profit  $1,134,580   $(1,134,580)  $85,630   $85,630 
                     
Expenses                    
Depreciation and amortization   10,295    (9,741)   -    554 
Marketing and promotion   660,291    (403,841)   -    256,450 
Consulting fees   459,498    (179,731)   -    279,767 
Office and administrative   2,329,067    (2,231,481)   -    97,586 
Professional fees   579,111    (446,511)   -    132,600 
Investor relations   91,009    -    -    91,009 
Research and development   426,243    (418,833)   -    7,410 
Foreign exchange (gain) loss   6,130    (2)   -    6,128 
Travel and entertainment   339,147    (319,762)   -    19,385 
Total Expenses  $4,900,791   $(4,009,902)  $-   $890,889 
                     
Net loss before other income (expense)  $(3,766,211)  $2,875,322   $85,630   $(805,259)
                     
Other income (expense)                    
Listing expense   (450,079)   -    -    (450,079)
Change in fair value of derivative liabilities   (71,266)   -    -    (71,266)
Interest income   5,564    -    -    5,564 
Interest expense   (19,525)   19,525    -    - 
Loss on sale of equipment   -    -    -    - 
Net loss  $(4,301,517)  $2,894,847   $85,630   $(1,321,040)
                     
Other comprehensive income (loss)                    
Currency translation adjustment   91    -    -    91 
Total comprehensive loss  $(4,301,426)  $2,894,847   $85,630   $(1,320,949)
                     
Basic and diluted loss per share  $(80.06)            $(24.59)
Weighted average shares outstanding   53,730              53,730 

 

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PMGC HOLDINGS INC. AND SUBSIDIARIES

UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS

Year Ended December 31, 2022

 

   Historical   Transaction accounting
adjustments – Sale		   Pro forma 
       (i)   (ii)     
Revenue  $766,277   $(766,277)  $38,314   $38,314 
Cost of sales   318,968    (318,968)   -    - 
Gross profit  $447,309   $(447,309)  $38,314   $38,314 
                     
Expenses                    
Depreciation and amortization   5,034    (4,507)   -    527 
Marketing and promotion   192,863    (190,845)   -    2,018 
Consulting fees   324,395    (109,317)   -    215,078 
Office and administrative   1,019,708    (1,007,083)   -    12,625 
Professional fees   192,409    (159,684)   -    32,725 
Investor relations   74,003    -    -    74,003 
Research and development   228,747    (194,582)   -    34,165 
Foreign exchange (gain) loss   2,749    -    -    2,749 
Travel and entertainment   198,442    (178,921)   -    19,521 
Total Expenses  $2,238,350   $(1,844,939)   -   $393,411 
                     
Net loss before other income (expense)  $(1,791,041)  $1,397,630   $38,314   $(355,097)
                     
Other income (expense)                    
Listing expense   -    -    -    - 
Change in fair value of derivative liabilities   (12,754)   -    -    (12,754)
Interest income   7,702    -    -    7,702 
Interest expense   (2,629)   -    -    (2,629)
Loss on sale of equipment   (1,546)   1,546    -    - 
Net loss  $(1,800,268)  $1,399,176   $38,314   $(362,778)
                     
Other comprehensive income (loss)                    
Currency translation adjustment   (91)   -    -    (91)
Total comprehensive loss  $(1,800,359)  $1,399,176   $38,314   $(362,869)
                     
Basic and diluted loss per share  $(37.79)            $(7.61)
Weighted average shares outstanding   47,644              47,644 

 

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Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements

 

1.Basis of Pro Forma Presentation

 

The accompanying unaudited pro forma financial statements of PMGC Holdings Inc. (the “Company”) were prepared in accordance with Article 11 of Regulation S-X and are based on the historical consolidated financial information of the Company. The consolidated financial information has been adjusted in the accompanying pro forma financial statements to give effect to the disposition of the Company’s skincare and healthcare business.

 

The unaudited pro forma consolidated balance sheet as of September 30, 2024 gives effect to the Sale as if it had occurred on September 30, 2024. The Sale gross proceeds do not reflect all settlement statement adjustments contemplated by the Asset Purchase Agreement, or any additional earn-out considerations.

 

The unaudited pro forma consolidated financial statements of operations for the years ended December 31, 2023, and 2022, and the nine months ended September 30, 2024 give effect to the Sale as if it had occurred on January 1, 2022.

 

On November 27, 2024, the Company consolidated its common shares on a ratio of two hundred old common shares for every one new post-consolidated common share. All current and comparative references to the number of common shares, weighted average number of common shares, and loss per share have been restated to give effect to this share consolidation.

 

2.Adjustments to the Pro Forma Consolidated Balance Sheet

 

Explanations of the adjustments to the pro forma consolidated balance sheet are as follows:

 

a.The cash portion of the Sale consideration, amounting to $56,525.

 

b.Divesture of the skincare and healthcare business, and certain transferred liabilities.

 

c.The portion of the Sale consideration related to the common stock of the Buyer, having a market value of $1,075,463.

 

d.Estimated gain on the Sale transaction. The gain on sale does not include any additional earn out consideration (“Contingent Consideration”) that may become receivable under the Asset Purchase Agreement. The Company will record Contingent Consideration at the time when the contingency is resolved.

 

3.Adjustments to the Pro Forma Consolidated Statements of Operations

 

Explanations of the adjustments to the pro forma consolidated statements of operations are as follows:

 

(i)To remove the direct historical results of operations of the Company’s skincare and healthcare business.

 

(ii)To include 5% of Net Sales of the skincare and healthcare business as earn-out royalty consideration within the terms of the Sale, to give effect to the Sale as if it had occurred on January 1, 2022.

 

The gain on Sale is not included as pro forma adjustments in the pro forma consolidated statements of operations as it is a nonrecurring item. Such amounts are only presented as adjustments to accumulated deficit in the pro forma consolidated balance sheet (see Note 2(d)).

 

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