Executive Summary / Key Takeaways

• PMGC Holdings Inc. ($ELAB) has fundamentally transformed its business model, divesting its historical skincare operations to become a diversified holding company focused on strategic acquisitions and investments across various industries, including biopharmaceuticals and potentially manufacturing.
• The company's biopharmaceutical subsidiary, Northstrive Biosciences, is developing differentiated engineered probiotic candidates (EL-22, EL-32) targeting the significant unmet need of muscle preservation in patients using GLP-1 weight loss drugs, leveraging preclinical and Phase 1 data and aiming for a Q2 2025 pre-IND meeting and 2025 IND filing for EL-22.
• Recent financial results for Q1 2025 reflect the new structure, showing increased operating expenses driven by R&D, consulting, and professional fees related to strategic initiatives and financing efforts, alongside investment losses, resulting in a wider net loss from continuing operations.
• Significant financing activities in Q1 2025, including warrant exercises and a registered direct offering totaling $2.94M in cash provided, have bolstered the cash position to $5.36M, though the company acknowledges its accumulated deficit and ongoing losses raise substantial doubt about its ability to continue as a going concern, dependent on future capital raising and successful acquisitions.
• Management's forward-looking strategy centers on increasing revenue through its investment arm (PMGC Capital), advancing biotech assets towards clinical trials, and pursuing acquisitions of profitable B2B companies, signaling a focus on building value through a diverse portfolio rather than organic growth in a single sector.

A Strategic Metamorphosis: From Skincare to Diversified Holdings

PMGC Holdings Inc., trading under the ticker $ELAB, has undergone a dramatic transformation, shedding its origins as a skincare development company to emerge as a diversified holding entity. Incorporated in 2020 as Elevai Labs Inc., the company initially focused on the design, manufacture, and marketing of skincare products. However, a strategic reorganization in 2024, including a name change and redomicile to Nevada, set the stage for a significant pivot.

The culmination of this shift was the divestiture of the skincare business, finalized on January 16, 2025. This move was explicitly aimed at reducing cash burn and enhancing operational efficiency, clearing the path for a new growth strategy centered on strategic acquisitions and investments across diverse sectors. This historical context is crucial for understanding ELAB's current state and future direction; it is no longer a skincare play but a vehicle for managing and growing a portfolio of distinct businesses.

Under this new structure, ELAB operates through three wholly-owned subsidiaries: Northstrive BioSciences Inc. (biopharmaceuticals), PMGC Research Inc. (Canadian R&D), and PMGC Capital LLC (multi-strategy investment). This diversified approach represents a fundamental change in the company's operational and strategic DNA.

Technological Pillars and Competitive Positioning

Central to ELAB's new strategy, particularly within its biopharmaceutical arm, is the focus on differentiated technology. Northstrive Biosciences is developing assets like EL-22 and EL-32, leveraging a first-in-class engineered probiotic approach. This technology is designed to address a critical unmet need in the burgeoning obesity treatment market, specifically the preservation of muscle mass in patients undergoing weight loss therapies, including the widely used GLP-1 receptor agonists.

The "so what" for investors here is significant. Current GLP-1 treatments from market leaders like Eli Lilly and Novo Nordisk , while highly effective for weight loss, can result in the loss of up to 30-50% of lean muscle mass. ELAB's engineered probiotic approach aims to mitigate this side effect by targeting pathways like myostatin and activin-A. Preclinical studies for EL-22 have shown significant physiological and functional improvements, and a Phase 1 trial in South Korea indicated it was generally well-tolerated and safe. While specific quantitative data on muscle preservation efficacy relative to competitors is still in development, the strategic intent is to offer a complementary or alternative therapy that improves the quality of weight loss.

Compared to the broad portfolios and established GLP-1 dominance of giants like Eli Lilly (LLY) and Novo Nordisk (NVO), ELAB is a niche player. Eli Lilly's Zepbound commands a significant 45% share of the weight loss market, and Novo Nordisk's Ozempic holds a 46% share in diabetes treatments, both generating billions in revenue with robust margins (Eli Lilly: ~80% gross, ~35% operating; Novo Nordisk: ~85% gross, ~40% operating). AstraZeneca (AZN) is also developing next-generation metabolic modulators. These companies benefit from massive scale, established distribution, and significant R&D budgets.

ELAB's competitive advantage lies in its unique technological approach targeting a specific GLP-1 side effect, potentially offering a differentiated product performance metric (reduced muscle loss). Management notes that the FDA has cleared other myostatin-based therapies to begin clinical trials in combination with GLP-1s, providing a regulatory precedent that Northstrive views as encouraging for its own development path. However, ELAB faces significant disadvantages due to its smaller scale, which likely results in higher operating costs and less financial flexibility compared to its large-cap competitors. Its innovation speed to market is also inherently slower given its early-stage pipeline compared to the rapid pace of product launches and label expansions seen from the market leaders.

Beyond biotech, ELAB's potential acquisition of a profitable CNC machine shop, as indicated by a recent LOI, introduces another competitive angle. This target company holds AS9100D and ISO 9001:2015 certifications, critical for serving the aerospace, defense, and industrial markets. In a climate prioritizing domestic supply chains, these certifications and the target's niche capabilities in exotic metals represent a competitive moat in the manufacturing sector, contrasting with the biotech focus but aligning with the diversified holding company strategy.

Financial Performance Reflecting Transition and Investment

The financial results for the three months ended March 31, 2025, primarily reflect the company's operations post-skincare divestiture, focusing on continuing operations. The shift is evident in the income statement. Total operating expenses for continuing operations increased to $1.12M in Q1 2025, up from $799,974 in Q1 2024. This rise was driven by several factors:

• Research and Development: R&D expenses saw a significant jump to $32,433 in Q1 2025 from a mere $2,782 in the prior-year period. This increase is directly tied to the advancement of the EL-22 project, including spending on clinical validation studies and costs associated with the planned Type B pre-IND meeting with the FDA.

• Consulting Fees: These rose substantially to $547,557 from $378,473, primarily due to bonus-related consulting expenses ($300,000 in Q1 2025 vs. $27,072 in Q1 2024) linked to the skincare sale and fundraising efforts.
• Professional Fees: Legal, audit, and accounting services increased sharply to $266,468 from $43,290, reflecting costs associated with corporate restructuring and financing activities during the quarter.

The "Other income/expense" line also saw a dramatic shift, moving from a net income of $255,853 in Q1 2024 to a net expense of $379,087 in Q1 2025. This unfavorable variance of $634,940 was largely due to realized ($466,678) and unrealized ($60,404) losses on investments held by PMGC Capital, which did not occur in the prior period. The absence of a $274,939 fair value gain on derivative liabilities seen in Q1 2024 also contributed. A gain of $129,613 on the termination of an intangible asset (License 1) and increased interest income ($28,856 vs. $86) partially offset these negative impacts.

Overall, the net loss from continuing operations widened to $1.58M in Q1 2025 compared to $544,121 in Q1 2024. Including discontinued operations (the skincare business results until its sale date), the total net loss for Q1 2025 was $1.61M, compared to $1.40M in Q1 2024 (which included a larger loss from discontinued skincare operations).

Looking at the balance sheet, cash increased to $5.36M at March 31, 2025, from $3.98M at December 31, 2024. This improvement was driven by financing activities. Cash used in operating activities from continuing operations increased to $1.16M in Q1 2025 from $889,600 in Q1 2024, reflecting the higher operating expenses. Cash used in investing activities from continuing operations was $215,319, including strategic investments ($430,024) partially offset by proceeds from the sale of shares received from the skincare divestiture.

The significant cash inflow came from financing activities, which provided $2.94M in Q1 2025 (compared to none in Q1 2024). This included $1.25M raised through the issuance of common stock and prefunded warrants and $1.70M from the exercise of Series A warrants. Subsequent to the quarter, all pre-funded warrants were exercised, and the company entered into an At-The-Market (ATM) facility, selling approximately $1.24M in stock as of May 14, 2025.

Despite the recent capital raises, the company's accumulated deficit stands at $14.88M as of March 31, 2025, and it continues to incur net losses and use cash in operations. These factors lead management to state that substantial doubt exists regarding the company's ability to continue as a going concern, dependent on securing additional financing and acquiring cash-flow-generating assets.

Outlook and Strategic Trajectory

Management's outlook for the next twelve months is firmly centered on executing its diversified holding company strategy. Key initiatives include:

• PMGC Capital: Increasing revenue by generating returns from investments in undervalued assets, public and private securities, and structured financing.
• Biopharma Advancement: Progressing Northstrive Biosciences' assets, particularly EL-22, towards IND applications and initiating clinical trials. The target is a Q2 2025 pre-IND meeting with the FDA and subsequent IND filing in 2025. The recent collaboration with Yuva Biosciences for AI-powered therapeutic development further underscores this focus.
• Acquisition Growth: Pursuing additional acquisitions of profitable business-to-business companies with positive EBITDA, exemplified by the LOI for the CNC machine shop.
• Portfolio Development: Establishing new subsidiaries for acquired or licensed assets and evaluating potential opportunities like out-licensing biotech applications, spin-offs, or creating new public entities.

This outlook signals a company actively seeking to build value through a portfolio approach rather than relying on the organic growth of a single core business. Success hinges on the ability of PMGC Capital to generate returns, Northstrive Biosciences to advance its pipeline through costly clinical stages, and the company's capacity to identify, acquire, and integrate profitable businesses.

Risks and Challenges

The most prominent risk facing ELAB is the substantial doubt about its ability to continue as a going concern. This is directly tied to its history of net losses, accumulated deficit, and dependence on external financing. While recent capital raises have provided a buffer, the need for continued financial support is paramount. There is no guarantee that the company will be able to raise funds as needed.

Other significant risks include the inherent uncertainties of biopharmaceutical development, including the success of clinical trials, regulatory approvals (specifically the IND process for EL-22), and the competitive landscape dominated by well-funded giants. The ability to keep pace with technological advancements and changing market needs across its diverse potential portfolio is also a challenge. The success of PMGC Capital's investment strategy is subject to market volatility and investment performance risks. Furthermore, the execution of the acquisition strategy carries integration risks and the uncertainty of closing potential deals, such as the CNC machine shop LOI. General economic conditions, inflation (which could impact operating costs), and reliance on key personnel also pose risks.

Conclusion

PMGC Holdings Inc. is a company in the midst of a radical transformation. By divesting its original skincare business, it has pivoted to a diversified holding company model aiming to create value through strategic investments and acquisitions in disparate sectors like biopharmaceuticals and manufacturing. The core investment thesis rests on the successful execution of this multi-pronged strategy, particularly the advancement of differentiated biotech assets like EL-22 and the acquisition of profitable, resilient businesses.

While recent financing activities have improved liquidity, the company's history of losses and stated going concern risk highlight the critical dependence on future capital. Investors must weigh the potential upside from successful pipeline development, strategic investments, and accretive acquisitions against the significant financial challenges, execution risks inherent in a diversified strategy, and intense competition in its target markets. ELAB represents a speculative opportunity tied to management's ability to build a sustainable, profitable portfolio from the ground up.