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Subsequent Events
12 Months Ended
Dec. 31, 2024
Subsequent Events [Abstract]  
Subsequent Events

NOTE 17 – Subsequent Events

 

2025 Private Placement

On December 23, 2024, the Company entered into a securities purchase agreement with certain investors for the sale of 8,065,210 shares of Common Stock and warrants to purchase up to 8,065,210 shares of Common Stock at an exercise price of $0.23 per share (the “Common Stock Warrants”) for gross proceeds of $1,851,849 (the “2025 Private Placement”). The closing of the 2025 Private Placement occurred on January 2, 2025. Upon the closing of the 2025 Private Placement, the Company issued a warrant to purchase up to 556,195 shares of Common Stock to the Placement Agent. This warrant has an exercise price of $0.23, a term of five years, and becomes exercisable on the six-month anniversary of its issuance. In conjunction with the 2025 Private Placement, the Company paid the Placement Agent $127,925 in fees and $60,000 in legal costs.

Elevai Acquisition

On December 31, 2024, the Company entered into an asset purchase agreement dated as of December 31, 2024 (the “Asset Purchase Agreement”), by and among the Company, a wholly owned subsidiary of the Company formed in connection with the transaction (“Buyer”), Parent and Seller to acquire substantially all of the assets (the “Purchased Assets”) and assume certain of the liabilities (the “Assumed Liabilities”) of PMGC Holdings, Inc. (formerly known as Elevai Labs Inc.) (“Parent”) and PMGC Impasse Corp. (formerly known as Elevai Skincare Inc.), a wholly owned subsidiary of Parent (the “Seller”), related to Seller’s skincare and haircare business (the “Elevai Acquisition”) for a purchase price consisting of: (i) shares of Common Stock having an aggregate Market Value (as defined in the Asset Purchase Agreement) of $1,075,463 (the “APA Shares”), of which $100,000 will be withheld by the Company for 12 months after the closing of the Elevai Acquisition on January 16, 2025 (the “APA Closing Date”) to secure the indemnification obligations of the Seller and Parent under the Asset Purchase Agreement; (ii) Buyer’s assumption of the Assumed Liabilities; and (iii) $56,525 in cash to be paid within 60 days following the sale by Buyer of certain finished goods inventory (as specified in the Asset Purchase Agreement) included in the Purchased Assets as of the APA Closing Date.

Following the APA Closing Date, the Company will pay the following additional earnout consideration for the Purchased Assets, if and when payable: (a) for each year ending on the anniversary of the APA Closing Date during the five-year period following the APA Closing Date, an amount, if any, equal to 5% of the Net Sales calculated as the aggregate gross sales minus (i) trade discounts, credits or allowances offered to customers and (ii) credits or allowances additionally granted upon returns, rejections or recalls) generated during such year from the Seller’s existing products as of the APA Closing Date; and (b) a one-time payment of $500,000 if Buyer achieves $500,000 in net revenue from sales of the Seller’s existing haircare products as of the APA Closing Date on or before the 24-month anniversary of the APA Closing Date.

Chief Executive Officer Transition

Effective January 20, 2025, the Company and Kendra Bracken-Ferguson mutually agreed that Ms. Bracken-Ferguson would no longer serve as the Chief Executive Officer of the Company. In connection with Ms. Bracken-Ferguson’s separation from the Company, she and the Company entered into a separation and release of claims agreement, dated January 24, 2025, pursuant to which Ms. Bracken-Ferguson will receive cash payments in the aggregate amount of $150,000 to be paid in equal installments over the subsequent six months. Effective as of January 24, 2025, the Board appointed Rajiv Shukla, the Company’s then-current Executive Chairman, as its Chief Executive Officer.

Nasdaq Delisting Notice

On August 30, 2024, the Company received a letter from the Listing Qualifications Department (the “Department”) of The Nasdaq Stock Market LLC (“Nasdaq”), notifying it that its Market Value of Listed Securities (the “MVLS”) was below the minimum of $35 million required for continued listing on the Nasdaq Capital Market pursuant to Nasdaq Listing Rule 5550(b)(2) (the “MVLS Requirement”). In accordance with Nasdaq Listing Rule 5810(c)(3)(C), Nasdaq provided the Company with 180 calendar days, or until February 26, 2025 (the “Compliance Date”), to regain compliance with the MVLS Requirement.

On March 4, 2025, the Company received written notice from the Department notifying it that the Company had failed to regain compliance with the MVLS Requirement by the Compliance Date and that Nasdaq would delist the Company’s securities from the Nasdaq Capital Market by March 11, 2025. On March 10, 2025, the Company requested an appeal of Nasdaq’s delisting determination to the Nasdaq Hearings Panel (the “Panel”), which will stay the delisting pending Nasdaq’s decision after the hearing scheduled for April 15, 2025. The Company believes it has a path to regaining compliance with Nasdaq's listing requirements, but no guarantee can be provided that it will be successful in doing so. Additionally, there can be no assurance that the Panel will provide a decision in the Company’s favor after the hearing or that the Company will be able to remain in compliance with the applicable Nasdaq listing requirements on an ongoing basis.