PMGC Holdings updates executive agreements to include acquisition-based awards

PMGC Holdings Inc. (NASDAQ:ELAB), a micro-cap company with a market value of $2.87 million, announced Monday that it has amended consulting agreements with entities owned by its Chairman and CEO to introduce new acquisition-based compensation provisions, according to a statement in a recent SEC filing. The company, which InvestingPro data shows has posted negative EBITDA of $4.28 million in the last twelve months, is implementing these changes amid challenging market conditions.

On August 12, the company executed Amendment No. 3 to its consulting agreements with Northstrive Companies Inc., owned by Chairman Braeden Lichti, and GB Capital Ltd, owned by Chief Executive Officer and Chief Financial Officer Graydon Bensler. According to InvestingPro analysis, PMGC Holdings maintains strong liquidity with a current ratio of 22.38, though it faces profitability challenges with significant cash burn rates. Unlock 13 additional key insights about PMGC Holdings with an InvestingPro subscription. Both agreements now provide for fully vested awards—either in restricted stock units, restricted stock, or cash—upon the completion of any acquisition by PMGC Holdings or its subsidiaries.

The amount of each award will be calculated as a percentage of the total purchase price of an acquisition, regardless of whether the consideration is paid in cash, stock, assumed debt, or other forms. The award percentages are structured as follows: 5% of the acquisition value for deals up to $5 million, 6% for deals over $5 million up to $10 million, 7% for deals over $10 million up to $20 million, and 8% for deals exceeding $20 million.

Additionally, the Compensation Committee may, at its discretion, grant an extra 1% of the applicable acquisition value if the acquisition is projected to be EBITDA or net income accretive within twelve months of closing or is deemed an advancement to the company’s long-term objectives or operational capabilities.

If the award is taken in restricted stock units or restricted stock, the number of shares will be determined by dividing the dollar value of the award by the trailing five-day volume-weighted average price of the company’s common stock before the acquisition closes. These equity awards will be fully vested and not subject to further service or performance conditions.

The amendments also include a name change for the agreements, which will now be titled “Consulting and Services Agreement for Non-Employee, Non-Executive Chairman” and “Consulting and Services Agreement for Non-Employee Chief Executive Officer.”

This information is based on a press release statement contained in the company’s Form 8-K filing with the Securities and Exchange Commission.

In other recent news, PMGC Holdings Inc. has made several strategic moves in its acquisition endeavors. The company announced the termination of its previous intent to acquire a U.S.-based electronics manufacturing firm, redirecting its focus toward CNC machine shops in the aerospace, defense, and industrial sectors. Following this shift, PMGC signed a non-binding letter of intent to acquire a U.S.-based CNC machining company specializing in aerospace and defense components, which reported $4.5 million in revenue and $500,000 in adjusted EBITDA for 2024. Additionally, PMGC has entered another non-binding agreement to acquire a California-based CNC machining firm with over 35 years of experience, known for its work with exotic metals and precision manufacturing.

In further developments, PMGC had previously announced its intention to acquire a U.S. electronics manufacturing company, which reported $699,000 in revenue and $173,000 in adjusted EBITDA for 2024. This acquisition is part of PMGC’s broader M&A strategy. Meanwhile, Northstrive Biosciences, a subsidiary of PMGC, completed Phase I research on EL-22, a novel treatment for muscle-wasting conditions. The research, conducted with Yuva Biosciences, highlights EL-22’s potential benefits, offering an oral delivery method that contrasts with traditional injectable therapies.

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