UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For The Quarterly Period Ended March 31, 2024

 

OR

 

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

Commission File Number: 001-41875 

 

ELEVAI LABS INC.
(Exact name of registrant as specified in its charter)

 

Delaware   85-1399981
(State of incorporation)   (I.R.S. Employer
Identification No.)

 

Jordan Plews

120 Newport Center Drive, Suite 250

Newport Beach, CA 92660

(Address of principal executive office) (Zip code)

 

(866) 794-4940

(Registrant’s telephone number, including area code)

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class   Trading Symbol(s)   Name of each exchange on which registered
Common Stock, par value $0.0001 per share   ELAB   The Nasdaq Stock Market LLC

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period than the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☐ No ☒

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐ 

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. 

 

Large accelerated filer ☐ Accelerated filer ☐
Non-accelerated filer ☒ Smaller reporting company ☒
    Emerging growth company ☒

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

 

As of May 15, 2024, there were 18,892,115 shares of our common stock, par value $0.0001 per share, issued and outstanding.

 

 

 

 

 

 

Elevai Labs Inc.Quarterly Report on Form 10-Q

 

TABLE OF CONTENTS

 

PART I – FINANCIAL INFORMATION 1
     
Item 1. Financial Statements 1
     
  Notes to Unaudited Condensed Financial Statements 5
     
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 20
     
Item 3. Quantitative and Qualitative Disclosure About Market Risk 30
     
Item 4. Controls and Procedures 30
     
PART II – OTHER INFORMATION 31
     
Item 1. Legal Proceedings 31
     
Item 1A. Risk Factors 31
     
Item 2. Recent Sales of Unregistered Securities; Use of Proceeds and Issuer Purchases of Equity Securities 31
     
Item 3. Defaults Upon Senior Securities 31
     
Item 4. Mine Safety Disclosures 32
     
Item 5. Other Information 32
     
Item 6. Exhibits 32
     
SIGNATURES 33

 

i

 

 

Forward-Looking Statements

 

This Quarterly Report of Elevai Labs Inc. (“we,” “us,” “our,” “Elevai” and the “Company”) contains statements that constitute “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Any statements that are not statements of historical facts may be deemed to be forward-looking statements. These statements appear in several different places in this Quarterly Report and, in some cases, can be identified by words such as “anticipates”, “estimates”, “projects”, “expects”, “contemplates”, “intends”, “believes”, “plans”, “may”, “will” or their negatives or other comparable words, although not all forward-looking statements contain these identifying words. Forward-looking statements in this Quarterly Report may include, but are not limited to, statements and/or information related to: our financial performance and projections; our business prospects and opportunities; our business strategy and future operations; the projection of timing and delivery of products in the future; projected costs; expected production capacity; expectations regarding demand and acceptance of our products; estimated costs of research and development to develop new pipeline products; trends in the market in which we operate; the plans and objectives of management; our liquidity and capital requirements, including cash flows and uses of cash; trends relating to our industry; plans relating to our current products; and plans and intentions to regain compliance with the listing requirements of The Nasdaq Stock Market LLC (“Nasdaq”), including, among other things, through the implementation of a reverse stock split.

 

We have based these forward-looking statements on our current expectations about future events on information that is available as of the date of this Quarterly Report, and any forward-looking statements made by us speak only as of the date on which they are made. While we believe these expectations are reasonable, such forward-looking statements are inherently subject to risks and uncertainties, many of which are beyond our control. Our actual future results may differ materially from those discussed or implied in our forward-looking statements for various reasons, including, our ability to change the direction of the Company; our ability to keep pace with new technology and changing market needs; our capital needs, and the competitive environment of our business. Additional Factors that could contribute to such differences include, but are not limited to:

 

●general economic and business conditions, including changes in interest rates;
   
●prices of other competitive products, costs associated with research and development of our products and other economic conditions;

 

●the effect of an outbreak of disease or similar public health threat, such as the COVID-19 pandemic, on the Company’s business (natural phenomena, including the lingering effects of the COVID-19 pandemic);

 

●the impact of political unrest, natural disasters or other crises, terrorist acts, acts of war and/or military operations, and our ability to maintain or broaden our business relationships and develop new relationships with strategic alliances, suppliers, customers, distributors or otherwise;
   
●breaches in data security, failure of information security systems, cyber-attacks or other security or privacy-related incidents affecting us or our suppliers;

 

●the ability of our information technology systems or information security systems to operate effectively;

 

●actions by government authorities, including changes in government regulation;

 

●uncertainties associated with legal proceedings;

 

●changes in the size of the medical aesthetics, cosmetics and biotechnology market;

 

●future decisions by management in response to changing conditions;

 

ii

 

 

●the Company’s ability to execute prospective business plans;

 

●misjudgments in the course of preparing forward-looking statements;

 

●the Company’s ability to raise sufficient funds to carry out its proposed business plan;

 

●inability to keep up with advances in medical aesthetics and biotechnology;

 

●inability to design, develop, market and sell new medical aesthetics and biotech products that address additional market opportunities to generate revenue and positive cash flows;

 

●dependency on certain key personnel and any inability to retain and attract qualified personnel;

 

●inability to succeed in establishing, maintaining and strengthening the Elevai brand;

 

●our expectations regarding our ability to obtain, maintain, protect, defend, and enforce our intellectual property rights and operate without infringing, misappropriating, or otherwise violating the intellectual property rights of others;

 

●disruption of supply or shortage of raw materials;

 

●the unavailability, reduction or elimination of government and economic incentives;

 

●failure to manage future growth effectively; and

 

●the other risks and uncertainties detailed from time to time in our filings with the Security and Exchange Commission (“SEC”), including but not limited to those described under “Risk Factors” in Part I, Item 1A of the Company’s Annual Report on Form 10-K as amended for the year ended December 31, 2023, filed with the SEC on March 29, 2024 (the “Form 10-K”).

 

Although management has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended. There is no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such forward-looking statements. Accordingly, readers should not place undue reliance on forward-looking statements. These cautionary remarks expressly qualify, in their entirety, all forward-looking statements attributable to our Company or persons acting on our Company’s behalf. We do not undertake to update any forward-looking statements to reflect actual results, changes in assumptions or changes in other factors affecting such statements, except as, and to the extent required by, applicable securities laws.

 

iii

 

 

PART I - FINANCIAL INFORMATION

 

Item 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

 

(Expressed in United States Dollars)

 

Elevai Labs Inc.

Condensed Consolidated Balance Sheets

(Expressed in United States dollar)

 

As of:  March 31,
2024		   December 31,
2023		 
ASSETS        
Current Assets        
Cash  $943,797   $3,326,851 
Receivables, net   54,205    36,161 
Prepaids and deposits   1,197,687    1,060,765 
Inventory, net   945,064    495,667 
Total Current Assets   3,140,753    4,919,444 
           
Deposit   10,773    10,773 
Property and equipment, net   59,003    53,119 
Intangibles, net   843,505    
-
 
Operating lease right-of-use asset   172,562    206,582 
TOTAL ASSETS  $4,226,596   $5,189,918 
LIABILITIES          
Current Liabilities          
Accounts payable and accrued liabilities  $528,822   $669,375 
Customer deposits   35,148    36,693 
Due to related parties   75,836    77,127 
Current portion of consideration payable   338,889    
-
 
Current portion of lease liability   149,208    145,000 
Derivative liabilities   94,219    369,158 
Total Current Liabilities   1,222,122    1,297,353 
           
Consideration payable   491,557    
-
 
Operating lease liability   26,571    65,489 
TOTAL LIABILIITES  $1,740,250   $1,362,842 

Commitments and Contingencies

   
 
    
 
 
EQUITY          
Common stock, $0.0001 par value, 300,000,000 shares authorized; 17,329,615 shares issued and outstanding as of March 31, 2024, and December 31, 2023, respectively   1,733    1,733 
Additional paid-in capital   10,904,370    10,849,031 
Accumulated other comprehensive income   1,383    202 
Accumulated deficit   (8,421,140)   (7,023,890)
TOTAL EQUITY   2,486,346    3,827,076 
TOTAL LIABILITIES AND EQUITY  $4,226,596   $5,189,918 

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements 

 

1

 

 

Elevai Labs Inc.

Condensed Consolidated Statements of Operations and Comprehensive Loss

For the three months ended March 31, 2024, and 2023

(Expressed in United States dollar)

 

   Three months
ended
March 31,
2024		   Three months
ended
March 31,
2023		 
Revenue  $614,563    142,820 
Cost of sales   168,911    44,433 
Gross profit  $445,652    98,387 
           
Expenses          
Depreciation and amortization   20,331    2,497 
Marketing and promotion   393,038    102,676 
Consulting fees   396,126    83,964 
Office and administrative   878,608    434,059 
Professional fees   179,922    137,797 
Investor relations   98,245    38,268 
Research and development   103,194    83,741 
Foreign exchange (gain) loss   541    259 
Travel and entertainment   59,108    61,515 
Total Expenses  $2,129,113    944,776 
           
Net loss before other income (expense)  $(1,683,461)   (846,389)
           
Other income (expense)          
Change in fair value of derivative liabilities   274,939    (236,778)
Interest income   86    5,107 
Interest expense   (23,537)   (2,636)
Other income   34,723    - 
Net loss  $(1,397,250)   (1,080,696)
           
Other comprehensive income (loss)          
Currency translation adjustment   1,181    113 
Total comprehensive loss  $(1,396,069)   (1,080,583)
           
Basic and diluted loss per share
  $(0.081)   (0.111)
Weighted average shares outstanding   17,329,615    9,707,364 

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements

 

2

 

 

Elevai Labs Inc.

Condensed Consolidated Statements of Changes in Stockholders’ Equity

For the three months ended March 31, 2024, and 2023

(Expressed in United States dollars)

 

   Series seed 1 preferred stock   Series seed 2 preferred stock   Series A
preferred stock		   Common Stock   Additional       Accumulated other     
   Number of shares   Amount   Number of shares   Amount   Number of shares   Amount   Number of shares   Amount   paid-in capital   Accumulated deficit   comprehensive income   Total 
   #   $   #   $   #   $   #   $   $   $   $   $ 
Balance, January 1, 2023   213,730    21    3,635,252    364    1,861,799    186    9,568,475    957    3,852,044    (2,722,373)   111    1,131,310 
Private placement   -    -    -    -    -    -    250,000    25    749,975    -    -    750,000 
Exercise of stock options   -    -    -    -    -    -    62,500    6    37,494    -    -    37,500 
Share-based compensation   -    -    -    -    -    -    -    -    75,161    -    -    75,161 
Net loss for the period   -    -    -    -    -    -    -    -    -    (1,080,696)   -    (1,080,696)
Currency translation adjustment   -    -    -    -    -    -    -    -    -    -    113    113 
Balance, March 31, 2023   213,730    21    3,635,252    364    1,861,799    186    9,880,975    988    4,714,674    (3,803,069)   224    913,388 
                                                             
Balance, January 1, 2024   -    -    -    -    -    -    17,329,615    1,733    10,849,031    (7,023,890)   202    3,827,076 
Share-based compensation   -    -    -    -    -    -    -    -    55,339    -    -    55,339 
Net loss for the period   -    -    -    -    -    -    -    -    -    (1,397,250)   -    (1,397,250)
Currency translation adjustment   -    -    -    -    -    -    -    -    -    -    1,181    1,181 
Balance, March 31, 2024   -    -    -    -    -    -    17,329,615    1,733    10,904,370    (8,421,140)   1,383    2,486,346 

 

The accompanying notes are an integral part of these condensed consolidated financial statements

 

3

 

 

Elevai Labs Inc.

Condensed Consolidated Statements of Cash Flows

For the three months ended March 31, 2024, and 2023

(Expressed in United States dollars)

 

   March 31,
2024		   March 31,
2023		 
Operating activities        
Net loss  $(1,397,250)  $(1,080,696)
Adjustments to reconcile net loss to net cash used in operating activities:          
Depreciation and amortization   21,188    2,912 
Share-based compensation   55,339    75,161 
Straight-line rent expense   (690)   (689)
Change in fair value of derivative liabilities   (274,939)   236,778 
Non-cash interest expense   18,994    
-
 
           
Changes in operating assets and liabilities:          
Receivables   (18,119)   (33,253)
Prepaid expenses and deposits   (136,951)   (222,404)
Inventory   (449,397)   (83,363)
Accounts payable and accrued liabilities   (140,698)   130,484 
Customer deposits   (1,545)   59,564 
Due to related parties   
-
    30,000 
Cash flows used in operating activities  $(2,324,068)  $(885,506)
           
Investing activities          
Purchase of equipment   (9,160)   (11,191)
Purchase of intangible assets   (50,000)   
-
 
Cash flows used in investing activities  $(59,160)  $(11,191)
           
Financing activities          
Exercise of stock options   
-
    37,500 
Proceeds from issuance of common stock and warrants   
-
    750,000 
Cash flows provided by financing activities  $
-
   $787,500 
           
Effect of exchange rate changes on cash   174    141 
           
Decrease in cash   (2,383,054)   (109,056)
Cash, beginning of period   3,326,851    1,154,901 
Cash, ending of period  $943,797   $1,045,845 
Supplemental cash flow information:        
   Cash paid for interest  $4,542   $2,636 
   Cash paid for taxes   
-
    
-
 

 

The accompanying notes are an integral part of these condensed consolidated financial statements

 

4

 

 

ELEVAI LABS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

 

1.Organization and nature of operations

 

Elevai Labs Inc. (“Elevai”) was incorporated under the laws of the State of Delaware on June 9, 2020. Elevai and its 100% owned subsidiary, Elevai Research Inc, are collectively referred to in these unaudited condensed consolidated financial statements as “the Company”.

 

The Company is a skincare development company engaged in the design, manufacture, and marketing of skincare products in the skincare industry. The Company’s principal activities are developing and manufacturing skincare products.

 

On April 29, 2024, Elevai Skincare Inc. (“Skincare”) and Elevai BioSciences Inc. (“BioSciences”) were incorporated under the laws of the state of Delaware. Elevai is the sole shareholder of Skincare and BioSciences. The purpose of Skincare is to operate the Company’s existing business. While the purpose of BioSciences is to develop the Company’s 2 drug candidates, EL-22, a clinical stage engineered probiotic expressing myostatin, and EL-32, a preclinical engineered probiotic expressing dual myostatin and activin-A. Effective May 1, 2024, Elevai transferred its operating assets and liabilities relating to its skincare business to Skincare in exchange for common shares of Skincare.

 

2.Going Concern

 

These unaudited 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 and the ability of the Company to obtain necessary equity financing to continue operations, and ultimately the attainment of profitable operations.

 

As of March 31, 2024, and December 31, 2023, the Company had a net working capital of $1,918,631 and $3,622,091, respectively, and has an accumulated deficit of $8,421,140 and $7,023,890, respectively. Furthermore, for the three months ended March 31, 2024, and 2023, the Company incurred a net loss of $1,397,250 and $1,080,696, respectively and used $2,324,068 and $885,506, respectively of cash flows for operating activities. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern. These unaudited 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 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.

 

Management’s plans that alleviate substantial doubt about the Company’s ability to continue as a going concern include raising additional debt or equity financing. Although the Company has been successful in raising funds in the past, and expects to do so in the future, there are no guarantees that it will be able to raise funds as anticipated.

 

5

 

 

3.Summary of Significant Accounting Policies

 

Basis of Presentation

 

These unaudited condensed consolidated financial statements have been prepared in accordance with rules and regulations of the Securities and Exchange Commission (“SEC”) and generally accepted accounting principles in the United States (“U.S. GAAP”) for interim financial information and are expressed in United States dollars. Accordingly, the unaudited condensed consolidated financial statements do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, we have included all adjustments considered necessary for a fair presentation and such adjustments are of a normal recurring nature. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements for the years ended December 31, 2023, and 2022. The results of operations for the three months ended March 31, 2024, are not necessarily indicative of the results to be expected for the full fiscal year ending December 31, 2024.

 

Principles of Consolidation

 

The unaudited condensed consolidated financial statements include the account of Elevai, and its 100% owned subsidiaries. All intercompany accounts, transactions and profits were eliminated in the unaudited condensed consolidated financial statements.

 

Use of Estimates

 

The preparation of the unaudited 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 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 unaudited condensed consolidated financial statements in the period they are determined.

 

Foreign Currency Translation

 

The Company’s functional and reporting currency is the U.S. dollar. The functional currency of Elevai 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.

 

6

 

 

The accounts of Elevai 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).

 

Intangible Asset

 

Intangible assets are recorded at cost less accumulated amortization. They are depreciated using the straight-line method over their estimated useful lives, which reflect the period over which economic benefits are expected to be realized. Management assesses impairment indicators at each reporting period end. The estimated useful lives of intangible assets are generally as follows:

 

License  10-year strait-line

 

New Accounting Standards

 

Recently Adopted Accounting Standards

 

In March 2022, the FASB issued ASU 2022-02, ASC Subtopic 326 “Credit Losses”: Troubled Debt Restructurings and Vintage Disclosures. Since the issuance of Accounting Standards Update No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, the Board has provided resources to monitor and assist stakeholders with the implementation of Topic 326. Post-Implementation Review (PIR) activities have included forming a Credit Losses Transition Resource Group, conducting outreach with stakeholders of all types, developing educational materials and staff question-and-answer guidance, conducting educational workshops, and performing an archival review of financial reports. ASU No. 2022-02 is effective for annual and interim periods beginning after December 15, 2022. The adoption of this standard did not have a significant impact on the Company’s unaudited condensed consolidated financial statements.

 

In June 2022, the FASB issued ASU 2022-03, ASC Subtopic 820 “Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions”. The FASB is issuing this Update (1) to clarify the guidance in Topic 820, Fair Value Measurement, when measuring the fair value of an equity security subject to contractual restrictions that prohibit the sale of an equity security, (2) to amend a related illustrative example, and (3) to introduce new disclosure requirements for equity securities subject to contractual sale restrictions that are measured at fair value in accordance with Topic 820.

 

Stakeholders asserted that the language in the illustrative example resulted in diversity in practice on whether the effects of a contractual restriction that prohibits the sale of an equity security should be considered in measuring that equity security’s fair value. Some stakeholders apply a discount to the price of an equity security subject to a contractual sale restriction, whereas other stakeholders consider the application of a discount to be inappropriate under the principles of Topic 820.

 

For public business entities, the amendments in this Update are effective for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years. The adoption of this standard did not have a significant impact on the Company’s unaudited condensed consolidated financial statements.

 

Recently Issued Accounting Standards

 

The Company assesses the adoption impacts of recently issued, but not yet effective, accounting standards by the Financial Accounting Standards Board on the Company’s unaudited condensed consolidated financial statements.

 

There are no recently issued accounting standards which may have effect on the Company’s unaudited condensed consolidated financial statements

 

7

 

 

4.Receivables

 

As of March 31, 2024, receivables consisted of the following:

 

   March 31,
2024		   December 31,
2023		 
Trade receivable  $48,590   $33,089 
Sales taxes receivable   5,615    3,072 
   $54,205   $36,161 

 

The Company records sales taxes receivable for recoverable sales taxes paid on eligible purchases in its Canadian subsidiary. As at March 31, 2024, and December 31, 2023, the Company recorded a provision for credit losses of $nil and $nil, respectively.

 

5.Prepaids and Deposits

 

As of March 31, 2024, and December 31, 2023, prepaid and deposits consisted of the following:

 

   March 31,
2024		   December 31,
2023		 
Prepaid expenses  $1,179,438   $957,645 
Deposits   29,022    113,893 
   $1,208,460   $1,071,538 
           
Prepaids and deposits - current   1,197,687    1,060,765 
Deposits- non-current   10,773    10,773 

 

As of March 31, 2024, and December 31, 2023, the security deposit on the Company’s long-term lease in the amount of $10,773 and $10,773, respectively, is classified as a non-current deposit on the balance sheet. The Company recorded a provision for credit losses of $nil and $nil, respectively.

 

6.Inventory

 

As of March 31, 2024, and December 31, 2023, inventory consisted of the following:

 

   March 31,
2024		   December 31,
2023		 
Raw materials  $331,371   $279,514 
Work in progress   283,780    147,906 
Finished goods   329,913    68,247 
   $945,064   $495,667 

 

Cost of inventory recognized as expense in cost of sales for the three months ended March 31, 2024, and 2023, totaled $80,907 and $19,750, respectively. In addition, the cost of inventory relating to samples given out and expensed in marketing and promotion for the three months ended March 31, 2024, and 2023, totaled $48,989 and $21,068, respectively. As at March 31, 2024, and December 31, 2023, the Company recorded an allowance for inventory of $nil and $nil, respectively.

 

8

 

 

7.Property and Equipment

 

   Equipment   Furniture and Fixtures   Computers   Total 
Cost                
Balance, December 31, 2022  $50,516   $8,365   $2,759   $61,640 
Additions   2,658    8,533    
-
    11,191 
Disposal                  
-
 
Foreign currency translation             61    61 
Balance, December 31, 2023  $53,174   $16,898   $2,820   $72,892 
Additions   9,160    
-
    
-
    9,160 
Foreign currency translation   
-
    
-
    (59)   (59)
Balance, March 31, 2024  $62,334   $16,898   $2,761   $81,993 
                     
Accumulated depreciation                    
Balance, December 31, 2022  $7,052   $548   $505   $8,105 
Depreciation   8,680    2,414    555    11,649 
Foreign currency translation             19    19 
Balance, December 31, 2023  $15,732   $2,962   $1,079   $19,773 
Depreciation   2,497    604    139    3,239 
Foreign currency translation             (22)   (22)
Balance, March 31, 2024  $18,229   $3,566   $1,195   $22,990 
                     
Net book value                    
December 31, 2023  $37,442   $13,936   $1,741   $53,119 
March 31, 2024  $44,104   $13,333   $1,566   $59,003 

 

During the three months ended March 31, 2024, and 2023, the Company capitalized depreciation of $853 and $412, respectively as part of the production of inventory.

 

8.Intangible assets

 

On January 15, 2024, (the “Effective Date”), the Company entered into a license agreement with a Biotechnology company to use their proprietary technology and process to assist in formulating stem cells. The term of the license is 10 years and has a purchase price of $1,000,000. The payments structure for the intangible asset is as follows:

 

a)$50,000 payable upon executing the license (paid)

 

b)$350,000 payable on July 15, 2024

 

c)$600,000 payable on completion of technology transfer or two years from the Effective Date, whichever comes first.

 

The cost of the intangible assets will be measured at $861,452, which is the fair value of the consideration payable on initial recognition, determined by discounting the future payments using a market interest rate of 11.75%. The determination of the interest rate was conducted by employing the revised discount rate utilized for assessing the lease liability, which was subsequently adjusted to reflect any alterations in the U.S. prime rate on the Effective Date.

 

   License 
Cost    
Balance, December 31, 2023  $
-
 
Additions   861,452 
Balance, March 31, 2024  $861,452 
      
Accumulated depreciation     
Balance, December 31, 2023  $
-
 
Additions   17,947 
Balance, March 31, 2024  $17,947 
      
Net Book value – March 31, 2024  $843,505 

 

9

 

 

9.Operating Lease

 

During 2022, the Company entered into a noncancelable operating lease that includes two property location, one which is being used as the Company’s office and the other as its lab for research and development and the production of inventory. The lease had a commencement date of June 1, 2022 and expires on May 31, 2025, after which the term will continue on a month-to-month basis.

 

On July 3rd, 2023, the Company amended the terms of the previously entered lease agreement to lease additional office space from the lessor. Rent increased from $10,773 to $13,477 per month commencing July 1, 2023, through May 31, 2025. The lease amendment required a remeasurement of the lease liability which resulted in an increase of $47,986 to the lease liability and an equal increase in the right of use asset as of July 1, 2023.

 

The Company recognized a total lease cost related to its noncancelable operating lease of $39,741 and $31,630 for the three months ended March 31, 2024, and 2023, respectively. The lease cost has been allocated as follows based on the square footage of each property location.

 

   March 31,
2024		   March 31,
2023		 
Office space, recorded in office and administration  $25,975   $22,176 
Lab space, recorded in research and development   9,453    7,299 
Lab space, capitalized to production of inventory   4,313    2,155 
   $39,741   $31,630 

 

As of March 31, 2024, and December 31, 2023, the Company recorded a security deposit of $10,773. (Note 5)

 

Future minimum lease payments under the Company’s operating lease that has an initial noncancelable lease term in excess of one year at March 31, 2024, are as follows:

 

As of March 31, 2024  Total 
2024   121,291 
2025   67,384 
Thereafter   
-
 
    188,675 
Less: Imputed interest   (12,896)
Operating lease liability   175,779 
      
Operating lease lability – current   149,208 
Operating lease lability – non-current  $26,571 

 

The Company used a discount rate of 11.50% upon the remeasurement of the lease liability on July 1, 2023, compared to an original discount rate of 8% on lease commencement, as its incremental cost of borrowing due to the amendment. The remaining lease term as of March 31, 2024, is 1.17 years (December 31, 2023 – 1.42 years).

 

10

 

 

10.Accounts Payable and Accrued Liabilities

 

As of March 31, 2024, and December 31, 2023, accounts payable and accrued liabilities consisted of the following:

 

   March 31,
2024		   December 31,
2023		 
Accounts payable  $395,249   $596,147 
Accrued liabilities   133,573    73,228 
   $528,822   $669,375 

 

11.Consideration payable

 

On January 15, 2024, the Company entered into a license agreement with a Biotechnology company to use their proprietary technology and process to assist in formulating stem cells. The fair value of the payments to be made is $950,000 (Note 8).

 

As of January 15, 2024, the fair value of the consideration payable stands at $950,000. The Company has accounted for a discount on the consideration payable to reflect the imputed interest on future installments, totaling $138,548.

 

   Consideration
payable		 
Outstanding, December 31, 2023  $
-
 
Additions   1,000,000 
Payment   (50,000)
Discount   138,548 
Accretion expense   18,994 
Outstanding, March 31, 2024  $830,446 
      
Consideration payable – current   338,889 
Consideration payable – non-current  $491,557 

 

12.Derivative liabilities

 

On July 15, 2022, the Company issued 231,828 common stock purchase warrants with an exercise price of $2.01 as part of the conversion of promissory notes (Note 10).

 

On November 21, 2023, the Company completed its Initial Public Offering (“IPO”) -and issued 75,000 warrants (the “IPO warrants”). The IPO warrants are exercisable into one common share of the Company at $4 per share and expire on November 21, 2028.

 

We analyzed the common stock purchase warrants issued as partial settlement of the promissory notes payable and the IPO warrants against the requirements of ASC 480, Distinguishing Liabilities from Equity, and determined that the warrants should be classified as financial liabilities since the terms allows for a cashless net share settlement at the option of the holder.

 

11

 

 

ASC 815, Derivatives and Hedging, requires that the warrants be accounted for as derivative liabilities with initial and subsequent measurement at fair value with changes in fair value recorded as other income (expense).

 

A continuity of the Company’s common stock purchase derivative liability warrants is as follows:

 

   Derivative liabilities 
Outstanding, December 31, 2022  $68,455 
Addition of new derivatives during IPO   229,437 
Change in fair value of derivative liabilities   71,266 
Outstanding, December 31, 2023  $369,158 
Change in fair value of derivative liabilities   (274,939)
Outstanding, March 31, 2024  $94,219 

 

We determined our derivative liabilities to be a Level 3 fair value measurement and used the Black-Scholes Option Pricing Model to calculate the fair value as of initial recognition and as of March 31, 2024, and December 31, 2023. The Black-Scholes Option Pricing Model requires six basic data inputs: the exercise or strike price, expected time to expiration or exercise, the risk-free interest rate, the current stock price, the estimated volatility of the stock price in the future, and the dividend rate. Changes to these inputs could produce a significantly higher or lower fair value measurement.

 

The following assumptions were used in the Black-Scholes option pricing model:

 

   March 31,
2024		   December 31,
2023		   November 21,
2023		   December 31,
2022		   July 15,
2022		 
Risk-free interest rate   4.21 - 4.40%   3.84 - 4.01%   4.41%   4.73%   3.12%
Expected life 1   3.07 – 4.65 years    3.32 – 4.90 years    5 years    0.75 years    0.6 years 
Expected dividend rate   0%   0%   0.00%   0.00%   0.00%
Expected volatility   100%   100%   100%   100%   100%

 

As of March 31, 2024, the following warrants were outstanding:

 

Outstanding  Expiry date1  Weighted average
exercise price ($)
75,840  April 27, 2027  2.01
63,037  April 27, 2027  2.01
80,388  April 27, 2027  2.01
12,563  April 27, 2027  2.01
75,000  November 21, 2028  4.00
306,828     2.49

 

As of March 31, 2024, and December 31, 2023, the weighted average life of derivative liability warrants outstanding was 3.46 and 3.71 years, respectively.

 

1On April 28, 2023, the Company amended the warrant agreements for the 231,828 derivative liability warrants outstanding. The amendment removed the clause to automatically convert warrants to shares on IPO date and all warrants were given an expiry date of April 27, 2027. This led to an increase in the expected life input in the Black-Scholes model as of December 31, 2023, compared to December 31, 2022, when the Company used the expected IPO date to calculate the expected life of the warrants.

 

12

 

 

13.Equity

 

Common Stock

 

Authorized

 

As of March 31, 2024, and December 31, 2023, the Company had 300,000,000 common stock authorized, each having a par value of $0.0001.

 

Issued and outstanding

 

As of March 31, 2024, and December 31, 2023, the Company had 17,329,615 shares issued and outstanding, respectively.

 

Transactions during the three months ended March 31, 2024

 

No share capital activity in the Company during the three months ended March 31, 2024.

 

Transactions during the three months ended March 31, 2023

 

On January 6, 2023, the Company issued 62,500 common stock upon the exercise of 62,500 stock options with an exercise price of $0.60 per common stock for $37,500, of which $6 was recognized in common stock and the remaining $37,494 in additional paid-in capital.

 

On March 2, 2023, the Company issued 250,000 common stock and 250,000 common stock purchase warrants for $750,000, of which $25 was recognized in common stock and the remaining $749,975 in additional paid-in capital. These warrants are accounted for as equity warrants.

 

Preferred Stock

 

Authorized

 

As of March 31, 2024, and December 31, 2023, the Company had 75,000,000 of all preferred stock authorized, each having a par value of $0.0001 per stock.

 

The holders of Preferred Stock shall have the right to convert their shares of Preferred Stock, at any time, into shares of Common Stock at a conversion price of 1:1. Upon IPO, all preferred shares were converted into common shares on November 21, 2023.

 

Issued and outstanding

 

As at March 31, 2024, and December 31, 2023, the Company had Nil preferred stock issued and outstanding.

 

Transactions during the three months ended March 31, 2024, and 2023

 

There were no preferred stock transactions during the three months ended March 31, 2024, and 2023.

 

13

 

 

Equity Warrants

 

Transactions during the three-month ended March 31, 2024.

 

There was no equity warrant activity during the three months ended March 31, 2024

 

Transactions during the three-month ended March 31, 2023.

 

On March 2, 2023, the Company issued 250,000 common stock and 250,000 common stock purchase warrants. Each warrant is exercisable at $3.00 per common stock. The warrants shall be exercisable, in whole or in part at the issue date but such exercisability shall cease upon the date of the Company’s IPO and listing of its common shares on the Nasdaq Capital Market or other Trading Market and shall continue to be exercisable in whole or in part immediately after the Lock-up Period but no later than the Warrant Expiration Date or Accelerated Warrant Expiration Date (the “Exercise Period”). In the event of the Company’s initial public offering and listing of shares of its common stock on a Trading Market, the Company shall notify the holder at least fifteen (15) calendar days prior to the consummation of such IPO. “Trading Market” shall mean a “national securities exchange” that has registered with the SEC under Section 6 of the Securities Exchange Act of 1934. The Expiration Date shall be the earlier of (i) three years and one hundred eighty (180) days from the issue date (the “Warrant Expiration Date”) or (ii) upon the Company’s reasonable judgment and written notice to the purchaser, of the Company’s option to accelerate the Warrant Expiration Date whereby upon purchaser’s receipt of the Company’s written notice of acceleration during the Exercise Period, the Purchaser’s option to exercise any number of warrants shall occur no later than fourteen (14) days following the receipt of the written notice of acceleration (the “Accelerated Warrant Expiration Date”). For the avoidance of doubt, it shall be reasonable for the Company to accelerate the Expiration Date of this warrant to coincide with transactions including, but not limited to (i) a change of control including but not limited to the voluntary or involuntary sale, assignment, transfer or other disposition, or transfer by operation of law, of more than 50% of any direct or indirect equity interest of the Company; or (ii) a subsequent capital financing other than the IPO consisting of but not limited to an offer or proposal for, or indication of interest in, the issuance of debt or the capital stock of the Company.

 

As of March 31, 2024, and December 31, 2023, the following equity warrants were outstanding:

 

Outstanding  Expiry date  Weighted average
exercise price ($)
250,000  August 28, 2026  3.00
99,998  March 12, 2027  3.00
349,998     3.00

 

As of March 31, 2024, and December 31, 2023, the weighted average life of equity warrants outstanding was 2.56 and 2.81 years, respectively.

 

14

 

 

Stock Options

 

The Company has a stock option plan included in the Company’s 2020 Equity Incentive Plan (the “Plan”) where the Board of Directors or any of its committees can grant Incentive Stock Options, Nonstatutory Stock Options, and Restricted Stock to employees, advisors and directors of the Company. As of December 31, 2023 and March 31, 2024, the aggregate number of shares allocated and made available for issuance pursuant to stock options granted under the Plan shall not exceed 1,734,188 shares. The plan shall remain in effect until it is terminated by the Board of Directors.

 

Transactions during the three-month ended March 31, 2024

 

In January 2024, the Company granted 12,500 stock options with a contractual life of ten years and an exercise price of $5.00 per common stock. These stock options were valued at $16,178 using the Black-Scholes Option Pricing Model. The options vest 25% on the first anniversary of the grant date and the remaining 75% vest evenly over 36 months thereafter.

 

On March 6, 2024, the Company granted 80,000 stock options with a contractual life of ten years and an exercise price of $1.00 per common stock. These stock options were valued at $52,845 using the Black-Scholes Option Pricing Model. The options vest 25% on the first anniversary of the grant date and the remaining 75% vest evenly over 36 months thereafter.

 

Transactions during the three-month ended March 31, 2023

 

On February 1, 2023, the Company granted 10,000 stock options with a contractual life of ten years and an exercise price of $5.00 per common stock. These stock options were valued at $10,767 using the Black-Scholes Option Pricing Model. The options vest 25% on the first anniversary of the grant date and the remaining 75% vest evenly over 36 months thereafter.

 

The following assumptions were used in the Black-Scholes option pricing model:

 

   March 31,
2024		   December 31,
2023		 
Risk-free interest rate   3.95% - 4.19%   3.39% -3.86%
Expected life   10 years    10 years 
Expected dividend rate   0.00%   0.00%
Expected volatility   100%   100%
Forfeiture rate   0.00%   0.00%

 

The continuity of stock options for the three months ended March 31, 2024, and December 31, 2023, is summarized below:

 

   Number of stock options   Weighted average exercise price 
Outstanding, December 31, 2022   1,366,167    1.08 
Granted   234,000    5.00 
Forfeited   (14,583)   0.60 
Exercised   (62,500)   0.60 
Outstanding, December 31, 2023   1,523,084    1.71 
Granted   92,500    1.54 
Forfeited   (58,333)   5.00 
Exercised   -    - 
Outstanding, March 31, 2024   1,557,251    1.57 

 

15

 

 

As of March 31, 2024, the following options were outstanding, entitling the holders thereof the right to purchase one common stock for each option held as follows:

 

Outstanding  Vested  Expiry date  Weighted average
exercise price ($)
841,667  666,327  February 8, 2031  0.60
35,417  38,543  February 27, 2031  0.60
45,000  21,563  April 25, 2032  0.60
16,000  7,000  June 1, 2032  1.34
110,000  45,833  July 1, 2032  1.34
100,000  39,583  August 8, 2032  1.34
16,000  6,000  September 30, 2032  1.34
80,000  30,000  September 30, 2032  5.00
10,000  3,542  October 15, 2032  1.34
10,000  3,333  November 1, 2032  1.34
5,000  1,667  November 1, 2032  5.00
20,000  6,250  December 12, 2032  5.00
10,000  2,708  February 1, 2033  5.00
50,000 
-
  April 16, 2033  5.00
80,000  21,667  May 1, 2033  5.00
21,667 
-
  January 25, 2033  5.00
10,000 
-
  June 27, 2033  5.00
2,500 
-
  July 10, 2033  5.00
1,500 
-
  July 1, 2033  5.00
5,000 
-
  January 17, 2024  5.00
2,500 
-
  January 17, 2024  5.00
5,000 
-
  February 12, 2024  5.00
80,000 
-
  March 5, 2024  1.00
1,557,251  894,016     1.00

 

As of March 31, 2024, and December 31, 2023, the weighted average life of stock options outstanding was 7.69 years and 7.84 years, respectively.

 

During the three months ended March 31, 2024, and 2023, the Company recorded $55,339 and $75,161, respectively, in share-based compensation expense, of which $53,929 and $1,410, and $71,901 and $3,260, respectively is included in office and administration and research and development, respectively.

 

14.Related Party Transactions

 

Related parties consist of the following individuals and corporations:

 

●Braeden Lichti, Chairman and former President, significant shareholder through BWL Investments Ltd. Resigned as President effective October 11, 2022.

 

●Jordan Plews, CEO and Director, significant shareholder through JP Bio Consulting LLC

 

●Graydon Bensler, CFO and Director

 

●Yi Guo, Former Director, resigned effective September 29, 2022

 

●Tim Sayed, Chief Medical Officer

 

●Brenda Buechler, Chief Marketing Officer

 

●Christoph Kraneiss, Chief Commercial Officer

 

●Jeffrey Parry, Director (appointed June 1, 2023)

 

●Julie Daley, Director (appointed June 1, 2023)

 

●Crystal Muilenburg, Director (appointed June 1, 2023, resigned February 29, 2024)

 

16

 

 

●George Kovalyov (appointed March 1, 2024)

 

●GB Capital Ltd., controlled by Graydon Bensler

 

●JP Bio Consulting LLC, significant shareholder and controlled by Jordan Plews

 

●BWL Investments Ltd., significant shareholder and controlled by Braeden Lichti

 

●Northstrive Companies Inc., controlled by Braeden Lichti

 

Key management personnel include those persons having authority and responsibility for planning, directing, and controlling the activities of the Company as a whole. The Company has determined that key management personnel consist of members of the Company’s Board of Directors, corporate officers, and individuals with more than 10% control.

 

Remuneration attributed to key management personnel are summarized as follows:

 

   Three months ended
March 31,
2024		   Three months ended
March 31,
2023		 
Consulting fees  $80,833   $51,250 
Salaries   207,016    156,439 
Share-based compensation   22,276    46,986 
   $310,125   $254,675 

 

During the three months ended March 31, 2024, the Company incurred consulting fees of $50,833 (March 31, 2023 - $21,250) to GB Capital Ltd., a company controlled by Graydon Bensler, CFO and Director. In addition, the Company incurred consulting fees of $30,000 (December 31, 2023 - $30,000) to Northstrive Companies Inc., a company controlled by the Company’s Chairman and former President.

 

Jordan Plews, CEO and Director, earned a Salary of $56,454 and $55,021 respectively during the three months ended March 31, 2024, and 2023 (includes employer taxes of $6,454 and $4,826, respectively).

 

Brenda Buechler, Chief Marketing Officer, earned a Salary of $77,669 and $52,326, respectively during the three months ended March 31, 2024, and 2023 (includes employer taxes of $8,086 and $4,826 respectively).

 

Christoph Kraneiss, Chief Commercial Officer, earned a Salary of $72,892 and $72,792, respectively during the three months ended March 31, 2024, and 2023 (includes employer taxes of $6,225 and $4,093, respectively).

 

During the three months ended March 31, 2024, and 2023, the company issued the following stock options to related parties:

 

On March 1, 2024, the Company granted 80,000 stock options to directors of the company with a contractual life of 10 years and exercise price of $1.00 per share of common stock. These stock options were valued at $45,986 using the Black-Scholes Option Pricing Model. The options vest 25% on the first anniversary of the grant date and the remaining 75% vest evenly over 36 months thereafter.

 

17

 

 

Details of the fair value granted to each related party in the current and prior periods, and the related expense recorded for the three months ended March 31, 2024, and 2023 is as follow:

 

   Three Months Ended
March 31,
2024		   Three Months Ended
March 31,
2023		   Fair value
of stock
options
granted		 
Braeden Lichti, Former Chairman and President  $878   $2,138   $50,995 
Graydon Bensler, CFO and Director   878    2,138    50,995 
Jordan Plews, CEO and Director   878    2,138    50,995 
Tim Sayed, Chief Medical Officer   878    2,138    50,995 
Jeffrey Parry, Director   7,243    
-
    107,669 
Crystal Muilenburg, Former Director1   (41,668)   
-
    210,245 
Julie Daley, Director   35,142    
-
    210,245 
George Kovalyov, Director   2,556    -    52,845 
Brenda Buechler, Chief Marketing Officer   8,096    20,840    143,671 
Christoph Kraneiss, Chief Commercial Officer   7,395    17,594    121,243 
   $22,276   $46,986   $1,049,898 

 

158,333 options were forfeited in the three months ended March 31, 2024

 

As of March 31, 2024, and December 31, 2023, the Company had $22,195 and $22,455, respectively due to companies controlled by Braeden Lichti, of which $22,195 and $22,455, respectively is unsecured, non-interest bearing and are due on demand.

 

As of March 31, 2024, the Company had $38,500 (December 31, 2023 - $34,378) in consulting fees due to Graydon Bensler, CFO and Director, $15,143 (December 31, 2023 - $15,143) due to companies controlled by Braeden Lichti, and $Nil and $Nil (December 31, 2023 - $4,272 and $879) due to Jordan Plews, CEO and Director, and Christopher Kraneiss, Chief Commercial Officer, respectively, for expenses incurred on behalf of the Company.

 

15.Commitments and Contingencies

 

There were no commitments as of March 31, 2024, and December 31, 2023, or during the periods then ended.

 

As of March 18, 2024, the Company has voluntarily stopped sale of its products in Canada following a communication from Health Canada regarding the way the Company’s products are marketed in Canada. The Company is working with Canadian regulatory and legal counsel to explore options to rectify the issues raised. On April 30, 2024, the Company’s appointed Canadian distributor terminated the existing distribution agreement. Termination of the distributor agreement does not result in any penalties or damages.

 

16.Concentrations

 

Customers

 

For the three months ended March 31, 2024, the Company recorded 11% of its revenue from its largest customer. The Company’s largest customer, representing $67,500 of revenue, relates to sales to a distributor during the period. During the three months ended March 31, 2023, the Company recorded 18% of its revenue from its largest customer. The Company’s largest customer, representing $25,500 of revenue, relates to a distributor agreement.

 

As of March 31 ,2024 and December 31, 2023, the Company had $49 receivables due from these customers and $Nil in customer deposits were received from its largest customer.

 

The Company expects its dependence on these major customers to decrease over time as it enters into additional distributor agreements and builds out its sales team.

 

18

 

 

Suppliers

 

During the three months ended March 31 ,2024, and 2023, the Company had 3 key suppliers that represented approximately 66% and 3 key suppliers that represented approximately 70%, respectively of the cost incurred in the purchase and production of inventory. The table below represents a breakdown of each supplier as a percentage of the cost incurred (Suppliers are shown from largest to smallest and does not necessarily represent the same suppliers period over period):

 

   Three Months Ended
March 31,
2024		   Three Months Ended
March 31,
2023		 
Supplier 1   33%   41%
Supplier 2   18%   18%
Supplier 3   15%   11%
    66%   70%

 

The Company continually evaluates the performance of its suppliers and the availability of alternatives to substitute or supplement its inventory production supply chain. The Company believes that a breakdown in supply from one of its key suppliers would be overcome in a short amount of time given the availability of alternatives.

 

17.Subsequent Events

 

Management has evaluated events subsequent to the year ended March 31, 2024, up to May 15, 2024, for transactions and other events that may require adjustment of and/or disclosure in the consolidated financial statements.

 

On April 30, 2024, the Company’s appointed Canadian distributor terminated the existing distribution agreement. (Note 15).

 

On April 30, 2024, the Company entered into an exclusive licensing agreement with a biomedical and pharmaceutical company for an upfront fee of $400,000 and 950,000 shares of common stock.

 

On May 3, 2024, the Company entered into a consulting agreement with a maturity of May 3, 2025. The consultant is to be paid $15,000 monthly as well as 612,500 common shares on each of May 3, 2024, August 1, 2024, November 1, 2024, and February 2, 2025.

 

19

 

 

ELEVAI LABS INC.

 

MANAGEMENT’S DISCUSSION AND ANALYSIS

(Unaudited)

 

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

References in this quarterly report to “we,” “us,” “Elevai” or the “Company” refer to Elevai Labs Inc. and its subsidiaries. The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) summarizes the significant factors affecting our results of operations, liquidity, capital resources and contractual obligations. The following discussion and analysis should be read in conjunction with the Company’s unaudited condensed consolidated financial statements and related notes included elsewhere herein.

 

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 Form 10-Q 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.

 

Organization and Overview of Operations

 

Elevai Labs, Inc. was incorporated in Delaware in June 2020. We are a topical skincare company specializing in aesthetic biotechnology. We have created, and continue to research, and commercialize innovative and science-driven topical skincare technologies for the medical aesthetic skincare market. We principally produce, commercialize, distribute, and sell a new generation of cosmetic topical products containing our proprietary stem cell-derived Elevai ExosomesTM.

 

On April 29, 2024, Elevai Skincare Inc. (“Skincare”) and Elevai BioSciences Inc. (“BioSciences”) were incorporated under the laws of the state of Delaware. Elevai is the sole shareholder of Skincare and BioSciences. The purpose of Skincare is to operate the Company’s existing business. While the purpose of BioSciences is to develop the Company’s 2 drug candidates, EL-22, a clinical stage engineered probiotic expressing myostatin, and EL-32, a preclinical engineered probiotic expressing dual myostatin and activin-A. Effective May 1, 2024, Elevai transferred its operating assets and liabilities relating to its skincare business to Skincare in exchange for common shares of Skincare. To bring our products to market, we developed a robust fully-commercialized process from source to skin (exosome secretion to product bottling) that holds and utilizes advanced patent pending knowledge alongside our cohesive production process. Our specialty product lines are topically applied to the skin to aid in the reduction of the appearance of a range of the most common skin conditions, including pre-mature aging, oxidative stress, photodamage, hyperpigmentation, elasticity, and soft tissue deficits, such as fine lines and wrinkles. We primarily sell our products through the physician dispensed channel.

 

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Outlook

 

Management’s Plans

 

Over the next twelve months we intend to focus on:

 

●Growing our revenue using our existing infrastructure to accelerate the commercialization of our products;

 

●Utilizing clinical validation studies to show the efficacy of our products;

 

●R&D to create new product formulations and bring them to market;

 

●Expanding our distribution partnerships internationally; and

 

●Pursue the identification and review of strategic acquisitions to complement our business.

 

Results of Operations

 

Comparison of the three months ended March 31, 2024.

 

The following table provides certain selected financial information for the periods presented:

 

   Three Months Ended
March 31,
2024		   Three Months Ended
March 31,
2023		   Change 
Revenue  $614,563   $142,820   $471,743 
Cost of revenue  $168,911   $44,433   $124,478 
Gross profit  $445,652   $98,387   $347,265 
Gross profit percentage  73%  $69%   4%
Depreciation and Amortization  $20,331   $2,497   $17,834 
Marketing and Promotion  $393,038   $102,676   $290,362 
Consulting Fees  $396,126   $83,964   $312,162 
Office and Administration  $878,608   $434,059   $444,549 
Professional Fees  $179,922   $137,797   $42,125 
Investor Relations  $98,245   $38,268   $59,977 
Research and Development  $103,194   $83,741   $19,453 
Foreign exchange (gain) loss  $541   $259   $282 
Travel and entertainment  $59,108   $61,515   $(2,407)
Total operating expenses  $2,129,113   $944,776   $1,184,337 
Loss from operations  $(1,683,461)  $(846,389)  $(837,072)
Other income (expense)1  $286,211   $(234,307)  $520,518 
Net loss  $(1,397,250)  $(1,080,696)  $(316,554)
Total Comprehensive Loss  $(1,396,069)  $(1,080,583)  $(315,486)
Basic and dilutive loss per common share  $(0.081)  $(0.111)  $0.031 
Weighted average number of shares outstanding – basic and diluted  17,329,615    9,707,364    7,622,251 

 

1Other expenses relates to interest income, interest expense, insurance settlement and fair value gain/loss on derivative liability.

 

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Revenue

 

Revenue for the three months ended March 31, 2024, was $614,563 as compared to $142,820 for the three months March 31, 2023, an increase of $471,743.

 

Our revenue by product category is as follows:

 

   Three Months Ended
March 31,
2024		   Three Months Ended
March 31,
2023		 
Enfinity  $358,576   $65,289 
Empower   255,987    77,531 
Total Revenue  $614,563   $142,820 

 

During the three months ended March 31, 2024, and 2023, the Company sold 2,954 and 474 bottles of Enfinity, respectively, an increase of 2,480 bottles or 523%. In addition, the Company sold 566 (eight packs) of Empower tubes in 2024, compared to 176 (eight packs) of Empower tubes during 2023, and an increase of 390 (eight packs) or 222%. The increase in sales volumes is primarily due to enhanced market acceptance, continued growth in the number of US accounts, onboarding of international distributors, and repeat business from current customers and distributors.

 

Cost of Revenue

 

Cost of Revenue for the three months ended March 31, 2024, was $168,911 as compared to $44,433 for the three months ended March 31, 2023.

 

Our cost of revenue by product category is as follows:

 

   Three Months Ended
March 31,
2024		   Three Months Ended
March 31,
2023		 
Enfinity  $106,562   $25,699 
Empower   62,349    18,734 
Total Cost of Revenue  $168,911   $44,433 

 

The increase in cost of revenue is directly attributed to the increase in sales during the three months ended March 31, 2024, compared to 2023. The following is a breakdown of the components of cost of revenue:

 

   Three Months Ended
March 31,
2024		   Three Months Ended
March 31,
2023		 
Cost of inventory  $80,907   $19,750 
Sales commission   47,750    16,885 
Shipping cost   40,254    7,798 
Total Cost of Revenue  $168,911   $44,433 

 

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Gross Profit

 

Gross profit for the three months ended March 31, 2024, was $445,652 as compared to $98,387 for the three months ended March 31, 2023, an increase of $347,265. This represents an overall gross margin percentage of 73% for three months ended March 31, 2024, compared to 69% in 2023. The overall increase in gross margin percentage is primarily due to the Company selling Enfinity at a higher gross margin due to less commissions paid to salespersons compared to overall sales. Additionally, the cost to produce each unit of Enfinity decreased as the company saw gross margin improvements due to operational efficiencies gained and securing better volume pricing with some of its key suppliers.

 

The following is a breakdown of gross profit percentage by product category:

 

   Three Months Ended
March 31,
2024		   Three Months Ended
March 31,
2023		 
Enfinity   70%   61%
Empower   76%   76%
Overall Gross Profit Percentage   73%   69%

 

Research and Development Expenses

 

Research and development expenses for the three months ended March 31, 2024, were $103,194 compared to $83,741 for the three months ended March 31, 2023, an increase of $19,453. Research and Development related to the Company’s Enfinity, Empower and development of new products for the Company. The increase in R&D is mainly driven by the company continuously testing new products and looking for ways to improve its formulation efficiency. During both the three months ended March 31, 2024 and 2023, the Company’s lab staff worked on increasing the efficiency and refining the production process.

 

Marketing and Promotion

 

Marketing and promotion expenses for the three months ended March 31, 2024, were $393,038 compared to $102,676 for the three months ended March 31, 2023, an increase of $290,362. During the three months ended March 31, 2024, the Company increased its marketing and promotion efforts to drive sales and support the Company’s existing customers, which included giving out product samples with a cost of $48,989 (three months ended March 31, 2023 - $21,068), and attending and sponsoring industry conferences.

 

Office and Administrative Expenses

 

Office and administrative expenses for the three months ended March 31, 2024, were $878,608, compared to $434,059 for the three months ended March 31, 2023, an increase of $444,549. The increase is mainly the result of salaries and wages of $556,772 and office rent of $34,193 incurred during the three months ended March 31, 2024, compared to $284,660 and $25,916 in the three months ended March 31, 2023, a combined increase of $280,389. Additionally, the increase is a result on insurance costs of $117,400 during the three months ended March 31, 2024, compared to $16,189 in the three months ended March 31, 2023. The Company increased its headcount and moved into a larger office location to accommodate the commercialization of its products and growth in operations in July 2023. The company also was required to purchase director and officer insurance in the current period as the Company was now publicly traded. During the three months ended March 31, 2024, office and administrative expenses also include share-based compensation of $53,929, compared to $71,902 in the three ended March 31, 2023, a decrease of $17,973. The decrease is due to a director resigning on February 29, 2024, resulting in the forfeiture of 58,333 options.

 

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Consulting Fees

 

Consulting fees for the three months ended March 31, 2024, were $396,126, compared to $83,964 for the three months ended March 31, 2023, an increase of $312,162. During the three months ended March 31, 2024, and 2023, the Company incurred consulting fees in relation to recruitment, strategic introductions, business advisory, international relations, and strategy. In addition, the Company received services from a number of parties (including companies controlled by related parties and CFO) in a consulting capacity. The increase in consulting fees is consistent with the increase in operations.

 

Professional Fees

 

Professional fees for the three months ended March 31, 2024, was $179,922, compared to $137,797 for the three months ended March 31, 2023, an increase of $42,125. Professional fees comprise of legal, audit and accounting services. The increase during 2024 is primarily due to an increase in audit, legal and accounting services as the company is now listed on the NASDAQ exchange.

 

Travel and Entertainment

 

Travel and entertainment for the three months ended March 31, 2024, was $59,108, compared to $61,515 for the three months ended March 31, 2023, a decrease of $2,407. Travel and entertainment expenses are related primarily to costs incurred during the attendance of industry trade shows and conferences.

 

Investor Relations

 

Investor relations for the three months ended March 31, 2024, was $98,245, compared to $38,298 for the three months ended March 31, 2024. The increase in investor relations spending is consistent with the Company’s growth strategy, which includes promotion to current and potential investors as the company is listed on the NASDAQ exchange.

 

Liquidity and Capital Resources

 

The accompanying 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 March 31, 2024, and December 31, 2023, the Company had a net working capital of $1,918,631 and $3,622,091, respectively, and has an accumulated deficit of $8,421,140 and $7,023,890, respectively. Furthermore, for the three months ended March 31, 2024, and 2023, the Company incurred a net loss of $1,397,280 and $1,080,696, respectively and used $2,324,068 and $885,506, 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 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.

 

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Our principal liquidity requirements are for working capital, capital expenditure, research and development and inventory production. We fund our liquidity requirements primarily through cash on hand, cash flows from operations, and the issuance of common and preferred stock. As of March 31, 2024, we had cash of $943,797, with $3,326,851 as of December 31, 2023.

 

The following table provides selected financial data as of March 31, 2024, and December 31, 2023, respectively.

 

   March 31,
2024		   December 31,
2023		   Change 
Current assets  $3,140,753   $4,919,444   $(1,778,691)
Current liabilities  $1,222,122   $1,297,353   $(75,231)
Working capital  $1,918,631   $3,622,091   $(1,703,460)

 

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

 

   Three Month Ended
March 31,
2024		   Three Month Ended
March 31,
2023		   Change 
Cash used in operating activities  $(2,324,068)  $(885,506)  $(1,438,562)
Cash used in investing activities  $(59,160)  $(11,191)  $(47,969)
Cash provided by financing activities  $-   $787,500   $(787,500)

 

Cash Flow from Operating Activities

 

For the three months ended March 31, 2024, net cash flows used in operating activities was $2,324,068 compared to $885,506 used during the three months ended March 31, 2023, respectively, primarily due to net loss and timing of settlement of assets and liabilities.

 

Cash Flows from Investing Activities

 

During the three months ended March 31, 2024, and 2023, we used $59,190 and $11,191, respectively, in investing activities primarily related to the purchase of equipment for our lab space to be used on the production of inventory and research and development. In the three months ended March 31, 2024, the company paid $50,000 for an intangible asset relating to the purchase of a license to produce stem cells.

 

Cash Flows from Financing Activities

 

During the three months ended March 31, 2024, we had cash flow provided by financing activities of $Nil compared to cash flow provided by financing activities of $787,500 in the three months ended March 31, 2023. During the three months ended March 31, 2023, the Company raised $750,000 through the issuance of common stock and common stock purchase warrants, and another $37,500 upon the exercise of stock options in exchange for common stock.

 

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Critical Accounting Policies and Significant Judgments and Estimates

 

This discussion and analysis of our financial condition and results of operations is based on our 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 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 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 property and equipment requires 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.

 

Revenue Recognition

 

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers. Since ASU 2014-09 was issued, several additional ASUs have been issued to clarify various elements of the guidance. These standards provide guidance on recognizing revenue, including a five-step model to determine when revenue recognition is appropriate.

 

The Company recognizes revenue when it satisfies a performance obligation by transferring control over a product to a customer. Revenue is measured based on the consideration the Company expects to receive in exchange for those products. In instances where financial acceptance of the product is specified by the customer, revenue is deferred until all acceptance criteria have been met. Revenues are recognized under ASC 606, “Revenue from Contracts with Customers,” in a manner that reasonably reflects the delivery of its products and services to customers in return for expected consideration.

 

The Company generates revenue through the sale of skincare products. Revenue from the sale of skincare products are recognized at the point in time when the Company considered revenue realized or realizable and earned, which is typically when all of the five following criteria are met: (1) the contract with the customer is identifiable (i.e. when a sales transaction has been entered into between the Company and the customer), (2) the performance obligation in the contract is identifiable (i.e. the customer has ordered a known quantity of product to be delivered), (3) the transaction price is determinable (i.e. the customer has agreed to the Company’s price for the products ordered), (4) the Company is able to allocate the transaction price to the performance obligations in the contract, and (5) the performance obligations have been satisfied, which is typically upon delivery of the product to the customer.

 

Transaction prices for performance obligations are explicitly outlined in relevant agreements; therefore, the Company does not believe that significant judgements are required with respect to the determination of the transaction price, including any variable consideration identified.

 

The Company is responsible for providing the products to customers. As a result, the Company is considered the Principal when providing products to customers. As the Company collects payment at the time of the customer order, its contracts do not have a significant financing component. Customers are entitled to replacement or full refund of any damaged or defective product, after the return of the damaged or defective product to the Company. There were no significant returns or refunds during the three months ended March 31, 2024, and 2023.

 

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Foreign Currency Translation

 

The Company’s functional and reporting currency is the U.S. dollar. The functional currency of the Company’s Canadian subsidiary, Elevai Research Inc. (“Elevai 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 Eleva 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).

 

Inventory

 

Inventory consists of raw materials, work-in-progress and finished goods and are valued at the lower of cost or net realizable value. The Company’s manufacturing process involves the production of our proprietary stem cell-derived Elevai ExosomesTM. Finished goods consists of a new generation of cosmetic topical products containing our proprietary stem cell-derived Elevai ExosomesTM. Cost is determined using the weighted average cost formula. Net realizable value is determined on the basis of anticipated sales proceeds less the estimated selling expenses. Management compares the cost of inventories with the net realizable value and an allowance is made to write down inventories to net realizable value, if lower.

 

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 three months ended March 31, 2024, and 2023, the Company recorded $55,339 and $75,161, respectively, in share-based compensation expense, of which $53,929 and $1,410, and $71,901 and $3,260, 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 three months ended March 31, 2024, and year ended December 31, 2023, 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.

 

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Concentrations

 

Customers

 

For the three months ended March 31, 2024, the Company recorded 11% of its revenue from its largest customer. The Company’s largest customer, representing $67,500 of revenue, relates to sales to a distributor during the period. During the three months ended March 31, 2023, the Company recorded 18% of its revenue from its largest customer. The Company’s largest customer, representing $25,500 of revenue, relates to a distributor agreement.

 

As of March 31 ,2024 and December 31, 2023, the Company had $49 receivables due from these customers and $Nil in customer deposits were received from its largest customer.

 

The Company expects its dependence on these major customers to decrease over time as it enters into additional distributor agreements and builds out its sales team.

 

Suppliers

 

During the three months ended March 31 ,2024, and 2023, the Company had 3 key suppliers that represented approximately 66% and 3 key suppliers that represented approximately 70%, respectively of the cost incurred in the purchase and production of inventory. The table below represents a breakdown of each supplier as a percentage of the cost incurred (Suppliers are shown from largest to smallest and does not necessarily represent the same suppliers period over period):

 

   Three Months Ended
March 31,
2024		   Three Months Ended
March 31,
2023		 
Supplier 1   33%   41%
Supplier 2   18%   18%
Supplier 3   15%   11%
    66%   70%

 

The Company continually evaluates the performance of its suppliers and the availability of alternatives to substitute or supplement its inventory production supply chain. The Company believes that a breakdown in supply from one of its key suppliers would be overcome in a short amount of time given the availability of alternatives.

 

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.

 

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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

 

Our Corporate Governance and Nominating Committee of our Board of Directors are required to approve all related party transactions. All related party transactions will be 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.

 

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 

Pursuant to Item 305(e) of Regulation S-K (§ 229.305(e)), the Company is not required to provide the information required by this Item as it is a “smaller reporting company,” as defined by Rule 229.10(f)(1). 

 

ITEM 4. CONTROLS AND PROCEDURES

 

Evaluation of Disclosure Controls and Procedures

 

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) at the end of the period covered by this quarterly report.

 

Based on this evaluation, the Chief Executive Officer and Chief Financial Officer concluded that, as of end of the period covered by this quarterly report, our disclosure controls and procedures (as defined in § 240.13a-15(e) or 240.15d-15(e) of Regulation S-K)  were effective to provide reasonable assurance that the information required to be disclosed by us in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information (i) is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosures and (2) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. 

 

We recognize that any controls system, no matter how well designed and operated, can provide only reasonable assurance of achieving its objectives, and our management necessarily applies its judgment in evaluating the benefits of possible controls and procedures relative to their costs.

 

Changes in Internal Control over Financial Reporting

 

There were no changes in our internal control over financial reporting during the period covered by this quarterly report  that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act).

 

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PART II – OTHER INFORMATION

 

ITEM 1. LEGAL PROCEEDINGS

 

We are not currently a party to any pending legal proceedings that we believe will have a material adverse effect on our business or financial conditions. We may, however, be subject to various claims and legal actions arising in the ordinary course of business from time to time.

 

ITEM 1A. RISK FACTORS

 

As a smaller reporting company, we are not required to make disclosures under this item.

 

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

 

In addition to the following transactions, there have been no sales of unregistered equity securities that we have not previously disclosed in filings with the U.S. Securities and Exchange Commission.  

 

On April 30, 2024, in partial consideration for the exclusive license granted by MOA Life Plus Co., Ltd. (“MOA”), we issued a non-refundable license fee upon execution of the license agreement 950,000 shares of our common stock to MOA. The issuance of the shares was exempt from registration under Section 4(a)(2) of the of the Securities Act of 1933, as amended.

 

On May 3, 2024, we issued 612,500 shares of our common stock to a consultant for services related to the Company’s wholly owned subsidiary Elevai Biosciences Inc, pursuant to the agreed upon compensation terms in the consulting agreement with the entity. The issuance of the shares was exempt from registration under Section 4(a)(2) of the of the Securities Act of 1933, as amended.

 

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

 

None.

 

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ITEM 4. MINE SAFETY DISCLOSURES

 

Not applicable.

 

ITEM 5. OTHER INFORMATION

 

Trading Arrangements of Section 16 Reporting Persons.

 

During the quarter ended March 31, 2024, no person who is required to file reports pursuant to Section 16(a) of the Securities and Exchange Act of 1934, as amended, with respect to holdings of, and transactions in, the Company’s common shares (i.e. directors and certain officers of the Company) maintained, adopted, modified or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1(c) arrangement”, as those terms are defined in Section 229.408 of the regulations of the SEC.

 

Item 6. Exhibits

 

The following exhibits are filed as part of, or incorporated by reference into, this Quarterly Report.

 

Exhibit No.   Description
31.1*   Certification of Principal Executive Officer Pursuant to Securities Exchange Act Rules 13a-14(a) and 15(d)-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2*   Certification of Principal Financial Officer Pursuant to Securities Exchange Act Rules 13a-14(a) and 15(d)-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1**   Certification of Principal Executive Officer and Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS   Inline XBRL Instance Document
101.SCH   Inline XBRL Taxonomy Extension Schema Document
101.CAL   Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF   Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB   Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE   Inline XBRL Taxonomy Extension Presentation Linkbase Document
104   Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

 

* Filed herewith.

 

** Furnished herewith. This certification is being furnished solely to accompany this report pursuant to 18 U.S.C. Section 1350, and is not being filed for purposes of Section 18 of the Exchange Act of 1934, as amended, and is not to be incorporated by reference into any filings of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing.

 

32

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

  Elevai Labs Inc.
     
Date: May 15, 2024 By: /s/ Jordan R. Plews
  Name:  Jordan R. Plews
  Title: Chief Executive Officer
    (Principal Executive Officer)
     
Date: May 15, 2024 By: /s/ Graydon Bensler
  Name:  Graydon Bensler
  Title: Chief Financial Officer
    (Principal Accounting and Financial Officer)

 

33

 

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Exhibit 31.1

 

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO RULE 13A-14(A) UNDER THE SECURITIES EXCHANGE ACT OF 1934,

AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

 

I,Jordan R. Plews, certify that:

 

1.I have reviewed this quarterly report on Form 10-Q of Elevai Labs Inc.;

 

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;

 

4.The company’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

(c)Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

(d)Disclosed in this report any change in the company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting; and

 

5.The company’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company’s auditors and the audit committee of the company’s board of directors (or persons performing the equivalent functions):

 

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company’s ability to record, process, summarize and report financial information; and

 

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internal control over financial reporting.

 

Dated: May 15, 2024    
  By: /s/ Jordan R. Plews
    Jordan R. Plews
    Chief Executive Officer, President and Director
    (Principal Executive Officer)

 

Exhibit 31.2

 

CERTIFICATION OF CHIEF FINANCIAL OFFICER

PURSUANT TO RULE 13A-14(A) UNDER THE SECURITIES EXCHANGE ACT OF 1934,

AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

 

I,Graydon Bensler, certify that:

 

1.I have reviewed this quarterly report on Form 10-Q of Elevai Labs Inc.;

 

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;

 

4.The company’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

(c)Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

(d)Disclosed in this report any change in the company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting; and

 

5.The company’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company’s auditors and the audit committee of the company’s board of directors (or persons performing the equivalent functions):

 

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company’s ability to record, process, summarize and report financial information; and

 

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internal control over financial reporting.

 

Dated: May 15, 2024    
  By: /s/ Graydon Bensler
    Graydon Bensler
    Chief Financial Officer and Director
    (Principal Accounting Officer and
Principal Financial Officer)

 

Exhibit 32.1

 

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

In connection with the quarterly report of Elevai Labs Inc. (the “Company”) on Form 10-Q for the quarterly period ended March 31, 2024 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), each of the undersigned, in the capacities and on the dates indicated below, hereby certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

 

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

 

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operation of the Company.

 

Dated: May 15, 2024    
  By: /s/ Jordan R. Plews
    Jordan R. Plews
    Chief Executive Officer, President and Director
     
  By: /s/ Graydon Bensler
    Graydon Bensler
    Chief Financial Officer and Director

 

v3.24.1.1.u2
Cover - shares
 3 Months Ended
Mar. 31, 2024
May 15, 2024
Document Information [Line Items]    
Document Type 10-Q  
Document Quarterly Report true  
Document Transition Report false  
Entity Interactive Data Current Yes  
Amendment Flag false  
Document Period End Date Mar. 31, 2024  
Document Fiscal Year Focus 2024  
Document Fiscal Period Focus Q1  
Entity Information [Line Items]    
Entity Registrant Name ELEVAI LABS INC.  
Entity Central Index Key 0001840563  
Entity File Number 001-41875  
Entity Tax Identification Number 85-1399981  
Entity Incorporation, State or Country Code DE  
Current Fiscal Year End Date --12-31  
Entity Current Reporting Status No  
Entity Shell Company false  
Entity Filer Category Non-accelerated Filer  
Entity Small Business true  
Entity Emerging Growth Company true  
Entity Ex Transition Period false  
Entity Contact Personnel [Line Items]    
Entity Address, Address Line One Jordan Plews  
Entity Address, Address Line Two 120 Newport Center Drive  
Entity Address, Address Line Three Suite 250  
Entity Address, City or Town Newport Beach  
Entity Address, State or Province CA  
Entity Address, Postal Zip Code 92660  
Entity Phone Fax Numbers [Line Items]    
City Area Code (866)  
Local Phone Number 794-4940  
Entity Listings [Line Items]    
Title of 12(b) Security Common Stock, par value $0.0001 per share  
Trading Symbol ELAB  
Security Exchange Name NASDAQ  
Entity Common Stock, Shares Outstanding   18,892,115
v3.24.1.1.u2
Condensed Consolidated Balance Sheets - USD ($)
Mar. 31, 2024
Dec. 31, 2023
Current Assets    
Cash $ 943,797 $ 3,326,851
Receivables, net 54,205 36,161
Prepaids and deposits 1,197,687 1,060,765
Inventory, net 945,064 495,667
Total Current Assets 3,140,753 4,919,444
Deposit 10,773 10,773
Property and equipment, net 59,003 53,119
Intangibles, net 843,505
Operating lease right-of-use asset 172,562 206,582
TOTAL ASSETS 4,226,596 5,189,918
Current Liabilities    
Accounts payable and accrued liabilities 528,822 669,375
Customer deposits 35,148 36,693
Current portion of consideration payable 338,889
Current portion of lease liability 149,208 145,000
Derivative liabilities 94,219 369,158
Total Current Liabilities 1,222,122 1,297,353
Consideration payable 491,557
Operating lease liability 26,571 65,489
TOTAL LIABILIITES 1,740,250 1,362,842
Commitments and Contingencies
EQUITY    
Common stock, $0.0001 par value, 300,000,000 shares authorized; 17,329,615 shares issued and outstanding as of March 31, 2024, and December 31, 2023, respectively 1,733 1,733
Additional paid-in capital 10,904,370 10,849,031
Accumulated other comprehensive income 1,383 202
Accumulated deficit (8,421,140) (7,023,890)
TOTAL EQUITY 2,486,346 3,827,076
TOTAL LIABILITIES AND EQUITY 4,226,596 5,189,918
Related Party    
Current Liabilities    
Due to related parties $ 75,836 $ 77,127
v3.24.1.1.u2
Condensed Consolidated Balance Sheets (Parentheticals) - $ / shares
Mar. 31, 2024
Dec. 31, 2023
Statement of Financial Position [Abstract]    
Common stock, par value (in Dollars per share) $ 0.0001 $ 0.0001
Common stock, shares authorized 300,000,000 300,000,000
Common stock, shares issued 17,329,615 17,329,615
Common stock, shares outstanding 17,329,615 17,329,615
v3.24.1.1.u2
Condensed Consolidated Statements of Operations and Comprehensive Loss - USD ($)
 3 Months Ended
Mar. 31, 2024
Mar. 31, 2023
Income Statement [Abstract]    
Revenue $ 614,563 $ 142,820
Cost of sales 168,911 44,433
Gross profit 445,652 98,387
Expenses    
Depreciation and amortization 20,331 2,497
Marketing and promotion 393,038 102,676
Consulting fees 396,126 83,964
Office and administrative 878,608 434,059
Professional fees 179,922 137,797
Investor relations 98,245 38,268
Research and development 103,194 83,741
Foreign exchange (gain) loss 541 259
Travel and entertainment 59,108 61,515
Total Expenses 2,129,113 944,776
Net loss before other income (expense) (1,683,461) (846,389)
Other income (expense)    
Change in fair value of derivative liabilities 274,939 (236,778)
Interest income 86 5,107
Interest expense (23,537) (2,636)
Other income 34,723  
Net loss (1,397,250) (1,080,696)
Other comprehensive income (loss)    
Currency translation adjustment 1,181 113
Total comprehensive loss $ (1,396,069) $ (1,080,583)
Basic loss per share (in Dollars per share) $ (0.081) $ (0.111)
Weighted average shares outstanding (in Shares) 17,329,615 9,707,364
v3.24.1.1.u2
Condensed Consolidated Statements of Operations and Comprehensive Loss (Parentheticals) - $ / shares
 3 Months Ended
Mar. 31, 2024
Mar. 31, 2023
Income Statement [Abstract]    
Diluted loss per share $ (0.081) $ (0.111)
v3.24.1.1.u2
Condensed Consolidated Statements of Changes in Stockholders’ Equity - USD ($)
Preferred Stock
Series Seed 1
Preferred Stock
Series Seed 2
Preferred Stock
Series A
Common Stock
Additional paid-in capital
Accumulated deficit
Accumulated other comprehensive income
Total
Beginning Balance at Dec. 31, 2022 $ 21 $ 364 $ 186 $ 957 $ 3,852,044 $ (2,722,373) $ 111 $ 1,131,310
Beginning Balance (in Shares) at Dec. 31, 2022 213,730 3,635,252 1,861,799 9,568,475        
Private placement $ 25 749,975 750,000
Private placement (in Shares) 250,000        
Exercise of stock options $ 6 37,494 37,500
Exercise of stock options (in Shares) 62,500        
Share-based compensation         75,161     75,161
Net loss for the period (1,080,696) (1,080,696)
Currency translation adjustment 113 113
Ending Balance at Mar. 31, 2023 $ 21 $ 364 $ 186 $ 988 4,714,674 (3,803,069) 224 913,388
Ending Balance (in Shares) at Mar. 31, 2023 213,730 3,635,252 1,861,799 9,880,975        
Beginning Balance at Dec. 31, 2022 $ 21 $ 364 $ 186 $ 957 3,852,044 (2,722,373) 111 1,131,310
Beginning Balance (in Shares) at Dec. 31, 2022 213,730 3,635,252 1,861,799 9,568,475        
Ending Balance at Dec. 31, 2023 $ 1,733 10,849,031 (7,023,890) 202 $ 3,827,076
Ending Balance (in Shares) at Dec. 31, 2023 17,329,615       17,329,615
Share-based compensation         55,339     $ 55,339
Net loss for the period (1,397,250) (1,397,250)
Currency translation adjustment 1,181 1,181
Ending Balance at Mar. 31, 2024 $ 1,733 $ 10,904,370 $ (8,421,140) $ 1,383 $ 2,486,346
Ending Balance (in Shares) at Mar. 31, 2024 17,329,615       17,329,615
v3.24.1.1.u2
Condensed Consolidated Statements of Cash Flows - USD ($)
 3 Months Ended
Mar. 31, 2024
Mar. 31, 2023
Operating activities    
Net loss $ (1,397,250) $ (1,080,696)
Adjustments to reconcile net loss to net cash used in operating activities:    
Depreciation and amortization 21,188 2,912
Share-based compensation 55,339 75,161
Straight-line rent expense (690) (689)
Change in fair value of derivative liabilities (274,939) 236,778
Non-cash interest expense 18,994
Changes in operating assets and liabilities:    
Receivables (18,119) (33,253)
Prepaid expenses and deposits (136,951) (222,404)
Inventory (449,397) (83,363)
Accounts payable and accrued liabilities (140,698) 130,484
Customer deposits (1,545) 59,564
Due to related parties 30,000
Cash flows used in operating activities (2,324,068) (885,506)
Investing activities    
Purchase of equipment (9,160) (11,191)
Purchase of intangible assets (50,000)
Cash flows used in investing activities (59,160) (11,191)
Financing activities    
Exercise of stock options 37,500
Proceeds from issuance of common stock and warrants 750,000
Cash flows provided by financing activities 787,500
Effect of exchange rate changes on cash 174 141
Decrease in cash (2,383,054) (109,056)
Cash, beginning of period 3,326,851 1,154,901
Cash, ending of period 943,797 1,045,845
Supplemental cash flow information:    
Cash paid for interest 4,542 2,636
Cash paid for taxes
v3.24.1.1.u2
Organization and Nature of Operations
 3 Months Ended
Mar. 31, 2024
Organization and Nature of Operations [Abstract]  
Organization and nature of operations
1.Organization and nature of operations

 

Elevai Labs Inc. (“Elevai”) was incorporated under the laws of the State of Delaware on June 9, 2020. Elevai and its 100% owned subsidiary, Elevai Research Inc, are collectively referred to in these unaudited condensed consolidated financial statements as “the Company”.

 

The Company is a skincare development company engaged in the design, manufacture, and marketing of skincare products in the skincare industry. The Company’s principal activities are developing and manufacturing skincare products.

 

On April 29, 2024, Elevai Skincare Inc. (“Skincare”) and Elevai BioSciences Inc. (“BioSciences”) were incorporated under the laws of the state of Delaware. Elevai is the sole shareholder of Skincare and BioSciences. The purpose of Skincare is to operate the Company’s existing business. While the purpose of BioSciences is to develop the Company’s 2 drug candidates, EL-22, a clinical stage engineered probiotic expressing myostatin, and EL-32, a preclinical engineered probiotic expressing dual myostatin and activin-A. Effective May 1, 2024, Elevai transferred its operating assets and liabilities relating to its skincare business to Skincare in exchange for common shares of Skincare.
v3.24.1.1.u2
Going Concern
 3 Months Ended
Mar. 31, 2024
Going Concern [Abstract]  
Going Concern
2.Going Concern

 

These unaudited 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 and the ability of the Company to obtain necessary equity financing to continue operations, and ultimately the attainment of profitable operations.

 

As of March 31, 2024, and December 31, 2023, the Company had a net working capital of $1,918,631 and $3,622,091, respectively, and has an accumulated deficit of $8,421,140 and $7,023,890, respectively. Furthermore, for the three months ended March 31, 2024, and 2023, the Company incurred a net loss of $1,397,250 and $1,080,696, respectively and used $2,324,068 and $885,506, respectively of cash flows for operating activities. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern. These unaudited 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 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.

 

Management’s plans that alleviate substantial doubt about the Company’s ability to continue as a going concern include raising additional debt or equity financing. Although the Company has been successful in raising funds in the past, and expects to do so in the future, there are no guarantees that it will be able to raise funds as anticipated.
v3.24.1.1.u2
Summary of Significant Accounting Policies
 3 Months Ended
Mar. 31, 2024
Summary of Significant Accounting Policies [Abstract]  
Summary of Significant Accounting Policies
3.Summary of Significant Accounting Policies

 

Basis of Presentation

 

These unaudited condensed consolidated financial statements have been prepared in accordance with rules and regulations of the Securities and Exchange Commission (“SEC”) and generally accepted accounting principles in the United States (“U.S. GAAP”) for interim financial information and are expressed in United States dollars. Accordingly, the unaudited condensed consolidated financial statements do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, we have included all adjustments considered necessary for a fair presentation and such adjustments are of a normal recurring nature. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements for the years ended December 31, 2023, and 2022. The results of operations for the three months ended March 31, 2024, are not necessarily indicative of the results to be expected for the full fiscal year ending December 31, 2024.

 

Principles of Consolidation

 

The unaudited condensed consolidated financial statements include the account of Elevai, and its 100% owned subsidiaries. All intercompany accounts, transactions and profits were eliminated in the unaudited condensed consolidated financial statements.

 

Use of Estimates

 

The preparation of the unaudited 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 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 unaudited condensed consolidated financial statements in the period they are determined.

 

Foreign Currency Translation

 

The Company’s functional and reporting currency is the U.S. dollar. The functional currency of Elevai 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 Elevai 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).

 

Intangible Asset

 

Intangible assets are recorded at cost less accumulated amortization. They are depreciated using the straight-line method over their estimated useful lives, which reflect the period over which economic benefits are expected to be realized. Management assesses impairment indicators at each reporting period end. The estimated useful lives of intangible assets are generally as follows:

 

License  10-year strait-line

 

New Accounting Standards

 

Recently Adopted Accounting Standards

 

In March 2022, the FASB issued ASU 2022-02, ASC Subtopic 326 “Credit Losses”: Troubled Debt Restructurings and Vintage Disclosures. Since the issuance of Accounting Standards Update No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, the Board has provided resources to monitor and assist stakeholders with the implementation of Topic 326. Post-Implementation Review (PIR) activities have included forming a Credit Losses Transition Resource Group, conducting outreach with stakeholders of all types, developing educational materials and staff question-and-answer guidance, conducting educational workshops, and performing an archival review of financial reports. ASU No. 2022-02 is effective for annual and interim periods beginning after December 15, 2022. The adoption of this standard did not have a significant impact on the Company’s unaudited condensed consolidated financial statements.

 

In June 2022, the FASB issued ASU 2022-03, ASC Subtopic 820 “Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions”. The FASB is issuing this Update (1) to clarify the guidance in Topic 820, Fair Value Measurement, when measuring the fair value of an equity security subject to contractual restrictions that prohibit the sale of an equity security, (2) to amend a related illustrative example, and (3) to introduce new disclosure requirements for equity securities subject to contractual sale restrictions that are measured at fair value in accordance with Topic 820.

 

Stakeholders asserted that the language in the illustrative example resulted in diversity in practice on whether the effects of a contractual restriction that prohibits the sale of an equity security should be considered in measuring that equity security’s fair value. Some stakeholders apply a discount to the price of an equity security subject to a contractual sale restriction, whereas other stakeholders consider the application of a discount to be inappropriate under the principles of Topic 820.

 

For public business entities, the amendments in this Update are effective for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years. The adoption of this standard did not have a significant impact on the Company’s unaudited condensed consolidated financial statements.

 

Recently Issued Accounting Standards

 

The Company assesses the adoption impacts of recently issued, but not yet effective, accounting standards by the Financial Accounting Standards Board on the Company’s unaudited condensed consolidated financial statements.

 

There are no recently issued accounting standards which may have effect on the Company’s unaudited condensed consolidated financial statements
v3.24.1.1.u2
Receivables
 3 Months Ended
Mar. 31, 2024
Receivables [Abstract]  
Receivables
4.Receivables

 

As of March 31, 2024, receivables consisted of the following:

 

   March 31,
2024		   December 31,
2023		 
Trade receivable  $48,590   $33,089 
Sales taxes receivable   5,615    3,072 
   $54,205   $36,161 

 

The Company records sales taxes receivable for recoverable sales taxes paid on eligible purchases in its Canadian subsidiary. As at March 31, 2024, and December 31, 2023, the Company recorded a provision for credit losses of $nil and $nil, respectively.
v3.24.1.1.u2
Prepaids and Deposits
 3 Months Ended
Mar. 31, 2024
Prepaids and Deposits [Abstract]  
Prepaids and Deposits
5.Prepaids and Deposits

 

As of March 31, 2024, and December 31, 2023, prepaid and deposits consisted of the following:

 

   March 31,
2024		   December 31,
2023		 
Prepaid expenses  $1,179,438   $957,645 
Deposits   29,022    113,893 
   $1,208,460   $1,071,538 
           
Prepaids and deposits - current   1,197,687    1,060,765 
Deposits- non-current   10,773    10,773 

 

As of March 31, 2024, and December 31, 2023, the security deposit on the Company’s long-term lease in the amount of $10,773 and $10,773, respectively, is classified as a non-current deposit on the balance sheet. The Company recorded a provision for credit losses of $nil and $nil, respectively.
v3.24.1.1.u2
Inventory
 3 Months Ended
Mar. 31, 2024
Inventory [Abstract]  
Inventory
6.Inventory

 

As of March 31, 2024, and December 31, 2023, inventory consisted of the following:

 

   March 31,
2024		   December 31,
2023		 
Raw materials  $331,371   $279,514 
Work in progress   283,780    147,906 
Finished goods   329,913    68,247 
   $945,064   $495,667 

 

Cost of inventory recognized as expense in cost of sales for the three months ended March 31, 2024, and 2023, totaled $80,907 and $19,750, respectively. In addition, the cost of inventory relating to samples given out and expensed in marketing and promotion for the three months ended March 31, 2024, and 2023, totaled $48,989 and $21,068, respectively. As at March 31, 2024, and December 31, 2023, the Company recorded an allowance for inventory of $nil and $nil, respectively.
v3.24.1.1.u2
Property and Equipment
 3 Months Ended
Mar. 31, 2024
Property and Equipment [Abstract]  
Property and equipment
7.Property and Equipment

 

   Equipment   Furniture and Fixtures   Computers   Total 
Cost                
Balance, December 31, 2022  $50,516   $8,365   $2,759   $61,640 
Additions   2,658    8,533    
-
    11,191 
Disposal                  
-
 
Foreign currency translation             61    61 
Balance, December 31, 2023  $53,174   $16,898   $2,820   $72,892 
Additions   9,160    
-
    
-
    9,160 
Foreign currency translation   
-
    
-
    (59)   (59)
Balance, March 31, 2024  $62,334   $16,898   $2,761   $81,993 
                     
Accumulated depreciation                    
Balance, December 31, 2022  $7,052   $548   $505   $8,105 
Depreciation   8,680    2,414    555    11,649 
Foreign currency translation             19    19 
Balance, December 31, 2023  $15,732   $2,962   $1,079   $19,773 
Depreciation   2,497    604    139    3,239 
Foreign currency translation             (22)   (22)
Balance, March 31, 2024  $18,229   $3,566   $1,195   $22,990 
                     
Net book value                    
December 31, 2023  $37,442   $13,936   $1,741   $53,119 
March 31, 2024  $44,104   $13,333   $1,566   $59,003 

 

During the three months ended March 31, 2024, and 2023, the Company capitalized depreciation of $853 and $412, respectively as part of the production of inventory.
v3.24.1.1.u2
Intangible Assets
 3 Months Ended
Mar. 31, 2024
Intangible Assets [Abstract]  
Intangible assets
8.Intangible assets

 

On January 15, 2024, (the “Effective Date”), the Company entered into a license agreement with a Biotechnology company to use their proprietary technology and process to assist in formulating stem cells. The term of the license is 10 years and has a purchase price of $1,000,000. The payments structure for the intangible asset is as follows:

 

a)$50,000 payable upon executing the license (paid)

 

b)$350,000 payable on July 15, 2024

 

c)$600,000 payable on completion of technology transfer or two years from the Effective Date, whichever comes first.

 

The cost of the intangible assets will be measured at $861,452, which is the fair value of the consideration payable on initial recognition, determined by discounting the future payments using a market interest rate of 11.75%. The determination of the interest rate was conducted by employing the revised discount rate utilized for assessing the lease liability, which was subsequently adjusted to reflect any alterations in the U.S. prime rate on the Effective Date.

 

   License 
Cost    
Balance, December 31, 2023  $
-
 
Additions   861,452 
Balance, March 31, 2024  $861,452 
      
Accumulated depreciation     
Balance, December 31, 2023  $
-
 
Additions   17,947 
Balance, March 31, 2024  $17,947 
      
Net Book value – March 31, 2024  $843,505 
v3.24.1.1.u2
Operating Lease
 3 Months Ended
Mar. 31, 2024
Operating Lease [Abstract]  
Operating Lease
9.Operating Lease

 

During 2022, the Company entered into a noncancelable operating lease that includes two property location, one which is being used as the Company’s office and the other as its lab for research and development and the production of inventory. The lease had a commencement date of June 1, 2022 and expires on May 31, 2025, after which the term will continue on a month-to-month basis.

 

On July 3rd, 2023, the Company amended the terms of the previously entered lease agreement to lease additional office space from the lessor. Rent increased from $10,773 to $13,477 per month commencing July 1, 2023, through May 31, 2025. The lease amendment required a remeasurement of the lease liability which resulted in an increase of $47,986 to the lease liability and an equal increase in the right of use asset as of July 1, 2023.

 

The Company recognized a total lease cost related to its noncancelable operating lease of $39,741 and $31,630 for the three months ended March 31, 2024, and 2023, respectively. The lease cost has been allocated as follows based on the square footage of each property location.

 

   March 31,
2024		   March 31,
2023		 
Office space, recorded in office and administration  $25,975   $22,176 
Lab space, recorded in research and development   9,453    7,299 
Lab space, capitalized to production of inventory   4,313    2,155 
   $39,741   $31,630 

 

As of March 31, 2024, and December 31, 2023, the Company recorded a security deposit of $10,773. (Note 5)

 

Future minimum lease payments under the Company’s operating lease that has an initial noncancelable lease term in excess of one year at March 31, 2024, are as follows:

 

As of March 31, 2024  Total 
2024   121,291 
2025   67,384 
Thereafter   
-
 
    188,675 
Less: Imputed interest   (12,896)
Operating lease liability   175,779 
      
Operating lease lability – current   149,208 
Operating lease lability – non-current  $26,571 

 

The Company used a discount rate of 11.50% upon the remeasurement of the lease liability on July 1, 2023, compared to an original discount rate of 8% on lease commencement, as its incremental cost of borrowing due to the amendment. The remaining lease term as of March 31, 2024, is 1.17 years (December 31, 2023 – 1.42 years).
v3.24.1.1.u2
Accounts Payable and Accrued Liabilities
 3 Months Ended
Mar. 31, 2024
Accounts Payable and Accrued Liabilities [Abstract]  
Accounts payable and accrued liabilities
10.Accounts Payable and Accrued Liabilities

 

As of March 31, 2024, and December 31, 2023, accounts payable and accrued liabilities consisted of the following:

 

   March 31,
2024		   December 31,
2023		 
Accounts payable  $395,249   $596,147 
Accrued liabilities   133,573    73,228 
   $528,822   $669,375 
v3.24.1.1.u2
Consideration Payable
 3 Months Ended
Mar. 31, 2024
Consideration payable [Abstract]  
Consideration payable
11.Consideration payable

 

On January 15, 2024, the Company entered into a license agreement with a Biotechnology company to use their proprietary technology and process to assist in formulating stem cells. The fair value of the payments to be made is $950,000 (Note 8).

 

As of January 15, 2024, the fair value of the consideration payable stands at $950,000. The Company has accounted for a discount on the consideration payable to reflect the imputed interest on future installments, totaling $138,548.

 

   Consideration
payable		 
Outstanding, December 31, 2023  $
-
 
Additions   1,000,000 
Payment   (50,000)
Discount   138,548 
Accretion expense   18,994 
Outstanding, March 31, 2024  $830,446 
      
Consideration payable – current   338,889 
Consideration payable – non-current  $491,557 
v3.24.1.1.u2
Derivative Liabilities
 3 Months Ended
Mar. 31, 2024
Derivative Liabilities [Abstract]  
Derivative liabilities
12.Derivative liabilities

 

On July 15, 2022, the Company issued 231,828 common stock purchase warrants with an exercise price of $2.01 as part of the conversion of promissory notes (Note 10).

 

On November 21, 2023, the Company completed its Initial Public Offering (“IPO”) -and issued 75,000 warrants (the “IPO warrants”). The IPO warrants are exercisable into one common share of the Company at $4 per share and expire on November 21, 2028.

 

We analyzed the common stock purchase warrants issued as partial settlement of the promissory notes payable and the IPO warrants against the requirements of ASC 480, Distinguishing Liabilities from Equity, and determined that the warrants should be classified as financial liabilities since the terms allows for a cashless net share settlement at the option of the holder.

 

ASC 815, Derivatives and Hedging, requires that the warrants be accounted for as derivative liabilities with initial and subsequent measurement at fair value with changes in fair value recorded as other income (expense).

 

A continuity of the Company’s common stock purchase derivative liability warrants is as follows:

 

   Derivative liabilities 
Outstanding, December 31, 2022  $68,455 
Addition of new derivatives during IPO   229,437 
Change in fair value of derivative liabilities   71,266 
Outstanding, December 31, 2023  $369,158 
Change in fair value of derivative liabilities   (274,939)
Outstanding, March 31, 2024  $94,219 

 

We determined our derivative liabilities to be a Level 3 fair value measurement and used the Black-Scholes Option Pricing Model to calculate the fair value as of initial recognition and as of March 31, 2024, and December 31, 2023. The Black-Scholes Option Pricing Model requires six basic data inputs: the exercise or strike price, expected time to expiration or exercise, the risk-free interest rate, the current stock price, the estimated volatility of the stock price in the future, and the dividend rate. Changes to these inputs could produce a significantly higher or lower fair value measurement.

 

The following assumptions were used in the Black-Scholes option pricing model:

 

   March 31,
2024		   December 31,
2023		   November 21,
2023		   December 31,
2022		   July 15,
2022		 
Risk-free interest rate   4.21 - 4.40%   3.84 - 4.01%   4.41%   4.73%   3.12%
Expected life 1   3.07 – 4.65 years    3.32 – 4.90 years    5 years    0.75 years    0.6 years 
Expected dividend rate   0%   0%   0.00%   0.00%   0.00%
Expected volatility   100%   100%   100%   100%   100%

 

As of March 31, 2024, the following warrants were outstanding:

 

Outstanding  Expiry date1  Weighted average
exercise price ($)
75,840  April 27, 2027  2.01
63,037  April 27, 2027  2.01
80,388  April 27, 2027  2.01
12,563  April 27, 2027  2.01
75,000  November 21, 2028  4.00
306,828     2.49

 

As of March 31, 2024, and December 31, 2023, the weighted average life of derivative liability warrants outstanding was 3.46 and 3.71 years, respectively.

 

1On April 28, 2023, the Company amended the warrant agreements for the 231,828 derivative liability warrants outstanding. The amendment removed the clause to automatically convert warrants to shares on IPO date and all warrants were given an expiry date of April 27, 2027. This led to an increase in the expected life input in the Black-Scholes model as of December 31, 2023, compared to December 31, 2022, when the Company used the expected IPO date to calculate the expected life of the warrants.
v3.24.1.1.u2
Equity
 3 Months Ended
Mar. 31, 2024
Equity [Abstract]  
Equity
13.Equity

 

Common Stock

 

Authorized

 

As of March 31, 2024, and December 31, 2023, the Company had 300,000,000 common stock authorized, each having a par value of $0.0001.

 

Issued and outstanding

 

As of March 31, 2024, and December 31, 2023, the Company had 17,329,615 shares issued and outstanding, respectively.

 

Transactions during the three months ended March 31, 2024

 

No share capital activity in the Company during the three months ended March 31, 2024.

 

Transactions during the three months ended March 31, 2023

 

On January 6, 2023, the Company issued 62,500 common stock upon the exercise of 62,500 stock options with an exercise price of $0.60 per common stock for $37,500, of which $6 was recognized in common stock and the remaining $37,494 in additional paid-in capital.

 

On March 2, 2023, the Company issued 250,000 common stock and 250,000 common stock purchase warrants for $750,000, of which $25 was recognized in common stock and the remaining $749,975 in additional paid-in capital. These warrants are accounted for as equity warrants.

 

Preferred Stock

 

Authorized

 

As of March 31, 2024, and December 31, 2023, the Company had 75,000,000 of all preferred stock authorized, each having a par value of $0.0001 per stock.

 

The holders of Preferred Stock shall have the right to convert their shares of Preferred Stock, at any time, into shares of Common Stock at a conversion price of 1:1. Upon IPO, all preferred shares were converted into common shares on November 21, 2023.

 

Issued and outstanding

 

As at March 31, 2024, and December 31, 2023, the Company had Nil preferred stock issued and outstanding.

 

Transactions during the three months ended March 31, 2024, and 2023

 

There were no preferred stock transactions during the three months ended March 31, 2024, and 2023.

 

Equity Warrants

 

Transactions during the three-month ended March 31, 2024.

 

There was no equity warrant activity during the three months ended March 31, 2024

 

Transactions during the three-month ended March 31, 2023.

 

On March 2, 2023, the Company issued 250,000 common stock and 250,000 common stock purchase warrants. Each warrant is exercisable at $3.00 per common stock. The warrants shall be exercisable, in whole or in part at the issue date but such exercisability shall cease upon the date of the Company’s IPO and listing of its common shares on the Nasdaq Capital Market or other Trading Market and shall continue to be exercisable in whole or in part immediately after the Lock-up Period but no later than the Warrant Expiration Date or Accelerated Warrant Expiration Date (the “Exercise Period”). In the event of the Company’s initial public offering and listing of shares of its common stock on a Trading Market, the Company shall notify the holder at least fifteen (15) calendar days prior to the consummation of such IPO. “Trading Market” shall mean a “national securities exchange” that has registered with the SEC under Section 6 of the Securities Exchange Act of 1934. The Expiration Date shall be the earlier of (i) three years and one hundred eighty (180) days from the issue date (the “Warrant Expiration Date”) or (ii) upon the Company’s reasonable judgment and written notice to the purchaser, of the Company’s option to accelerate the Warrant Expiration Date whereby upon purchaser’s receipt of the Company’s written notice of acceleration during the Exercise Period, the Purchaser’s option to exercise any number of warrants shall occur no later than fourteen (14) days following the receipt of the written notice of acceleration (the “Accelerated Warrant Expiration Date”). For the avoidance of doubt, it shall be reasonable for the Company to accelerate the Expiration Date of this warrant to coincide with transactions including, but not limited to (i) a change of control including but not limited to the voluntary or involuntary sale, assignment, transfer or other disposition, or transfer by operation of law, of more than 50% of any direct or indirect equity interest of the Company; or (ii) a subsequent capital financing other than the IPO consisting of but not limited to an offer or proposal for, or indication of interest in, the issuance of debt or the capital stock of the Company.

 

As of March 31, 2024, and December 31, 2023, the following equity warrants were outstanding:

 

Outstanding  Expiry date  Weighted average
exercise price ($)
250,000  August 28, 2026  3.00
99,998  March 12, 2027  3.00
349,998     3.00

 

As of March 31, 2024, and December 31, 2023, the weighted average life of equity warrants outstanding was 2.56 and 2.81 years, respectively.

 

Stock Options

 

The Company has a stock option plan included in the Company’s 2020 Equity Incentive Plan (the “Plan”) where the Board of Directors or any of its committees can grant Incentive Stock Options, Nonstatutory Stock Options, and Restricted Stock to employees, advisors and directors of the Company. As of December 31, 2023 and March 31, 2024, the aggregate number of shares allocated and made available for issuance pursuant to stock options granted under the Plan shall not exceed 1,734,188 shares. The plan shall remain in effect until it is terminated by the Board of Directors.

 

Transactions during the three-month ended March 31, 2024

 

In January 2024, the Company granted 12,500 stock options with a contractual life of ten years and an exercise price of $5.00 per common stock. These stock options were valued at $16,178 using the Black-Scholes Option Pricing Model. The options vest 25% on the first anniversary of the grant date and the remaining 75% vest evenly over 36 months thereafter.

 

On March 6, 2024, the Company granted 80,000 stock options with a contractual life of ten years and an exercise price of $1.00 per common stock. These stock options were valued at $52,845 using the Black-Scholes Option Pricing Model. The options vest 25% on the first anniversary of the grant date and the remaining 75% vest evenly over 36 months thereafter.

 

Transactions during the three-month ended March 31, 2023

 

On February 1, 2023, the Company granted 10,000 stock options with a contractual life of ten years and an exercise price of $5.00 per common stock. These stock options were valued at $10,767 using the Black-Scholes Option Pricing Model. The options vest 25% on the first anniversary of the grant date and the remaining 75% vest evenly over 36 months thereafter.

 

The following assumptions were used in the Black-Scholes option pricing model:

 

   March 31,
2024		   December 31,
2023		 
Risk-free interest rate   3.95% - 4.19%   3.39% -3.86%
Expected life   10 years    10 years 
Expected dividend rate   0.00%   0.00%
Expected volatility   100%   100%
Forfeiture rate   0.00%   0.00%

 

The continuity of stock options for the three months ended March 31, 2024, and December 31, 2023, is summarized below:

 

   Number of stock options   Weighted average exercise price 
Outstanding, December 31, 2022   1,366,167    1.08 
Granted   234,000    5.00 
Forfeited   (14,583)   0.60 
Exercised   (62,500)   0.60 
Outstanding, December 31, 2023   1,523,084    1.71 
Granted   92,500    1.54 
Forfeited   (58,333)   5.00 
Exercised   -    - 
Outstanding, March 31, 2024   1,557,251    1.57 

 

As of March 31, 2024, the following options were outstanding, entitling the holders thereof the right to purchase one common stock for each option held as follows:

 

Outstanding  Vested  Expiry date  Weighted average
exercise price ($)
841,667  666,327  February 8, 2031  0.60
35,417  38,543  February 27, 2031  0.60
45,000  21,563  April 25, 2032  0.60
16,000  7,000  June 1, 2032  1.34
110,000  45,833  July 1, 2032  1.34
100,000  39,583  August 8, 2032  1.34
16,000  6,000  September 30, 2032  1.34
80,000  30,000  September 30, 2032  5.00
10,000  3,542  October 15, 2032  1.34
10,000  3,333  November 1, 2032  1.34
5,000  1,667  November 1, 2032  5.00
20,000  6,250  December 12, 2032  5.00
10,000  2,708  February 1, 2033  5.00
50,000 
-
  April 16, 2033  5.00
80,000  21,667  May 1, 2033  5.00
21,667 
-
  January 25, 2033  5.00
10,000 
-
  June 27, 2033  5.00
2,500 
-
  July 10, 2033  5.00
1,500 
-
  July 1, 2033  5.00
5,000 
-
  January 17, 2024  5.00
2,500 
-
  January 17, 2024  5.00
5,000 
-
  February 12, 2024  5.00
80,000 
-
  March 5, 2024  1.00
1,557,251  894,016     1.00

 

As of March 31, 2024, and December 31, 2023, the weighted average life of stock options outstanding was 7.69 years and 7.84 years, respectively.

 

During the three months ended March 31, 2024, and 2023, the Company recorded $55,339 and $75,161, respectively, in share-based compensation expense, of which $53,929 and $1,410, and $71,901 and $3,260, respectively is included in office and administration and research and development, respectively.
v3.24.1.1.u2
Related Party Transactions
 3 Months Ended
Mar. 31, 2024
Related Party Transactions [Abstract]  
Related Party Transactions
14.Related Party Transactions

 

Related parties consist of the following individuals and corporations:

 

●Braeden Lichti, Chairman and former President, significant shareholder through BWL Investments Ltd. Resigned as President effective October 11, 2022.

 

●Jordan Plews, CEO and Director, significant shareholder through JP Bio Consulting LLC

 

●Graydon Bensler, CFO and Director

 

●Yi Guo, Former Director, resigned effective September 29, 2022

 

●Tim Sayed, Chief Medical Officer

 

●Brenda Buechler, Chief Marketing Officer

 

●Christoph Kraneiss, Chief Commercial Officer

 

●Jeffrey Parry, Director (appointed June 1, 2023)

 

●Julie Daley, Director (appointed June 1, 2023)

 

●Crystal Muilenburg, Director (appointed June 1, 2023, resigned February 29, 2024)

 

●George Kovalyov (appointed March 1, 2024)

 

●GB Capital Ltd., controlled by Graydon Bensler

 

●JP Bio Consulting LLC, significant shareholder and controlled by Jordan Plews

 

●BWL Investments Ltd., significant shareholder and controlled by Braeden Lichti

 

●Northstrive Companies Inc., controlled by Braeden Lichti

 

Key management personnel include those persons having authority and responsibility for planning, directing, and controlling the activities of the Company as a whole. The Company has determined that key management personnel consist of members of the Company’s Board of Directors, corporate officers, and individuals with more than 10% control.

 

Remuneration attributed to key management personnel are summarized as follows:

 

   Three months ended
March 31,
2024		   Three months ended
March 31,
2023		 
Consulting fees  $80,833   $51,250 
Salaries   207,016    156,439 
Share-based compensation   22,276    46,986 
   $310,125   $254,675 

 

During the three months ended March 31, 2024, the Company incurred consulting fees of $50,833 (March 31, 2023 - $21,250) to GB Capital Ltd., a company controlled by Graydon Bensler, CFO and Director. In addition, the Company incurred consulting fees of $30,000 (December 31, 2023 - $30,000) to Northstrive Companies Inc., a company controlled by the Company’s Chairman and former President.

 

Jordan Plews, CEO and Director, earned a Salary of $56,454 and $55,021 respectively during the three months ended March 31, 2024, and 2023 (includes employer taxes of $6,454 and $4,826, respectively).

 

Brenda Buechler, Chief Marketing Officer, earned a Salary of $77,669 and $52,326, respectively during the three months ended March 31, 2024, and 2023 (includes employer taxes of $8,086 and $4,826 respectively).

 

Christoph Kraneiss, Chief Commercial Officer, earned a Salary of $72,892 and $72,792, respectively during the three months ended March 31, 2024, and 2023 (includes employer taxes of $6,225 and $4,093, respectively).

 

During the three months ended March 31, 2024, and 2023, the company issued the following stock options to related parties:

 

On March 1, 2024, the Company granted 80,000 stock options to directors of the company with a contractual life of 10 years and exercise price of $1.00 per share of common stock. These stock options were valued at $45,986 using the Black-Scholes Option Pricing Model. The options vest 25% on the first anniversary of the grant date and the remaining 75% vest evenly over 36 months thereafter.

 

Details of the fair value granted to each related party in the current and prior periods, and the related expense recorded for the three months ended March 31, 2024, and 2023 is as follow:

 

   Three Months Ended
March 31,
2024		   Three Months Ended
March 31,
2023		   Fair value
of stock
options
granted		 
Braeden Lichti, Former Chairman and President  $878   $2,138   $50,995 
Graydon Bensler, CFO and Director   878    2,138    50,995 
Jordan Plews, CEO and Director   878    2,138    50,995 
Tim Sayed, Chief Medical Officer   878    2,138    50,995 
Jeffrey Parry, Director   7,243    
-
    107,669 
Crystal Muilenburg, Former Director1   (41,668)   
-
    210,245 
Julie Daley, Director   35,142    
-
    210,245 
George Kovalyov, Director   2,556    -    52,845 
Brenda Buechler, Chief Marketing Officer   8,096    20,840    143,671 
Christoph Kraneiss, Chief Commercial Officer   7,395    17,594    121,243 
   $22,276   $46,986   $1,049,898 

 

158,333 options were forfeited in the three months ended March 31, 2024

 

As of March 31, 2024, and December 31, 2023, the Company had $22,195 and $22,455, respectively due to companies controlled by Braeden Lichti, of which $22,195 and $22,455, respectively is unsecured, non-interest bearing and are due on demand.

 

As of March 31, 2024, the Company had $38,500 (December 31, 2023 - $34,378) in consulting fees due to Graydon Bensler, CFO and Director, $15,143 (December 31, 2023 - $15,143) due to companies controlled by Braeden Lichti, and $Nil and $Nil (December 31, 2023 - $4,272 and $879) due to Jordan Plews, CEO and Director, and Christopher Kraneiss, Chief Commercial Officer, respectively, for expenses incurred on behalf of the Company.
v3.24.1.1.u2
Commitments and Contingencies
 3 Months Ended
Mar. 31, 2024
Commitments and Contingencies [Abstract]  
Commitments and Contingencies
15.Commitments and Contingencies

 

There were no commitments as of March 31, 2024, and December 31, 2023, or during the periods then ended.

 

As of March 18, 2024, the Company has voluntarily stopped sale of its products in Canada following a communication from Health Canada regarding the way the Company’s products are marketed in Canada. The Company is working with Canadian regulatory and legal counsel to explore options to rectify the issues raised. On April 30, 2024, the Company’s appointed Canadian distributor terminated the existing distribution agreement. Termination of the distributor agreement does not result in any penalties or damages.
v3.24.1.1.u2
Concentrations
 3 Months Ended
Mar. 31, 2024
Concentrations [Abstract]  
Concentrations
16.Concentrations

 

Customers

 

For the three months ended March 31, 2024, the Company recorded 11% of its revenue from its largest customer. The Company’s largest customer, representing $67,500 of revenue, relates to sales to a distributor during the period. During the three months ended March 31, 2023, the Company recorded 18% of its revenue from its largest customer. The Company’s largest customer, representing $25,500 of revenue, relates to a distributor agreement.

 

As of March 31 ,2024 and December 31, 2023, the Company had $49 receivables due from these customers and $Nil in customer deposits were received from its largest customer.

 

The Company expects its dependence on these major customers to decrease over time as it enters into additional distributor agreements and builds out its sales team.

 

Suppliers

 

During the three months ended March 31 ,2024, and 2023, the Company had 3 key suppliers that represented approximately 66% and 3 key suppliers that represented approximately 70%, respectively of the cost incurred in the purchase and production of inventory. The table below represents a breakdown of each supplier as a percentage of the cost incurred (Suppliers are shown from largest to smallest and does not necessarily represent the same suppliers period over period):

 

   Three Months Ended
March 31,
2024		   Three Months Ended
March 31,
2023		 
Supplier 1   33%   41%
Supplier 2   18%   18%
Supplier 3   15%   11%
    66%   70%

 

The Company continually evaluates the performance of its suppliers and the availability of alternatives to substitute or supplement its inventory production supply chain. The Company believes that a breakdown in supply from one of its key suppliers would be overcome in a short amount of time given the availability of alternatives.
v3.24.1.1.u2
Subsequent Events
 3 Months Ended
Mar. 31, 2024
Subsequent Events [Abstract]  
Subsequent Events
17.Subsequent Events

 

Management has evaluated events subsequent to the year ended March 31, 2024, up to May 15, 2024, for transactions and other events that may require adjustment of and/or disclosure in the consolidated financial statements.

 

On April 30, 2024, the Company’s appointed Canadian distributor terminated the existing distribution agreement. (Note 15).

 

On April 30, 2024, the Company entered into an exclusive licensing agreement with a biomedical and pharmaceutical company for an upfront fee of $400,000 and 950,000 shares of common stock.

 

On May 3, 2024, the Company entered into a consulting agreement with a maturity of May 3, 2025. The consultant is to be paid $15,000 monthly as well as 612,500 common shares on each of May 3, 2024, August 1, 2024, November 1, 2024, and February 2, 2025.
v3.24.1.1.u2
Pay vs Performance Disclosure - USD ($)
 3 Months Ended
Mar. 31, 2024
Mar. 31, 2023
Pay vs Performance Disclosure    
Net Income (Loss) $ (1,397,250) $ (1,080,696)
v3.24.1.1.u2
Insider Trading Arrangements
 3 Months Ended
Mar. 31, 2024
Trading Arrangements, by Individual  
Rule 10b5-1 Arrangement Adopted false
Non-Rule 10b5-1 Arrangement Adopted false
Rule 10b5-1 Arrangement Terminated false
Non-Rule 10b5-1 Arrangement Terminated false
Rule 10b5-1 Arrangement Modified false
Non-Rule 10b5-1 Arrangement Modified false
v3.24.1.1.u2
Accounting Policies, by Policy (Policies)
 3 Months Ended
Mar. 31, 2024
Summary of Significant Accounting Policies [Abstract]  
Basis of Presentation

Basis of Presentation

These unaudited condensed consolidated financial statements have been prepared in accordance with rules and regulations of the Securities and Exchange Commission (“SEC”) and generally accepted accounting principles in the United States (“U.S. GAAP”) for interim financial information and are expressed in United States dollars. Accordingly, the unaudited condensed consolidated financial statements do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, we have included all adjustments considered necessary for a fair presentation and such adjustments are of a normal recurring nature. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements for the years ended December 31, 2023, and 2022. The results of operations for the three months ended March 31, 2024, are not necessarily indicative of the results to be expected for the full fiscal year ending December 31, 2024.
Principles of Consolidation

Principles of Consolidation

The unaudited condensed consolidated financial statements include the account of Elevai, and its 100% owned subsidiaries. All intercompany accounts, transactions and profits were eliminated in the unaudited condensed consolidated financial statements.
Use of Estimates

Use of Estimates

The preparation of the unaudited 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 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 unaudited condensed consolidated financial statements in the period they are determined.
Foreign Currency Translation

Foreign Currency Translation

The Company’s functional and reporting currency is the U.S. dollar. The functional currency of Elevai 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 Elevai 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).
Intangible Asset

Intangible Asset

Intangible assets are recorded at cost less accumulated amortization. They are depreciated using the straight-line method over their estimated useful lives, which reflect the period over which economic benefits are expected to be realized. Management assesses impairment indicators at each reporting period end. The estimated useful lives of intangible assets are generally as follows:

License  10-year strait-line
New Accounting Standards

New Accounting Standards

Recently Adopted Accounting Standards

In March 2022, the FASB issued ASU 2022-02, ASC Subtopic 326 “Credit Losses”: Troubled Debt Restructurings and Vintage Disclosures. Since the issuance of Accounting Standards Update No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, the Board has provided resources to monitor and assist stakeholders with the implementation of Topic 326. Post-Implementation Review (PIR) activities have included forming a Credit Losses Transition Resource Group, conducting outreach with stakeholders of all types, developing educational materials and staff question-and-answer guidance, conducting educational workshops, and performing an archival review of financial reports. ASU No. 2022-02 is effective for annual and interim periods beginning after December 15, 2022. The adoption of this standard did not have a significant impact on the Company’s unaudited condensed consolidated financial statements.

In June 2022, the FASB issued ASU 2022-03, ASC Subtopic 820 “Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions”. The FASB is issuing this Update (1) to clarify the guidance in Topic 820, Fair Value Measurement, when measuring the fair value of an equity security subject to contractual restrictions that prohibit the sale of an equity security, (2) to amend a related illustrative example, and (3) to introduce new disclosure requirements for equity securities subject to contractual sale restrictions that are measured at fair value in accordance with Topic 820.

Stakeholders asserted that the language in the illustrative example resulted in diversity in practice on whether the effects of a contractual restriction that prohibits the sale of an equity security should be considered in measuring that equity security’s fair value. Some stakeholders apply a discount to the price of an equity security subject to a contractual sale restriction, whereas other stakeholders consider the application of a discount to be inappropriate under the principles of Topic 820.

For public business entities, the amendments in this Update are effective for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years. The adoption of this standard did not have a significant impact on the Company’s unaudited condensed consolidated financial statements.

Recently Issued Accounting Standards

The Company assesses the adoption impacts of recently issued, but not yet effective, accounting standards by the Financial Accounting Standards Board on the Company’s unaudited condensed consolidated financial statements.

There are no recently issued accounting standards which may have effect on the Company’s unaudited condensed consolidated financial statements
v3.24.1.1.u2
Summary of Significant Accounting Policies (Tables)
 3 Months Ended
Mar. 31, 2024
Summary of Significant Accounting Policies [Abstract]  
Schedule of Estimated Useful Lives of Intangible Assets The estimated useful lives of intangible assets are generally as follows:
License  10-year strait-line
v3.24.1.1.u2
Receivables (Tables)
 3 Months Ended
Mar. 31, 2024
Receivables [Abstract]  
Schedule of Receivables As of March 31, 2024, receivables consisted of the following:
   March 31,
2024		   December 31,
2023		 
Trade receivable  $48,590   $33,089 
Sales taxes receivable   5,615    3,072 
   $54,205   $36,161 
v3.24.1.1.u2
Prepaids and Deposits (Tables)
 3 Months Ended
Mar. 31, 2024
Prepaids and Deposits [Abstract]  
Schedule of Prepaid and Deposits As of March 31, 2024, and December 31, 2023, prepaid and deposits consisted of the following:
   March 31,
2024		   December 31,
2023		 
Prepaid expenses  $1,179,438   $957,645 
Deposits   29,022    113,893 
   $1,208,460   $1,071,538 
           
Prepaids and deposits - current   1,197,687    1,060,765 
Deposits- non-current   10,773    10,773 
v3.24.1.1.u2
Inventory (Tables)
 3 Months Ended
Mar. 31, 2024
Inventory [Abstract]  
Schedule of Inventory As of March 31, 2024, and December 31, 2023, inventory consisted of the following:
   March 31,
2024		   December 31,
2023		 
Raw materials  $331,371   $279,514 
Work in progress   283,780    147,906 
Finished goods   329,913    68,247 
   $945,064   $495,667 
v3.24.1.1.u2
Property and Equipment (Tables)
 3 Months Ended
Mar. 31, 2024
Property and Equipment [Abstract]  
Schedule of Property and Equipment Property and Equipment
   Equipment   Furniture and Fixtures   Computers   Total 
Cost                
Balance, December 31, 2022  $50,516   $8,365   $2,759   $61,640 
Additions   2,658    8,533    
-
    11,191 
Disposal                  
-
 
Foreign currency translation             61    61 
Balance, December 31, 2023  $53,174   $16,898   $2,820   $72,892 
Additions   9,160    
-
    
-
    9,160 
Foreign currency translation   
-
    
-
    (59)   (59)
Balance, March 31, 2024  $62,334   $16,898   $2,761   $81,993 
                     
Accumulated depreciation                    
Balance, December 31, 2022  $7,052   $548   $505   $8,105 
Depreciation   8,680    2,414    555    11,649 
Foreign currency translation             19    19 
Balance, December 31, 2023  $15,732   $2,962   $1,079   $19,773 
Depreciation   2,497    604    139    3,239 
Foreign currency translation             (22)   (22)
Balance, March 31, 2024  $18,229   $3,566   $1,195   $22,990 
                     
Net book value                    
December 31, 2023  $37,442   $13,936   $1,741   $53,119 
March 31, 2024  $44,104   $13,333   $1,566   $59,003 
v3.24.1.1.u2
Intangible Assets (Tables)
 3 Months Ended
Mar. 31, 2024
Intangible Assets [Abstract]  
Schedule of Intangible Assets The determination of the interest rate was conducted by employing the revised discount rate utilized for assessing the lease liability, which was subsequently adjusted to reflect any alterations in the U.S. prime rate on the Effective Date.
   License 
Cost    
Balance, December 31, 2023  $
-
 
Additions   861,452 
Balance, March 31, 2024  $861,452 
      
Accumulated depreciation     
Balance, December 31, 2023  $
-
 
Additions   17,947 
Balance, March 31, 2024  $17,947 
      
Net Book value – March 31, 2024  $843,505 
v3.24.1.1.u2
Operating Lease (Tables)
 3 Months Ended
Mar. 31, 2024
Operating Lease [Abstract]  
Schedule of Lease Cost The lease cost has been allocated as follows based on the square footage of each property location.
   March 31,
2024		   March 31,
2023		 
Office space, recorded in office and administration  $25,975   $22,176 
Lab space, recorded in research and development   9,453    7,299 
Lab space, capitalized to production of inventory   4,313    2,155 
   $39,741   $31,630 
Schedule of Future Minimum Lease Payments Future minimum lease payments under the Company’s operating lease that has an initial noncancelable lease term in excess of one year at March 31, 2024, are as follows:
As of March 31, 2024  Total 
2024   121,291 
2025   67,384 
Thereafter   
-
 
    188,675 
Less: Imputed interest   (12,896)
Operating lease liability   175,779 
      
Operating lease lability – current   149,208 
Operating lease lability – non-current  $26,571 
v3.24.1.1.u2
Accounts Payable and Accrued Liabilities (Tables)
 3 Months Ended
Mar. 31, 2024
Accounts Payable and Accrued Liabilities [Abstract]  
Schedule of Accounts Payable and Accrued Liabilities As of March 31, 2024, and December 31, 2023, accounts payable and accrued liabilities consisted of the following:
   March 31,
2024		   December 31,
2023		 
Accounts payable  $395,249   $596,147 
Accrued liabilities   133,573    73,228 
   $528,822   $669,375 
v3.24.1.1.u2
Consideration Payable (Tables)
 3 Months Ended
Mar. 31, 2024
Consideration payable [Abstract]  
Schedule of Consideration Payable The Company has accounted for a discount on the consideration payable to reflect the imputed interest on future installments, totaling $138,548.
   Consideration
payable		 
Outstanding, December 31, 2023  $
-
 
Additions   1,000,000 
Payment   (50,000)
Discount   138,548 
Accretion expense   18,994 
Outstanding, March 31, 2024  $830,446 
      
Consideration payable – current   338,889 
Consideration payable – non-current  $491,557 
v3.24.1.1.u2
Derivative Liabilities (Tables)
 3 Months Ended
Mar. 31, 2024
Derivative Liabilities [Line Items]  
Schedule of Common Stock Purchase Derivative Liability Warrants A continuity of the Company’s common stock purchase derivative liability warrants is as follows:
   Derivative liabilities 
Outstanding, December 31, 2022  $68,455 
Addition of new derivatives during IPO   229,437 
Change in fair value of derivative liabilities   71,266 
Outstanding, December 31, 2023  $369,158 
Change in fair value of derivative liabilities   (274,939)
Outstanding, March 31, 2024  $94,219 
Derivative liabilities [Member]  
Derivative Liabilities [Line Items]  
Schedule of Black-Scholes Option Pricing Model The following assumptions were used in the Black-Scholes option pricing model:
   March 31,
2024		   December 31,
2023		   November 21,
2023		   December 31,
2022		   July 15,
2022		 
Risk-free interest rate   4.21 - 4.40%   3.84 - 4.01%   4.41%   4.73%   3.12%
Expected life 1   3.07 – 4.65 years    3.32 – 4.90 years    5 years    0.75 years    0.6 years 
Expected dividend rate   0%   0%   0.00%   0.00%   0.00%
Expected volatility   100%   100%   100%   100%   100%
1On April 28, 2023, the Company amended the warrant agreements for the 231,828 derivative liability warrants outstanding. The amendment removed the clause to automatically convert warrants to shares on IPO date and all warrants were given an expiry date of April 27, 2027. This led to an increase in the expected life input in the Black-Scholes model as of December 31, 2023, compared to December 31, 2022, when the Company used the expected IPO date to calculate the expected life of the warrants.
Schedule of Derivative Liability Warrants Outstanding As of March 31, 2024, the following warrants were outstanding:
Outstanding  Expiry date1  Weighted average
exercise price ($)
75,840  April 27, 2027  2.01
63,037  April 27, 2027  2.01
80,388  April 27, 2027  2.01
12,563  April 27, 2027  2.01
75,000  November 21, 2028  4.00
306,828     2.49
1On April 28, 2023, the Company amended the warrant agreements for the 231,828 derivative liability warrants outstanding. The amendment removed the clause to automatically convert warrants to shares on IPO date and all warrants were given an expiry date of April 27, 2027. This led to an increase in the expected life input in the Black-Scholes model as of December 31, 2023, compared to December 31, 2022, when the Company used the expected IPO date to calculate the expected life of the warrants.
v3.24.1.1.u2
Equity (Tables)
 3 Months Ended
Mar. 31, 2024
Equity (Tables) [Line Items]  
Schedule of Equity Warrants As of March 31, 2024, and December 31, 2023, the following equity warrants were outstanding:
Outstanding  Expiry date  Weighted average
exercise price ($)
250,000  August 28, 2026  3.00
99,998  March 12, 2027  3.00
349,998     3.00
Schedule of Stock Options The continuity of stock options for the three months ended March 31, 2024, and December 31, 2023, is summarized below:
   Number of stock options   Weighted average exercise price 
Outstanding, December 31, 2022   1,366,167    1.08 
Granted   234,000    5.00 
Forfeited   (14,583)   0.60 
Exercised   (62,500)   0.60 
Outstanding, December 31, 2023   1,523,084    1.71 
Granted   92,500    1.54 
Forfeited   (58,333)   5.00 
Exercised   -    - 
Outstanding, March 31, 2024   1,557,251    1.57 

 
Schedule of Right To Purchase One Common Stock Option Held As of March 31, 2024, the following options were outstanding, entitling the holders thereof the right to purchase one common stock for each option held as follows:
Outstanding  Vested  Expiry date  Weighted average
exercise price ($)
841,667  666,327  February 8, 2031  0.60
35,417  38,543  February 27, 2031  0.60
45,000  21,563  April 25, 2032  0.60
16,000  7,000  June 1, 2032  1.34
110,000  45,833  July 1, 2032  1.34
100,000  39,583  August 8, 2032  1.34
16,000  6,000  September 30, 2032  1.34
80,000  30,000  September 30, 2032  5.00
10,000  3,542  October 15, 2032  1.34
10,000  3,333  November 1, 2032  1.34
5,000  1,667  November 1, 2032  5.00
20,000  6,250  December 12, 2032  5.00
10,000  2,708  February 1, 2033  5.00
50,000 
-
  April 16, 2033  5.00
80,000  21,667  May 1, 2033  5.00
21,667 
-
  January 25, 2033  5.00
10,000 
-
  June 27, 2033  5.00
2,500 
-
  July 10, 2033  5.00
1,500 
-
  July 1, 2033  5.00
5,000 
-
  January 17, 2024  5.00
2,500 
-
  January 17, 2024  5.00
5,000 
-
  February 12, 2024  5.00
80,000 
-
  March 5, 2024  1.00
1,557,251  894,016     1.00
Equity Option [Member]  
Equity (Tables) [Line Items]  
Schedule of Black-Scholes Option Pricing Model The following assumptions were used in the Black-Scholes option pricing model:
   March 31,
2024		   December 31,
2023		 
Risk-free interest rate   3.95% - 4.19%   3.39% -3.86%
Expected life   10 years    10 years 
Expected dividend rate   0.00%   0.00%
Expected volatility   100%   100%
Forfeiture rate   0.00%   0.00%
v3.24.1.1.u2
Related Party Transactions (Tables)
 3 Months Ended
Mar. 31, 2024
Related Party Transactions [Abstract]  
Schedule of Remuneration of Directors and Key Management Personnel Remuneration attributed to key management personnel are summarized as follows:
   Three months ended
March 31,
2024		   Three months ended
March 31,
2023		 
Consulting fees  $80,833   $51,250 
Salaries   207,016    156,439 
Share-based compensation   22,276    46,986 
   $310,125   $254,675 
Schedule of fair value of the options granted to each individual and the related expense Details of the fair value granted to each related party in the current and prior periods, and the related expense recorded for the three months ended March 31, 2024, and 2023 is as follow:
   Three Months Ended
March 31,
2024		   Three Months Ended
March 31,
2023		   Fair value
of stock
options
granted		 
Braeden Lichti, Former Chairman and President  $878   $2,138   $50,995 
Graydon Bensler, CFO and Director   878    2,138    50,995 
Jordan Plews, CEO and Director   878    2,138    50,995 
Tim Sayed, Chief Medical Officer   878    2,138    50,995 
Jeffrey Parry, Director   7,243    
-
    107,669 
Crystal Muilenburg, Former Director1   (41,668)   
-
    210,245 
Julie Daley, Director   35,142    
-
    210,245 
George Kovalyov, Director   2,556    -    52,845 
Brenda Buechler, Chief Marketing Officer   8,096    20,840    143,671 
Christoph Kraneiss, Chief Commercial Officer   7,395    17,594    121,243 
   $22,276   $46,986   $1,049,898 
158,333 options were forfeited in the three months ended March 31, 2024
v3.24.1.1.u2
Concentrations (Tables)
 3 Months Ended
Mar. 31, 2024
Concentrations [Abstract]  
Schedule of Suppliers Percentage of Cost The table below represents a breakdown of each supplier as a percentage of the cost incurred (Suppliers are shown from largest to smallest and does not necessarily represent the same suppliers period over period):
   Three Months Ended
March 31,
2024		   Three Months Ended
March 31,
2023		 
Supplier 1   33%   41%
Supplier 2   18%   18%
Supplier 3   15%   11%
    66%   70%
v3.24.1.1.u2
Organization and Nature of Operations (Details)
Jun. 09, 2020
Elevai Labs Inc. [Member]  
Organization and Nature of Operations [Line Items]  
Owned subsidiary percentage 100.00%
v3.24.1.1.u2
Going Concern (Details) - USD ($)
 3 Months Ended
Mar. 31, 2024
Mar. 31, 2023
Dec. 31, 2023
Going Concern [Abstract]      
Net working capital $ 1,918,631   $ 3,622,091
Accumulated deficit (8,421,140)   $ (7,023,890)
Net loss (1,397,250) $ (1,080,696)  
Cash flows for operating activities $ (2,324,068) $ (885,506)  
v3.24.1.1.u2
Summary of Significant Accounting Policies (Details)
Mar. 31, 2024
Prinicipal of Consolidation [Member]  
Summary of Significant Accounting Policies (Details) [Line Items]  
Owners percentage 100.00%
v3.24.1.1.u2
Summary of Significant Accounting Policies (Details) - Schedule of Estimated Useful Lives of Intangible Assets
Mar. 31, 2024
License [Member]  
Schedule of Estimated Useful Lives of Intangible Assets [Line Items]  
Estimated useful lives 10 years
v3.24.1.1.u2
Receivables (Details) - USD ($)
Mar. 31, 2024
Dec. 31, 2023
Receivables [Abstract]    
Provision for doubtful accounts
v3.24.1.1.u2
Receivables (Details) - Schedule of Receivables - USD ($)
Mar. 31, 2024
Dec. 31, 2023
Schedule of Receivables [Abstract]    
Trade receivable $ 48,590 $ 33,089
Sales taxes receivable 5,615 3,072
Total $ 54,205 $ 36,161
v3.24.1.1.u2
Prepaids and Deposits (Details) - USD ($)
 3 Months Ended 12 Months Ended
Mar. 31, 2024
Dec. 31, 2023
Prepaids and Deposits [Abstract]    
Long term lease $ 10,773 $ 10,773
Provision for credit losses
v3.24.1.1.u2
Prepaids and Deposits (Details) - Schedule of Prepaid and Deposits - USD ($)
Mar. 31, 2024
Dec. 31, 2023
Schedule of Prepaid And Deposits [Abstract]    
Prepaid expenses $ 1,179,438 $ 957,645
Deposits 29,022 113,893
Prepaid and deposits 1,208,460 1,071,538
Prepaids and deposits - current 1,197,687 1,060,765
Deposits- non-current $ 10,773 $ 10,773
v3.24.1.1.u2
Inventory (Details) - USD ($)
 3 Months Ended
Mar. 31, 2024
Mar. 31, 2023
Dec. 31, 2023
Inventory [Abstract]      
Cost of sales $ 80,907 $ 19,750  
Marketing and promotion 48,989 $ 21,068  
Allowance for inventory  
v3.24.1.1.u2
Inventory (Details) - Schedule of Inventory - USD ($)
Mar. 31, 2024
Dec. 31, 2023
Schedule of Inventory [Abstract]    
Raw materials $ 331,371 $ 279,514
Work in progress 283,780 147,906
Finished goods 329,913 68,247
Total inventory $ 945,064 $ 495,667
v3.24.1.1.u2
Property and Equipment (Details) - USD ($)
Mar. 31, 2024
Mar. 31, 2023
Property and Equipment [Abstract]    
Capitalized depreciation $ 853 $ 412
v3.24.1.1.u2
Property and Equipment (Details) - Schedule of Property and Equipment - USD ($)
 3 Months Ended 12 Months Ended
Mar. 31, 2024
Dec. 31, 2023
Cost    
Cost, Balance beginning $ 72,892 $ 61,640
Cost, Additions 9,160 11,191
Cost, Disposal  
Cost, Foreign currency translation (59) 61
Cost, Balance ending 81,993 72,892
Accumulated depreciation    
Accumulated depreciation, Balance beginning 19,773 8,105
Depreciation 3,239 11,649
Accumulated depreciation, Foreign currency translation (22) 19
Accumulated depreciation, Balance ending 22,990 19,773
Net book value, beginning 53,119 53,119
Net book value, ending 59,003 53,119
Equipment [Member]    
Cost    
Cost, Balance beginning 53,174 50,516
Cost, Additions 9,160 2,658
Cost, Foreign currency translation  
Cost, Balance ending 62,334 53,174
Accumulated depreciation    
Accumulated depreciation, Balance beginning 15,732 7,052
Depreciation 2,497 8,680
Accumulated depreciation, Balance ending 18,229 15,732
Net book value, beginning   37,442
Net book value, ending 44,104  
Furniture and Fixtures [Member]    
Cost    
Cost, Balance beginning 16,898 8,365
Cost, Additions 8,533
Cost, Foreign currency translation  
Cost, Balance ending 16,898 16,898
Accumulated depreciation    
Accumulated depreciation, Balance beginning 2,962 548
Depreciation 604 2,414
Accumulated depreciation, Balance ending 3,566 2,962
Net book value, beginning   13,936
Net book value, ending 13,333  
Computers [Member]    
Cost    
Cost, Balance beginning 2,820 2,759
Cost, Additions
Cost, Foreign currency translation (59) 61
Cost, Balance ending 2,761 2,820
Accumulated depreciation    
Accumulated depreciation, Balance beginning 1,079 505
Depreciation 139 555
Accumulated depreciation, Foreign currency translation (22) 19
Accumulated depreciation, Balance ending 1,195 1,079
Net book value, beginning   $ 1,741
Net book value, ending $ 1,566  
v3.24.1.1.u2
Intangible Assets (Details) - USD ($)
Jan. 15, 2024
Mar. 31, 2024
Dec. 31, 2023
Intangible Assets [Line Items]      
Purchase price $ 1,000,000    
Intangible asset payable 600,000    
License [Member]      
Intangible Assets [Line Items]      
Intangible assets term   10 years  
Intangible asset payable 50,000    
Intangible assets   $ 861,452
Consideration Payable [Member]      
Intangible Assets [Line Items]      
Interest rate of percentage   11.75%  
July 15, 2024 [Member]      
Intangible Assets [Line Items]      
Intangible asset payable $ 350,000    
v3.24.1.1.u2
Intangible Assets (Details) - Schedule of Intangible Assets - License [Member]
 3 Months Ended
Mar. 31, 2024
USD ($)
Cost  
Balance, December 31, 2023
Additions 861,452
Balance, March 31, 2024 861,452
Accumulated depreciation  
Balance, December 31, 2023
Additions 17,947
Balance, March 31, 2024 17,947
Net Book value – March 31, 2024 $ 843,505
v3.24.1.1.u2
Operating Lease (Details) - USD ($)
 3 Months Ended
Jul. 03, 2023
Jul. 01, 2023
Mar. 31, 2024
Mar. 31, 2023
Dec. 31, 2023
Operating Lease [Line Items]          
Increase lease liability   $ 47,986      
Operating lease     $ 39,741 $ 31,630  
Security deposit     $ 10,773   $ 10,773
Discount rate of lease liability   11.50%      
Percentage of discount rate   8.00%      
Remaining lease term     1 year 2 months 1 day   1 year 5 months 1 day
Minimum [Member]          
Operating Lease [Line Items]          
Rent increased $ 10,773        
Maximum [Member]          
Operating Lease [Line Items]          
Rent increased $ 13,477        
v3.24.1.1.u2
Operating Lease (Details) - Schedule of Lease Cost - USD ($)
 3 Months Ended
Mar. 31, 2024
Mar. 31, 2023
Schedule of Lease Cost [Abstract]    
Office space, recorded in office and administration $ 25,975 $ 22,176
Lab space, recorded in research and development 9,453 7,299
Lab space, capitalized to production of inventory 4,313 2,155
Operating lease $ 39,741 $ 31,630
v3.24.1.1.u2
Operating Lease (Details) - Schedule of Future Minimum Lease Payments - USD ($)
Mar. 31, 2024
Dec. 31, 2023
Schedule of Future Minimum Lease Payments [Abstract]    
2024 $ 121,291  
2025 67,384  
Thereafter  
Total lease payment 188,675  
Less: Imputed interest (12,896)  
Operating lease liability 175,779  
Operating lease lability – current 149,208 $ 145,000
Operating lease lability – non-current $ 26,571 $ 65,489
v3.24.1.1.u2
Accounts Payable and Accrued Liabilities (Details) - Schedule of Accounts Payable and Accrued Liabilities - USD ($)
Mar. 31, 2024
Dec. 31, 2023
Schedule of Accounts Payable and Accrued Liabilities [Abstract]    
Accounts payable $ 395,249 $ 596,147
Accrued liabilities 133,573 73,228
Total $ 528,822 $ 669,375
v3.24.1.1.u2
Consideration Payable (Details)
Jan. 15, 2024
USD ($)
Consideration payable [Abstract]  
Fair value of payments $ 950,000
Fair value of the consideration payable 950,000
Discount on the consideration payable $ 138,548
v3.24.1.1.u2
Consideration Payable (Details) - Schedule of Consideration Payable - Consideration Payable [Member]
 3 Months Ended
Mar. 31, 2024
USD ($)
Schedule of Consideration Payable [Line Items]  
Outstanding, December 31, 2023
Additions 1,000,000
Payment (50,000)
Discount 138,548
Accretion expense 18,994
Outstanding, March 31, 2024 830,446
Consideration payable – current 338,889
Consideration payable – non-current $ 491,557
v3.24.1.1.u2
Derivative Liabilities (Details) - USD ($)
 3 Months Ended 12 Months Ended
Nov. 21, 2023
Apr. 28, 2023
Jul. 15, 2022
Mar. 31, 2024
Dec. 31, 2023
Mar. 02, 2023
Derivative Liabilities [Line Items]            
Purchase warrants     $ 231,828      
Warrant exercise price     $ 2.01      
Price per share $ 4          
Expected life of the warrants Nov. 21, 2028 Apr. 27, 2027        
Weighted average life of warrants outstanding       3 years 5 months 15 days 3 years 8 months 15 days  
Derivative liability warrants outstanding   231,828        
Warrant [Member]            
Derivative Liabilities [Line Items]            
Warrant exercise price           $ 3
Warrants issued 75,000          
v3.24.1.1.u2
Derivative Liabilities (Details) - Schedule of Common Stock Purchase Derivative Liability Warrants - Derivative Liabilities [Member] - USD ($)
 3 Months Ended 12 Months Ended
Mar. 31, 2024
Dec. 31, 2023
Dec. 31, 2022
Derivative Liabilities (Details) - Schedule of Common Stock Purchase Derivative Liability Warrants [Line Items]      
Derivative liabilities outstanding, Ending balance $ 94,219 $ 369,158 $ 68,455
Addition of new derivatives during IPO   229,437  
Change in fair value of derivative liabilities $ (274,939) $ 71,266  
v3.24.1.1.u2
Derivative Liabilities (Details) - Schedule of Black-Scholes Option Pricing Model - Black-Scholes Option Pricing Model [Member]
 3 Months Ended
Dec. 31, 2023
Nov. 21, 2023
Dec. 31, 2022
Jul. 15, 2022
Mar. 31, 2024
Derivative Liabilities (Details) - Schedule of Black-Scholes Option Pricing Model [Line Items]          
Risk-free interest rate   4.41% 4.73% 3.12%  
Expected life [1]   5 years 9 months 7 months 6 days  
Expected dividend rate 0.00% 0.00% 0.00% 0.00% 0.00%
Expected volatility 100.00% 100.00% 100.00% 100.00% 100.00%
Minimum [Member]          
Derivative Liabilities (Details) - Schedule of Black-Scholes Option Pricing Model [Line Items]          
Risk-free interest rate 3.84%       4.21%
Expected life [1] 3 years 3 months 25 days       3 years 25 days
Maximum [Member]          
Derivative Liabilities (Details) - Schedule of Black-Scholes Option Pricing Model [Line Items]          
Risk-free interest rate 4.01%       4.40%
Expected life [1] 4 years 10 months 24 days       4 years 7 months 24 days
[1] On April 28, 2023, the Company amended the warrant agreements for the 231,828 derivative liability warrants outstanding. The amendment removed the clause to automatically convert warrants to shares on IPO date and all warrants were given an expiry date of April 27, 2027. This led to an increase in the expected life input in the Black-Scholes model as of December 31, 2023, compared to December 31, 2022, when the Company used the expected IPO date to calculate the expected life of the warrants.
v3.24.1.1.u2
Derivative Liabilities (Details) - Schedule of Derivative Liability Warrants Outstanding - Warrant [Member]
 3 Months Ended
Mar. 31, 2024
$ / shares
shares
Derivative Liabilities (Details) - Schedule of Derivative Liability Warrants Outstanding [Line Items]  
Outstanding | shares 306,828
Weighted average exercise price | $ / shares $ 2.49
April 27, 2027 [Member]  
Derivative Liabilities (Details) - Schedule of Derivative Liability Warrants Outstanding [Line Items]  
Outstanding | shares 75,840
Expiry date Apr. 27, 2027 [1]
Weighted average exercise price | $ / shares $ 2.01
April 27, 2027 [Member]  
Derivative Liabilities (Details) - Schedule of Derivative Liability Warrants Outstanding [Line Items]  
Outstanding | shares 63,037
Expiry date Apr. 27, 2027 [1]
Weighted average exercise price | $ / shares $ 2.01
April 27, 2027 [Member]  
Derivative Liabilities (Details) - Schedule of Derivative Liability Warrants Outstanding [Line Items]  
Outstanding | shares 80,388
Expiry date Apr. 27, 2027 [1]
Weighted average exercise price | $ / shares $ 2.01
April 27, 2027 [Member]  
Derivative Liabilities (Details) - Schedule of Derivative Liability Warrants Outstanding [Line Items]  
Outstanding | shares 12,563
Expiry date Apr. 27, 2027 [1]
Weighted average exercise price | $ / shares $ 2.01
November 21, 2028 [Member]  
Derivative Liabilities (Details) - Schedule of Derivative Liability Warrants Outstanding [Line Items]  
Outstanding | shares 75,000
Expiry date Nov. 21, 2028 [1]
Weighted average exercise price | $ / shares $ 4
[1] On April 28, 2023, the Company amended the warrant agreements for the 231,828 derivative liability warrants outstanding. The amendment removed the clause to automatically convert warrants to shares on IPO date and all warrants were given an expiry date of April 27, 2027. This led to an increase in the expected life input in the Black-Scholes model as of December 31, 2023, compared to December 31, 2022, when the Company used the expected IPO date to calculate the expected life of the warrants.
v3.24.1.1.u2
Equity (Details) - USD ($)
 3 Months Ended 12 Months Ended
Mar. 06, 2024
Jan. 01, 2024
Mar. 02, 2023
Feb. 01, 2023
Jan. 06, 2023
Mar. 31, 2024
Mar. 31, 2023
Dec. 31, 2023
Jul. 15, 2022
Equity [Line Items]                  
Common stock, shares authorized           300,000,000   300,000,000  
Par value (in Dollars per share)           $ 0.0001   $ 0.0001  
Common stock, shares issued           17,329,615   17,329,615  
Common stock, shares outstanding           17,329,615   17,329,615  
Stock options, shares         62,500        
Exercise price per share (in Dollars per share) $ 1     $ 5 $ 0.6        
Common stock, value (in Dollars)         $ 37,500 $ 1,733   $ 1,733  
Stock options value (in Dollars) $ 52,845 $ 16,178   $ 10,767          
Number of common stock purchase warrants     250,000            
Common stock purchase (in Dollars)     $ 750,000            
Exercisable price (in Dollars per share)                 $ 2.01
Warrants outstanding term           2 years 6 months 21 days    
Granted stock options 80,000 12,500   10,000          
Contractual life   10 years              
Exercise price (in Dollars per share)   $ 5              
Contractual life       10 years          
Share based compensation expense (in Dollars)           $ 55,339 $ 75,161    
Equity interest [Member]                  
Equity [Line Items]                  
Equity interest     50.00%            
Warrant [Member]                  
Equity [Line Items]                  
Common stock, shares issued     250,000            
Number of common stock purchase warrants     250,000            
Exercisable price (in Dollars per share)     $ 3            
Black-Scholes Option Pricing Model [Member]                  
Equity [Line Items]                  
Vesting percentage   25.00%   25.00%          
Percentage of option vesting for remaining period   75.00%   75.00%          
Independent Directors [Member]                  
Equity [Line Items]                  
Vesting percentage 25.00%                
Percentage of option vesting for remaining period 75.00%                
Stock Options [Member]                  
Equity [Line Items]                  
Number of shares allocated           1,734,188   1,734,188  
Office Equipment [Member]                  
Equity [Line Items]                  
Share based compensation expense (in Dollars)           $ 53,929 71,901    
Research and Development Expense [Member]                  
Equity [Line Items]                  
Share based compensation expense (in Dollars)           $ 1,410 $ 3,260    
Common Stock [Member]                  
Equity [Line Items]                  
Common stock, shares authorized           300,000,000   300,000,000  
Par value (in Dollars per share)           $ 0.0001   $ 0.0001  
Common stock, shares issued     250,000   62,500        
Stock options value (in Dollars)         $ 6        
Common stock purchase (in Dollars)     $ 25            
Preferred stock, shares outstanding              
Preferred stock, shares issued              
Additional Paid-in Capital [Member]                  
Equity [Line Items]                  
Stock options value (in Dollars)         $ 37,494        
Common stock purchase (in Dollars)     $ 749,975            
Preferred Stock [Member]                  
Equity [Line Items]                  
Preferred stock shares authorized           75,000,000   75,000,000  
Series A preferred stock, par value (in Dollars per share)           $ 0.0001   $ 0.0001  
Series seed 1 preferred stock [Member]                  
Equity [Line Items]                  
Warrants outstanding term           7 years 8 months 8 days   7 years 10 months 2 days  
v3.24.1.1.u2
Equity (Details) - Schedule of Equity Warrants - Warrants [Member]
 12 Months Ended
Dec. 31, 2023
$ / shares
shares
Class of Warrant or Right [Line Items]  
Outstanding | shares 349,998
Weighted average exercise price | $ / shares $ 3
August 28 2026 [Member]  
Class of Warrant or Right [Line Items]  
Outstanding | shares 250,000
Expiry date Aug. 28, 2026
Weighted average exercise price | $ / shares $ 3
March 12 2027 [Member]  
Class of Warrant or Right [Line Items]  
Outstanding | shares 99,998
Expiry date Mar. 12, 2027
Weighted average exercise price | $ / shares $ 3
v3.24.1.1.u2
Equity (Details) - Schedule of Black-Scholes Option Pricing Model
 3 Months Ended 12 Months Ended
Mar. 31, 2024
Dec. 31, 2023
Equity (Details) - Schedule of Black-Scholes Option Pricing Model [Line Items]    
Expected life 10 years 10 years
Expected dividend rate 0.00% 0.00%
Expected volatility 100.00% 100.00%
Forfeiture rate 0.00% 0.00%
Minimum [Member]    
Equity (Details) - Schedule of Black-Scholes Option Pricing Model [Line Items]    
Risk-free interest rate 3.95% 3.39%
Maximum [Member]    
Equity (Details) - Schedule of Black-Scholes Option Pricing Model [Line Items]    
Risk-free interest rate 4.19% 3.86%
v3.24.1.1.u2
Equity (Details) - Schedule of Stock Options - Stock Options [Member] - $ / shares
 3 Months Ended 12 Months Ended
Mar. 31, 2024
Dec. 31, 2023
Equity (Details) - Schedule of Stock Options [Line Items]    
Outstanding, Number of stock options beginning 1,523,084 1,366,167
Outstanding, Weighted average exercise price beginning $ 1.71 $ 1.08
Outstanding, Number of stock options ending 1,557,251 1,523,084
Outstanding, Weighted average exercise price ending $ 1.57 $ 1.71
Granted, Number of stock options 92,500 234,000
Granted, Weighted average exercise price $ 1.54 $ 5
Forfeited, Number of stock options (58,333) (14,583)
Forfeited, Weighted average exercise price $ 5 $ 0.6
Exercised, Number of stock options   (62,500)
Exercised, Weighted average exercise price   $ 0.6
v3.24.1.1.u2
Equity (Details) - Schedule of Right To Purchase One Common Stock Option Held - Common Stock [Member]
 3 Months Ended
Mar. 31, 2024
$ / shares
shares
Equity (Details) - Schedule of Right To Purchase One Common Stock Option Held [Line Items]  
Outstanding 1,557,251
Vested 894,016
Weighted average exercise price ($) (in Dollars per share) | $ / shares $ 1
Stock Option One [Member]  
Equity (Details) - Schedule of Right To Purchase One Common Stock Option Held [Line Items]  
Outstanding 841,667
Vested 666,327
Expiry date Feb. 08, 2031
Weighted average exercise price ($) (in Dollars per share) | $ / shares $ 0.6
Stock Option Two [Member]  
Equity (Details) - Schedule of Right To Purchase One Common Stock Option Held [Line Items]  
Outstanding 35,417
Vested 38,543
Expiry date Feb. 27, 2031
Weighted average exercise price ($) (in Dollars per share) | $ / shares $ 0.6
Stock Option Three [Member]  
Equity (Details) - Schedule of Right To Purchase One Common Stock Option Held [Line Items]  
Outstanding 45,000
Vested 21,563
Expiry date Apr. 25, 2032
Weighted average exercise price ($) (in Dollars per share) | $ / shares $ 0.6
Stock Option Four [Member]  
Equity (Details) - Schedule of Right To Purchase One Common Stock Option Held [Line Items]  
Outstanding 16,000
Vested 7,000
Expiry date Jun. 01, 2032
Weighted average exercise price ($) (in Dollars per share) | $ / shares $ 1.34
Stock Option Five [Member]  
Equity (Details) - Schedule of Right To Purchase One Common Stock Option Held [Line Items]  
Outstanding 110,000
Vested 45,833
Expiry date Jul. 01, 2032
Weighted average exercise price ($) (in Dollars per share) | $ / shares $ 1.34
Stock Option Six [Member]  
Equity (Details) - Schedule of Right To Purchase One Common Stock Option Held [Line Items]  
Outstanding 100,000
Vested 39,583
Expiry date Aug. 08, 2032
Weighted average exercise price ($) (in Dollars per share) | $ / shares $ 1.34
Stock Option Seven [Member]  
Equity (Details) - Schedule of Right To Purchase One Common Stock Option Held [Line Items]  
Outstanding 16,000
Vested 6,000
Expiry date Sep. 30, 2032
Weighted average exercise price ($) (in Dollars per share) | $ / shares $ 1.34
Stock Option Eight [Member]  
Equity (Details) - Schedule of Right To Purchase One Common Stock Option Held [Line Items]  
Outstanding 80,000
Vested 30,000
Expiry date Sep. 30, 2032
Weighted average exercise price ($) (in Dollars per share) | $ / shares $ 5
Stock Option Nine [Member]  
Equity (Details) - Schedule of Right To Purchase One Common Stock Option Held [Line Items]  
Outstanding 10,000
Vested 3,542
Expiry date Oct. 15, 2032
Weighted average exercise price ($) (in Dollars per share) | $ / shares $ 1.34
Stock Option Ten [Member]  
Equity (Details) - Schedule of Right To Purchase One Common Stock Option Held [Line Items]  
Outstanding 10,000
Vested 3,333
Expiry date Nov. 01, 2032
Weighted average exercise price ($) (in Dollars per share) | $ / shares $ 1.34
Stock Option Eleven [Member]  
Equity (Details) - Schedule of Right To Purchase One Common Stock Option Held [Line Items]  
Outstanding 5,000
Vested 1,667
Expiry date Nov. 01, 2032
Weighted average exercise price ($) (in Dollars per share) | $ / shares $ 5
Stock Option Twelve [Member]  
Equity (Details) - Schedule of Right To Purchase One Common Stock Option Held [Line Items]  
Outstanding 20,000
Vested 6,250
Expiry date Dec. 12, 2032
Weighted average exercise price ($) (in Dollars per share) | $ / shares $ 5
Stock Option Thirteen [Member]  
Equity (Details) - Schedule of Right To Purchase One Common Stock Option Held [Line Items]  
Outstanding 10,000
Vested 2,708
Expiry date Feb. 01, 2033
Weighted average exercise price ($) (in Dollars per share) | $ / shares $ 5
Stock Option Fourteen [Member]  
Equity (Details) - Schedule of Right To Purchase One Common Stock Option Held [Line Items]  
Outstanding 50,000
Vested
Expiry date Apr. 16, 2033
Weighted average exercise price ($) (in Dollars per share) | $ / shares $ 5
Stock Option Fifteen [Member]  
Equity (Details) - Schedule of Right To Purchase One Common Stock Option Held [Line Items]  
Outstanding 80,000
Vested 21,667
Expiry date May 01, 2033
Weighted average exercise price ($) (in Dollars per share) | $ / shares $ 5
Stock Option Sixteen [Member]  
Equity (Details) - Schedule of Right To Purchase One Common Stock Option Held [Line Items]  
Outstanding 21,667
Vested
Expiry date Jan. 25, 2033
Weighted average exercise price ($) (in Dollars per share) | $ / shares $ 5
Stock Option Seventeen [Member]  
Equity (Details) - Schedule of Right To Purchase One Common Stock Option Held [Line Items]  
Outstanding 10,000
Vested
Expiry date Jun. 27, 2033
Weighted average exercise price ($) (in Dollars per share) | $ / shares $ 5
Stock Option Eighteen [Member]  
Equity (Details) - Schedule of Right To Purchase One Common Stock Option Held [Line Items]  
Outstanding 2,500
Vested
Expiry date Jul. 10, 2033
Weighted average exercise price ($) (in Dollars per share) | $ / shares $ 5
Stock Option Nineteen [Member]  
Equity (Details) - Schedule of Right To Purchase One Common Stock Option Held [Line Items]  
Outstanding 1,500
Vested
Expiry date Jul. 01, 2033
Weighted average exercise price ($) (in Dollars per share) | $ / shares $ 5
Stock Option Twenty [Member]  
Equity (Details) - Schedule of Right To Purchase One Common Stock Option Held [Line Items]  
Outstanding 5,000
Vested
Expiry date Jan. 17, 2024
Weighted average exercise price ($) (in Dollars per share) | $ / shares $ 5
Stock Option Twenty One [Member]  
Equity (Details) - Schedule of Right To Purchase One Common Stock Option Held [Line Items]  
Outstanding 2,500
Vested
Expiry date Jan. 17, 2024
Weighted average exercise price ($) (in Dollars per share) | $ / shares $ 5
Stock Option Twenty Two [Member]  
Equity (Details) - Schedule of Right To Purchase One Common Stock Option Held [Line Items]  
Outstanding 5,000
Vested
Expiry date Feb. 12, 2024
Weighted average exercise price ($) (in Dollars per share) | $ / shares $ 5
Stock Option Twenty Three [Member]  
Equity (Details) - Schedule of Right To Purchase One Common Stock Option Held [Line Items]  
Outstanding 80,000
Vested
Expiry date Mar. 05, 2024
Weighted average exercise price ($) (in Dollars per share) | $ / shares $ 1
v3.24.1.1.u2
Related Party Transactions (Details) - USD ($)
 3 Months Ended 12 Months Ended
Mar. 01, 2024
Mar. 31, 2024
Mar. 31, 2023
Dec. 31, 2023
Related Party Transactions [Line Items]        
Percentage of authority control   10.00%    
Consulting fees      
Stock options granted (in Shares) 80,000      
Contractual life 10 years      
Stock options value $ 45,986      
Vesting percentage 25.00%      
Stock Issued During Period, Shares, Restricted Stock Award, Forfeited (in Shares)   58,333    
Share based compensation expense   $ 55,339 $ 75,161  
Unsecured amount   22,195   22,455
Northstrive Companies Inc. [Member]        
Related Party Transactions [Line Items]        
Consulting fees     30,000 30,000
Due to related party   38,500   34,378
Jordan Plews [Member]        
Related Party Transactions [Line Items]        
Amount of salary paid   56,454 55,021  
Employer taxes   6,454 4,826  
Four Related Parties [Member]        
Related Party Transactions [Line Items]        
Stock options granted (in Shares) 1      
GB Capital Ltd [Member]        
Related Party Transactions [Line Items]        
Consulting fees   50,833 21,250  
Braeden Lichti [Member]        
Related Party Transactions [Line Items]        
Consulting fees   4,272   879
Share based compensation expense   22,195   22,455
Graydon Bensler [Member]        
Related Party Transactions [Line Items]        
Consulting fees   15,143   $ 15,143
Jordan Plews [Member]        
Related Party Transactions [Line Items]        
Consulting fees      
Black-Scholes Option Pricing Model [Member]        
Related Party Transactions [Line Items]        
Percentage of option vesting 75.00%      
Brenda Buechler [Member]        
Related Party Transactions [Line Items]        
Amount of salary paid   77,669 52,326  
Employer taxes   8,086 4,826  
Christoph Kraneiss [Member]        
Related Party Transactions [Line Items]        
Amount of salary paid   72,892 72,792  
Employer taxes   $ 6,225 $ 4,093  
v3.24.1.1.u2
Related Party Transactions (Details) - Schedule of Remuneration of Directors and Key Management Personnel - Directors and Key Management Personnel [Member] - USD ($)
 3 Months Ended
Mar. 31, 2024
Mar. 31, 2023
Related Party Transactions (Details) - Schedule of Remuneration of Directors and Key Management Personnel [Line Items]    
Consulting fees $ 80,833 $ 51,250
Salaries 207,016 156,439
Share-based compensation 22,276 46,986
Total $ 310,125 $ 254,675
v3.24.1.1.u2
Related Party Transactions (Details) - Schedule of Fair Value of the Options Granted to Each Individual and the Related Expense - USD ($)
 3 Months Ended
Mar. 31, 2024
Mar. 31, 2023
Fair Value, Option, Quantitative Disclosures [Line Items]    
Individual and the related expense $ 22,276 $ 46,986
Grant date fair value of stock options 1,049,898  
Braeden Lichti, Former Chairman and President [Member]    
Fair Value, Option, Quantitative Disclosures [Line Items]    
Individual and the related expense 878 2,138
Grant date fair value of stock options 50,995  
Graydon Bensler, CFO and Director [Member]    
Fair Value, Option, Quantitative Disclosures [Line Items]    
Individual and the related expense 878 2,138
Grant date fair value of stock options 50,995  
Jordan Plews, CEO and Director [Member]    
Fair Value, Option, Quantitative Disclosures [Line Items]    
Individual and the related expense 878 2,138
Grant date fair value of stock options 50,995  
Tim Sayed, Chief Medical Officer [Member]    
Fair Value, Option, Quantitative Disclosures [Line Items]    
Individual and the related expense 878 2,138
Grant date fair value of stock options 50,995  
Jeffrey Parry, Director [Member]    
Fair Value, Option, Quantitative Disclosures [Line Items]    
Individual and the related expense 7,243
Grant date fair value of stock options 107,669  
Crystal Muilenburg, Former Director [Member]    
Fair Value, Option, Quantitative Disclosures [Line Items]    
Individual and the related expense [1] (41,668)
Grant date fair value of stock options [1] 210,245  
Julie Daley, Director [Member]    
Fair Value, Option, Quantitative Disclosures [Line Items]    
Individual and the related expense 35,142
Grant date fair value of stock options 210,245  
George Kovalyov, Director [Member]    
Fair Value, Option, Quantitative Disclosures [Line Items]    
Individual and the related expense 2,556  
Grant date fair value of stock options 52,845  
Brenda Buechler, Chief Marketing Officer [Member]    
Fair Value, Option, Quantitative Disclosures [Line Items]    
Individual and the related expense 8,096 20,840
Grant date fair value of stock options 143,671  
Christoph Kraneiss, Chief Commercial Officer [Member]    
Fair Value, Option, Quantitative Disclosures [Line Items]    
Individual and the related expense 7,395 $ 17,594
Grant date fair value of stock options $ 121,243  
[1] 58,333 options were forfeited in the three months ended March 31, 2024
v3.24.1.1.u2
Concentrations (Details) - USD ($)
 3 Months Ended
Mar. 31, 2024
Mar. 31, 2023
Dec. 31, 2023
Concentrations [Line Items]      
Customer representing revenue $ 67,500    
Customer revenue 25,500    
Largest Customer [Member]      
Concentrations [Line Items]      
Receivables $ 49  
Customer Concentration Risk [Member] | Largest Customer [Member] | Revenue Benchmark [Member]      
Concentrations [Line Items]      
Revenue percentage 11.00% 18.00%  
Supplier Concentration Risk [Member] | Revenue Benchmark [Member] | Three Suppliers [Member]      
Concentrations [Line Items]      
Revenue percentage 66.00% 70.00%  
v3.24.1.1.u2
Concentrations (Details) - Schedule of Suppliers Percentage of Cost - Supplier Concentration Risk [Member] - Accounts Payable [Member]
 3 Months Ended
Mar. 31, 2024
Mar. 31, 2023
Supplier 1 [Member]    
Schedule of Suppliers Percentage of Cost [Line Items]    
Total 33.00% 41.00%
Supplier 2 [Member]    
Schedule of Suppliers Percentage of Cost [Line Items]    
Total 18.00% 18.00%
Supplier 3 [Member]    
Schedule of Suppliers Percentage of Cost [Line Items]    
Total 15.00% 11.00%
Total Suppliers [Member]    
Schedule of Suppliers Percentage of Cost [Line Items]    
Total 66.00% 70.00%
v3.24.1.1.u2
Subsequent Events (Details) - USD ($)
 3 Months Ended
May 03, 2024
Apr. 30, 2024
Mar. 31, 2024
Mar. 31, 2023
Dec. 31, 2023
Subsequent Events [Line Items]          
Upfront fee   $ 400,000      
Common stock     17,329,615   17,329,615
Consultant fee     $ 179,922 $ 137,797  
Subsequent Event [Member]          
Subsequent Events [Line Items]          
Common stock 612,500 950,000      
Consultant fee $ 15,000        
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