# EDGAR Filing Document

**Accession Number:** 0001840563
**File Stem:** 0001213900-26-055405
**Filing Date:** 2026-5
**Character Count:** 262007
**Document Hash:** 799fbc567bbc3eb45ed8583cdf8f19bb
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001213900-26-055405.hdr.sgml**: 20260513

**ACCESSION NUMBER**: 0001213900-26-055405

**CONFORMED SUBMISSION TYPE**: 8-K

**PUBLIC DOCUMENT COUNT**: 16

**CONFORMED PERIOD OF REPORT**: 20260511

**ITEM INFORMATION**: Entry into a Material Definitive Agreement

**ITEM INFORMATION**: Completion of Acquisition or Disposition of Assets

**ITEM INFORMATION**: Regulation FD Disclosure

**ITEM INFORMATION**: Financial Statements and Exhibits

**FILED AS OF DATE**: 20260513

**DATE AS OF CHANGE**: 20260513

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** PMGC Holdings Inc.
- **CENTRAL INDEX KEY:** 0001840563
- **STANDARD INDUSTRIAL CLASSIFICATION:** PHARMACEUTICAL PREPARATIONS [2834]
- **ORGANIZATION NAME:** 03 Life Sciences
- **EIN:** 851399981
- **STATE OF INCORPORATION:** DE
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 8-K
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-41875
- **FILM NUMBER:** 26970768

**BUSINESS ADDRESS:**
- **STREET 1:** 120 NEWPORT CENTER DRIVE
- **CITY:** NEWPORT BEACH
- **STATE:** CA
- **ZIP:** 92660
- **BUSINESS PHONE:** 888-445-4886

**MAIL ADDRESS:**
- **STREET 1:** 120 NEWPORT CENTER DRIVE
- **CITY:** NEWPORT BEACH
- **STATE:** CA
- **ZIP:** 92660

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** Elevai Labs Inc.
- **DATE OF NAME CHANGE:** 20211207

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** Reactive Medical Labs Inc.
- **DATE OF NAME CHANGE:** 20210114

?xml version='1.0' encoding='ASCII'?

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**WASHINGTON, D.C. 20549**

**FORM 8-K**

**CURRENT REPORT**

**PURSUANT TO SECTION 13 OR 15(d) OF**

**THE SECURITIES EXCHANGE ACT OF 1934**

**Date of Report (Date of earliest event reported): May 11, 2026**

---

| |
|:---|
| **PMGC Holdings Inc.** |
| (Exact name of registrant as specified in its charter) |

---

---

| | | |
|:---|:---|:---|
| **Nevada** | **001-41875** | **33-2382547** |
| (State or other jurisdiction<br> of incorporation) | (Commission File Number) | (I.R.S. Employer<br> Identification No.) |

---

---

| | |
|:---|:---|
| **c/o 120 Newport Center Drive**<br> **Newport Beach, CA** | **92660** |
| (Address of principal executive offices) | (Zip Code) |

---

Registrant's telephone number, including area code: **(888) 445-4886**

**<u>N/A</u>**

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4© under the Exchange Act (17 CFR 240.13e-4©)

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

---

| | |
|:---|:---|
| **Title of each class** | **Name of each exchange on which registered** |
| Common Stock, $0.0001 par value ELAB | The Nasdaq Stock Market LLC |

---

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

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. ☐

**Item 1.01 Entry into a Material Definitive Agreement.**

The information set forth under Item 2.01 of this Current Report on Form 8-K ("Form 8-K) is incorporated herein by reference.

**Item 2.01. Completion of Acquisition or Disposition of Assets.**

On May 12, 2026, PMGC Holdings Inc. (the "Company") completed the acquisition (the "Acquisition") of 100% of the issued and outstanding shares (the "Shares") of A&B Aerospace, Inc., a California corporation (the "Target"), pursuant to a Stock Purchase Agreement dated as of May 11, 2026 (the "Purchase Agreement"), by and between the Company, the Target, and stockholders of the Target owning the Shares (such stockholders, collectively, the "Sellers," and, together with the Company and the Target, the "Parties").

The Acquisition closed on May 12, 2026 (consummation of the Acquisition, "Closing" and such date, "Closing Date"). The purchase consideration for the Shares consisted of: (i) $4,500,000 in cash, of which $4,275,000 was paid to the Sellers at Closing (the "Closing Purchase Price") and $225,000 was retained by the Company at Closing as an indemnification holdback (the "Indemnification Holdback") as to the Litigation (as defined below); plus (ii) the Estimated Closing Cash Balance (as defined below), which the Sellers are required under Purchase Agreement to use commercially best efforts to cause to be at least $300,000 at the Closing; plus (iii) the amount, if any, by which the Estimated Net Working Capital (as defined below) is greater than the Net Working Capital Target (as defined below), less (iv) the amount, if any, by which the Estimated Net Working Capital is less than the Net Working Capital Target (as defined below). The Purchase Agreement provides for a post-Closing true-up consisting of: (1) a Closing Cash Balance Adjustment equal to the Final Cash Balance (as defined below) minus the Estimated Closing Cash Balance (as defined below), and (B) a Net Working Capital Adjustment Amount equal to the Final Net Working Capital minus the Estimated Net Working Capital, with the sum of such two amounts (the "Final Adjustment Amount") settled in cash between the Company and the Sellers within five Business Days after final determination.

After Closing, the Target will continue operating its business at the Target's existing facility, pursuant to a commercial lease agreement entered into at Closing between the Target and certain lessors (the "Lease Agreement"). The President of the Target prior to Closing will continue to serve as President of the Target following the Closing, pursuant to an employment agreement entered into at Closing between such individual and the Target. Under the Purchase Agreement, the Sellers agreed to remain available to the Company for a period of six (6) months after the Closing Date to provide reasonable transition services, including assistance with required financial audits, operational knowledge transfer, and other reasonable matters for post-Closing transition. The Sellers also agreed to a three (3)-year non-competition provision in the Purchase Agreement as to the information technology packaging business the State of California and commencing on the Closing Date. The Sellers also agreed to a customary non-solicitation provision.

The Parties agreed to certain customary closing conditions and representations and warranties. The Parties agreed to certain customary indemnification provisions, and the Sellers agreed to indemnify the Company for, among other things: (i) all Taxes of the Target attributable to Pre-Closing Tax Periods (as defined below), (ii) Losses related to any employee being ineligible or unauthorized to work in the United States as of the Closing Date, and (iii) any claim with respect to a certain pending litigation of the Target.

"Balance Sheet" means the balance sheet of the Target as of December 31, 2025.

"Closing Cash Balance Adjustment" means the Final Cash Balance minus the Estimated Closing Cash Balance.

"Closing Net Working Capital" means the calculation of the Target's Net Working Capital as of the Closing, as set forth in the Closing Statement.

"Closing Statement" means a closing statement prepared by the Company and delivered to the Sellers within 90 days after the Closing, setting forth the Closing Net Working Capital and the Final Cash Balance.

"Estimated Closing Balance Sheet" means the balance sheet of the Target as of the Closing, prepared on a basis consistent with the preparation of the Balance Sheet.

"Estimated Closing Cash Balance" means the calculated cash and cash equivalents of the Target as of the Closing.

"Estimated Net Working Capital" means the calculated net working capital of the Target based on the Estimated Closing Balance Sheet.

"Final Cash Balance" means the Closing Cash Balance as set forth in the Closing Statement, as finally determined in accordance with Section 1.04(c) of the Purchase Agreement.

"Net Working Capital Target" means an amount equal to $855,669.

"Pre-Closing Tax Period" means any taxable period ending on or before the Closing Date and, with respect to any taxable period beginning before and ending after the Closing Date, the portion of such taxable period ending on and including the Closing Date.

Capitalized terms used but not otherwise defined in this Form 8-K shall have the respective meanings ascribed thereto by the Purchase Agreement, filed in this Form 8-K as Exhibit 10.1. The foregoing summary of the transactions contemplated by the Purchase Agreement do not purport to be complete and are subject to, and qualified in their entirety by, the full text of the Purchase Agreement filed herein as Exhibit 10.1.

**Item 7.01 Regulation FD Disclosure.**

On May 13, 2026, the Company issued a press release, a copy of which is furnished as Exhibit 99.4 to this Form 8-K.

The information furnished pursuant to this Item 7.01, including Exhibit 99.1 shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities of that section, and shall not be deemed to be incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

**Item 9.01. Financial Statements and Exhibits.**

(a) Financial Statements of Business Acquired.

The unaudited financial statements of A&B Aerospace, Inc. as of the nine months ended February 28, 2026 and February 28, 2025 are filed herein as Exhibit 99.1 and incorporated herein by reference into this Item 9.01(a). The audited financial statements of A&B Aerospace, Inc. as of the fiscal year ended May 31, 2025 and May 31, 2024 are filed herein as Exhibit 99.2 and incorporated herein by reference into this Item 9.01(a).

(b) Pro Forma Financial Information.

The Unaudited Pro Forma Condensed Combined Balance Sheet of PMGC Holdings Inc. as of December 31, 2025 and the Unaudited Pro Forma Condensed Combined Statements of Operations of PMGC Holdings Inc. for the year ended December 31, 2025 are filed herein as Exhibit 99.3 and incorporated herein by reference into this Item 9.01(b).

(d) Exhibits.

The following exhibits are being filed herewith:

---

| | |
|:---|:---|
| **Exhibit No.** | **Description** |
| 10.1\*+ | [Stock Purchase Agreement dated as of May 11, 2026, by and between PMGC Holdings Inc., A&B Aerospace, Inc., and the stockholders of A&B Aerospace, Inc.](ea029009801ex10-1.htm) |
| 99.1 | [Unaudited financial statements of A&B Aerospace, Inc. as of the nine months ended February 28, 2026 and February 28, 2025.](ea029009801ex99-1.htm) |
| 99.2 | [Audited financial statements of A&B Aerospace, Inc. as of the fiscal year ended May 31, 2025 and May 31, 2024](ea029009801ex99-2.htm) |
| 99.3 | [Unaudited Pro Forma Condensed Combined Balance Sheet of PMGC Holdings Inc. for the year ended December 31, 2025 and Unaudited Pro Forma Condensed Combined Statements of Operations for the year ended December 31, 2025.](ea029009801ex99-3.htm) |
| 99.4 | [Press release dated May 13, 2026.](ea029009801ex99-4.htm) |
| 104 | Cover Page Interactive Data File (embedded with the Inline XBRL document). |

---

---

| | |
|:---|:---|
| \* | The schedules, exhibits or similar attachments have been omitted from this filing pursuant to Item 601(b)(2) of Regulation S-K. The Company will furnish copies of any schedules, exhibits or similar attachments to the Securities and Exchange Commission upon request. |
| + | Portions of this exhibit have been redacted. |

---

**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 hereunto duly authorized.

Date: May 13, 2026

---

| | |
|:---|:---|
| PMGC Holdings, Inc. | PMGC Holdings, Inc. |
| By: | /s/ Graydon Bensler |
| Name: | Graydon Bensler |
| Title: | Chief Executive Officer, President and Director |

---

## Exhibit 10.1

**Exhibit 10.1**

PORTIONS OF THIS EXHIBIT HAVE BEEN REDACTED BECAUSE IT IS NOT MATERIAL AND OF A TYPE THAT PMGC HOLDINGS INC. TREATS AS PRIVATE OR CONFIDENTIAL. SUCH REDACTED PORTIONS ARE INDICATED WITH "[\*\*\*]."

**STOCK PURCHASE AGREEMENT**

between

**[\*\*\*], [\*\*\*], A&B AEROSPACE, INC.,**

and

**PMGC Holdings Inc.**

dated as of

May 11, 2026

**STOCK PURCHASE AGREEMENT**

This Stock Purchase Agreement (this "**Agreement**"), dated as of [\*], 2026, is entered into by and among A&B Aerospace, Inc., a California corporation (the "**Company**"), [\*\*\*], and [\*\*\*], constituting all of the stockholders of the Company (collectively, "**Sellers**"), and PMGC Holdings Inc., a Nevada corporation ("**Buyer**"). Capitalized terms used in this Agreement have the meanings given to such terms herein, including those set forth in <u>Exhibit A</u> attached hereto.

**RECITALS**

**WHEREAS**, Sellers own 100% of the issued and outstanding shares (the "**Shares**"), of the Company; and

**WHEREAS**, Sellers wish to sell to Buyer, and Buyer wishes to purchase from Sellers, the Shares, subject to the terms and conditions set forth herein.

**NOW, THEREFORE**, in consideration of the mutual covenants and agreements hereinafter set forth and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

**ARTICLE I<br> Purchase and sale**

**Section 1.01 Purchase and Sale.** Subject to the terms and conditions set forth herein, at the Closing, Sellers shall sell to Buyer, and Buyer shall purchase from Sellers, the Shares, free and clear of any mortgage, pledge, lien, charge, security interest, claim, community property interest, option, equitable interest, restriction of any kind (including any restriction on use, voting, transfer, receipt of income, or exercise of any other ownership attribute), or other encumbrance) (each, an "**Encumbrance**"), except for those items set forth in <u>Section 1.01 of the Disclosure Schedules</u>, on a cash-free debt-free basis.

**Section 1.02 Purchase Price.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The aggregate purchase price for the Shares (the "**Purchase Price**") is (1) $4,500,000 in cash, of which $4,275, 0000 is payable to the Sellers in cash at Closing (the "**Closing Purchase Price**"), and $225,000 constituting the Holdback Amount (the "**Indemnification Holdback**"), which shall be retained by Buyer at Closing; plus (2) the Estimated Closing Cash Balance, it being agreed and understood that the Sellers shall use their commercially best efforts to cause the Company to have an Estimated Closing Cash Balance of at least $300,000; plus (3) the amount, if any, by which Estimated Closing Net Working Capital is greater than the Net Working Capital Target less (4) the amount, if any, by which the Estimated Closing Net Working Capital is less than the Net Working Capital Target as described in <u>Section 1.04</u> (the "**Closing Payment**"). The "**Net Working Capital Target**" means an amount equal to $855,669.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Buyer shall pay the Closing Purchase Price to Sellers at the Closing by wire transfer of immediately available funds in accordance with the wire transfer instructions set forth in <u>Section 1.02 of the Disclosure Schedules</u>. The term "**Disclosure Schedules**" means the disclosure schedules, attached hereto and made a part of this Agreement, delivered by Sellers concurrently with the execution, closing, and delivery of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) At Closing, the Buyer will retain the Indemnification Holdback to satisfy the indemnification under <u>Section 7.01(d)</u>. In the event that such indemnification claim is less than the Indemnification Holdback, Buyer shall pay over to the Sellers any remaining amounts of the Indemnification Holdback within ten days of the final adjudication of such claim.

**Section 1.03 Withholding Taxes.** Buyer is entitled to deduct and withhold from the Purchase Price all Taxes that Buyer may be required to deduct and withhold under any provision of Tax Law. All such withheld amounts shall be treated as delivered to Sellers hereunder.

**Section 1.04 Closing Adjustment.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) No later than three (3) Business Days prior to the Closing Date, Sellers shall deliver to Buyer a statement (the "**Estimated Closing Statement**") setting forth a reasonable good faith calculation of an estimate of (i) a balance sheet of the Company as of the Closing prepared on a basis consistent with the preparation of the Balance Sheet (the "**Estimated Closing Balance Sheet**") and (ii) a calculation of the Net Working Capital based on the Estimated Closing Balance Sheet (the "**Estimated Net Working Capital**"). The Estimated Net Working Capital will be calculated as at the Closing Date, and applied on a basis consistent with the accounting, policies, principles, practices, procedures, methodologies, and estimation techniques used in the preparation of the Balance Sheet, and shall include accounts receivable, works in progress, booked but unfulfilled orders, less accounts payable and two payrolls of the Company, all as of the Closing Date, and (iii) a calculation of the Cash of the Company at Closing (the "**Estimated Closing Cash Balance**"). The Parties acknowledge that the Estimated Closing Statement shall be used for purposes of calculating the Closing Payment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Within ninety (90) days after the Closing, Buyer shall prepare and deliver to Sellers a calculation of the Net Working Capital of the Company as of the Closing (the "**Closing Net Working Capital**"), and a calculation of the Cash of the Company as of the Closing (the "**Final Closing Cash Balance**"), collectively, the "**Closing Statement**"). After delivery of the Closing Statement, Buyer shall permit Seller and its accountants reasonable access to the accounting records, work papers and computations used by Buyer in the preparation of the Closing Statement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) If Sellers dispute any amounts reflected on the Closing Statement as delivered by Buyer, Sellers shall so notify Buyer in writing (a "Notice of Dispute") not more than forty-five (45) days after the date Sellers receive the Closing Statement, specifying in reasonable detail all points of disagreement and setting forth Sellers' own calculations of the amounts it claims are proper for each such item in the Closing Statement it disagrees with (any such disagreement hereinafter, a "**Disagreement**"). If Sellers fail to deliver a Notice of Dispute within such forty-five (45)-day period, Sellers shall be deemed to have accepted the Closing Statement (and all amounts and calculations set forth thereon) and the Closing Statement as originally delivered by Buyer (and all such amounts and calculations) shall be final, binding, and non-appealable by the Parties. If a Notice of Dispute is timely delivered, Sellers and Buyer shall negotiate in good faith to resolve any Disagreement (as evidenced by a written agreement between them). Only those items and calculations specifically included in the Notice of Dispute as required herein shall be eligible for inclusion in the Disagreement. If the Disagreement is not resolved by Buyer and Sellers in writing within thirty (30) days after Buyer receives the Notice of Dispute, they shall refer the Disagreement to an independent nationally recognized accounting firm that is mutually agreed to by Buyer and Sellers in writing (the "**Accountant**") for resolution of such Disagreement in accordance with the terms of this Agreement. Buyer and Seller shall instruct the Accountant that the determinations of such firm with respect to any Disagreement shall be rendered within fifteen (15) days after the referral of the Disagreement or as soon thereafter as reasonably possible. The scope of the Accountant's authority to act shall be strictly limited to determining whether the unresolved items that remain in dispute in the Disagreement were prepared in accordance with this Agreement, including the Accounting Principles, and the Accountant shall determine, on such basis, whether and to what extent the Closing Statement requires adjustment. The Accountant's decision shall be based solely on written submissions and presentations by Sellers and Buyer and their respective representatives and not based on any independent review by the Accountant. The Accountant shall act as an expert, not an arbitrator, and shall have authority only to address and calculate values for only those items that remain in dispute in the Disagreement and may not assign a value greater than the greatest value claimed for such item by either Party or smaller than the smallest value for such item claimed by either Party. The determination of the Accountant pursuant to this <u>Section 1.04(c)</u> shall be final and binding on the Parties. The fees, costs and expenses of the Accountant shall be allocated between the Sellers, jointly and severally, on the one hand, and Buyer, on the other hand, in the same proportion that the aggregate amount of the disputed items submitted to the Accountant that is unsuccessfully disputed by each such Party (as finally determined by the Accountant) bears to the total amount of disputed items so submitted; provided, that such fees, costs and expenses shall not include, so long as a Party complies with the procedures of this <u>Section 1.04(c)</u>, the other Party's outside counsel or accounting fees. The Closing Net Working Capital and Closing Cash Balance, each as set forth on the Closing Statement as finally determined in accordance with the terms of this <u>Section 1.04(c)</u>, shall be referred to as the "**Final Net Working Capital**" and the "**Final Cash Balance**" respectively.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) *Final Adjustment Amount*.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) The "**Closing Cash Balance Adjustment**," which may be positive or negative, means the Final Cash Balance minus the Estimated Closing Cash Balance.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) The "**Net Working Capital Adjustment Amount**," which may be positive or negative, means the Final Net Working Capital minus the Estimated Net Working Capital.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) The "**Final Adjustment Amount**", which may be positive or negative, means the Closing Cash Balance Adjustment plus the Net Working Capital Adjustment Amount.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) If the Final Adjustment Amount is a positive number, Seller shall be entitled to receive from Buyer an amount in cash. If the Final Adjustment Amount is a negative number, Buyer shall be entitled to receive from the Seller an amount in cash equal to such amount.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) If either Party is entitled to receive a payment pursuant to <u>Section 1.04(e)</u>, such Party shall, not more than five (5) Business Days after determination of the Final Adjustment Amount, make payment of the value of the Final Adjustment Amount by wire transfer in immediately available funds to the other Party as so directed by such Party.

**ARTICLE II<br> CLOSING**

**Section 2.01 Closing.** The closing of the transactions contemplated by this Agreement (the "**Closing**") shall take place simultaneously with the execution of this Agreement on the date of this Agreement (the "**Closing Date**") remotely by exchange of documents and signatures (or their electronic counterparts).

**Section 2.02 Sellers' Closing Deliverables.** At the Closing, Sellers shall deliver to Buyer the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Share certificates evidencing the Shares, free and clear of all Encumbrances, duly endorsed in blank or accompanied by stock powers or other instruments of transfer duly executed in blank;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) A certificate of the Sellers or a Secretary (or other officer acting in such capacity) of the Seller if an entity certifying: (i) that attached thereto are true and complete copies of all resolutions of the board of directors of the Sellers and its stockholders authorizing the execution, delivery, and performance of this Agreement, and any other agreement, document or instrument entered into or delivered in connection with the transactions contemplated in this Agreement (collectively, the "**Transaction Documents**") to which the Sellers or the Company is a party and the Closing, and that such resolutions are in full force and effect; (ii) the names, titles, and signatures of the officers or other signatories of the Sellers authorized to execute the Transaction Documents; and (iii) that attached thereto are true and complete copies of the governing documents of the Company, including any amendments or restatements thereof, and that such governing documents are in full force and effect;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) A duly executed Lease Agreement between the Company and [\*\*\*] and [\*\*\*];

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) A duly executed Employment Agreement between the Company and [\*\*\*] in substantially the form attached hereto as <u>Exhibit B</u> ("[\*\*\*] **Employment Agreement**");

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Copies of all required consents or approvals;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) Resignations of the directors and officers of the Company, effective as of the Closing Date, *provided, however,* that [\*\*\*] will remain as the President of the Company pursuant to the terms of the [\*\*\*] Employment Agreement; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) A good standing certificate (or its equivalent) for the Company from the secretary of state or similar Governmental Authority of the jurisdiction in which the Company is organized and each jurisdiction where the Company is required to be qualified, registered, or authorized to do business. The term "**Governmental Authority**" means any federal, state, local, or foreign government or political subdivision thereof, or any agency or instrumentality of such government or political subdivision, or any arbitrator, court, or tribunal of competent jurisdiction.

**Section 2.03 Buyer's Deliveries.** At the Closing, Buyer shall deliver the following to Seller:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Closing Purchase Price; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) A certificate of the Secretary (or other officer) of Buyer certifying: (i) that attached thereto are true and complete copies of all resolutions of the board of directors of Buyer authorizing the execution, delivery, and performance of this Agreement and the Transaction Documents to which it is a party and the consummation of the transactions contemplated hereby and thereby, and that such resolutions are in full force and effect; and (ii) the names, titles, and signatures of the officers of Buyer authorized to sign this Agreement and the other Transaction Documents to which it is a party.

**ARTICLE III<br> Representations and warranties of THE SELLERS AND THE COMPANY**

The Sellers, jointly and severally, represent and warrant to Buyer that the statements contained in this <u>ARTICLE III</u> are true and correct as of the date hereof. For purposes of this <u>ARTICLE III</u>, "**Seller's knowledge**," "**knowledge of Seller**," and any similar phrases shall mean the actual knowledge of any Seller and any director or officer of the Company, after due inquiry.

**Section 3.01 Organization and Authority of the Company.** The Company is a corporation duly organized, validly existing, and in good standing under the Laws (as defined in <u>Section 3.05</u>) of California. The Company and the Seller each has full power and authority to enter into this Agreement and the other Transaction Documents to which Company and the Seller is a party, to carry out its obligations hereunder and thereunder, and to consummate the transactions contemplated hereby and thereby. The execution and delivery by the Company and by each Seller of this Agreement and any other Transaction Document to which the Company and such Seller is a party, the performance by the Company and each Seller of its respective obligations hereunder and thereunder, and the consummation by the Company and each Seller of the transactions contemplated hereby and thereby have been duly authorized by all requisite corporate action on the part of the Company and each Seller. This Agreement and each Transaction Document to which Company and each Seller is a party constitute legal, valid, and binding obligations of the Company and such Seller enforceable against Company and such Seller, respectively, in accordance with their respective terms, except as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors' rights generally.

**Section 3.02 Title to Shares.** All of the Shares owned by each Seller are owned of record and beneficially by each such Seller, free and clear of all Encumbrances. Upon the transfer, assignment, and delivery of the Shares and payment therefore in accordance with the terms of this Agreement, Buyer shall own all of the Shares, free and clear of all Encumbrances. Notwithstanding anything herein to the contrary, each Seller makes the representation set forth in this Section 3.02 for himself only and not for any other Seller.

**Section 3.03 Capitalization.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The authorized shares of the Company consist of 5,000 shares, of which 1,000 shares are issued and outstanding and constitute the Shares. All of the Shares have been duly authorized, are validly issued, fully paid, and nonassessable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) All of the Shares were issued in compliance with applicable Laws. None of the Shares were issued in violation of any agreement or commitment to which Seller or the Company is a party or is subject to or in violation of any preemptive or similar rights of any individual, corporation, partnership, joint venture, limited liability company, Governmental Authority, unincorporated organization, trust, association, or other entity (each, a "**Person**").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) There are no outstanding or authorized options, warrants, convertible securities, stock appreciation, phantom stock, profit participation, or other rights, agreements, or commitments relating to the shares of the Company or obligating Seller or the Company to issue or sell any shares of, or any other interest in, the Company. There are no voting trusts, stockholder agreements, proxies, or other agreements in effect with respect to the voting or transfer of any of the Shares.

**Section 3.04 No Subsidiaries.** The Company does not have, or have the right to acquire, an ownership interest in any other Person.

**Section 3.05 No Conflicts or Consents.** The execution, delivery, and performance by the Company and Sellers of this Agreement and the other Transaction Documents to which it is a party, and the consummation of the transactions contemplated hereby and thereby, do not and will not: (a) violate or conflict with any provision of the certificate of incorporation, by-laws, or other governing documents of any Seller or the Company; (b) violate or conflict with any provision of any statute, law, ordinance, regulation, rule, code, treaty, or other requirement of any Governmental Authority (collectively, "**Law**") or any order, writ, judgment, injunction, decree, determination, penalty, or award entered by or with any Governmental Authority ("**Governmental Order**") applicable to any Seller or the Company; (c) except as set forth on Schedule 3.05, require the consent, notice, or filing with or other action by any Person or require any Permit, license, or Governmental Order; (d) violate or conflict with, result in the acceleration of, or create in any party the right to accelerate, terminate, or modify any contract, lease, deed, mortgage, license, instrument, note, indenture, joint venture, or any other agreement, commitment, or legally binding arrangement, whether written or oral (collectively, "**Contracts**"), to which any Seller or the Company is a party or by which any Seller or the Company is bound or to which any of their respective properties and assets are subject; or (e) result in the creation or imposition of any Encumbrance on any properties or assets of the Company or the Shares.

**Section 3.06 Financial Statements.** Complete copies of: (i) the Company's unaudited financial statements consisting of the balance sheet of the Company as at December 31, 2024 and December 31, 2023, and the related statements of income and retained earnings, stockholders' equity, and cash flow for the years then ended; and (ii) unaudited financial statements for each fiscal quarter of 2025 of the Company prior to the Closing Date (the financial statements in clauses (i) and (ii) of this Section 3.06, collectively, the "**Financial Statements**") have been or will be delivered to Buyer prior to the Closing Date, to the satisfaction of Buyer. The Financial Statements and any Audited Financial Statements delivered by the Seller prior to the Closing have been prepared in accordance with generally accepted accounting principles in effect in the United States from time to time ("**GAAP**"), applied on a consistent basis throughout the period involved. The Financial Statements and the Audited Financial Statements are based on the books and records of the Company and fairly present the financial condition of the Company as of the respective dates they were prepared and the results of the operations of the Company for the periods indicated. The balance sheet of the Company as of December 31, 2025 is referred to herein as the "**Balance Sheet**" and the date thereof as the "**Balance Sheet Date.**" The Company maintains a standard system of accounting established and administered in accordance with GAAP.

**Section 3.07 Undisclosed Liabilities.** The Company has no liabilities, obligations, or commitments of any nature whatsoever, whether asserted, known, absolute, accrued, matured, or otherwise (collectively, "**Liabilities**"), except: (a) those which are adequately reflected or reserved against in the Balance Sheet as of the Balance Sheet Date; and (b) those which have been incurred in the ordinary course of business consistent with past practice since the Balance Sheet Date and which are not, individually or in the aggregate, material in amount. The Company does not have any Liabilities for borrowed money or other indebtedness.

**Section 3.08 Absence of Certain Changes, Events, and Conditions.** Since the Balance Sheet Date, the Company has been operating in the ordinary course of business consistent with past practice and there has not been, with respect to the Company, any change, event, condition, or development that is, or could reasonably be expected to be, individually or in the aggregate, to have a material adverse effect on the business, results of operations, condition (financial or otherwise), or assets of the Company.

**Section 3.09 Material Contracts.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Section 3.09(a) of the Disclosure Schedules</u> lists each Contract that is material to the Company (such Contracts, together with all Contracts concerning the occupancy, management, or operation of any Real Property (as defined in <u>Section 3.10(a)</u>), being "**Material Contracts**"), including the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) each Contract of the Company involving aggregate consideration in excess of $100,000.00 and which, in each case, cannot be cancelled by the Company without penalty or without more than 60 days' notice;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) all Contracts that provide for the indemnification by the Company of any Person or the assumption of any Tax (as defined in <u>Section 3.19(a)</u>), environmental, or other Liability of any Person;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) all Contracts relating to Intellectual Property (as defined in <u>Section 3.11(a)</u>), including all licenses, sublicenses, settlements, coexistence agreements, covenants not to sue, and permissions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) except for Contracts relating to trade payables, all Contracts relating to indebtedness (including, without limitation, guarantees) of the Company; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) all Contracts that limit or purport to limit the ability of the Company to compete in any line of business or with any Person or in any geographic area or during any period of time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Each Material Contract is valid and binding on the Company in accordance with its terms and is in full force and effect. None of the Company or, to Seller's knowledge, any other party thereto is in breach of or default under (or is alleged to be in breach of or default under), or has provided or received any notice of any intention to terminate, any Material Contract. Complete and correct copies of each Material Contract (including all modifications, amendments, and supplements thereto and waivers thereunder) have been made available to Buyer.

**Section 3.10 Real Property; Title to Assets; Condition and Sufficiency of Assets.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Section 3.10(a) of the Disclosure Schedules</u> lists all real property in which the Company has an ownership or leasehold (or subleasehold) interest (together with all buildings, structures, and improvements located thereon, the "**Real Property**"), including: (i) the street address of each parcel of Real Property; (ii) for Real Property that is leased or subleased by the Company, the landlord under the lease, the rental amount currently being paid, and the expiration of the term of such lease or sublease, and any termination or renewal rights of any party to the lease; and (iii) the current use of each parcel of Real Property. Seller has delivered or made available to Buyer true, correct, and complete copies of all Contracts, title insurance policies, and surveys relating to the Real Property.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Company has good and valid (and, in the case of owned Real Property, good and indefeasible fee simple) title to, or a valid leasehold interest in, all Real Property and personal property and other assets used in the operation of the business of the Company or reflected in the Financial Statements, or used in the operation of the business of the Company and acquired after the Balance Sheet Date (other than properties and assets sold or otherwise disposed of in the ordinary course of business consistent with past practice since the Balance Sheet Date). All Real Property and such personal property and other assets (including leasehold interests) are free and clear of Encumbrances except for those items set forth in <u>Section 3.10(b) of the Disclosure Schedules</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The Company is not a sublessor or grantor under any sublease or other instrument granting to any other Person any right to possess, lease, occupy, or use any leased Real Property. The use of the Real Property in the conduct of the Company's business does not violate in any material respect any Law, covenant, condition, restriction, easement, license, permit, or Contract and no material improvements constituting a part of the Real Property encroach on real property owned or leased by a Person other than the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) The buildings, plants, structures, furniture, fixtures, machinery, equipment, vehicles and other items of tangible personal property currently owned or leased by the Company are structurally sound, are in good operating condition and repair, and are adequate for the uses to which they are being put, and none of such buildings, plants, structures, furniture, fixtures, machinery, equipment, vehicles and other items of tangible personal property is in need of maintenance or repairs except for ordinary, routine maintenance and repairs that are not material in nature or cost. The buildings, plants, structures, furniture, fixtures, machinery, equipment, vehicles and other items of tangible personal property currently owned or leased by the Company, together with all other properties and assets of the Company, are sufficient for the continued conduct of the Company's business after the Closing in substantially the same manner as conducted prior to the Closing and constitute all of the rights, property and assets necessary to conduct the business of the Company as currently conducted.

**Section 3.11 Intellectual Property.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The term "**Intellectual Property**" means any and all of the following in any jurisdiction throughout the world: (i) issued patents and patent applications; (ii) trademarks, service marks, trade names, and other similar indicia of source or origin, together with the goodwill connected with the use of and symbolized by, and all registrations, applications for registration, and renewals of, any of the foregoing; (iii) copyrights, including all applications and registrations; (iv) trade secrets, know-how, inventions (whether or not patentable), technology, and other confidential and proprietary information and all rights therein; (v) internet domain names and social media accounts and pages; and (vi) other intellectual or industrial property and related proprietary rights, interests, and protections.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Section 3.11(b) of the Disclosure Schedules</u> lists all issued patents, registered trademarks, domain names and copyrights, and pending applications for any of the foregoing and all material unregistered Intellectual Property that are owned by the Company (the "**Company IP Registrations**"). The Company owns or has the valid and enforceable right to use all Intellectual Property used in or necessary for the conduct of the Company's business as currently conducted (the "**Company Intellectual Property**"), free and clear of all Encumbrances. All of the Company Intellectual Property is valid and enforceable, and all Company IP Registrations are subsisting and in full force and effect. The Company has taken all necessary steps to maintain and enforce the Company Intellectual Property.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The conduct of the Company's business, as currently and formerly conducted, has not infringed, misappropriated, or otherwise violated the Intellectual Property or other rights of any Person. No Person has infringed, misappropriated, or otherwise violated any Company Intellectual Property.

**Section 3.12 Material Customers and Suppliers.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Section 3.12(a) of the Disclosure Schedules</u> sets forth each customer who has paid aggregate consideration to the Company for goods or services rendered in an amount greater than or equal to $100,000.00 for each of the two (2) most recent fiscal years (collectively, the "**Material Customers**"). The Company has not received any notice, and has no reason to believe, that any of its Material Customers has ceased, or intends to cease after the Closing, to purchase or use its goods or services or to otherwise terminate or materially reduce its relationship with the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Section 3.12(b) of the Disclosure Schedules</u> sets forth each supplier to whom the Company has paid consideration for goods or services rendered in an amount greater than or equal to $100,000.00 for each of the two (2) most recent fiscal years (collectively, the "**Material Suppliers**"). The Company has not received any notice, and has no reason to believe, that any of its Material Suppliers has ceased, or intends to cease, to supply goods or services to the Company or to otherwise terminate or materially reduce its relationship with the Company.

**Section 3.13 Insurance.** <u>Section 3.13 of the Disclosure Schedules</u> sets forth a true and complete list of all current policies or binders of insurance maintained by Seller or its Affiliates (including the Company) and relating to the assets, business, operations, employees, officers, and directors of the Company (collectively, the "**Insurance Policies**"). Such Insurance Policies: (a) are in full force and effect; (b) are valid and binding in accordance with their terms; (c) are provided by carriers who are financially solvent; and (d) have not been subject to any lapse in coverage. Neither Seller nor any of its Affiliates (including the Company) has received any written notice of cancellation of, premium increase with respect to, or alteration of coverage under, any of such Insurance Policies. All premiums due on such Insurance Policies have been paid. None of Seller or any of its Affiliates (including the Company) is in default under, or has otherwise failed to comply with, in any material respect, any provision contained in any Insurance Policy. The Insurance Policies are of the type and in the amounts customarily carried by Persons conducting a business similar to the Company and are sufficient for compliance with all applicable Laws and Contracts to which the Company is a party or by which it is bound. For purposes of this Agreement: (x) "**Affiliate**" of a Person means any other Person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, such Person; and (y) the term "**control**" (including the terms "controlled by" and "under common control with") means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities or other ownership interests, by contract, or otherwise.

**Section 3.14 Legal Proceedings; Governmental Orders.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Except as set forth on <u>Section 3.14 of the Disclosure Schedules</u>, there are no claims, actions, causes of action, demands, lawsuits, arbitrations, inquiries, audits, notices of violation, proceedings, litigation, citations, summons, subpoenas, or investigations of any nature, whether at law or in equity (collectively, "**Actions**") pending or, to Seller's knowledge, threatened against or by the Company, Seller, or any Affiliate of Seller: (i) relating to or affecting the Company or any of the Company's properties or assets; or (ii) that challenge or seek to prevent, enjoin, or otherwise delay the transactions contemplated by this Agreement. To Seller's knowledge, no event has occurred or circumstances exist that may give rise to, or serve as a basis for, any such Action.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) There are no outstanding, and the Company is in compliance with all, Governmental Orders against, relating to, or affecting the Company or any of its properties or assets.

**Section 3.15 Compliance with Laws; Permits.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Company has complied, and is now complying, with all Laws applicable to it or its business, properties, or assets.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) All permits, licenses, franchises, approvals, registrations, certificates, variances, and similar rights obtained, or required to be obtained, from Governmental Authorities (collectively, "**Permits**") in order for the Company to conduct its business, including, without limitation, owning or operating any of the Real Property, have been obtained and are valid and in full force and effect. <u>Section 3.15(b) of the Disclosure Schedules</u> lists all current Permits issued to the Company and, to Seller's knowledge, no event has occurred that would reasonably be expected to result in the revocation or lapse of any such Permit.

**Section 3.16 Environmental Matters.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The terms: (i) "**Environmental Laws**" means all Laws, now or hereafter in effect, in each case as amended or supplemented from time to time, relating to the regulation and protection of human health, safety, the environment, and natural resources, including any federal, state, or local transfer of ownership notification or approval statutes; and (ii) "**Hazardous Substances**" means: (A) "hazardous materials," "hazardous wastes," "hazardous substances," "industrial wastes," or "toxic pollutants," as such terms are defined under any Environmental Laws; (B) any other hazardous or radioactive substance, contaminant, or waste; and (C) any other substance with respect to which any Environmental Law or Governmental Authority requires environmental investigation, regulation, monitoring, or remediation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Company has complied, and is now complying, with all Environmental Laws. Neither the Company nor Seller has received notice from any Person that the Company, its business or assets, or any real property currently or formerly owned, leased, or used by the Company is or may be in violation of any Environmental Law or any applicable Law regarding Hazardous Substances.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) To the knowledge of the Sellers, there has not been any spill, leak, discharge, injection, escape, leaching, dumping, disposal, or release of any kind of any Hazardous Substances in violation of any Environmental Law: (i) with respect to the business or assets of the Company; or (ii) at, from, in, adjacent to, or on any real property currently or formerly owned, leased, or used by the Company. There are no Hazardous Substances in, on, about, or migrating to any real property currently or formerly owned, leased, or used by the Company, and such real property is not affected in any way by any Hazardous Substances.

**Section 3.17 Employee Benefit Matters.**

<u>Section 3.17(a) of the Disclosure Schedules</u> contains a true and complete list of each "employee benefit plan" as defined in Section 3(3) of the Employee Retirement Income Security Act of 1974 (as amended, and including the regulations thereunder, "**ERISA**"), whether or not written and whether or not subject to ERISA, and each supplemental retirement, compensation, employment, consulting, profit-sharing, deferred compensation, incentive, bonus, equity, change in control, retention, severance, salary continuation, and other similar agreement, plan, policy, program, practice, or arrangement which is or has been established, maintained, sponsored, or contributed to by the Company or under which the Company has or may have any Liability (each, a "**Benefit Plan**").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) For each Benefit Plan, Seller has made available to Buyer accurate, current, and complete copies of each of the following: (i) the plan document with all amendments, or if not reduced to writing, a written summary of all material plan terms; (ii) any written contracts and arrangements related to such Benefit Plan, including trust agreements or other funding arrangements, and insurance policies, certificates, and contracts; (iii) in the case of a Benefit Plan intended to be qualified under Section 401(a) of the Code, the most recent favorable determination or national office approval letter issued by the Internal Revenue Service and any legal opinions issued thereafter with respect to the Benefit Plan's continued qualification; (iv) the most recent Form 5500 filed with respect to such Benefit Plan; and (v) any material notices, audits, inquiries, or other correspondence from, or filings with, any Governmental Authority relating to the Benefit Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Each Benefit Plan and related trust has been established, administered, and maintained in accordance with its terms and in compliance with all applicable Laws (including ERISA and the Code). Nothing has occurred with respect to any Benefit Plan that has subjected or could reasonably be expected to subject the Company or, with respect to any period on or after the Closing Date, Buyer or any of its Affiliates, to a civil action, penalty, surcharge, or Tax under applicable Law or which would jeopardize the previously-determined qualified status of any Benefit Plan. All benefits, contributions, and premiums relating to each Benefit Plan have been timely paid in accordance with the terms of such Benefit Plan and all applicable Laws and accounting principles. Benefits accrued under any unfunded Benefit Plan have been paid, accrued, or adequately reserved for to the extent required by GAAP.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The Company has not incurred and does not reasonably expect to incur: (i) any Liability under Title I or Title IV of ERISA, any related provisions of the Code, or applicable Law relating to any Benefit Plan; or (ii) any Liability to the Pension Benefit Guaranty Corporation. No complete or partial termination of any Benefit Plan has occurred or is expected to occur.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) The Company has not now or at any time since its inception contributed to, sponsored, or maintained: (i) any "multiemployer plan" as defined in Section 3(37) of ERISA; (ii) any "single-employer plan" as defined in Section 4001(a)(15) of ERISA; (iii) any "multiple employer plan" as defined in Section 413(c) of the Code; (iv) any "multiple employer welfare arrangement" as defined in Section 3(40) of ERISA; (v) a leveraged employee stock ownership plan described in Section 4975(e)(7) of the Code; or (vi) any other Benefit Plan subject to required minimum funding requirements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Other than as required under Sections 601 to 608 of ERISA or other applicable Law, no Benefit Plan provides post-termination or retiree welfare benefits to any individual for any reason.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) Neither the execution of this Agreement nor any of the transactions contemplated by this Agreement will, either alone or in combination with any other event: (i) entitle any current or former director, officer, employee, independent contractor, or consultant of the Company to any severance pay, increase in severance pay, or other payment; (ii) accelerate the time of payment, funding, or vesting, or increase the amount of compensation (including stock-based compensation) due to any such individual; (iii) limit or restrict the right of the Company to amend or terminate any Benefit Plan; (iv) increase the amount payable under any Benefit Plan; (v) result in any "excess parachute payments" within the meaning of Section 280G(b) of the Code; or (vi) require a "gross-up" or other payment to any "disqualified individual" within the meaning of Section 280G(c) of the Code.

**Section 3.18 Employment Matters.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Section 3.18(a) of the Disclosure Schedules</u> lists: (i) all employees, independent contractors, and consultants of the Company; and (ii) for each individual described in clause (i), (A) the individual's title or position, hire date, and compensation, (B) any Contracts entered into between the Company and such individual, and (C) the fringe benefits provided to each such individual. All compensation payable to all employees, independent contractors, or consultants of the Company for services performed on or prior to the Closing Date have been paid in full.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Company is not, and has not been, a party to or bound by any collective bargaining agreement or other Contract with a union or similar labor organization (collectively, "**Union**"), and no Union has represented or purported to represent any employee of the Company. There has never been, nor has there been any threat of, any strike, work stoppage, slowdown, picketing, or other similar labor disruption or dispute affecting the Company or any of its employees.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The Company is and has been in compliance with: (i) all applicable employment Laws and agreements regarding hiring, employment, termination of employment, plant closings and mass layoffs, employment discrimination, harassment, retaliation, and reasonable accommodation, leaves of absence, terms and conditions of employment, wages and hours of work, employee classification, employee health and safety, engagement and classification of independent contractors, payroll taxes, and immigration with respect to all employees, independent contractors, and contingent workers; and (ii) all applicable Laws relating to the relations between it and any labor organization, trade union, work council, or other body representing employees of the Company.

**Section 3.19 Taxes.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) All returns, declarations, reports, information returns and statements, and other documents relating to Taxes (including amended returns and claims for refund) (collectively, "**Tax Returns**") required to be filed by the Company on or before the Closing Date have been timely filed. Such Tax Returns are true, correct, and complete in all respects. All Taxes due and owing by the Company (whether or not shown on any Tax Return) have been timely paid. No extensions or waivers of statutes of limitations have been given or requested with respect to any Taxes of the Company. Seller has delivered to Buyer copies of all Tax Returns and examination reports of the Company and statements of deficiencies assessed against, or agreed to by, the Company, for all Tax periods ending after December 31, 2021. The term "**Taxes**" means all federal, state, local, foreign, and other income, gross receipts, sales, use, production, ad valorem, transfer, franchise, registration, profits, license, lease, service, service use, withholding, payroll, employment, unemployment, estimated, excise, severance, environmental, stamp, occupation, premium, property (real or personal), real property gains, windfall profits, customs, duties, or other taxes, fees, assessments, or charges of any kind whatsoever, together with any interest, additions, or penalties with respect thereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Company has not been a member of an affiliated, combined, consolidated, or unitary Tax group for Tax purposes. The Company has no Liability for Taxes of any Person (other than the Company) under Treasury Regulations Section 1.1502-6 (or any corresponding provision of state, local, or foreign Law), as transferee or successor, by contract, or otherwise.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) There are no liens for Taxes (other than for current Taxes not yet due and payable) upon the assets of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Seller is not a "foreign person" as that term is used in Treasury Regulations Section 1.1445-2. The Company is not, nor has it been, a United States real property holding corporation (as defined in Section 897(c)(2) of the Code) during the applicable period in Section 897(c)(1)(a) of the Code.

**Section 3.20 Books and Records.** The minute books and share record and transfer books of the Company, all of which are in the possession of the Company and have been made available to Buyer, are complete and correct.

**Section 3.21 Related Party Transactions.** Except as set forth on <u>Section 3.20 of the Disclosure Schedules</u>, there are no Contracts or other arrangements involving the Company in which Seller, its Affiliates, or any of its or their respective directors, officers, or employees (or any immediate family members thereof) is a party, has a financial interest, or otherwise owns or leases any material asset, property, or right which is used by the Company.

**Section 3.22 Brokers.** Except as set forth on <u>Section 3.22 of the Disclosure Schedules</u>, no broker, finder, or investment banker is entitled to any brokerage, finder's, or other fee or commission in connection with the transactions contemplated by this Agreement or any other Transaction Document based upon arrangements made by or on behalf of Seller.

**Section 3.23 Full Disclosure.** No representation or warranty by Seller in this Agreement and no statement contained in the Disclosure Schedules to this Agreement or any certificate or other document furnished or to be furnished to Buyer pursuant to this Agreement contains any untrue statement of a material fact, or omits to state a material fact necessary to make the statements contained therein, in light of the circumstances in which they are made, not misleading.

**ARTICLE IV<br> Representations and warranties of buyer**

Buyer represents and warrants to Sellers that the statements contained in this Article V are true and correct as of the date hereof. For purposes of this <u>ARTICLE IV</u>, "**Buyer's knowledge**," "**knowledge of Buyer**," and any similar phrases shall mean the actual or constructive knowledge of any director or officer of Buyer, after due inquiry.

**Section 4.01 Organization and Authority of Buyer.** Buyer is a corporation duly organized, validly existing, and in good standing under the Laws of the state of Nevada. Buyer has full corporate power and authority to enter into this Agreement and the other Transaction Documents to which Buyer is a party, to carry out its obligations hereunder and thereunder, and to consummate the transactions contemplated hereby and thereby. The execution and delivery by Buyer of this Agreement and any other Transaction Document to which Buyer is a party, the performance by Buyer of its obligations hereunder and thereunder, and the consummation by Buyer of the transactions contemplated hereby and thereby have been duly authorized by all requisite corporate action on the part of Buyer. This Agreement and each Transaction Document constitute legal, valid, and binding obligations of Buyer enforceable against Buyer in accordance with their respective terms.

**Section 4.02 No Conflicts; Consents.** The execution, delivery, and performance by Buyer of this Agreement and the other Transaction Documents to which it is a party, and the consummation of the transactions contemplated hereby and thereby, do not and will not: (a) violate or conflict with any provision of the Articles of Incorporation, by-laws, or other governing documents of Buyer; (b) violate or conflict with any provision of any Law or Governmental Order applicable to Buyer; or (c) require the consent, notice, declaration, or filing with or other action by any Person or require any Permit, license, or Governmental Order.

**Section 4.03 Investment Purpose.** Buyer is acquiring the Shares solely for its own account for investment purposes and not with a view to, or for offer or sale in connection with, any distribution thereof or any other security related thereto within the meaning of the Securities Act of 1933, as amended (the "**Securities Act**"). Buyer acknowledges that Seller has not registered the offer and sale of the Shares under the Securities Act or any state securities laws, and that the Shares may not be pledged, transferred, sold, offered for sale, hypothecated, or otherwise disposed of except pursuant to the registration provisions of the Securities Act or pursuant to an applicable exemption therefrom and subject to state securities laws and regulations, as applicable.

**Section 4.04 Brokers.** Except for Joseph Harmon of DAUM Commercial Real Estate, no broker, finder, or investment banker is entitled to any brokerage, finder's, or other fee or commission in connection with the transactions contemplated by this Agreement or any other Transaction Document based upon arrangements made by or on behalf of Buyer.

**ARTICLE V<br> Covenants**

**Section 5.01 Confidentiality.** From and after the Closing, the Sellers shall, and shall cause their respective Affiliates and its and their respective directors, officers, employees, consultants, counsel, accountants, and other agents (collectively, "**Representatives**") to, hold in confidence any and all information, in any form, concerning the Company, except to the extent that the Sellers can show that such information: (a) is generally available to and known by the public through no fault of the Sellers, any of their respective Affiliates, or their respective Representatives; or (b) is lawfully acquired by Sellers, any of their respective Affiliates, or their respective Representatives from and after the Closing from sources which are not prohibited from disclosing such information by any obligation. If Sellers or any of their respective Affiliates or their respective Representatives are compelled to disclose any information by Governmental Order or Law, Sellers shall promptly notify Buyer in writing and shall disclose only that portion of such information which is legally required to be disclosed; *provided, however*, Sellers shall use reasonable best efforts to obtain as promptly as possible an appropriate protective order or other reasonable assurance that confidential treatment will be accorded such information.

**Section 5.02 Non-Competition; Non-Solicitation.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) For a period of three (3) years commencing on the Closing Date (the "**Restricted Period**"), Sellers will not, and will not permit any of their respective Affiliates to, directly or indirectly: (i) engage in or assist others in engaging in the information technology packaging business (the "**Restricted Business**") in the State of California (the "**Territory**"); (ii) have an interest in any Person that engages, directly or indirectly, in the Restricted Business in the Territory in any capacity, including as a partner, stockholder, director, officer, member, manager, employee, contractor, principal, agent, volunteer, intern, advisor, or consultant; or (iii) intentionally interfere in any material respect with the business relationships (whether formed prior to or after the date of this Agreement) between the Company and customers or suppliers of the Company. Notwithstanding the foregoing, Sellers may own, directly or indirectly, solely as an investment, securities of any Person traded on any national securities exchange if such Seller is not a controlling Person of, or a member of a group which controls, such Person and does not, directly or indirectly, own two percent (2)% or more of any class of securities of such Person.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) During the Restricted Period, Sellers will not, and will not permit any of their respective Affiliates to, directly or indirectly, hire or solicit any current or former employee of the Company or encourage any employee to leave the Company's employment, except pursuant to a general solicitation which is not directed specifically to any such employees; *provided, however*, nothing in this <u>Section 5.02(b)</u> shall prevent any Seller or any of their respective Affiliates from hiring: (i) any employee terminated by the Company; or (ii) after one hundred eighty (180) days from the date of resignation, any employee that has resigned from the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Sellers acknowledge that a breach or threatened breach of this <u>Section 5.02</u> would give rise to irreparable harm to Buyer, for which monetary damages would not be an adequate remedy, and hereby agrees that in the event of a breach or a threatened breach by any Seller of any such obligations, Buyer shall, in addition to any and all other rights and remedies that may be available to it in respect of such breach, be entitled to equitable relief, including a temporary restraining order, an injunction, or specific performance (without any requirement to post bond).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Sellers acknowledge that the restrictions contained in this <u>Section 5.02</u> are reasonable and necessary to protect the legitimate interests of Buyer and constitute a material inducement to Buyer to enter into this Agreement and consummate the transactions contemplated by this Agreement. In the event that any covenant contained in this <u>Section 5.02</u> should ever be adjudicated to exceed the time, geographic, product or service, or other limitations permitted by applicable Law in any jurisdiction or any Governmental Order, then any court is expressly empowered to reform such covenant, and such covenant shall be deemed reformed, in such jurisdiction to the maximum time, geographic, product or service, or other limitations permitted by applicable Law or such Governmental Order. The covenants contained in this <u>Section 5.02</u> and each provision hereof are severable and distinct covenants and provisions. The invalidity or unenforceability of any such covenant or provision as written will not invalidate or render unenforceable the remaining covenants or provisions hereof, and any such invalidity or unenforceability in any jurisdiction will not invalidate or render unenforceable such covenant or provision in any other jurisdiction.

**Section 5.03 Audit**. Sellers have agreed to cause the Company to cooperate with the Buyer and the Buyer's auditors in conducting an audit of the Company's financial statements for the fiscal years ending December 31, 2024 and December 31, 2025 (the "**Audit**" and such audited financial statements referred to as the "**Audited Financial Statements**"). In connection therewith, the Sellers agreed to make all of its books and records of the Company available to the Buyer and its auditor and to make its employees and outside accountants available to the Buyer and its auditor in connection therewith.

**Section 5.04 Further Assurances.** Following the Closing, each of the parties hereto shall, and shall cause their respective Affiliates to, execute and deliver such additional documents and instruments and take such further actions as may be reasonably required to carry out the provisions hereof and give effect to the transactions contemplated by this Agreement and the other Transaction Documents.

**ARTICLE VI<br> Tax matters**

**Section 6.01 Tax Covenants.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Without the prior written consent of Buyer, Sellers will not, to the extent it may affect or relate to the Company: (i) make, change, or rescind any Tax election; (ii) amend any Tax Return; (iii) take any position on any Tax Return; or (iv) take any action, omit to take any action, or enter into any other transaction that would have the effect of increasing the Tax liability or reducing any Tax asset of Buyer or the Company, in respect of any taxable period that begins after the Closing Date or, in respect of any taxable period that begins before and ends after the Closing Date (each such period, a "**Straddle Period**"), the portion of any Straddle Period beginning after the Closing Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) All transfer, documentary, sales, use, stamp, registration, value added, and other such Taxes and fees (including any penalties and interest) incurred in connection with this Agreement and the other Transaction Documents shall be borne and paid by Sellers when due. Sellers shall, at their own expense, timely file any Tax Return or other document with respect to such Taxes or fees (and Buyer shall cooperate with respect thereto as necessary).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Buyer shall prepare, or cause to be prepared, all Tax Returns required to be filed by the Company after the Closing Date with respect to any taxable period or portion thereof ending on or before the Closing Date and all Straddle Period Tax Returns. Any such Tax Return shall be prepared in a manner consistent with past practice (unless otherwise required by Law) and without a change of any election or any accounting method.

**Section 6.02 Straddle Period.** In the case of Taxes that are payable with respect to a Straddle Period, the portion of any such Taxes that are allocated to Pre-Closing Tax Periods (as defined in <u>Section 6.04</u>) for purposes of this Agreement is: (a) in the case of Taxes: (i) based upon, or related to, income, receipts, profits, wages, capital, or net worth; (ii) imposed in connection with the sale, transfer, or assignment of property; or (iii) required to be withheld, the amount of Taxes which would be payable if the taxable year ended with the Closing Date; and (b) in the case of other Taxes, the amount of such Taxes for the entire period multiplied by a fraction, the numerator of which is the number of days in the period ending on the Closing Date and the denominator of which is the number of days in the entire period.

**Section 6.03 Termination of Existing Tax Sharing Agreements.** Any and all existing Tax sharing agreements (whether written or not) binding upon the Company shall be terminated as of the Closing Date. After such date neither the Company, Sellers, nor any of Sellers' Affiliates and their respective Representatives shall have any further rights or liabilities thereunder.

**Section 6.04 Tax Indemnification.** The Sellers shall indemnify the Buyer and each Buyer Indemnitee (as defined in <u>Section 7.01</u>) and hold them harmless from and against (a) any loss, damage, liability, deficiency, Action, judgment, interest, award, penalty, fine, cost or expense of whatever kind (collectively, including reasonable attorneys' fees and the cost of enforcing any right to indemnification under this Agreement, "**Losses**") attributable to any breach of or inaccuracy in any representation or warranty made in <u>Section 3.19</u>; (b) any Loss attributable to any breach or violation of, or failure to fully perform, any covenant, agreement, undertaking, or obligation in <u>ARTICLE VI</u>; (c) all Taxes of the Company or relating to the business of the Company for all Pre-Closing Tax Periods (as defined below); (d) all Taxes of any member of an affiliated, consolidated, combined, or unitary group of which the Company (or any predecessor of the Company) is or was a member on or prior to the Closing Date by reason of a liability under Treasury Regulation Section 1.1502-6 or any comparable provisions of foreign, state, or local Law; and (e) any and all Taxes of any Person imposed on the Company arising under the principles of transferee or successor liability or by contract, relating to an event or transaction occurring before the Closing Date. In each of the above cases, together with any out-of-pocket fees and expenses (including attorneys' and accountants' fees) incurred in connection therewith, the Sellers shall reimburse Buyer for any Taxes of the Company that are the responsibility of Sellers pursuant to this <u>Section 6.04</u> within ten business days after payment of such Taxes by Buyer or the Company. The term "**Pre-Closing Tax Period**" means any taxable period ending on or before the Closing Date and, with respect to any taxable period beginning before and ending after the Closing Date, the portion of such taxable period ending on and including the Closing Date.

**Section 6.05 Cooperation and Exchange of Information.** The Sellers and Buyer shall provide each other with such cooperation and information as either of them reasonably may request of the other in filing any Tax Return pursuant to this <u>ARTICLE VI</u> or in connection with any proceeding in respect of Taxes of the Company, including providing copies of relevant Tax Returns and accompanying documents. Each of Sellers and Buyer shall retain all Tax Returns and other documents in its possession relating to Tax matters of the Company for any Pre-Closing Tax Period (collectively, "**Tax Records**") until the expiration of the statute of limitations of the taxable periods to which such Tax Records relate.

**Section 6.06 Survival.** Notwithstanding anything in this Agreement to the contrary, the provisions of <u>Section 3.19</u> and this <u>ARTICLE VI</u> shall survive for the full period of all applicable statutes of limitations (giving effect to any waiver, mitigation, or extension thereof) plus sixty (60) days.

**Section 6.07 Further Assurances.** Following the Closing, each of the parties hereto shall, and shall cause their respective Affiliates to, execute and deliver such additional documents and instruments and take such further actions as may be reasonably required to carry out the provisions hereof and give effect to the transactions contemplated by this Agreement and the other Transaction Documents. For the avoidance of doubt, Sellers shall remain available to the Buyer for a period of six (6) months after the Closing Date to provide reasonable transition services to the Buyer, including assistance with the preparation and facilitation of any required financial audits, operational knowledge transfer, and other reasonable matters necessary for post-Closing transition.

**ARTICLE VII<br> Indemnification**

**Section 7.01 Indemnification by Seller.** Subject to the other terms and conditions of this <u>ARTICLE VII</u>, each Seller shall, jointly and severally (except that with respect to the representation set forth in Section 3.02, each Seller shall be liable on a several, and not joint basis, only), indemnify and defend each of Buyer and its Affiliates (including the Company) and their respective Representatives (collectively, the "**Buyer Indemnitees**") against, and shall hold each of them harmless from and against, and shall pay and reimburse each of them for, any and all Losses incurred or sustained by, or imposed upon, the Buyer Indemnitees based upon, arising out of, with respect to, or by reason of:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) any inaccuracy in or breach of any of the representations or warranties of Sellers or the Company contained in this Agreement or the other Transaction Documents;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) any breach or non-fulfillment of any covenant, agreement, or obligation to be performed by the Sellers or by the Company (prior to the Closing) pursuant to this Agreement or the other Transaction Documents;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) any Losses arising out of or relating to any employee of the Business being, as of the Closing Date, ineligible or unauthorized to work in the United States, including due to improper, incomplete, or inaccurate I-9 documentation or any other legal or regulatory reason, and any corrective action to be taken by Buyer with respect to such employee, including termination, replacement, or remediation, together with any direct costs associated therewith, such as government fines or penalties, recruiter or placement agency fees, wage adjustments, training costs, and other reasonable and documented out-of-pocket expenses; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) any claim with respect to the [\*\*\*] litigation claim disclosed on <u>Section 3.14 of the Disclosure Schedules</u>.

**Section 7.02 Indemnification by Buyer.** Subject to the other terms and conditions of this <u>ARTICLE VII</u>, Buyer shall indemnify and defend each of the Sellers and their respective Affiliates and their respective Representatives (collectively, the "**Seller Indemnitees**") against, and shall hold each of them harmless from and against, and shall pay and reimburse each of them for, any and all Losses incurred or sustained by, or imposed upon, the Seller Indemnitees based upon, arising out of, with respect to, or by reason of:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) any inaccuracy in or breach of any of the representations or warranties of Buyer contained in this Agreement or the other Transaction Documents; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) any breach or non-fulfillment of any covenant, agreement, or obligation to be performed by Buyer pursuant to this Agreement.

**Section 7.03 Indemnification Procedures.** Whenever any claim shall arise for indemnification under this Agreement, the indemnified party ("**Indemnified Party**") shall promptly provide written notice of such claim to the indemnifying party (the "**Indemnifying Party**"). Such notice by the Indemnified Party shall: (a) describe the claim in reasonable detail; (b) include copies of all material written evidence thereof; and (c) indicate the estimated amount, if reasonably practicable, of the Loss that has been or may be sustained by the Indemnified Party. In connection with any claim giving rise to indemnity hereunder resulting from or arising out of any Action by a Person who is not a party to this Agreement, the Indemnifying Party, at its sole cost and expense and upon written notice to the Indemnified Party, may assume the defense of any such Action with counsel reasonably satisfactory to the Indemnified Party. The Indemnified Party shall be entitled to participate in the defense of any such Action, with its counsel and at its own cost and expense, subject to the Indemnifying Party's right to control the defense thereof. If the Indemnifying Party does not assume the defense of any such Action, the Indemnified Party may, but shall not be obligated to, defend against such Action in such manner as it may deem appropriate, including settling such Action, after giving notice of it to the Indemnifying Party, on such terms as the Indemnified Party may deem appropriate, and no action taken by the Indemnified Party in accordance with such defense and settlement shall relieve the Indemnifying Party of its indemnification obligations herein provided with respect to any damages resulting therefrom. Seller and Buyer shall cooperate with each other in all reasonable respects in connection with the defense of any claim, including: (i) making available records relating to such claim; and (ii) furnishing, without expense (other than reimbursement of actual out-of-pocket expenses) to the defending party, management employees of the Indemnified Party as may be reasonably necessary for the preparation of the defense of such claim. Notwithstanding the foregoing, an Indemnifying Party shall not settle any Action without the Indemnified Party's prior written consent (which consent shall not be unreasonably withheld, conditioned or delayed).

**Section 7.04 Limitations**. Notwithstanding anything herein to the contrary, no Indemnifying Party shall be liable under this Agreement for any punitive, consequential, special, incidental or indirect damages, including, without limitation, lost profits, lost revenues, lost opportunity or loss of business; provided, however, that this limitation shall not apply to (a) damages arising from third-party claims for which indemnification is sought, or (b) damages resulting from the Indemnifying Party's gross negligence or willful misconduct. In the event of any losses or damages, or alleged losses or damages, giving rise to indemnification or a claim for indemnification under this Agreement, the Indemnified Party hereby covenants and agrees to use commercially reasonable efforts (not requiring material expense, litigation, or diversion of significant internal resources) to mitigate such loss or damages, and the resulting indemnified losses or damages. The amount of an Indemnified Party's indemnification obligations hereunder will be offset by the amount of any insurance proceeds actually recovered from insurers with respect to such losses or damages (net of any deductibles, co-payments or out-of-pocket costs of collection and any increase in insurance premiums attributable to such recovery). The Indemnifying Party shall not be liable to the Indemnified Party for indemnification under <u>Section 7.01(a) or Section 7.02(a)</u>, as the case may be, until the aggregate amount of all Losses in respect of indemnification under such applicable section exceeds $25,000 (the "**Deductible**"), in which event the Indemnifying Party shall only be required to pay or be liable for Losses in excess of the Deductible.

**Section 7.05 Survival.** Subject to the limitations and other provisions of this Agreement, the representations and warranties contained herein and all related rights to indemnification shall survive the Closing for a period of 12 (twelve) months; *provided, however,* the representations and warranties in <u>Section 3.01</u>, <u>Section 3.02</u>, <u>Section 3.03</u>, <u>Section 3.04</u>, <u>Section 3.05</u>, <u>Section 3.10(b)</u>, <u>Section 3.19</u>, <u>Section 3.22</u>, <u>Section 4.01</u>, <u>Section 4.02</u> and <u>Section 4.04</u> shall survive indefinitely. Subject to <u>ARTICLE VI</u>, all covenants and agreements of the parties hereto contained herein shall survive the Closing indefinitely unless another period is explicitly specified herein. Notwithstanding the foregoing, any claims which are timely asserted in writing by notice from the non-breaching party to the breaching party prior to the expiration date of the applicable survival period will not thereafter be barred by the expiration of the relevant representation or warranty and such claims shall survive until finally resolved.

**Section 7.06 Tax Claims.** Notwithstanding any other provision of this Agreement, the control of any claim, assertion, event, or proceeding in respect of Taxes of the Company (including, but not limited to, any such claim in respect of a breach of the representations and warranties in <u>Section 3.19</u> hereof or any breach or violation of or failure to fully perform any covenant, agreement, undertaking, or obligation in <u>ARTICLE VI</u>) shall be governed exclusively by <u>ARTICLE VI</u> hereof.

**Section 7.07 Cumulative Remedies.** The rights and remedies provided for in this <u>ARTICLE VII</u> (and in <u>ARTICLE VI</u>) are cumulative and are in addition to and not in substitution for any other rights and remedies available at Law or in equity or otherwise.

**ARTICLE VIII<br> Miscellaneous**

**Section 8.01 Expenses.** All costs and expenses incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the party incurring such costs and expenses.

**Section 8.02 Notices.** All notices, claims, demands, and other communications hereunder shall be in writing and shall be deemed to have been given: (a) when delivered by hand (with written confirmation of receipt); (b) when received by the addressee if sent by a nationally recognized overnight courier (receipt requested); (c) on the date sent by email of a PDF document (with confirmation of transmission) if sent during normal business hours of the recipient, and on the next business day if sent after normal business hours of the recipient; or (d) on the third day after the date mailed, by certified or registered mail, return receipt requested, postage prepaid, if sent to the respective parties at the following addresses (or at such other address for a party as shall be specified in a notice given in accordance with this Section 8.02):

---

| | |
|:---|:---|
| **If to Sellers:** | [\*\*\*]<br> Email: [\*\*\*]<br> Attention: [\*\*\*]<br>[\*\*\*]<br> Email: [\*\*\*]<br> Attention: [\*\*\*]<br>|
| with a copy (which will not constitute notice) to: | [\*\*\*]<br> [\*\*\*]Email: [\*\*\*]<br> Attention: Louis Brilleman, Esq.<br>|
| **If to Buyer:** | PMGC Holdings Inc.<br> 120 Newport Center Drive<br> Newport Beach, CA 92660<br> Email: [\*\*\*]<br> Attention: Graydon Bensler<br>|
| with a copy (which will not constitute notice) to: | Sichenzia Ross Ference Carmel LLP<br> 1185 Avenue of the Americas, 31<sup>st</sup> Floor<br> New York, NY 10036<br> Email: [\*\*\*]<br> Attention: Carl Kleidman, Esq. |

---

**Section 8.03 Interpretation; Headings.** This Agreement shall be construed without regard to any presumption or rule requiring construction or interpretation against the party drafting an instrument or causing any instrument to be drafted. The headings in this Agreement are for reference only and will not affect the interpretation of this Agreement.

**Section 8.04 Severability.** If any term or provision of this Agreement is invalid, illegal, or unenforceable in any jurisdiction, such invalidity, illegality, or unenforceability will not affect any other term or provision of this Agreement.

**Section 8.05 Entire Agreement.** This Agreement and the other Transaction Documents constitute the sole and entire agreement of the parties to this Agreement with respect to the subject matter contained herein and therein, and supersede all prior and contemporaneous understandings and agreements, both written and oral, with respect to such subject matter. In the event of any inconsistency between the statements in the body of this Agreement and those in the other Transaction Documents, and the Disclosure Schedules (other than an exception expressly set forth as such in the Disclosure Schedules), the statements in the body of this Agreement will control.

**Section 8.06 Successors and Assigns.** This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and permitted assigns. Neither party may assign its rights or obligations hereunder without the prior written consent of the other party, which consent will not be unreasonably withheld or delayed. No assignment shall relieve the assigning party of any of its obligations hereunder.

**Section 8.07 Amendment and Modification; Waiver.** This Agreement may only be amended, modified, or supplemented by an agreement in writing signed by each party hereto. No waiver by any party of any of the provisions hereof shall be effective unless explicitly set forth in writing and signed by the party so waiving. No failure to exercise, or delay in exercising, any right or remedy arising from this Agreement shall operate or be construed as a waiver thereof. No single or partial exercise of any right or remedy hereunder shall preclude any other or further exercise thereof or the exercise of any other right or remedy.

**Section 8.08 Governing Law; Submission to Jurisdiction.**

This Agreement shall be governed by and construed in accordance with the internal laws of the State of California, without giving effect to any choice or conflict of law provision or rule (whether of the State of California or any other jurisdiction). Any legal suit, action, proceeding, or dispute arising out of or related to this Agreement, the other Transaction Documents, or the transactions contemplated hereby or thereby may be instituted in the federal courts of the United States of America or the courts of the State of California, in each case located in the county of Orange, and each party hereto irrevocably submits to the exclusive jurisdiction of such courts in any such suit, action, proceeding, or dispute.

**Section 8.09 Counterparts.** This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together shall be deemed to be one and the same agreement. A signed copy of this Agreement delivered by email or other means of electronic transmission shall be deemed to have the same legal effect as delivery of an original signed copy of this Agreement.

[*signature page follows*]

**IN WITNESS WHEREOF**, the parties hereto have caused this Stock Purchase Agreement to be executed as of the date first written above.

---

| |
|:---|
| /s/ |
| [\*\*\*] |
| /s/ |
| [\*\*\*] |
| A&B Aerospace, Inc. |

---

---

| | |
|:---|:---|
| By: | /s/ |
|  | [\*\*\*] |
|  | President and Chief Executive Officer |

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PMGC Holdings Inc.

---

| | |
|:---|:---|
| By: | /s/ Graydon Bensler |
|  | Graydon Bensler |
|  | Chief Executive Officer |

---

## Exhibit 99.1

**Exhibit 99.1**

**Financial Statements of**

**A&B AEROSPACE, INC.**

**For the three and nine months ended February 28, 2026 and 2025 (Unaudited)**

**A&B AEROSPACE, INC.**

*Balance Sheet (unaudited)*

 

---

| | | | |
|:---|:---|:---|:---|
| As of: | ***Note*** | **Feb 28, <br> 2026** | **May 31, <br> 2025** |
| **ASSETS** |  |  |  |
| **Current Assets** |  |  |  |
| &nbsp;&nbsp;&nbsp;Cash and cash equivalents |  | $681509 | $558081 |
| &nbsp;&nbsp;&nbsp;Accounts receivable, net | 5 | 388048 | 327788 |
| &nbsp;&nbsp;&nbsp;Other receivables |  | 4000 | 2982 |
| &nbsp;&nbsp;&nbsp;Investments, at fair value | 9 | 344336 | 178657 |
| &nbsp;&nbsp;&nbsp;Inventories, net | 6 | 502717 | 469220 |
| &nbsp;&nbsp;&nbsp;Prepaid expenses and other current assets |  | 24231 | 7187 |
| **Total Current Assets** |  | $**1944841** | $**1543915** |
| **Non-current Assets** |  |  |  |
| &nbsp;&nbsp;&nbsp;Property and equipment, net | 7 | $463772 | $543627 |
| **TOTAL ASSETS** |  | $**2408613** | $**2087542** |
| **LIABILITIES** |  |  |  |
| **Current Liabilities** |  |  |  |
| &nbsp;&nbsp;&nbsp;Accounts payable |  | $158645 | $127201 |
| &nbsp;&nbsp;&nbsp;Credit card payable |  | 5818 | 301 |
| &nbsp;&nbsp;&nbsp;Notes payable | 8 | 108034 | 161692 |
| &nbsp;&nbsp;&nbsp;Customer deposits |  |  | 6135 |
| &nbsp;&nbsp;&nbsp;Accrued settlement liability |  | 225000 | 225000 |
| **Total Current Liabilities** |  | $**497497** | $**520329** |
| **TOTAL LIABILITIES** |  | $**497497** | $**520329** |
| **COMMITMENT AND CONTINGENCIES** | 11 |  |  |
| **STOCKHOLDERS' EQUITY** |  |  |  |
| &nbsp;&nbsp;&nbsp;Capital stock *(no par value, 100,000 shares authorized; 10,000 shares issued and outstanding at February 28, 2026 and May 31, 2025)* | 10 | $*-* | $*-* |
| &nbsp;&nbsp;&nbsp;Paid-in Capital | 10 | 10000 | 10000 |
| &nbsp;&nbsp;&nbsp;Retained Earnings | 10 | 1901116 | 1557213 |
| **TOTAL STOCKHOLDERS' EQUITY** |  | $**1911116** | $**1567213** |
| **TOTAL LIABILITIES AND EQUITY** |  | $**2408613** | $**2087542** |

---

 

The accompanying notes are an integral part of these statements.

**A&B AEROSPACE, INC.**

*Statement of Operations (unaudited)*

 

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | | **Three Months Ended <br> February 28,** | **Three Months Ended <br> February 28,** | **Nine Months Ended <br> February 28,** | **Nine Months Ended <br> February 28,** |
|  | ***Note*** | **2026** | **2025** | **2026** | **2025** |
| &nbsp;&nbsp;&nbsp;**Revenue** | *3* | $**1274503** | $**1015933** | $**3607404** | $**3197393** |
| &nbsp;&nbsp;&nbsp;Cost of goods sold |  | (1003914) | (945867) | (2139952) | (2568491) |
| &nbsp;&nbsp;&nbsp;Inventory impairments and write-offs | 6 | - | - | (695763) | - |
| **Total cost of goods sold** |  | **(1003914)** | **(945867)** | **(2835715)** | **(2568491)** |
| &nbsp;&nbsp;&nbsp;**Gross profit** |  | $**270589** | $**70066** | $**771689** | $**628902** |
| &nbsp;&nbsp;&nbsp;Other income, net |  | 2694 | 2082 | 16167 | 3922 |
| &nbsp;&nbsp;&nbsp;Litigation settlement expense | *11* |  | (225000) |  | (225000) |
| &nbsp;&nbsp;&nbsp;Other operating expenses |  | (146129) | (157068) | (432968) | (504900) |
| **Income (loss) before income taxes** |  | $**127154** | $**(309920)** | $**354888** | $**(97076)** |
| &nbsp;&nbsp;&nbsp;Income tax expense | *13* | (3662) | (3662) | (10985) | (10985) |
| **Net income (loss)** |  | $**123492** | $**(313582)** | $**343903** | $**(108061)** |
| **Earnings (loss) per share - basic and diluted** |  | $**12.35** | $**(31.36)** | $**34.39** | $**(10.81)** |
| **Weighted-average shares outstanding - basic and diluted** |  | **10000** | **10000** | **10000** | **10000** |

---

 

The accompanying notes are an integral part of these statements.

**A&B AEROSPACE, INC.**

*Statement of Changes in Stockholders' Equity (unaudited)*

 

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three Months Ended <br> February 28,** | **Three Months Ended <br> February 28,** | **Nine Months Ended <br> February 28,** | **Nine Months Ended <br> February 28,** |
|  | **2026** | **2025** | **2026** | **2025** |
| **Paid-in Capital** | $10000 | $10000 | $10000 | $10000 |
| **Retained Earnings** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Beginning Balance | $1777624 | $1874512 | $1557213 | $1668991 |
| &nbsp;&nbsp;&nbsp;Net Income (loss) | 123492 | (313582) | 343903 | (108061) |
| **Ending Balance** | $**1901116** | $**1560930** | $**1901116** | $**1560930** |
| **Total Equity** | $**1911116** | $**1570930** | $**1911116** | $**1570930** |

---

 

The accompanying notes are an integral part of these statements.

**A&B AEROSPACE, INC.** 

*Statement of Cash Flows (unaudited)*

 

---

| | | |
|:---|:---|:---|
|  | **Nine Months Ended <br> February 28,** | **Nine Months Ended <br> February 28,** |
|  | **2026** | **2025** |
| **Operating activities** |  |  |
| Net Income (Loss) | $343903 | $(108061) |
| Adjustments to reconcile net loss to net cash provided by (used in) operating activities: |  |  |
| &nbsp;&nbsp;&nbsp;Depreciation and amortization | 86342 | 76540 |
| &nbsp;&nbsp;&nbsp;Provision for doubtful accounts |  | (198042) |
| &nbsp;&nbsp;&nbsp;Inventory reserves and write-downs |  | 80182 |
| &nbsp;&nbsp;&nbsp;Non-cash adjustments to PP&E and inventory, net |  | (130722) |
| &nbsp;&nbsp;&nbsp;Reversal of non-cash accrual |  | 225000 |
| Changes in operating assets and liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;Decrease (increase) in accounts receivable | (60260) | 172533 |
| &nbsp;&nbsp;&nbsp;Decrease (increase) in Inventories | (33497) |  |
| &nbsp;&nbsp;&nbsp;Increase in prepaid expenses and taxes | (17044) | (7500) |
| &nbsp;&nbsp;&nbsp;Decrease (Increase) in other receivables | (1018) | 4549 |
| &nbsp;&nbsp;&nbsp;Increase in accounts payable and credit cards | 36961 | 42001 |
| &nbsp;&nbsp;&nbsp;Decrease in accrued expenses |  | (2747) |
| &nbsp;&nbsp;&nbsp;Decrease in customer deposits | (6135) | (19498) |
| **Net cash (used in) provided by operating activities** | $**349252** | $**134235** |
| **Investing activities** |  |  |
| &nbsp;&nbsp;&nbsp;Purchases of office equipment | (6487) | (7891) |
| &nbsp;&nbsp;&nbsp;Purchases of investments | (165679) | - |
| **Net cash provided by (used in) investing activities** | $**(172166)** | $**(7891)** |
| **Financing activities** |  |  |
| &nbsp;&nbsp;&nbsp;(Repayments) of Newlane Finance note payable |  | (16013) |
| &nbsp;&nbsp;&nbsp;(Repayments) of INTECH note payable | (25893) | (25003) |
| &nbsp;&nbsp;&nbsp;(Repayments) of US Bank Equipment loan | (15179) | (14262) |
| &nbsp;&nbsp;&nbsp;(Repayments) of SBA PPP loan | (12586) | (12490) |
| **Net cash provided by (used in) financing activities** | $**(53658)** | $**(67768)** |
| Net increase in cash | $123428 | $58576 |
| **Cash, beginning of period** | $**558081** | $**595813** |
| **Cash, end of period** | $**681509** | $**654389** |

---

 

The accompanying notes are an integral part of these statements.

**A&B AEROSPACE, INC.**

*Notes to the Financial Statements (unaudited)*

**<u>Notes to the Financial Statements</u>**

**<u>As of February 28, 2026 and May 31, 2025, and for the three and nine months ended February 28, 2026 and 2025 (Unaudited)</u>**

**NOTE 1: Nature of Operations**

A&B Aerospace, Inc. (the "Company") is a California corporation incorporated in 1992, operating as a precision CNC machining contractor serving the aerospace, defense, and industrial end-markets. The Company manufactures close-tolerance machined components from customer-supplied and Company-procured raw materials, principally aluminum, stainless steel, titanium, and high-temperature alloys, using CNC turning centers, Swiss-type automatic lathes, and vertical machining centers at its facility in Southern California. The Company operates under an AS9100D-certified quality management system and supplies both production and aftermarket components. The Company's fiscal year ends on May 31. These interim financial statements cover the three and nine months ended February 28, 2026 and the comparable prior-period three and nine months ended February 28, 2025. The nine-month stub period extends from June 1, 2025 through February 28, 2026. The stub period financial statements have been prepared in connection with a potential sale transaction.

**NOTE 2: Summary of Significant Accounting Policies**

**Basis of presentation**

The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("US GAAP") and are presented in U.S. dollars.

In accordance with Accounting Standards Codification (ASC) 205-40, Presentation of Financial Statements, Going Concern, management has evaluated whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company's ability to continue as a going concern within one year after the date these financial statements are available to be issued. The Company generated net income of $123,492 for the three months ended February 28, 2026, compared to a net loss of $313,582 for the three months ended February 28, 2025. For the nine months ended February 28, 2026, the Company generated net income of $343,903, compared to a net loss of $108,061 for the nine months ended February 28, 2025. The Company generated positive cash flow from operations of $349,252 for the nine months ended February 28, 2026, compared to $134,235 for the nine months ended February 28, 2025, demonstrating an ability to fund its day-to-day operations from recurring revenue.

At February 28, 2026, the Company had net working capital (current assets less current liabilities) of approximately $1,447,000, comprising total current assets of approximately $1,945,000 and total current liabilities of approximately $497,000, resulting in a current ratio of approximately 3.9 to 1. Cash and cash equivalents totaled $681,509 and the Company held an additional $344,000 in marketable equity securities, providing aggregate liquid resources of approximately $1,026,000 against total current obligations of approximately $497,000.

Management has assessed the Company's available cash and cash equivalents, its investment portfolio, and projected operating cash requirements for the twelve months following the date the financial statements are available to be issued. Based on this assessment (including the Company's positive operating cash-flow trend and its net working capital position) management believes the Company has sufficient liquidity to meet its obligations as they become due, and accordingly the financial statements have been prepared on a going-concern basis.

**Use of estimates**

The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. Areas requiring significant management judgment include the allowance for credit losses on accounts receivable, the net realizable value of inventories (including the capitalized manufacturing-overhead component), the useful lives and recoverability of property and equipment, the valuation of investments, and the assessment of revenue recognition for consignment arrangements under ASC 606. Actual results could differ from those estimates.

**A&B AEROSPACE, INC.**

*Notes to the Financial Statements (unaudited)*

 

**Cash and cash equivalents**

Cash and cash equivalents include cash on hand, cash held in demand deposit accounts at federally-insured financial institutions, and highly-liquid investments with original maturities of three months or less at the date of acquisition. Money market funds held at Morgan Stanley are classified as cash equivalents as they are redeemable on demand at net asset value and are invested in short-term, high-credit-quality instruments.

**Concentrations of credit risk**

The Company is exposed to concentrations of credit risk on cash deposits and trade accounts receivable. The Company's accounting policy and the quantitative disclosures regarding these concentrations are presented in Note 4.

**Investments**

Investments consist of marketable equity securities and money market instruments held in a brokerage account at Morgan Stanley. Equity securities are measured at fair value with changes in fair value recognized in the Statement of Operations as a component of Other Income, Net, in accordance with ASC 321, Investments - Equity Securities. Fair values are determined based on quoted market prices in active markets (Level 1 inputs, see Note 9). Dividend income is recognized when the Company's right to receive payment is established.

**Accounts receivable and allowance for credit losses**

Accounts receivable are recorded at the invoiced amount, net of an allowance for credit losses. The Company applies the current expected credit loss ("CECL") model under ASC 326, Financial Instruments - Credit Losses. Under CECL, the Company estimates lifetime expected credit losses at the reporting date based on a combination of (i) a specific-reserve analysis for invoices aged greater than 90 days or where other indicators of collectability risk exist, and (ii) a pooled historical-loss assessment for the remainder of the portfolio. Forward-looking economic indicators (including aerospace end-market demand, customer-specific financial condition, and general macroeconomic conditions) are incorporated where they would materially affect the expected loss estimate. Invoices are charged off against the allowance when management determines, after exhausting commercially reasonable collection efforts, that recovery is not probable.

**Inventories**

Inventories are stated at the lower of cost or net realizable value, with cost determined using a first-in, first-out (FIFO) method. Inventory cost includes direct materials, direct labor, and an allocation of manufacturing overhead under a full-absorption costing model consistent with ASC 330, Inventory. Manufacturing overhead allocated to inventory includes, among other items, indirect production labor, manufacturing utilities, plant rent, plant insurance, tooling, plant supplies, and depreciation on manufacturing equipment. The Company periodically reviews inventory for excess and obsolete items and records an inventory reserve when necessary.

**A&B AEROSPACE, INC.**

*Notes to the Financial Statements (unaudited)*

 

The Company evaluates its inventories for excess, slow-moving, and obsolete quantities at each reporting date. A reserve is recorded against inventories where the estimated net realizable value is less than carrying cost based on management's analysis of (i) ageing of finished goods, (ii) historical and forecast usage by part number, (iii) customer-specific demand visibility (including consumption against open vendor-managed inventory ("VMI") replenishment commitments), and (iv) the salvage or scrap value of components for which no further demand is anticipated. Write-downs are recognized in the period in which the reduction in net realizable value is identified and are presented within Inventory impairments and write-offs in the Statements of Operations.

Raw material, work-in-process and finished goods are held on the Company's premises and measured using year-end physical counts. The Company applies a standard-cost system for routine operational measurement; standard costs are reviewed at least annually and are designed to approximate actual cost. At each reporting date, total purchase-price, labor, and overhead variances are analyzed and any portion attributable to inventory remaining on hand is capitalized into inventory, with the remainder recognized in Cost of Goods Sold. Through this process, inventory is presented at amounts that approximate actual cost in accordance with ASC 330. Consigned inventory (goods held at Honeywell and MOOG VMI bin locations but over which the Company retains control per ASC 606-10-55-2) is reported as an asset until control transfers to the customer upon the customer's consumption of the inventory.

**Property and Equipment**

Property and equipment are stated at cost less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets: machinery and equipment, seven years; computer software (numerical control programming), three years; vehicles, five years; office equipment and furniture and fixtures, five years; and leasehold improvements, the lesser of the estimated useful life of the improvement or the remaining lease term. Maintenance and repairs are expensed as incurred; expenditures that extend an asset's useful life or increase its capacity are capitalized. Upon disposal, the cost and related accumulated depreciation are removed from the accounts and any resulting gain or loss is recognized in the Statement of Operations.

The Company evaluates property and equipment for impairment in accordance with ASC 360, Property, Plant, and Equipment, whenever events or changes in circumstances indicate that the carrying value of an asset or asset group may not be recoverable. Recoverability is assessed by comparing the carrying amount of the asset (or asset group) to the future undiscounted net cash flows expected to be generated by the asset. If the carrying amount is not recoverable, an impairment loss is measured as the excess of the carrying amount over the asset's fair value.

**Revenue Recognition**

The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers, when control of the promised goods transfers to the customer, in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods. See Note 3 for a detailed description of the Company's revenue policies.

**Segment reporting**

The Company operates as a single reportable segment under ASC 280, Segment Reporting. The Company's chief operating decision-maker, who is its president, reviews financial information on a consolidated basis for purposes of allocating resources and assessing performance. All of the Company's long-lived assets are located in the United States and substantially all of its revenue is generated from customers located in the United States.

**Income taxes**

The Company is a C corporation and accounts for income taxes under ASC 740, Income Taxes, using the asset-and-liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and to operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to reverse. A valuation allowance is established against any deferred tax asset to the extent that, on a more-likely-than-not basis, the asset will not be realized.

**A&B AEROSPACE, INC.**

*Notes to the Financial Statements (unaudited)*

The Company assesses its income tax positions in accordance with ASC 740-10 and recognizes the financial-statement effects of a tax position when it is more likely than not, based on the technical merits, that the position will be sustained upon examination by the relevant taxing authority. Management has evaluated the Company's tax positions taken or expected to be taken in its tax returns and has concluded that no liability for unrecognized tax benefits is required to be recorded at February 28, 2026 or May 31, 2025. The Company recognizes interest and penalties related to unrecognized tax benefits, if any, within income tax expense. The Company's federal income tax returns for fiscal years 2022 and forward, and California franchise tax returns for fiscal years 2021 and forward, remain subject to examination by the applicable taxing authorities.

**Leases**

The Company evaluates its arrangements at inception to determine whether a lease exists under ASC 842, Leases. An arrangement is a lease, or contains a lease, if it conveys the right to control the use of an identified asset for a period of time in exchange for consideration. Operating-lease right-of-use assets and lease liabilities are recognized at the commencement date based on the present value of fixed lease payments over the lease term, using the Company's incremental borrowing rate when the rate implicit in the lease is not readily determinable. The Company occupies its principal manufacturing facility under a related-party arrangement with an entity wholly owned by the Company's two officer-shareholders. The arrangement is not documented by an enforceable written contract and is terminable at will by either party; accordingly, the Company has accounted for the arrangement as a month-to-month tenancy and has not recognized a right-of-use asset or lease liability under ASC 842. Rent expense is recognized on a straight-line basis as incurred. See Note 11 for further detail on the related-party arrangement.

**Fair value of financial instruments**

The Company's financial instruments consist of cash and cash equivalents, accounts receivable, investments, accounts payable, and notes payable. The carrying values of cash, accounts receivable, and accounts payable approximate fair value due to the short-term nature of these instruments. The carrying value of notes payable approximates fair value based on their stated interest rates relative to current market rates for comparable instruments. Fair-value measurements of investments are disclosed in Note 9.

**Recent accounting pronouncements**

In November 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which expands segment disclosure requirements to include incremental information about significant segment expenses. The Company adopted ASU 2023-07 on June 1, 2024 and applied the standard retrospectively to the comparative period. Because the Company operates as a single reportable segment, the adoption did not have a material effect on the Company's financial position, results of operations, or cash flows other than enhanced footnote disclosure.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires disaggregated information about an entity's effective tax-rate reconciliation and income taxes paid. The standard is effective for the Company for annual periods beginning June 1, 2025. The Company is currently evaluating the effect of adoption on its income-tax footnote disclosures and does not expect the adoption to have a material effect on its financial position or results of operations.

Management has reviewed other recently issued accounting pronouncements and does not believe any other pronouncement issued but not yet effective will have a material effect on the Company's financial statements upon adoption.

**A&B AEROSPACE, INC.**

*Notes to the Financial Statements (unaudited)*

**NOTE 3: Revenue from Contracts with Customers**

**Contracts and performance obligations**

The Company enters into contracts with customers pursuant to master supply agreements and individual purchase orders for the sale of machined components. Each purchase order is treated as a separate contract for financial reporting purposes.

**Principal versus agent considerations**

The Company has assessed whether it acts as a principal or as an agent in its arrangements with customers under ASC 606-10-55-36 through 55-40. The Company has concluded that it is the principal in all of its revenue arrangements because it (i) is primarily responsible for fulfilling the promised goods, (ii) has inventory risk before the goods are transferred to the customer, including with respect to consigned and VMI-held inventory over which the Company retains control until customer consumption, and (iii) has discretion in establishing the price for its components. Accordingly, revenue is recognized on a gross basis at the amount the Company expects to be entitled to in exchange for the components delivered. The Company has determined that each identified part number within a purchase order represents a distinct performance obligation, as the customer can benefit from each part separately and the parts are separately identifiable within the contract.

Transaction prices are fixed per the unit prices stated in each purchase order. The Company's contracts do not contain material variable consideration, significant financing components, non-cash consideration, or consideration payable to the customer. Sales-related taxes collected from customers on behalf of governmental authorities are excluded from revenue.

**Standard shipments**

For standard (non-consignment) purchase-order shipments, the Company recognizes revenue at the point in time when control of the goods transfers to the customer. The Company's customary terms are F.O.B. shipping point, and control transfers, and revenue is recognized, upon shipment from the Company's facility. Revenue from standard shipments was $886,646 and $632,582 for the three months ended February 28, 2026 and 2025, respectively, and $2,567,153 and $2,194,460 for the nine months ended February 28, 2026 and 2025, respectively.

**Vendor-managed inventory (VMI) consignment**

The Company sells certain part numbers to Honeywell International Inc. and MOOG, Inc. through vendor-managed inventory ("VMI") consignment programs. Under these programs, the Company ships goods to customer-operated stocking locations but does not recognize a sale upon shipment. The Company has analyzed the VMI arrangements against the indicators in ASC 606-10-55-2 and has concluded that control of the goods does not transfer to the customer upon shipment to the stocking location because:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) the Company retains legal title to the goods until the customer's
consumption event;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) the Company retains the right to recall or substitute inventory
held at the stocking location at any time prior to customer consumption;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) the customer has no unconditional obligation to pay for goods
until it withdraws inventory for its own production use; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) risk of physical loss and obsolescence at the stocking location
is contractually borne by the Company until consumption.

Revenue on VMI shipments is therefore recognized at the point in time when the customer draws goods from the stocking location for its own production (the "pull event"), at which point the customer accepts the quantity and unit price reflected in an auto-generated consumption invoice. Revenue from VMI consignment was $387,857 and $382,111 for the three months ended February 28, 2026 and 2025, respectively, and $1,040,251 and $1,001,693 for the nine months ended February 28, 2026 and 2025, respectively.

**A&B AEROSPACE, INC.**

*Notes to the Financial Statements (unaudited)*

 

The inventory held at customer stocking locations but over which the Company retains control is reported within Inventories on the Balance Sheet as "Consigned (Honeywell + MOOG)." Consigned inventory was $168,855 and $203,236 at February 28, 2026 and May 31, 2025, respectively (see Note 6).

**MOOG Philippines consignment**

During fiscal year 2025, the Company commenced a separate consignment arrangement with MOOG Philippines. Revenue is recognized on the same pull-event basis described above. Revenue from this program was $0 and $1,240 for the three months ended February 28, 2026 and 2025, respectively, and $0 and $1,240 for the nine months ended February 28, 2026 and 2025, respectively.

**Contract balances**

The Company does not have material contract assets or contract liabilities. Customer deposits reported on the Balance Sheet ($0 at February 28, 2026; $6,135 at May 31, 2025) represent advance payments received on specific purchase orders for which the related performance obligation had not yet been satisfied at the respective balance sheet date. Customer deposits are recognized as revenue when control of the related goods transfers to the customer.

**Disaggregation of revenue**

Revenue disaggregated by revenue stream for the three and nine months ended February 28 is as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **3-mo Feb 28, 2026** | **3-mo Feb 28, 2025** | **9-mo Feb 28, 2026** | **9-mo Feb 28, 2025** |
| Sales - standard | $886646 | $632582 | $2567153 | $2194460 |
| Sales - VMI consignment (Honeywell + MOOG) | 387857 | 382111 | 1040251 | 1001693 |
| Sales - consignment (MOOG Philippines) | - | 1240 | - | 1240 |
| **Total Revenue** | $**1274503** | $**1015933** | $**3607404** | $**3197393** |

---

**NOTE 4: Concentrations of Credit Risk**

Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash on deposit and accounts receivable. The Company maintains its cash balances with high-credit-quality U.S. financial institutions. Deposits at each institution may at times exceed federally insured limits ($250,000 per depositor, per institution under the Federal Deposit Insurance Corporation); the Company has not experienced any losses on such accounts and does not believe it is exposed to significant credit risk with respect to its cash balances.

The Company sells primarily to large aerospace original equipment manufacturers and their tier-one suppliers. As a result, accounts receivable are concentrated among a limited number of customers. The Company performs ongoing credit evaluations of its customers, maintains specific reserves for receivables deemed uncollectible (see Note 5), and has not historically required collateral from its customers.

Customer and accounts receivable concentrations. During the nine months ended February 28, 2026 and 2025, customers each individually exceeding 10% of revenue accounted for the following approximate percentages of total revenue: Honeywell International Inc. (including authorized distributor and VMI consignment programs), approximately 34% and 48%; The Boeing Company (through Boeing Distribution Services), approximately 23% and 12%; and MOOG, Inc. (including its consignment program), approximately 16% and 15%. No other customer accounted for more than 10% of revenue in either period. At February 28, 2026 and May 31, 2025, balances due from these same customers represented the following percentages of trade accounts receivable: Honeywell International Inc., approximately 58% and 67%; The Boeing Company, approximately 14% and 8%; and MOOG, Inc., approximately 10% and 10%, respectively. Collectively, the three customers represented approximately 83% of trade accounts receivable at February 28, 2026 and approximately 84% at May 31, 2025. Substantially all trade accounts receivable at each balance sheet date is due from customers engaged in the aerospace and defense industry.

**A&B AEROSPACE, INC.**

*Notes to the Financial Statements (unaudited)*

 

Supplier and accounts payable concentrations. The Company purchases raw materials (principally aluminum, stainless steel, titanium, and high-temperature alloys) and outside-process services (heat treatment, surface finishing) from a limited number of qualified vendors. During the year ended May 31, 2025, the largest single vendor balance represented approximately 12% of total accounts payable at May 31, 2025, and no other vendor exceeded 10% of total accounts payable. At February 28, 2026, two vendors each represented approximately 19% and 18% of total accounts payable, respectively, and no other vendor exceeded 10% of total accounts payable. The Company believes that, while the loss of any one of these suppliers could temporarily disrupt operations, equivalent materials and services are available from alternate qualified sources and the impact of any such disruption would not be material to its financial position or results of operations.

**NOTE 5: Accounts Receivable**

Accounts receivable, net consists of the following:

---

| | | |
|:---|:---|:---|
|  | **Feb 28, <br> 2026** | **May 31, <br> 2025** |
| Trade accounts receivable, gross | $399565 | $346574 |
| Less: allowance for credit losses | (11517) | (18786) |
| **Trade accounts receivable, net** | $**388048** | $**327788** |

---

The Company applies ASC 326 (Financial Instruments - Credit Losses) to trade receivables. The allowance for credit losses is estimated using a specific-identification approach supplemented by historical loss experience on aged balances. At each reporting date, management reviews the aging of customer balances, known customer-specific credit issues, and reasonable-and-supportable forecasts of economic conditions affecting the aerospace industry. Account balances are written off against the allowance when management determines the receivable is not collectible.

**NOTE 6: Inventories**

Inventories are stated at the lower of cost (first-in, first-out basis, applied on a full-absorption standard) or net realizable value. Cost includes direct materials, direct labor, and an allocation of manufacturing overhead, including indirect labor, factory occupancy costs (rent, utilities, repairs), production-employee benefits, production insurance, shop supplies, and perishable tooling. Manufacturing overhead allocated to inventory totaled approximately $178,626 and $169,374 for the three months ended February 28, 2026 and 2025, respectively, and $535,879 and $508,123 for the nine months ended February 28, 2026 and 2025, respectively.

Consigned inventory represents goods physically located at customer-operated stocking locations but over which the Company retains control under the VMI arrangements described in Note 3.

The Company does not maintain a separate inventory valuation reserve; items identified as excess, slow-moving, obsolete, or otherwise unrecoverable are written down directly against the related inventory accounts. Such charges, recognized within Inventory impairments and write-offs in the Statements of Operations, totaled $0 and $0 for the three months ended February 28, 2026 and 2025, respectively, and $695,763 and $0 for the nine months ended February 28, 2026 and 2025, respectively.

**A&B AEROSPACE, INC.**

*Notes to the Financial Statements (unaudited)*

Inventories consist of the following:

---

| | | |
|:---|:---|:---|
|  | **Feb 28, <br> 2026** | **May 31, <br> 2025** |
| Work in process | $140089 | $88086 |
| Finished goods | 193773 | 177898 |
| Consigned (Honeywell + MOOG) | 168855 | 203236 |
| **Total inventories** | $**502717** | $**469220** |

---

**NOTE 7: Property and Equipment**

Property and equipment is stated at cost, net of accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, generally seven years for machinery and equipment, five years for office equipment and vehicles, and three years for computer software. Expenditures for major additions and improvements are capitalized; expenditures for routine repairs and maintenance are charged to operations as incurred. Upon retirement or disposal of an asset, the cost and related accumulated depreciation are removed from the accounts, and any resulting gain or loss is reflected in the statement of operations.

Property and equipment consists of the following:

---

| | | |
|:---|:---|:---|
|  | **Feb 28, <br> 2026** | **May 31, <br> 2025** |
| Machinery and equipment | $2523587 | $2523587 |
| Computer software (NC) | 6484 | 6484 |
| Vehicles | 29722 | 29722 |
| Office equipment & furniture | 65545 | 59058 |
| **Total property and equipment, at cost** | $**2625338** | $**2618851** |
| Less: Accumulated depreciation | (2161566) | (2075224) |
| **Total property and equipment, net** | $**463772** | $**543627** |

---

Depreciation expense was $28,781 and $25,513 for the three months ended February 28, 2026 and 2025, respectively, and $86,342 and $76,540 for the nine months ended February 28, 2026 and 2025, respectively, substantially all of which was included in cost of goods sold as manufacturing overhead.

**NOTE 8: Notes Payable and SBA Loan**

The Company maintains financing arrangements related to the acquisition of manufacturing equipment. These arrangements consist of term loans with INTECH Funding and U.S. Bank Equipment Finance, and a residual U.S. Small Business Administration ("SBA") Paycheck Protection Program ("PPP") loan balance. All borrowings are classified as current based on management's expectation that the outstanding balances will be settled within twelve months of the balance sheet date.

**A&B AEROSPACE, INC.**

*Notes to the Financial Statements (unaudited)*

 

---

| | | |
|:---|:---|:---|
|  | **Feb 28, <br> 2026** | **May 31, <br> 2025** |
| INTECH Funding Corp - equipment note, 5.87% fixed, matures Oct 2027 | $52884 | $78777 |
| U.S. Bank Equipment Finance - equipment note, 7.50% fixed, matures Aug 2028 | 55150 | 70329 |
| California Bank & Trust - SBA PPP loan, 1.00% fixed, matures Feb 2026 |  | 12586 |
| **Total notes payable, current portion** | $**108034** | $**161692** |
| Non-current portion: |  |  |
| INTECH Funding Corp |  |  |
| U.S. Bank Equipment Finance |  |  |
| California Bank & Trust - SBA PPP |  |  |
| **Total notes payable, non-current portion** | $**—** | $**—** |
| **Total notes payable** | $**108034** | $**161692** |

---

The INTECH Funding note was entered into on October 31, 2022 in the original principal amount of $151,338 to finance the acquisition of a Star Swiss automatic lathe. The note bears interest at a fixed annual rate of 5.87%, requires sixty monthly payments of $2,924, and is collateralized by the financed equipment.

The U.S. Bank Equipment Finance note was entered into on July 24, 2023 in the original principal amount of $100,000 to finance the acquisition of a Hyundai WIA HD2200 CNC lathe and ATS bar feeder. The note bears interest at a fixed annual rate of 7.50%, requires fifty-eight monthly payments of $2,086.64, and is collateralized by the financed equipment.

The Company also previously held an equipment note with Newlane Finance Company that financed the acquisition of manufacturing equipment in a prior fiscal year. Scheduled monthly principal and interest payments of $16,013 in aggregate were made during the nine months ended February 28, 2025, fully extinguishing the outstanding balance prior to May 31, 2025. No balance remained outstanding at May 31, 2025 or February 28, 2026, and accordingly the note is not reflected in the table above.

The California Bank & Trust note represents the remaining balance of a Small Business Administration Paycheck Protection Program loan obtained during fiscal year 2021. The loan bears interest at 1.00% per annum and requires monthly payments of $1,408 through final maturity in February 2026.

Interest expense on the notes payable described above totaled $1,949 and $2,372 for the three months ended February 28, 2026 and 2025, respectively, and $7,041 and $9,009 for the nine months ended February 28, 2026 and 2025, respectively, and is included within Other operating expenses on the Statements of Operations. All interest was expensed as incurred (no interest was capitalized into property and equipment), and no accrued but unpaid interest was outstanding at either balance sheet date.

**A&B AEROSPACE, INC.**

*Notes to the Financial Statements (unaudited)*

**NOTE 9: Fair Value Measurements**

The Company applies ASC 820 (Fair Value Measurement) to financial assets and liabilities measured at fair value on a recurring basis and to non-financial assets subject to non-recurring fair-value measurement (e.g., long-lived asset impairment). ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date and establishes a three-level fair-value hierarchy:

Level 1 - quoted prices in active markets for identical assets or liabilities;

Level 2 - observable inputs other than Level 1 quoted prices, including quoted prices for similar assets in active markets, quoted prices in markets that are not active, or other directly observable inputs; and

Level 3 - unobservable inputs reflecting the Company's own assumptions about the assumptions market participants would use.

Financial assets measured at fair value on a recurring basis consist of the Company's investments in marketable securities held in a managed brokerage account with Morgan Stanley. The Company's investments are classified within Level 1 of the hierarchy as fair value is determined by reference to quoted market prices on active exchanges at each reporting date. The Company had no financial liabilities measured at fair value on a recurring basis and no Level 2 or Level 3 recurring measurements at either balance sheet date.

Financial assets measured at fair value on a recurring basis consist of the following:

---

| | | |
|:---|:---|:---|
|  | **Feb 28, <br> 2026** | **May 31, <br> 2025** |
| Investments - marketable securities (Level 1) | $344336 | $178657 |
| **Total recurring fair value measurements** | $**344336** | $**178657** |

---

The amounts presented on the Balance Sheet represent the period-end fair value of the Company's marketable equity securities as reported on the Morgan Stanley brokerage statements at each measurement date. The Company marks its investment portfolio to market at each reporting date with the resulting unrealized gains and losses recognized in the Statements of Operations within other income, net. For the nine months ended February 28, 2026, the Company recognized a net realized gain of $26,378 on investment sales and reversed the prior-period cumulative unrealized loss of $15,252 through the Statements of Operations. The net increase in the carrying value of the investment portfolio of $165,679 between May 31, 2025 ($178,657) and February 28, 2026 ($344,336) reflects net purchases and reinvested earnings, net realized gains of $26,378, the reversal of the prior-period cumulative unrealized loss of $15,252, and the mark-to-market adjustment recognized during the period.

**NOTE 10: Stockholders' Equity**

**Capital stock**

The Company is authorized to issue 100,000 shares of capital stock, no par value. At February 28, 2026 and May 31, 2025, there were 10,000 shares issued and outstanding. Because the shares have no par value, no amount is allocated to capital stock; the aggregate consideration of $10,000 received on issuance is reported in paid-in capital.

**A&B AEROSPACE, INC.**

*Notes to the Financial Statements (unaudited)*

 

**Distributions**

No distributions to shareholders were declared or paid during the nine months ended February 28, 2026 and 2025.

**Changes in retained earnings**

Retained earnings increased by $123,492 during the three months ended February 28, 2026 (reflecting net income of $123,492 for the quarter) and increased by $343,903 during the nine months ended February 28, 2026 (reflecting net income of $343,903 for the nine-month period). Retained earnings decreased by $313,582 during the three months ended February 28, 2025 (reflecting the net loss for the quarter) and decreased by $108,061 during the nine months ended February 28, 2025 (reflecting the net loss for the nine-month period). See the Statement of Changes in Stockholders' Equity for a complete roll forward.

**NOTE 11: Commitments and Contingencies**

**Operating lease - manufacturing facility**

The Company occupies its principal manufacturing facility under a related-party arrangement with an entity wholly owned by the Company's two officer-shareholders (the "Lessor Entity"). The arrangement provides for monthly rental payments of $12,000, or $144,000 per annum, payable in arrears. Rent expense under this arrangement was $36,000 for each of the three months ended February 28, 2026 and 2025 and $108,000 for each of the nine months ended February 28, 2026 and 2025, and is classified within cost of goods sold as manufacturing overhead. The Company has determined that, in substance, the arrangement is a lease under ASC 842 because it conveys the right to control the use of an identified facility for consideration over a period of time, notwithstanding the absence of an enforceable written contract. The arrangement is terminable at will by either party and operates as a month-to-month tenancy. The Company has elected the short-term lease recognition exemption available under ASC 842-20-25-2 for leases with a term of twelve months or less, and accordingly does not recognize a right-of-use asset or lease liability for this arrangement. Rent expense is recognized on a straight-line basis as incurred.

**Legal proceedings**

During fiscal year 2025, the Company agreed to settle a wage-and-hour class action. The Company accrued $225,000, management's best estimate of the probable loss, recognized as litigation settlement expense and recorded within accrued settlement liability in current liabilities, with payment expected within twelve months.

Other than the matter described above, the Company is not a party to any material legal proceedings. From time to time the Company may become involved in routine litigation incidental to the conduct of its business; management does not believe any such matters currently pending are likely to have a material adverse effect on the Company's financial position, results of operations, or cash flows.

**Customer warranties and product-liability claims**

The Company's machined components are subject to product-acceptance inspection by its aerospace customers and, in certain cases, source inspection by the customer's representative prior to shipment. Rejected parts are reworked or replaced at the Company's cost; historical rework and rejection costs are not material (approximately $0 and $2,100 for the three months ended February 28, 2026 and 2025, respectively, and a net recovery of approximately $12,500 and costs of approximately $36,900 for the nine months ended February 28, 2026 and 2025, respectively, representing less than 1% of net revenue in each period) and are expensed as incurred. The Company does not provide extended warranties beyond those implied by industry custom and has not recorded a warranty accrual at either balance sheet date.

**A&B AEROSPACE, INC.**

*Notes to the Financial Statements (unaudited)*

**NOTE 12: Related Party Transactions**

The Company has the following related parties: (i) the Lessor Entity, an entity wholly owned by the Company's two officer-shareholders that owns the manufacturing facility leased to the Company, and (ii) the two officer-shareholders themselves, who serve as the Company's sole directors and officers and provide payroll services to the Company.

Facility lease. The Company occupies its principal manufacturing facility under a month-to-month arrangement with the Lessor Entity. Total related-party rent expense recognized was $36,000 for each of the three months ended February 28, 2026 and 2025 and $108,000 for each of the nine months ended February 28, 2026 and 2025. No amounts were payable to, or receivable from, the Lessor Entity at either balance sheet date. The rental rate is believed by management to approximate market terms for comparable light-industrial space in the Company's geographic area; however, the arrangement was not negotiated at arm's length and could be modified at the discretion of the parties. See Note 11 for the lease accounting conclusion.

Officer-shareholder compensation. Officer-shareholder compensation, including salary and employer payroll taxes, totaled $67,650 for the three months ended February 28, 2026 and 2025, respectively, and $202,950 for the nine months ended February 28, 2026 and 2025, respectively, and is included within operating expenses.

**NOTE 13: Income Taxes**

The Company is taxed as a C corporation in the United States and is subject to United States federal income tax and California franchise and income tax. The Company files separate United States federal and California corporate income tax returns on a fiscal-year basis ending May 31.

Current income tax expense totaled $3,662 for each of the three months ended February 28, 2026 and 2025, comprising United States federal income tax of $3,454 and California franchise tax of $208 in each quarter. Current income tax expense for the nine months ended February 28, 2026 and 2025 totaled $10,985 and $10,985, respectively, comprising United States federal income tax of $10,363 and $10,363 and California franchise tax of $622 and $622. The Company has recognized deferred tax assets attributable to its net operating loss carryforwards, against which a full valuation allowance has been recorded (see "Deferred tax assets and valuation allowance" below). The Company has not yet quantified deferred tax assets or liabilities for other temporary differences between the financial-reporting and income-tax bases of its assets and liabilities, principally inventory write-offs, accumulated depreciation, and the allowance for credit losses. Such amounts will be quantified once the Company's tax provider has prepared a tax-basis balance sheet that reconciles the book-basis adjustments reflected in these financial statements to the corresponding amounts reported on the United States federal income tax return.

**Effective income tax rate**

The Company's effective income tax rate differs from the United States federal statutory rate of 21 per cent principally because of the following: (a) significant book-to-tax adjustments arising from inventory write-offs and other items that are recognized in the financial statements but treated differently for income-tax purposes; (b) a full valuation allowance maintained against the Company's deferred tax assets, which eliminates any income tax benefit that would otherwise arise from the net operating loss carryforwards; (c) state income taxes; and (d) non-deductible permanent differences, including officer life-insurance premiums and the disallowed portion of meals expense. As a result, the Company recorded income tax expense of $10,985 for each of the nine months ended February 28, 2026 and February 28, 2025, an effective rate below the statutory rate when measured against pre-tax income for financial-reporting purposes.

**A&B AEROSPACE, INC.**

*Notes to the Financial Statements (unaudited)*

 

**Components of income tax expense**

Income tax expense for the three and nine months ended February 28, 2026 and 2025 consists entirely of current income tax, as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three Months Ended <br> February 28,** | **Three Months Ended <br> February 28,** | **Nine Months Ended <br> February 28,** | **Nine Months Ended <br> February 28,** |
|  | **2026** | **2025** | **2026** | **2025** |
| **Current United States federal** | $3454 | $3454 | $10363 | $10363 |
| California franchise tax | 208 | 208 | 622 | 622 |
| **Total current income tax expense** | **3662** | **3662** | **10985** | **10985** |

---

There were no income taxes paid in cash during the nine months ended February 28, 2026 and 2025.

**Net operating loss carryforwards**

United States federal net operating loss carryforwards available to the Company at the beginning of the nine months ended February 28, 2026 totaled approximately $1,000. The Company does not expect material utilization of the remaining carryforward during the stub period, leaving a remaining federal net operating loss carryforward of approximately $1,000 at February 28, 2026. These carryforwards arose in tax years beginning after December 31, 2017 and accordingly carry forward indefinitely; however, their utilization in any given year is limited to 80 per cent of taxable income under Section 172(a) of the Internal Revenue Code, as amended by the Tax Cuts and Jobs Act.

No California net operating loss carryforward remained at May 31, 2025, the carryforwards available at the beginning of fiscal year 2025 having been fully utilized in prior periods. During the nine months ended February 28, 2026, the Company generated a California net operating loss of approximately $4,815, leaving a California net operating loss carryforward of approximately $4,815 at February 28, 2026.

California net operating losses generated in tax years beginning on or after January 1, 2020 are available for a twenty-year carryforward period and accordingly will expire on or about December 31, 2046 if not utilized.

**Deferred tax assets and valuation allowance**

The Company's only identified deferred tax asset arises from the net operating loss carry forwards described above. At February 28, 2026, the gross deferred tax asset totaled $1,632, comprising a federal deferred tax asset of $1,206 on a federal net operating loss carry forward of $5,745 measured at the statutory rate of 21 per cent and a California deferred tax asset of $426 on a California net operating loss carry forward of $4,815 measured at the statutory rate of 8.84 per cent. At May 31, 2025, the gross deferred tax asset totaled $195, comprising a federal deferred tax asset of $195 on a federal net operating loss carry forward of $930 measured at the statutory rate of 21 per cent. No other material temporary differences between the financial-reporting and income-tax bases of the Company's assets and liabilities were identified at either balance-sheet date.

**A&B AEROSPACE, INC.**

*Notes to the Financial Statements (unaudited)*

Management assessed the realizability of these deferred tax assets in accordance with ASC 740-10-30-5. Although the Company generated net income for financial-reporting purposes during the nine months ended February 28, 2026, management concluded that, in light of the limited magnitude of the underlying net operating loss carry forwards, the absence of a sustained history of taxable income at the federal level, and the inherent uncertainty in projecting future taxable income against which the carry forwards would be utilized, a full valuation allowance was warranted. Accordingly, a valuation allowance equal to the gross deferred tax asset was recorded at each balance-sheet date, reducing the net deferred tax asset to zero. The valuation allowance increased by $1,437 during the nine months ended February 28, 2026, from $195 to $1,632 (with no material change during the three months ended February 28, 2026), as the Company generated a federal net operating loss of approximately $4,815 and a California net operating loss of approximately $4,815 during the nine-month period. The valuation allowance decreased by $91,481 during the year ended May 31, 2025, from $91,676 to $195, as the underlying net operating loss carry forwards were utilized against taxable income.

No deferred tax liabilities were identified at February 28, 2026 or May 31, 2025.

The utilization of the Company's remaining net operating loss carryforwards may be subject to annual limitation under Sections 382 and 383 of the Internal Revenue Code if the Company experiences an ownership change, generally defined as a cumulative change of more than 50 percentage points by certain stockholders during a rolling three-year period. The Company has not completed a formal Section 382 and 383 study; however, the Company is not aware of any ownership change events that would limit the utilization of these carryforwards.

**Uncertain tax positions**

The Company recognizes the financial statement benefit of a tax position only when the position is more likely than not to be sustained on examination by the relevant taxing authority. As of February 28, 2026 and May 31, 2025, the Company had no unrecognized tax benefits, and no tax positions are reported on Schedule UTP of the Company's federal income tax return. The Company records interest related to uncertain tax positions within interest expense and any related penalties within general and administrative expenses; no such amounts were recognized during the nine months ended February 28, 2026 and 2025.

**Open tax years**

The Company is subject to taxation in the United States federal jurisdiction and in California. The Company's federal tax returns for fiscal years ended May 31, 2022 through May 31, 2025 and California tax returns for fiscal years ended May 31, 2021 through May 31, 2025 remain open to examination by the United States Internal Revenue Service and the California Franchise Tax Board, respectively. There were no examinations in progress at February 28, 2026.

**NOTE 14: Subsequent Events**

The Company has evaluated subsequent events through May 12, 2026, the date these financial statements were available to be issued. No events have occurred subsequent to February 28, 2026 that require recognition or disclosure in these financial statements.

## Exhibit 99.2

**Exhibit 99.2**

*Financial Statements of*

 

**A&B AEROSPACE, INC.**

*For the years ended May 31, 2025 and May 31, 2024*

 

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To Members and Stockholders of<br> A&B Aerospace, Inc.

**<u>Opinion on the Financial Statements</u>**

We have audited the accompanying balance sheets of A&B Aerospace, Inc. (the Company) as of May 31, 2025 and 2024, and the related statements of operations, equity, and cash flows for the years ended May 31, 2025 and 2024, and the related notes (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of May 31, 2025 and 2024, and the results of its operations and its cash flows for the years ended May 31, 2025, in conformity with accounting principles generally accepted in the United States of America.

**<u>Basis for Opinion</u>**

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

**<u>Critical Audit Matters</u>**

A critical audit matter is a matter arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee or the Company's governance and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating a critical audit, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. We determined that there are no critical audit matters communicated or required to be communicated to the audit committee.

/s/ HTL International, LLC

HTL International, LLC

We have served as the Company's auditor since 2025.

Houston, TX

May 12, 2026

PCAOB ID: 7000

**Balance Sheet**

As of May 31, 2025 and May 31, 2024

*(Expressed in U.S. dollars)*

 

---

| | | | |
|:---|:---|:---|:---|
|  | **Note** | **May 31,<br> 2025** | **May 31, <br> 2024** |
| **ASSETS** | | | |
| **Current Assets** | | | |
| &nbsp;&nbsp;&nbsp;Cash and cash equivalents |  | $558081 | $595813 |
| &nbsp;&nbsp;&nbsp;Accounts receivable, net | 5 | 327788 | 424854 |
| &nbsp;&nbsp;&nbsp;Other receivables |  | 2982 | 4550 |
| &nbsp;&nbsp;&nbsp;Investments, at fair value | 9 | 178657 | 148682 |
| &nbsp;&nbsp;&nbsp;Inventories, net | 6 | 469220 | 456886 |
| &nbsp;&nbsp;&nbsp;Prepaid expenses and other current assets |  | 7187 | 27710 |
| &nbsp;&nbsp;&nbsp;**Total Current Assets** |  | $**1543915** | $**1658495** |
| **Non-current Assets** |  |  |  |
| &nbsp;&nbsp;&nbsp;Property and equipment, net | 7 | $543627 | $507049 |
| **TOTAL ASSETS** |  | $**2087542** | $**2165544** |
| **LIABILITIES** |  |  |  |
| **Current Liabilities** |  |  |  |
| &nbsp;&nbsp;&nbsp;Accounts payable |  | $127201 | $234858 |
| &nbsp;&nbsp;&nbsp;Credit card payable |  | 301 | 1706 |
| &nbsp;&nbsp;&nbsp;Notes payable | 8 | 161692 | 81214 |
| &nbsp;&nbsp;&nbsp;Customer deposits |  | 6135 | 7083 |
| &nbsp;&nbsp;&nbsp;Accrued settlement liability | 11 | 225000 | - |
| &nbsp;&nbsp;&nbsp;**Total Current Liabilities** |  | $**520329** | $**324861** |
| **Long-term Liabilities** |  |  |  |
| &nbsp;&nbsp;&nbsp;Notes payable | 8 | $- | 161692 |
| **Total Long-term Liabilities** |  | $**-** | $**161692** |
| **TOTAL LIABILITIES** |  | $**520329** | $**486553** |
| **COMMITMENTS AND CONTINGENCIES** | **11** |  |  |
| **STOCKHOLDERS' EQUITY** |  |  |  |
| Capital stock *(no par value, 100,000 shares authorized; 10,000 shares issued and outstanding at May 31, 2025 and 2024)* | 10 | $- | $- |
| &nbsp;&nbsp;&nbsp;Paid-in capital | 10 | 10000 | 10000 |
| &nbsp;&nbsp;&nbsp;Retained earnings | 10 | 1557213 | 1668991 |
| &nbsp;&nbsp;&nbsp;**Total Stockholders' Equity** |  | $**1567213** | $**1678991** |
| **TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY** |  | $**2087542** | $**2165544** |

---

 

The accompanying notes are an integral part of these statements

**Statement of Operations**

For the years ended May 31, 2025 and May 31, 2024

*(Expressed in U.S. dollars)*

 

---

| | | | |
|:---|:---|:---|:---|
|  | **Note** | **May 31, <br> 2025** | **May 31, <br> 2024** |
| **Revenue** | 3 | $**4284780** | $**4188062** |
| &nbsp;&nbsp;&nbsp;Cost of products sold |  | 3338795 | 3161942 |
| &nbsp;&nbsp;&nbsp;Inventory impairments and write-offs | 6 | 650284 | 752953 |
| **Gross profit** |  | $**295701** | $**273167** |
| &nbsp;&nbsp;&nbsp;Other income, net | 9 | 21097 | 7004 |
| &nbsp;&nbsp;&nbsp;Litigation settlement expense |  | (225000) |  |
| &nbsp;&nbsp;&nbsp;Other operating expenses |  | (188929) | (198311) |
| **Income (loss) before income taxes** |  | $**(97131)** | $**81860** |
| &nbsp;&nbsp;&nbsp;Income tax expense | 13 | (14647) | (11526) |
| **Net income (loss)** |  | $**(111778)** | $**70334** |
| &nbsp;&nbsp;&nbsp;Earnings (loss) per share - basic and diluted |  | $(11.18) | $7.03 |
| &nbsp;&nbsp;&nbsp;Weighted-average shares outstanding - basic and diluted |  | 10000 | 10000 |

---

The accompanying notes are an integral part of these statements

**Statement of Changes in Stockholders' Equity**

For the years ended May 31, 2025 and May 31, 2024

*(Expressed in U.S. dollars)*

 

---

| | | | |
|:---|:---|:---|:---|
|  | **Paid-in <br> Capital** | **Retained <br> Earnings** | **Total Equity** |
| **Balance - May 31, 2023** | $**10000** | $**1598657** | $**1608657** |
| Net income |  | 70334 | 70334 |
| Distributions to shareholders |  | - | - |
| **Balance - May 31, 2024** | $**10000** | $**1668991** | $**1678991** |
| Net loss |  | (111778) | (111778) |
| Distributions to shareholders |  | - | - |
| **Balance - May 31, 2025** | $**10000** | $**1557213** | $**1567213** |

---

 

The accompanying notes are an integral part of these statements

**Statement of Cash Flows**

For the years ended May 31, 2025 and May 31, 2024

*(Expressed in U.S. dollars)*

 

---

| | | |
|:---|:---|:---|
|  | **May 31, <br> 2025** | **May 31, <br> 2024** |
| **Operating activities** | | |
| Net income (loss) | $(111778) | $70334 |
| **Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:** |  |  |
| &nbsp;&nbsp;&nbsp;Depreciation and amortization | 102054 | 75737 |
| &nbsp;&nbsp;&nbsp;Inventory impairments and write-offs (non-cash) | 650284 | 752953 |
| **Non-cash adjustments** |  |  |
| &nbsp;&nbsp;&nbsp;Inventory roll-forward | (115013) | (129691) |
| &nbsp;&nbsp;&nbsp;AR consignment & opening true-ups | (264056) | (327232) |
| &nbsp;&nbsp;&nbsp;PP&E reconciliation | 106909 | 77289 |
| &nbsp;&nbsp;&nbsp;Leasehold cleanup & full-absorption COGS reclass | (137872) | 69258 |
| &nbsp;&nbsp;&nbsp;Unrealized (gain) / loss on investments (non-cash) | (15252) | (3365) |
| **Changes in operating assets and liabilities:** |  |  |
| &nbsp;&nbsp;&nbsp;Decrease in accounts receivable | 97066 | 352012 |
| &nbsp;&nbsp;&nbsp;Decrease (increase) in inventory | (12334) | (300080) |
| &nbsp;&nbsp;&nbsp;Decrease in prepaid expenses and deposits | 20523 | 8779 |
| &nbsp;&nbsp;&nbsp;Decrease (increase) in other receivables | 1568 | (4550) |
| &nbsp;&nbsp;&nbsp;(Decrease) increase in accounts payable and credit card payable | (109062) | 110706 |
| &nbsp;&nbsp;&nbsp;Increase (decrease) in accrued expenses |  |  |
| &nbsp;&nbsp;&nbsp;Decrease in customer deposits | (948) | (7917) |
| **Net cash (used in) provided by operating activities** | $**212089** | $**744233** |
| **Investing activities** |  |  |
| &nbsp;&nbsp;&nbsp;Purchases of machinery and equipment | (130741) | (292222) |
| &nbsp;&nbsp;&nbsp;Purchases of office equipment | (7891) | (1869) |
| &nbsp;&nbsp;&nbsp;Purchases of investments | (29975) | (148682) |
| **Net cash provided by (used in) investing activities** | $**(168607)** | $**(442773)** |
| **Financing activities** |  |  |
| &nbsp;&nbsp;&nbsp;Repayments of Newlane Finance note payable | (16013) | (24020) |
| &nbsp;&nbsp;&nbsp;Repayments of INTECH note payable | (29421) | (25471) |
| &nbsp;&nbsp;&nbsp;Proceeds (repayments) of US Bank Equipment loan | (19105) | 89434 |
| &nbsp;&nbsp;&nbsp;Repayments of SBA PPP loan | (16675) | (16510) |
| **Net cash (used in) provided by financing activities** | $**(81214)** | $**23433** |
| **Net (decrease) increase in cash** | $**(37732)** | $**324893** |
| Cash, beginning of period | 595813 | 270920 |
| **Cash, end of period** | $**558081** | $**595813** |

---

 

The accompanying notes are an integral part of these statements

**Notes to the Financial Statements**

 

*For the Years ended May 31, 2025 and 2024*

 

**NOTE 1: Nature of Operations**

A&B Aerospace, Inc. (the "Company") is a California corporation incorporated in 1992, operating as a precision CNC machining contractor serving the aerospace, defense, and industrial end-markets. The Company manufactures close-tolerance machined components from customer-supplied and Company-procured raw materials, principally aluminum, stainless steel, titanium, and high-temperature alloys, using CNC turning centers, Swiss-type automatic lathes, and vertical machining centers at its facility in Southern California. The Company operates under an AS9100D-certified quality management system and supplies both production and aftermarket components. The Company's fiscal year ends on May 31.

**NOTE 2: Summary of Significant Accounting Policies**

**Basis of presentation**

The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("US GAAP") and are presented in U.S. dollars.

**Going concern**

In accordance with Accounting Standards Codification (ASC) 205-40, Presentation of Financial Statements, Going Concern, management has evaluated whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company's ability to continue as a going concern within one year after the date these financial statements are available to be issued. The Company incurred a net loss of $111,778 for the year ended May 31, 2025 and recognized net income of $70,334 for the year ended May 31, 2024. The Company generated positive cash flow from operations of $212,089 and $744,233 in fiscal year 2025 and fiscal year 2024, respectively, demonstrating an ability to fund its day-to-day operations from recurring revenue.

At May 31, 2025, the Company had net working capital (current assets less current liabilities) of approximately $1,024,000, comprising total current assets of approximately $1,544,000 and total current liabilities of approximately $520,000, resulting in a current ratio of approximately 2.9 to 1. Cash and cash equivalents totaled $558,081 and the Company held an additional $179,000 in marketable equity securities, providing aggregate liquid resources of approximately $737,000 against total current obligations of approximately $520,000.

Management has assessed the Company's available cash and cash equivalents, its investment portfolio, and projected operating cash requirements for the twelve months following the date the financial statements are available to be issued. Based on this assessment (including the Company's positive operating cash-flow trend and its net working capital position) management believes the Company has sufficient liquidity to meet its obligations as they become due, and accordingly the financial statements have been prepared on a going-concern basis.

**Use of estimates**

The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. Areas requiring significant management judgment include the allowance for credit losses on accounts receivable, the net realizable value of inventories (including the capitalized manufacturing-overhead component), the useful lives and recoverability of property and equipment, the valuation of investments, and the assessment of revenue recognition for consignment arrangements under ASC 606. Actual results could differ from those estimates.

**Cash and cash equivalents**

Cash and cash equivalents include cash on hand, cash held in demand deposit accounts at federally-insured financial institutions, and highly-liquid investments with original maturities of three months or less at the date of acquisition. Money market funds held at Morgan Stanley are classified as cash equivalents as they are redeemable on demand at net asset value and are invested in short-term, high-credit-quality instruments.

**Concentrations of credit risk**

Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash deposits and accounts receivable. The Company maintains cash balances in excess of federally-insured limits ($250,000 per depositor, per institution under the Federal Deposit Insurance Corporation) at a commercial bank. The Company has not experienced losses on its cash balances and management considers the credit risk to be minimal based on the financial strength of the institutions.

Accounts receivable credit risk is concentrated among a limited number of aerospace OEMs and authorized distributors. For the years ended May 31, 2025 and 2024, three customers collectively accounted for a substantial portion of the Company's revenue: Honeywell International Inc. and its authorized distributor, The Boeing Company (through Boeing Distribution Services), and MOOG, Inc. Management performs ongoing credit evaluations of its customers and generally does not require collateral.

**Investments**

Investments consist of marketable equity securities and money market instruments held in a brokerage account at Morgan Stanley. Equity securities with readily determinable fair values are measured at fair value at each balance sheet date in accordance with ASC 321, Investments — Equity Securities, with all changes in fair value — both realized gains and losses on sale and unrealized gains and losses arising from changes in market prices during the period — recognized in the Statement of Operations within Other income as they occur. The carrying amount of the portfolio at each balance sheet date therefore represents its period-end fair value. Fair values are determined by reference to quoted market prices on active exchanges (Level 1 inputs; see Note 9). Dividend income is recognized when the Company's right to receive payment is established.

**Accounts receivable and allowance for credit losses**

Accounts receivable are recorded at the invoiced amount, net of an allowance for credit losses. The Company applies the current expected credit loss ("CECL") model under ASC 326, Financial Instruments - Credit Losses. Under CECL, the Company estimates lifetime expected credit losses at the reporting date based on a combination of (i) a specific-reserve analysis for invoices aged greater than 90 days or where other indicators of collectability risk exist, and (ii) a pooled historical-loss assessment for the remainder of the portfolio. Forward-looking economic indicators (including aerospace end-market demand, customer-specific financial condition, and general macroeconomic conditions) are incorporated where they would materially affect the expected loss estimate. Invoices are charged off against the allowance when management determines, after exhausting commercially reasonable collection efforts, that recovery is not probable.

**Inventories**

Inventories are stated at the lower of cost or net realizable value, with cost determined using a first-in, first-out (FIFO) method. Inventory cost includes direct materials, direct labor, and an allocation of manufacturing overhead under a full-absorption costing model consistent with ASC 330, Inventory. Manufacturing overhead allocated to inventory includes, among other items, indirect production labor, manufacturing utilities, plant rent, plant insurance, tooling, plant supplies, and depreciation on manufacturing equipment. The Company periodically reviews inventory for excess, slow-moving, and obsolete items and writes such items down directly against the related inventory accounts, with the charge recognized in cost of goods sold.

The Company evaluates its inventories for excess, slow-moving, and obsolete quantities at each reporting date. A write-down is recorded directly against the carrying amount of the affected inventory where the estimated net realizable value is less than carrying cost based on management's analysis of (i) ageing of finished goods, (ii) historical and forecast usage by part number, (iii) customer-specific demand visibility (including consumption against open vendor-managed inventory ("VMI") replenishment commitments), and (iv) the salvage or scrap value of components for which no further demand is anticipated. Write-downs are recognized in the period in which the reduction in net realizable value is identified and are included within Cost of goods sold in the Statement of Operations, presented separately on the face of the Statement of Operations as Inventory impairments and write-offs in accordance with ASC 330.

Work-in-process and finished goods held on the Company's premises are measured using year-end physical counts. The Company applies a standard-cost system for routine operational measurement; standard costs are reviewed at least annually and are designed to approximate actual cost. At each reporting date, total purchase-price, labor, and overhead variances are analyzed and any portion attributable to inventory remaining on hand is capitalized into inventory, with the remainder recognized in cost of goods sold. Through this process, inventory is presented at amounts that approximate actual cost in accordance with ASC 330. Consigned inventory (goods held at Honeywell and MOOG VMI bin locations but over which the Company retains control per ASC 606-10-55-2) is reported as an asset until control transfers to the customer upon the customer's consumption of the inventory.

**Property and equipment**

Property and equipment are stated at cost less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets: machinery and equipment, seven years; computer software (numerical control programming), three years; vehicles, five years; office equipment and furniture and fixtures, five years; and leasehold improvements, the lesser of the estimated useful life of the improvement or the remaining lease term. Maintenance and repairs are expensed as incurred; expenditures that extend an asset's useful life or increase its capacity are capitalized. Upon disposal, the cost and related accumulated depreciation are removed from the accounts and any resulting gain or loss is recognized in the Statement of Operations.

The Company evaluates property and equipment for impairment in accordance with ASC 360, Property, Plant, and Equipment, whenever events or changes in circumstances indicate that the carrying value of an asset or asset group may not be recoverable. Recoverability is assessed by comparing the carrying amount of the asset (or asset group) to the future undiscounted net cash flows expected to be generated by the asset. If the carrying amount is not recoverable, an impairment loss is measured as the excess of the carrying amount over the asset's fair value.

**Revenue recognition**

The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers, when control of the promised goods transfers to the customer, in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods. See Note 3 for a detailed description of the Company's revenue policies.

**Segment reporting**

The Company operates as a single reportable segment under ASC 280, Segment Reporting. The Company's chief operating decision-maker, who is its president, reviews financial information on a consolidated basis for purposes of allocating resources and assessing performance. All of the Company's long-lived assets are located in the United States and substantially all of its revenue is generated from customers located in the United States.

**Income taxes**

The Company is a C corporation and accounts for income taxes under ASC 740, Income Taxes, using the asset-and-liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and to operating loss and tax credit carryforwards.

Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to reverse. A valuation allowance is established against any deferred tax asset to the extent that, on a more-likely-than-not basis, the asset will not be realized.

The Company assesses its income tax positions in accordance with ASC 740-10 and recognizes the financial-statement effects of a tax position when it is more likely than not, based on the technical merits, that the position will be sustained upon examination by the relevant taxing authority. Management has evaluated the Company's tax positions taken or expected to be taken in its tax returns and has concluded that no liability for unrecognized tax benefits is required to be recorded at May 31, 2025 or May 31, 2024. The Company recognizes interest and penalties related to unrecognized tax benefits, if any, within income tax expense. The Company's federal income tax returns for fiscal years 2021 and forward, and California franchise tax returns for fiscal years 2020 and forward, remain subject to examination by the applicable taxing authorities.

**Leases**

The Company evaluates its arrangements at inception to determine whether a lease exists under ASC 842, Leases. An arrangement is a lease, or contains a lease, if it conveys the right to control the use of an identified asset for a period of time in exchange for consideration. Operating-lease right-of-use assets and lease liabilities are recognized at the commencement date based on the present value of fixed lease payments over the lease term, using the Company's incremental borrowing rate when the rate implicit in the lease is not readily determinable. The Company occupies its principal manufacturing facility under a related-party arrangement with an entity wholly owned by the Company's two officer-shareholders. The arrangement is not documented by an enforceable written contract and is terminable at will by either party; accordingly, the Company has accounted for the arrangement as a month-to-month tenancy and has not recognized a right-of-use asset or lease liability under ASC 842. Rent expense is recognized on a straight-line basis as incurred. See Note 11 for further detail on the related-party arrangement.

**Fair value of financial instruments**

The Company's financial instruments consist of cash and cash equivalents, accounts receivable, investments, accounts payable, and notes payable. The carrying values of cash, accounts receivable, and accounts payable approximate fair value due to the short-term nature of these instruments. The carrying value of notes payable approximates fair value based on their stated interest rates relative to current market rates for comparable instruments. Fair-value measurements of investments are disclosed in Note 9.

**Recent accounting pronouncements**

In November 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which expands segment disclosure requirements to include incremental information about significant segment expenses. The Company adopted the new guidance effective June 1, 2024 and applied it retrospectively to the comparative period presented. As the Company operates as a single reportable segment, management does not expect the adoption of ASU 2023-07 to have a material effect on the Company's recognition or measurement of segment results, and the adoption did not have a material effect on the Company's financial position, results of operations, or cash flows. The impact of adoption was limited to enhanced footnote disclosure of significant segment expenses (see Segment reporting above).

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires disaggregated information about an entity's effective tax-rate reconciliation and income taxes paid. The standard is effective for the Company for annual periods beginning June 1, 2025. As ASU 2023-09 affects only income-tax footnote disclosures and does not change the recognition or measurement of income taxes, the adoption will not have a material effect on the Company's financial position, results of operations, or cash flows. The impact is expected to be limited to expanded disclosure of the effective tax-rate reconciliation and income taxes paid.

Management has reviewed other recently issued accounting pronouncements and does not believe any other pronouncement issued but not yet effective will have a material effect on the Company's financial statements upon adoption.

**NOTE 3: Revenue from Contracts with Customers**

**Contracts and performance obligations**

The Company enters into contracts with customers pursuant to master supply agreements and individual purchase orders for the sale of machined components. Each purchase order is treated as a separate contract for financial reporting purposes.

**Principal versus agent considerations**

The Company has assessed whether it acts as a principal or as an agent in its arrangements with customers under ASC 606-10-55-36 through 55-40. The Company has concluded that it is the principal in all of its revenue arrangements because it (i) is primarily responsible for fulfilling the promised goods, (ii) has inventory risk before the goods are transferred to the customer, including with respect to consigned and VMI-held inventory over which the Company retains control until customer consumption, and (iii) has discretion in establishing the price for its components. Accordingly, revenue is recognized on a gross basis at the amount the Company expects to be entitled to in exchange for the components delivered. The Company has determined that each identified part number within a purchase order represents a distinct performance obligation, as the customer can benefit from each part separately and the parts are separately identifiable within the contract.

Transaction prices are fixed per the unit prices stated in each purchase order. The Company's contracts do not contain material variable consideration, significant financing components, non-cash consideration, or consideration payable to the customer. Sales-related taxes collected from customers on behalf of governmental authorities are excluded from revenue.

**Standard shipments**

For standard (non-consignment) purchase-order shipments, the Company recognizes revenue at the point in time when control of the goods transfers to the customer. The Company's customary terms are F.O.B. shipping point, and control transfers, and revenue is recognized, upon shipment from the Company's facility. Revenue from standard shipments was $3,022,207 and $3,393,013 for the years ended May 31, 2025 and 2024, respectively.

**Vendor-managed inventory (VMI) consignment**

The Company sells certain part numbers to Honeywell International Inc. and MOOG, Inc. through vendor-managed inventory ("VMI") consignment programs. Under these programs, the Company ships goods to customer-operated stocking locations but does not recognize a sale upon shipment. The Company has analyzed the VMI arrangements against the indicators in ASC 606-10-55-2 and has concluded that control of the goods does not transfer to the customer upon shipment to the stocking location because:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) the
 Company retains legal title to the goods until the customer's consumption event;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) the
 Company retains the right to recall or substitute inventory held at the stocking location
 at any time prior to customer consumption;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) the
 customer has no unconditional obligation to pay for goods until it withdraws inventory for
 its own production use; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) risk
 of physical loss and obsolescence at the stocking location is contractually borne by the
 Company until consumption.

Revenue on VMI shipments is therefore recognized at the point in time when the customer draws goods from the stocking location for its own production (the "pull event"), at which point the customer accepts the quantity and unit price reflected in an auto-generated consumption invoice. Revenue from VMI consignment was $1,261,333 and $795,049 for the years ended May 31, 2025 and 2024, respectively. The year-over-year increase reflects the ramp of a new Honeywell program that began recurring consumption during fiscal year 2025.

The inventory held at customer stocking locations but over which the Company retains control is reported within Inventories on the Balance Sheet as "Consigned (Honeywell + MOOG)." Consigned inventory was $203,237 and $205,581 at May 31, 2025 and 2024, respectively (see Note 6).

**MOOG Philippines consignment**

During fiscal year 2025, the Company commenced a separate consignment arrangement with MOOG Philippines. Revenue is recognized on the same pull-event basis described above. Revenue from this program was $1,240 for the year ended May 31, 2025 (no comparable activity in fiscal year 2024).

**Contract balances**

The Company does not have material contract assets or contract liabilities. Customer deposits reported on the Balance Sheet ($6,135 at May 31, 2025; $7,083 at May 31, 2024) represent advance payments received on specific purchase orders for which the related performance obligation had not yet been satisfied at the respective balance sheet date. Customer deposits are recognized as revenue when control of the related goods transfers to the customer.

**Disaggregation of revenue**

Revenue disaggregated by revenue stream for the years ended May 31 is as follows:

---

| | | |
|:---|:---|:---|
|  | **May 31, <br> 2025** | **May 31, <br> 2024** |
| Sales - standard | $3022207 | $3393013 |
| Sales - VMI consignment (Honeywell + MOOG) | 1261333 | 795049 |
| Sales - consignment (MOOG Philippines) | 1240 | - |
| **Total revenue** | $**4284780** | $**4188062** |

---

**NOTE 4: Concentrations of Credit Risk**

Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash on deposit and accounts receivable. The Company maintains its cash balances with high-credit-quality U.S. financial institutions. Deposits at each institution may at times exceed federally insured limits; the Company has not experienced any losses on such accounts and does not believe it is exposed to significant credit risk with respect to its cash balances.

The Company sells primarily to large aerospace original equipment manufacturers and their tier-one suppliers. As a result, accounts receivable are concentrated among a limited number of customers. The Company performs ongoing credit evaluations of its customers, maintains specific reserves for receivables deemed uncollectible (see Note 5), and has not historically required collateral from its customers.

Customer and accounts receivable concentrations. During the years ended May 31, 2025 and 2024, customers each individually exceeding 10% of revenue accounted for the following percentages of total revenue: Honeywell International Inc. (including authorized distributor and VMI consignment programs), approximately 33% and 22%; The Boeing Company (through Boeing Distribution Services), approximately 27% and 19%; and MOOG, Inc. (including its consignment program), approximately 13% and 22%. No other customer accounted for more than 10% of revenue in either fiscal year. At May 31, 2025 and May 31, 2024, balances due from these same customers represented the following percentages of trade accounts receivable: Honeywell International Inc., approximately 67% and 64%; The Boeing Company, approximately 8% and 6%; and MOOG, Inc., approximately 10% and 16%, respectively. Collectively, the three customers represented approximately 84% of trade accounts receivable at May 31, 2025 and approximately 86% at May 31, 2024. Substantially all trade accounts receivable at each balance sheet date is due from customers engaged in the aerospace and defense industry.

Supplier and accounts payable concentrations. The Company purchases raw materials (principally aluminum, stainless steel, titanium, and high-temperature alloys) and outside-process services (heat treatment, surface finishing) from a limited number of qualified vendors. During the year ended May 31, 2024, one vendor (Star CNC Machine Tool Corp.) represented approximately 67% of total accounts payable at May 31, 2024. During the year ended May 31, 2025, the largest single vendor balance represented approximately 12% of total accounts payable at May 31, 2025, and no other vendor exceeded 10% of total accounts payable. The Company believes that, while the loss of any one of these suppliers could temporarily disrupt operations, equivalent materials and services are available from alternate qualified sources and the impact of any such disruption would not be material to its financial position or results of operations.

**NOTE 5: Accounts Receivable**

Accounts receivable, net consists of the following at May 31:

---

| | | |
|:---|:---|:---|
|  | **May 31, <br> 2025** | **May 31, <br> 2024** |
| Trade accounts receivable, gross | $346574 | $480726 |
| Less: allowance for credit losses | (18786) | (55872) |
| **Trade accounts receivable, net** | **327788** | **424854** |

---

The Company applies ASC 326 (Financial Instruments - Credit Losses) to trade receivables. The allowance for credit losses is estimated using a specific-identification approach supplemented by historical loss experience on aged balances. At each reporting date, management reviews the aging of customer balances, known customer-specific credit issues, and reasonable-and-supportable forecasts of economic conditions affecting the aerospace industry. Account balances are written off against the allowance when management determines the receivable is not collectible. Write-offs against the allowance totaled $56,192 and $69,930 for the years ended May 31, 2025 and May 31, 2024, respectively, principally representing previously-reserved invoices from a small number of customers that were ultimately determined to be uncollectible.

**NOTE 6: Inventories**

Inventories are stated at the lower of cost (first-in, first-out basis, applied on a full-absorption standard) or net realizable value. Cost includes direct materials, direct labor, and an allocation of manufacturing overhead, including indirect labor, factory occupancy costs (rent, utilities, repairs), production-employee benefits, production insurance, shop supplies, and perishable tooling. Manufacturing overhead allocated to inventory totaled $677,497 and $646,588 for the years ended May 31, 2025 and 2024, respectively.

Consigned inventory represents goods physically located at customer-operated stocking locations but over which the Company retains control under the VMI arrangements described in Note 3.

The Company does not maintain a separate inventory valuation reserve; items identified as excess, slow-moving, obsolete, or otherwise unrecoverable are written down directly against the related inventory accounts. Such charges, recognized within Cost of goods sold in the Statement of Operations as Inventory impairments and write-offs (a component of cost in accordance with ASC 330), totaled $650,284 and $752,953 for the years ended May 31, 2025 and May 31, 2024, respectively.

Inventories consist of the following at May 31:

---

| | | |
|:---|:---|:---|
|  | **May 31, <br> 2025** | **May 31, <br> 2024** |
| Work in process | $88086 | $114954 |
| Finished goods | 177897 | 136351 |
| Consigned (Honeywell + MOOG) | 203237 | 205581 |
| **Total inventories** | $**469220** | $**456886** |

---

**NOTE 7: Property and Equipment**

Property and equipment is stated at cost, net of accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, generally seven years for machinery and equipment, five years for office equipment and vehicles, and three years for computer software. Expenditures for major additions and improvements are capitalized; expenditures for routine repairs and maintenance are charged to operations as incurred. Upon retirement or disposal of an asset, the cost and related accumulated depreciation are removed from the accounts, and any resulting gain or loss is reflected in the statement of operations.

Property and equipment consists of the following at May 31:

---

| | | |
|:---|:---|:---|
|  | **May 31, <br> 2025** | **May 31, <br> 2024** |
| Machinery and equipment | $2523587 | $2595374 |
| Computer software (NC) | 6484 | 6484 |
| Vehicles | 29722 | 29722 |
| Office equipment | 59058 | 51166 |
| **Total property and equipment, at cost** | $**2618851** | $**2682746** |
| Less: Accumulated depreciation | (2075224) | (2175697) |
| **Property and equipment, net** | $**543627** | $**507049** |

---

Depreciation expense was $102,054 and $75,737 for the years ended May 31, 2025 and 2024, respectively, substantially all of which was included in cost of goods sold as manufacturing overhead.

**Disposal of Miyano CNC lathe**

In May 2025, the Company disposed of a fully depreciated Miyano CNC lathe with a historical cost of $202,528 and accumulated depreciation of an equal amount. No gain or loss was recognized on the disposal, and the asset and related accumulated depreciation were removed from property and equipment during fiscal year 2025.

**NOTE 8: Notes Payable**

Notes payable consist of equipment-financing obligations and a Small Business Administration Paycheck Protection Program ("PPP") loan, each collateralized as described below.

Notes payable balances at May 31, segregated between current maturities (principal amounts contractually due within twelve months of the balance sheet date) and non-current portions, are as follows:

---

| | | |
|:---|:---|:---|
|  | **May 31, <br> 2025** | **May 31, <br> 2024** |
| **Current portion:** | | |
| INTECH Funding Corp - equipment note, 5.87% fixed, matures Oct 2027 | $78777 | $29421 |
| U.S. Bank Equipment Finance - equipment note, 7.50% fixed, matures Aug 2028 | 70329 | 19105 |
| California Bank & Trust - SBA PPP loan, 1.00% fixed, matures Feb 2026 | 12586 | 16675 |
| Newlane Finance - equipment note (paid in full during fiscal year 2025) |  | 16013 |
| **Total notes payable, current portion** | $**161692** | $**81214** |
| **Non-current portion:** |  |  |
| INTECH Funding Corp |  | $78777 |
| U.S. Bank Equipment Finance |  | 70329 |
| California Bank & Trust - SBA PPP |  | 12586 |
| Newlane Finance |  |  |
| **Total notes payable, non-current portion** | $**-** | $**161692** |
| **Total notes payable** | $**161692** | $**242906** |

---

The INTECH Funding note was entered into on October 31, 2022 in the original principal amount of $151,338 to finance the acquisition of a Star Swiss automatic lathe. The note bears interest at a fixed annual rate of 5.87%, requires sixty monthly payments of $2,924, and is collateralized by the financed equipment.

The U.S. Bank Equipment Finance note was entered into on July 24, 2023 in the original principal amount of $100,000 to finance the acquisition of a Hyundai WIA HD2200 CNC lathe and ATS bar feeder. The note bears interest at a fixed annual rate of 7.50%, requires fifty-eight monthly payments of $2,086.64, and is collateralized by the financed equipment.

The California Bank & Trust note represents the remaining balance of a Small Business Administration Paycheck Protection Program loan obtained during fiscal year 2021. The loan bears interest at 1.00% per annum and requires monthly payments of $1,408 through final maturity in February 2026.

Interest expense on the notes payable described above totaled $11,894 and $15,197 for the fiscal years ended May 31, 2025, and May 31, 2024, respectively, and is included within Other operating expenses on the Statement of Operations. All interest was expensed as incurred (no interest was capitalized into property and equipment), and no accrued but unpaid interest was outstanding at either balance sheet date.

**NOTE 9: Fair Value Measurements**

The Company applies ASC 820 (Fair Value Measurement) to financial assets and liabilities measured at fair value on a recurring basis and to non-financial assets subject to non-recurring fair-value measurement (e.g., long-lived asset impairment). ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date and establishes a three-level fair-value hierarchy:

Level 1 - quoted prices in active markets for identical assets or liabilities;

Level 2 - observable inputs other than Level 1 quoted prices, including quoted prices for similar assets in active markets, quoted prices in markets that are not active, or other directly observable inputs; and

Level 3 - unobservable inputs reflecting the Company's own assumptions about the assumptions market participants would use.

Financial assets measured at fair value on a recurring basis consist of the Company's investments in marketable securities held in a managed brokerage account with Morgan Stanley. The Company's investments are classified within Level 1 of the hierarchy as fair value is determined by reference to quoted market prices on active exchanges at each reporting date. The Company had no financial liabilities measured at fair value on a recurring basis and no Level 2 or Level 3 recurring measurements at either balance sheet date.

Financial assets measured at fair value on a recurring basis consist of the following at May 31:

---

| | | |
|:---|:---|:---|
|  | **May 31, <br> 2025** | **May 31, <br> 2024** |
| Marketable equity securities, at fair value (Level 1) | $178657 | $148682 |
| **Total recurring fair value measurements** | $**178657** | $**148682** |

---

The Company's marketable equity investments are measured at fair value, with all changes in fair value recognized in the Statement of Operations in the period of change in accordance with ASC 321, Investments - Equity Securities. The portfolio is presented on the Balance Sheet at its period-end fair value: $178,657 at May 31, 2025 and $148,682 at May 31, 2024. The carrying amount of the portfolio increased by $29,975 during the year ended May 31, 2025, comprising net cash invested in the portfolio of $29,975 as reflected in investing activities on the Statement of Cash Flows. For the year ended May 31, 2025, the Company recognized within "Gain/(Loss) on Investments" a $15,252 unrealized gain on securities still held at year-end and $1,939 of realized gains on securities sold during the year; together with dividend and interest income of $3,906, these amounts contributed to total other income of $21,097 for the year. The unrealized component is reversed as a non-cash adjustment in the reconciliation of net income (loss) to cash provided by operating activities.

**NOTE 10: Stockholders' Equity**

**Capital stock**

The Company is authorized to issue 100,000 shares of capital stock, no par value. At May 31, 2025 and 2024, there were 10,000 shares issued and outstanding. Because the shares have no par value and no stated value has been assigned, no amount is allocated to capital stock; the aggregate consideration of $10,000 received on issuance is reported in paid-in capital.

**Distributions**

No distributions to shareholders were declared or paid during the years ended May 31, 2025 and 2024.

**Changes in retained earnings**

Retained earnings decreased by $111,778 during the year ended May 31, 2025, reflecting the net loss for the year. Retained earnings increased by $70,334 during the year ended May 31, 2024, reflecting net income for the year.

**NOTE 11: Commitments and Contingencies**

**Operating lease - manufacturing facility**

The Company occupies its principal manufacturing facility under a related-party arrangement with an entity wholly owned by the Company's two officer-shareholders (the "Lessor Entity"). The arrangement provides for monthly rental payments of $12,000, or $144,000 per annum, payable in arrears. Rent expense under this arrangement was $144,000 for each of the years ended May 31, 2025 and 2024 and is classified within cost of goods sold as manufacturing overhead. Although the arrangement is not documented by a written contract, the absence of a written agreement does not mean the arrangement does not meet the definition of a lease under ASC 842; ASC 842 evaluates leases on the substance of the arrangement rather than the form of documentation, and management has concluded that the arrangement conveys the right to control the use of an identified facility for a period of time in exchange for consideration. Either party may terminate the arrangement at any time without substantive penalty (i.e., a month-to-month tenancy), and accordingly the enforceable lease term is one month. The Company has elected the short-term lease practical expedient under ASC 842-20-25-2 for this class of underlying asset and recognizes the related rental payments as expense on a straight-line basis over the lease term. Accordingly, no right-of-use asset or lease liability has been recognized at either balance sheet date.

**Legal proceedings**

During fiscal year 2025, the Company agreed to settle a wage-and-hour class action. The Company accrued $225,000, management's best estimate of the probable loss, recognized as litigation settlement expense and recorded within accrued settlement liability in current liabilities. Although the final timing of payment remains uncertain pending completion of the administrative settlement process, the obligation is classified as current as the Company expects to settle the liability within the twelve months following the balance sheet date.

Other than the matter described above, the Company is not a party to any material legal proceedings. From time to time the Company may become involved in routine litigation incidental to the conduct of its business; management does not believe any such matters currently pending are likely to have a material adverse effect on the Company's financial position, results of operations, or cash flows.

**Customer warranties and product-liability claims**

The Company's machined components are subject to product-acceptance inspection by its aerospace customers and, in certain cases, source inspection by the customer's representative prior to shipment. Rejected parts are reworked or replaced at the Company's cost; historical rework and rejection costs are not material (totaling approximately $38,700 and $12,900 for the years ended May 31, 2025 and 2024, respectively, representing less than 1% of net revenue in each period) and are expensed as incurred. The Company does not provide extended warranties beyond those implied by industry custom and has not recorded a warranty accrual at either balance sheet date.

**NOTE 12: Related-Party Transactions**

The Company has the following related parties: (i) the Lessor Entity, an entity wholly owned by the Company's two officer-shareholders that owns the manufacturing facility leased to the Company, and (ii) the two officer-shareholders themselves, who serve as the Company's sole directors and officers and provide payroll services to the Company.

Facility lease. The Company occupies its principal manufacturing facility under a month-to-month arrangement with the Lessor Entity. Total related-party rent expense recognized was $144,000 for each of the years ended May 31, 2025 and May 31, 2024. No amounts were payable to, or receivable from, the Lessor Entity at either balance sheet date. The rental rate is believed by management to approximate market terms for comparable light-industrial space in the Company's geographic area; however, the arrangement was not negotiated at arm's length and could be modified at the discretion of the parties. See Note 11 for the Company's application of the short-term lease practical expedient to this arrangement.

Officer-shareholder compensation. Officer-shareholder compensation, including salary and employer payroll taxes, totaled $270,600 and $265,396 for the years ended May 31, 2025 and 2024 and is included within Other operating expenses on the Statement of Operations.

**NOTE 13: Income Taxes**

The Company is taxed as a C corporation in the United States and is subject to United States federal income tax and California franchise and income tax. The Company files separate United States federal and California corporate income tax returns on a fiscal year basis ending May 31.

Current income tax expense for the years ended May 31, 2025 and May 31, 2024 totaled $14,647 and $11,526, respectively, comprising United States federal income tax of $13,817 and $10,726 and California franchise tax of $830 and $800. The Company's income tax expense for the years ended May 31, 2025 and May 31, 2024 is entirely current; no deferred income tax expense or benefit was recognized in either period.

**Components of income tax expense**

Income tax expense for the years ended May 31, 2025 and May 31, 2024 consists entirely of current income tax, as follows:

---

| | | |
|:---|:---|:---|
|  | **Year ended<br> May 31,**<br>**2025** | **Year ended<br> May 31,**<br>**2024** |
| **Current** |  |  |
| United States federal | $13817 | $10726 |
| California franchise tax | 830 | 800 |
| **Total current income tax expense** | $**14647** | $**11526** |

---

Income taxes paid in cash (including amounts applied from prior-year overpayments) totaled $16,884 and $20,560 during the years ended May 31, 2025 and May 31, 2024, respectively.

**Effective income tax rate**

The Company's effective income tax rate differs from the United States federal statutory rate of 21 per cent principally because of the following: (a) significant inventory impairments and write-offs that are recognized as expenses for financial-reporting purposes but are not currently deductible for income-tax purposes, resulting in taxable income for income-tax purposes despite a pre-tax loss for financial-reporting purposes in fiscal year 2025; (b) a full valuation allowance maintained against the Company's deferred tax assets, which eliminates any income tax benefit that would otherwise arise from the net operating loss carryforwards; (c) state income taxes; and (d) non-deductible permanent differences, including officer life-insurance premiums and the disallowed portion of meals expense. As a result, the Company recorded income tax expense of $14,647 and $11,526 for the years ended May 31, 2025 and May 31, 2024, respectively, notwithstanding a pre-tax loss for financial-reporting purposes in the year ended May 31, 2025 and a modest pre-tax income for financial-reporting purposes in the year ended May 31, 2024.

**Net operating loss carryforwards**

United States federal net operating loss carryforwards available to the Company at the beginning of the year ended May 31, 2025 totaled approximately $264,104. During the year, approximately $263,174 of these carryforwards was utilized against current-year taxable income, leaving a remaining federal net operating loss carryforward of approximately $930 at May 31, 2025. These carryforwards arose in tax years beginning after December 31, 2017 and accordingly carry forward indefinitely; however, their utilization in any given year is limited to 80 per cent of taxable income under Section 172(a) of the Internal Revenue Code, as amended by the Tax Cuts and Jobs Act.

California net operating loss carryforwards available to the Company at the beginning of the year ended May 31, 2025 totaled approximately $409,661 (originating in tax years 2021 and 2022). These carryforwards were fully utilized against California-source taxable income during the year ended May 31, 2025, and no California net operating loss carryforward remained at May 31, 2025.

**Deferred tax assets and valuation allowance**

The Company's only identified deferred tax asset arises from the net operating loss carryforwards described above. At May 31, 2025, the gross deferred tax asset totaled $195, comprising a federal deferred tax asset of $195 on the remaining federal net operating loss carryforward of $930 measured at the statutory rate of 21 per cent. At May 31, 2024, the gross deferred tax asset totaled $91,676, comprising a federal deferred tax asset of $55,462 (on a federal net operating loss carryforward of $264,104 at 21 per cent) and a California deferred tax asset of $36,214 (on a California net operating loss carryforward of approximately $410,000 at 8.84 per cent). No other material temporary differences between the financial-reporting and income-tax bases of the Company's assets and liabilities were identified at either balance-sheet date.

Management assessed the realizability of these deferred tax assets in accordance with ASC 740-10-30-5 and concluded that, in light of the Company's cumulative book losses and the variability of recent operating results, a full valuation allowance was warranted. Accordingly, a valuation allowance equal to the gross deferred tax asset was recorded at each balance-sheet date, reducing the net deferred tax asset to zero. The valuation allowance decreased by $91,481 during the year ended May 31, 2025, from $91,676 to $195, and decreased by $43,839 during the year ended May 31, 2024, from $135,515 to $91,676, in each case as the underlying net operating loss carryforwards were utilized against taxable income.

No deferred tax liabilities were identified at May 31, 2025 or May 31, 2024.

The utilization of the Company's remaining net operating loss carryforwards may be subject to annual limitation under Sections 382 and 383 of the Internal Revenue Code if the Company experiences an ownership change, generally defined as a cumulative change of more than 50 percentage points by certain stockholders during a rolling three-year period. The Company has not completed a formal Section 382 and 383 study; however, the Company is not aware of any ownership change events that would limit the utilization of these carryforwards.

**Uncertain tax positions**

The Company recognizes the financial statement benefit of a tax position only when the position is more likely than not to be sustained on examination by the relevant taxing authority. As of May 31, 2025 and May 31, 2024, the Company had no unrecognized tax benefits, and no tax positions are reported on Schedule UTP of the Company's federal income tax return. The Company's policy is to record interest and penalties related to uncertain tax positions within Other operating expenses on the Statement of Operations; no such amounts were recognized during the years ended May 31, 2025 and May 31, 2024.

**Open tax years**

The Company is subject to taxation in the United States federal jurisdiction and in California. The Company's federal tax returns for fiscal years ended May 31, 2022 through May 31, 2025 and California tax returns for fiscal years ended May 31, 2021 through May 31, 2025 remain open to examination by the United States Internal Revenue Service and the California Franchise Tax Board, respectively. There were no examinations in progress at May 31, 2025.

**NOTE 14: Subsequent Events**

The Company has evaluated subsequent events through May 12, 2026, the date these financial statements were available to be issued. No events have occurred subsequent to May 31, 2025 that require recognition or disclosure in these financial statements.

## Exhibit 99.3

**Exhibit 99.3** 

**UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION**

On May 11, 2026, PMGC Holdings Inc., a Nevada corporation (the "Buyer" or the "Company"), entered into a Stock Purchase Agreement (the "Stock Purchase Agreement" or the "SPA") to acquire 100% of the issued and outstanding shares (the "Shares") of A&B Aerospace, Inc., a California corporation (the "Target" or "A&B"). The SPA was entered into by and among the Buyer, the Target, and Kennith Edward Smith and Jack Joseph Badeau, constituting all of the stockholders of the Target (collectively, the "Sellers"). The Buyer's acquisition of the Target is referred to as the "Transaction," and the Buyer, the Target, and the Sellers are referred to collectively as the "Parties."

Upon the closing of the Transaction (the "Closing"), the aggregate purchase price for the Shares (the "Purchase Price") consists of: (i) $4,275,000 in cash payable to the Sellers at Closing (the "Closing Purchase Price"); plus (ii) $225,000 retained by the Buyer at Closing as an indemnification holdback (the "Indemnification Holdback"); plus (iii) the Estimated Closing Cash Balance, defined in the SPA as the cash and cash equivalents of the Target as of the Closing, which the Sellers are required under the SPA to use commercially best efforts to cause to be at least $300,000 at Closing, and which for purposes of the unaudited pro forma condensed combined financial statements is presented at such $300,000 floor; plus or minus (iv) the amount, if any, by which Estimated Closing Net Working Capital is greater than, or less than, the Net Working Capital Target of $855,669, in each case as defined in the SPA. The SPA additionally provides for a post-closing true-up under Section 1.04(d) consisting of (A) a Closing Cash Balance Adjustment equal to the Final Cash Balance minus the Estimated Closing Cash Balance, and (B) a Net Working Capital Adjustment Amount equal to the Final Net Working Capital minus the Estimated Net Working Capital, with the aggregate of such two amounts (the "Final Adjustment Amount") settled in cash between the Parties within five Business Days after final determination.

Following the Closing, the Target will continue operating its business at the Target's existing facility pursuant to a duly executed commercial Lease Agreement to be entered into at Closing between the Target and Malcolm E Smith and Mary B Smith; Malcolm and Mary Smith Trust (the "Lease Agreement"), as required by the SPA. Mr. Badeau will continue to serve as President of the Target following the Closing pursuant to an Employment Agreement to be entered into at Closing in substantially the form attached as Exhibit B to the SPA (the "Badeau Employment Agreement"). Under the SPA, the Sellers have agreed to remain available to the Buyer for a period of six (6) months after the Closing Date to provide reasonable transition services, including assistance with required financial audits, operational knowledge transfer, and other reasonable post-Closing transition matters, and have agreed to a three-year non-competition restriction within the State of California commencing on the Closing Date. In addition to the Indemnification Holdback, the Sellers have agreed to indemnify the Buyer under the SPA for, among other matters, (i) all Taxes of the Target attributable to Pre-Closing Tax Periods under ARTICLE VI of the SPA, (ii) Losses related to any employee being ineligible or unauthorized to work in the United States as of the Closing Date under Section 7.01(c) of the SPA, and (iii) the Salvador Rivera litigation matter under Section 7.01(d) of the SPA, the Indemnification Holdback being earmarked as collateral for clause (iii).

The foregoing description of the SPA and the Transaction does not purport to be complete and is qualified in its entirety by reference to the full text of the SPA, which is filed as an exhibit to the Buyer's Current Report on Form 8-K originally filed with the SEC reporting the entry into the Transaction, and is incorporated herein by reference.

The following unaudited pro forma condensed combined financial information has been prepared to illustrate the effect of the Transaction and has been derived by applying pro forma adjustments to the historical consolidated financial statements and other financial information of the Buyer and the Target. The historical financial information has been adjusted in the unaudited pro forma condensed combined financial statements to give effect to pro forma adjustments that are (1) directly attributable to the Transaction, (2) factually supportable, and (3) with respect to the statements of operations, expected to have a continuing impact on the combined results of the Buyer.

The unaudited pro forma condensed combined balance sheet combines the historical audited consolidated balance sheet of the Buyer as of December 31, 2025 with the historical reviewed balance sheet of the Target as of February 28, 2026, and has been prepared to reflect the Transaction as if it occurred on December 31, 2025. The unaudited pro forma condensed combined statement of operations for the year ended December 31, 2025 combines the historical audited consolidated results of operations of the Buyer for the year ended December 31, 2025 with the historical results of operations of the Target for the trailing twelve months ended February 28, 2026, in each case giving effect to the Transaction as if it occurred on January 1, 2025. The Target's fiscal year ends May 31, which differs from the Buyer's December 31 fiscal year end. The Target's trailing twelve months ended February 28, 2026 has been constructed by taking the Target's audited results of operations for the fiscal year ended May 31, 2025, subtracting the Target's reviewed results of operations for the nine months ended February 28, 2025, and adding the Target's reviewed results of operations for the nine months ended February 28, 2026. This presentation aligns the Target's historical period in length with the Buyer's twelve-month reporting period and brings the Target's period end to within ninety-three days of the Buyer's fiscal year end, as permitted by Rule 11-02(c)(3) of Regulation S-X. Because the Buyer's and Target's respective periods nonetheless have different period-ends, with an approximately two-month period of overlap (December 31, 2025 to February 28, 2026), the unaudited pro forma condensed combined statement of operations is presented for illustrative purposes only; the basis of presentation, including the residual period mismatch between the Buyer's and Target's reporting periods, is described further in the accompanying notes.

The unaudited pro forma condensed combined financial statements are presented for illustrative purposes only and are based on the estimates and assumptions set forth in the accompanying notes. They do not purport to indicate the results that would actually have been obtained had the Transaction been completed on the assumed dates or for the periods presented, nor do they purport to project the future operating results or financial position of the Buyer following the consummation of the Transaction.

The unaudited pro forma condensed combined financial statements should be read in conjunction with:

● the accompanying notes to the unaudited pro forma condensed combined financial statements;

● the historical audited consolidated financial statements of the Buyer as of and for the year ended December 31, 2025 (with comparative information as of and for the year ended December 31, 2024), and the related notes, included in the Buyer's Annual Report on Form 10-K filed with the SEC on March 30, 2026;

● the historical reviewed financial statements of the Target as of and for the nine months ended February 28, 2026 (with comparative information for the nine months ended February 28, 2025), and the related notes, included as Exhibit 99.1 to this Current Report;

● the historical audited financial statements of the Target as of and for the fiscal year ended May 31, 2025 (with comparative information as of and for the fiscal year ended May 31, 2024), and the related notes, included as Exhibit 99.2 to this Current Report; and

● the Acquisition Agreement filed as Exhibit 10.1 to this Current Report.

**UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET**

**AS OF DECEMBER 31, 2025**

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Buyer <br> Historical** | **Target <br> Historical** | **Acquisition <br> Pro Forma <br> Adjustments** |  | **Pro Forma <br> Combined** |
| **ASSETS** | | | |  | |
| **Current assets:** | | | |  | |
| &nbsp;&nbsp;&nbsp;Bank | $5402333 | $681509 | $(4956509) | 1 | $1127333 |
| &nbsp;&nbsp;&nbsp;Account Receivables, net | 245423 | 388048 |  |  | 633471 |
| &nbsp;&nbsp;&nbsp;Other receivables | 95108 | 4000 |  |  | 99108 |
| &nbsp;&nbsp;&nbsp;Prepaids and deposits | 461239 | 24232 |  |  | 485471 |
| &nbsp;&nbsp;&nbsp;Inventory | 95098 | 502717 | 50272 | 2 | 648087 |
| &nbsp;&nbsp;&nbsp;Investments in securities | 572054 | 344336 |  |  | 916390 |
| **Total current assets** | **6871255** | **1944841** | **(4906238)** |  | **3909859** |
| Fixed Assets, net | 885520 | 463772 | 250000 | 2 | 1599292 |
| Right-of-use-asset | 1241527 |  |  |  | 1241527 |
| Intangibles, net | 2892397 |  | 1500000 | 2 | 4392397 |
| Goodwill | 977774 | - | 1362087 | 2 | 2339861 |
| **Total assets** | $**12868473** | $**2408613** | $**(1794150)** |  | $**13482936** |
| **LIABILITIES AND SHAREHOLDERS' (DEFICIT) EQUITY** |  |  |  |  |  |
| **Current liabilities:** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Accounts payable and accrued liabilities | $782633 | $164463 | $- |  | $947096 |
| &nbsp;&nbsp;&nbsp;Due to related parties - current | 1032895 |  |  |  | 1032895 |
| &nbsp;&nbsp;&nbsp;Consideration Payable | 206250 |  | 225000 | 1 | 431250 |
| &nbsp;&nbsp;&nbsp;Notes payable – current |  | 108034 | (108034) | 1 |  |
| &nbsp;&nbsp;&nbsp;Lease liability - short term | 247627 | - | - |  | 247627 |
| Accrued settlement liability | - | 225000 | - |  | 225000 |
| &nbsp;&nbsp;&nbsp;Derivative liabilities and convertible debt | 1672891 |  |  |  | 1672891 |
| &nbsp;&nbsp;&nbsp;**Total current liabilities** | **3942296** | **497497** | **116966** |  | **4556759** |
| &nbsp;&nbsp;&nbsp;Lease liability - long term | 972843 | - | - |  | 972843 |
| Notes payable – non-current | 85000 | - | - |  | 85000 |
| Deferred tax liabilities | 30972 |  |  |  | 30972 |
| &nbsp;&nbsp;&nbsp;**Total liabilities** | **5031111** | **497497** | **116966** |  | **5645574** |
| &nbsp;&nbsp;&nbsp;Common stock | 645 |  |  |  | 645 |
| &nbsp;&nbsp;&nbsp;Retained earnings |  | 1901116 | (1901116) | 2 |  |
| &nbsp;&nbsp;&nbsp;Additional paid-in capital | 28856496 | 10000 | (10000) | 2 | 28856496 |
| &nbsp;&nbsp;&nbsp;Accumulated other comprehensive income | (2339) |  |  |  | (2339) |
| &nbsp;&nbsp;&nbsp;Accumulated deficit | (21017440) | - | - |  | (21017440) |
| **Total stockholders' (deficit) equity** | **7837362** | **1911116** | **(1911116)** |  | **7837362** |
| **Total liabilities and stockholders' equity** | $**12868473** | $**2408613** | $**(1794150)** |  | $**13482936** |

---

The accompanying notes are an integral part of these financial statements

**UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS**

**FOR THE YEAR ENDED DECEMBER 31, 2025**

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Buyer Historical**<br> **Year Ended**<br> **December 31, 2025** | **Target Historical <br> Twelve Months <br> Ended<br> February 28, <br> 2026** | **Acquisition <br> Pro Forma <br> Adjustments** | **Note** | **Pro Forma <br> Combined** |
| Revenue | $590084 | $4694791 | $- |  | $5284875 |
| Cost of Goods Sold *(1)* | 404770 | 4256303 | - |  | 4661073 |
| &nbsp;&nbsp;&nbsp;&nbsp;Gross Profit | 185314 | 438488 | - |  | 623802 |
| **Operating expenses:** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Selling, general and administrative | 6253463 | 116998 | (330999) | (a) | 6039462 |
| &nbsp;&nbsp;&nbsp;&nbsp;Depreciation and amortization | 96145 |  |  |  | 96145 |
| &nbsp;&nbsp;&nbsp;&nbsp;Repairs and maintenance | 717654 | - | - |  | 717654 |
| Total operating expenses | 7067262 | 116998 | (330999) |  | 6853261 |
| **Loss from operations** | **(6881948)** | **321490** | **330999** |  | **(6229459)** |
| Other income (expense): |  |  |  |  |  |
| Total other income (expense), net | (867820) | 33342 | 9926 | (b) | (824552) |
| **Loss from continuing operations before income taxes** | **(7749768)** | **354832** | **340925** |  | **(7054011)** |
| Income tax expense | (30972) | (14647) | - |  | (45619) |
| **Loss from continuing operations** | **(7780740)** | **340185** | **340925** |  | **(7099630)** |
| **Income from discontinued operations, net of tax** | 32927 |  |  |  | 32927 |
| Net profit / (loss) | (7747813) | 340185 | 340925 |  | (7066703) |
| Foreign currency translation adjustment | (2002) | - | - |  | (2002) |
| **Total comprehensive loss** | $**(7749815)** | **340185** | **340925** |  | **(7068705)** |
| **Net loss per share - basic and diluted:** |  |  |  |  |  |
| Continuing operations | $(382.32) |  |  |  | $(348.84) |
| Discontinued operations | 1.62 |  |  |  | 1.62 |
| Weighted average of common shares outstanding - basic and diluted | **20352** |  |  |  | **20352** |

---

*(1)* *Includes a non-recurring inventory write-down of approximately $750,588 within the Target's historical Cost of Goods Sold. See Note 4(c) to the unaudited pro forma condensed combined financial statements.* 

The accompanying notes are an integral part of these financial statements

**Notes to Unaudited Pro Forma Condensed Combined Financial Statements**

**Note 1 - Accounting for the Acquisition**

The unaudited pro forma condensed combined financial statements give effect to the acquisition of A&B Aerospace, Inc. (the "Target" or "A&B") by PMGC Holdings Inc. (the "Buyer" or the "Company") under the acquisition method of accounting in accordance with FASB ASC 805, Business Combinations, with the Buyer treated as the accounting acquirer. Under the acquisition method, the total purchase consideration is allocated to the identifiable assets acquired and liabilities assumed based on their estimated fair values as of the Closing Date. The excess of the total purchase consideration over the estimated fair value of the net identifiable assets acquired, if any, is recorded as goodwill.

For purposes of estimating fair value, where applicable, of the assets acquired and liabilities assumed reflected in the unaudited pro forma condensed combined financial information, the Company has applied the guidance in ASC 820, Fair Value Measurement, which establishes a framework for measuring fair value. Fair value represents an exit price and is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

As of the date of this Current Report on Form 8-K/A (this "Current Report"), the Company has not finalized the valuation work necessary to determine the final fair values of the assets acquired and liabilities assumed. Accordingly, the preliminary purchase price allocation included in these unaudited pro forma condensed combined financial statements is based on management's preliminary estimates. The preliminary purchase price allocation is subject to adjustment as additional information becomes available and as additional analyses are completed during the measurement period (not to exceed one year from the Closing Date). There can be no assurance that the finalization of the valuation work will not result in material changes from the preliminary purchase price allocation.

As of the Closing Date, the total consideration for the Acquisition included the following:

---

| | |
|:---|:---|
| Cash consideration at Closing | $4275000 |
| Indemnification Holdback | 225000 |
| Cash paid to Sellers in respect of Estimated Closing Cash Balance | 300000 |
| **Total consideration** | $**4800000** |

---

The Indemnification Holdback of $225,000 is retained by the Buyer at Closing and constitutes part of the total purchase consideration under ASC 805. The Holdback Amount is held by the Buyer specifically to satisfy the Sellers' indemnification obligations under Section 7.01(d) of the SPA in respect of the litigation matter described in Section 3.14 of the Disclosure Schedules to the SPA, and is recognized at the Closing Date as a liability of the Buyer to the Sellers, included within Consideration Payable on the unaudited pro forma condensed combined balance sheet. Pursuant to the SPA, in the event that the indemnification claim resolves for an amount less than the Holdback Amount, the Buyer shall pay over to the Sellers any remaining portion of the Indemnification Holdback within ten days of the final adjudication of such claim. The Target is being acquired on a cash-free, debt-free basis. Accordingly, the unaudited pro forma condensed combined balance sheet reflects the Buyer's assumption of the $225,000 accrued litigation liability (Salvador Rivera), which is recoverable by the Buyer from the Indemnification Holdback under Section 7.01(d) of the SPA, the pre-Closing payoff of the Target's outstanding equipment notes payable totaling $108,034, and the Sellers' pre-Closing sweep of the Target's cash balances down to the $300,000 minimum cash threshold required under the SPA. The Estimated Closing Cash Balance and the at-Closing Net Working Capital adjustment are determined based on the Target's actual cash and net working capital balances as of the Closing Date as set forth on the Estimated Closing Statement delivered by the Sellers prior to Closing pursuant to Section 1.04 of the SPA, with the Net Working Capital component compared to the Net Working Capital Target of $855,669. The SPA additionally contemplates a post-closing true-up under Section 1.04(d) consisting of (i) a Closing Cash Balance Adjustment equal to the Final Cash Balance minus the Estimated Closing Cash Balance, and (ii) a Net Working Capital Adjustment Amount equal to the Final Net Working Capital minus the Estimated Net Working Capital. Because the Closing has not yet occurred and the foregoing amounts cannot be determined as of the date of these unaudited pro forma condensed combined financial statements, no post-closing true-up amount is reflected and the Estimated Closing Cash Balance is presented at the $300,000 minimum cash floor specified in the SPA.

The preliminary allocation of the purchase consideration to the estimated fair values of assets acquired and liabilities assumed is as follows:

---

| | |
|:---|:---|
| **Assets acquired:** | |
| &nbsp;&nbsp;&nbsp;Cash and cash equivalents | $300000 |
| &nbsp;&nbsp;&nbsp;Accounts receivable, net | 388048 |
| &nbsp;&nbsp;&nbsp;Inventory (at fair value) | 552988 |
| &nbsp;&nbsp;&nbsp;Investments and other current assets | 372567 |
| &nbsp;&nbsp;&nbsp;Property and equipment (at fair value) | 713772 |
| &nbsp;&nbsp;&nbsp;Identifiable intangible assets | 1500000 |
| **Liabilities assumed:** |  |
| &nbsp;&nbsp;&nbsp;Accounts payable and accrued liabilities | (164463) |
| &nbsp;&nbsp;&nbsp;Accrued settlement liability assumed (Salvador Rivera) | (225000) |
| &nbsp;&nbsp;&nbsp;Goodwill (preliminary, residual) | 1362087 |
| **Total consideration** | $**4800000** |

---

**Note 2 - Basis of Presentation**

The unaudited pro forma condensed combined financial information has been prepared in accordance with Article 11 of Regulation S-X and has been derived from the historical financial statements of PMGC Holdings Inc. (the "Buyer") and A&B Aerospace, Inc. (the "Target"). The Buyer's fiscal year ends December 31. The Target's fiscal year ends May 31. The Target's reviewed balance sheet as of February 28, 2026 has been combined with the Buyer's audited consolidated balance sheet as of December 31, 2025, with an endpoint difference of fifty-nine days, within the ninety-three day tolerance permitted by Rule 11-02(c)(3) of Regulation S-X. The Target's historical results of operations for the trailing twelve months ended February 28, 2026 have been combined with the Buyer's audited consolidated results of operations for the year ended December 31, 2025. The Target's trailing twelve-month period has been constructed by taking the Target's audited results of operations for the fiscal year ended May 31, 2025, subtracting the Target's reviewed results of operations for the nine months ended February 28, 2025, and adding the Target's reviewed results of operations for the nine months ended February 28, 2026. Although the Target's constructed twelve-month period is equal in length to the Buyer's twelve-month period, the period-ends differ, with an approximately two-month period of overlap (December 31, 2025 to February 28, 2026); the unaudited pro forma condensed combined statement of operations is therefore presented for illustrative purposes only and is not necessarily indicative of the results that would have been reported had the Target's historical results of operations been presented over a period coterminous with the Buyer's. The pro forma adjustments have been identified and presented to provide relevant information necessary for an illustrative understanding of the Buyer upon consummation of the acquisition of the Target pursuant to the Stock Purchase Agreement (the "SPA"), in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP"). The unaudited pro forma condensed combined financial statements are presented at the major caption level for the Target as permitted by Rule 11-02(c)(3) of Regulation S-X.

The assumptions and estimates underlying the pro forma adjustments are described in the accompanying notes. The unaudited pro forma condensed combined financial information has been presented for illustrative purposes only and is not necessarily indicative of the operating results or financial position that would have been achieved had the acquisition occurred on the dates indicated. Further, the unaudited pro forma condensed combined financial information does not purport to project future operating results or financial position following the consummation of the acquisition. The pro forma adjustments represent management's estimates based on information available as of the date of this unaudited pro forma condensed combined financial information and are subject to change as additional information becomes available and analyses are performed.

The Buyer and the Target had no historical relationship prior to the Transaction; accordingly, no adjustments were required to eliminate activities between the Buyer and the Target.

**Note 3 - Reclassification Adjustments**

The unaudited pro forma condensed combined balance sheet and condensed combined statements of operations have been adjusted to reflect certain reclassifications of the Target's historical financial statements to conform to the Buyer's financial statement presentation.

**Note 4 - Pro Forma Adjustments**

*Adjustments to Unaudited Pro Forma Condensed Combined Balance Sheet*

&nbsp;&nbsp;&nbsp;&nbsp;1. Reflects the cash and consideration entries arising from the Transaction. The Buyer pays $4,275,000 in
cash to the Sellers at Closing (the Closing Purchase Price) and an additional $300,000 to the Sellers in respect of the Estimated Closing
Cash Balance, and retains the $225,000 Indemnification Holdback as a liability of the Buyer to the Sellers, recorded within Consideration
Payable. Pursuant to the SPA, the Sellers, prior to Closing, (i) sweep $381,509 of the Target's cash on hand in excess of the $300,000
minimum cash threshold and (ii) cause the Target's outstanding equipment notes payable, totaling $108,034, to be paid off in full
out of the swept proceeds, with the result that the Target enters Closing on a cash-free, debt-free basis with $300,000 of cash and no
equipment notes payable. The Buyer assumes the $225,000 accrued litigation liability (Salvador Rivera) included in the Target's
historical balance sheet; that liability remains on the unaudited pro forma condensed combined balance sheet and is recoverable by the
Buyer from the Indemnification Holdback under Section 7.01(d) of the SPA. The aggregate cash adjustment of $4,956,509 reflected in the
unaudited pro forma condensed combined balance sheet equals the $4,275,000 Closing Purchase Price plus the $300,000 paid by the Buyer
in respect of the Estimated Closing Cash Balance plus the $381,509 cash swept by the Sellers.

&nbsp;&nbsp;&nbsp;&nbsp;2. Reflects the preliminary allocation of the total purchase consideration of $4,800,000 to the estimated
fair values of the assets acquired and liabilities assumed under ASC 805, and the elimination of the Target's pre-merger equity
remaining after the Sellers' pre-Closing cash sweep described in Adjustment 1 (Additional Paid-In Capital of $10,000 and Retained
Earnings of $1,519,607, aggregating $1,529,607, the latter representing the Target's historical Retained Earnings of $1,901,116
less the $381,509 cash swept by the Sellers and charged to Retained Earnings). The preliminary fair value adjustments to the Target's
historical balances are: (i) an inventory step-up of $50,272 to reflect estimated selling price less cost to complete and reasonable margin
in accordance with ASC 805-20-30-1; (ii) a property and equipment fair value increase of $250,000 to reflect estimated fair value based
on management's preliminary assessment pending an independent appraisal; (iii) recognition of $1,500,000 of identifiable intangible
assets, expected to comprise customer relationships, trade name, and backlog, with useful lives to be determined upon completion of an
independent valuation; and (iv) recognition of $1,362,087 of goodwill as the residual of consideration over the fair value of the net
identifiable assets acquired. The Company has not yet completed the valuation work necessary to finalize the fair values of the assets
acquired and liabilities assumed or to determine the useful lives of the identifiable intangible assets. The preliminary purchase price
allocation is subject to change as additional information becomes available, and the final allocation may differ materially from the preliminary
amounts presented herein, including reallocations between identifiable intangibles and goodwill and changes in inventory and property
and equipment fair values.

&nbsp;&nbsp;&nbsp;&nbsp;3. Reflects the period differences between the Buyer's and Target's respective reporting periods.
The Target's reviewed balance sheet as of February 28, 2026 has been combined with the Buyer's audited consolidated balance
sheet as of December 31, 2025, an endpoint difference of fifty-nine days, within the ninety-three day tolerance permitted by Rule 11-02(c)(3)
of Regulation S-X. The Target's results of operations for the trailing twelve months ended February 28, 2026, constructed as described
in Note 2, have been combined with the Buyer's audited consolidated results of operations for the year ended December 31, 2025.
The Target's trailing twelve month period and the Buyer's fiscal year overlap by approximately ten months and differ in their
respective endpoints by fifty-nine days; accordingly, the unaudited pro forma condensed combined statement of operations is presented
for illustrative purposes only, and the combined results are not indicative of the results that would have been reported had the Target's
results of operations been presented over a period coterminous with the Buyer's.

*Pro Forma Condensed Combined Statements of Operations*

The following transaction accounting adjustments have been reflected in the Acquisition Pro Forma Adjustments column of the unaudited pro forma condensed combined statement of operations:

&nbsp;&nbsp;&nbsp;&nbsp;(a) Owner compensation reduction and elimination of factoring fees.
Reflects a net reduction of $330,999 to Selling, general and administrative expense, comprising (i) a net reduction of $290,934 in owner
compensation expense, reflecting the elimination of the historical fully-loaded compensation of both Mr. Smith and Mr. Badeau as the
Target's owner-employees less Mr. Badeau's continuing compensation as President pursuant to the Badeau Employment Agreement
at his historical annual rate of $171,546, and (ii) the elimination of $40,066 of third-party invoice factoring fees incurred by the
Target during the trailing twelve months ended February 28, 2026, which the Buyer expects to discontinue post-Closing by funding the
Target's working capital from cash on hand. With respect to clause (i), the historical combined fully-loaded owner compensation
of the Sellers (Mr. Smith and Mr. Badeau) for the Target's fiscal year ended May 31, 2025 was approximately $463,826, comprising
base wages and employer payroll taxes derived from the Target's ADP payroll records. The Sellers' historical owner compensation
applicable to the trailing twelve months ended February 28, 2026 has been derived using the same build-up methodology described in Note
2 (i.e., the Target's fiscal year ended May 31, 2025 of $463,826, less an estimate of the comparable nine months ended February
28, 2025 of $347,870 derived as nine-twelfths of fiscal 2025 (owner compensation having been substantially flat year-over-year), plus
actual owner compensation for the nine months ended February 28, 2026 of $346,524), resulting in trailing twelve month historical owner
compensation of approximately $462,480. The $290,934 owner compensation adjustment represents the difference between such trailing twelve
month historical owner compensation and Mr. Badeau's continuing compensation under the Badeau Employment Agreement at his historical
annual rate of $171,546. Both components of the adjustment are directly attributable to the Transaction, factually supportable, and expected
to have a continuing impact on the combined results.

&nbsp;&nbsp;&nbsp;&nbsp;(b) Interest expense reversal. Reflects the elimination of $9,926
of interest expense recognized during the Target's trailing twelve months ended February 28, 2026 on the Target's INTECH
Funding and US Bank Equipment Financing notes payable, which the Sellers are required under the SPA to pay off in full prior to Closing
on a cash-free, debt-free basis. The adjustment is directly attributable to the Transaction, factually supportable, and expected to have
a continuing impact on the combined results.

&nbsp;&nbsp;&nbsp;&nbsp;(c) Non-recurring inventory write-down within Target historical Cost of Goods Sold. The Target's historical
Cost of Goods Sold for the trailing twelve months ended February 28, 2026 includes a non-recurring inventory write-down of approximately
$750,588, comprising the write-off of scrap inventory and the reclassification and write-off of orphan inventory items identified during
a comprehensive physical inventory review performed by the Target during the period. Management considers this charge to be non-recurring
in nature and does not expect it to recur in future periods. The $750,588 charge is reflected within the Target Historical column of the
unaudited pro forma condensed combined statement of operations and is not separately captioned on the face of the statement. No pro forma
adjustment has been made to remove this charge from the Target's historical results, as the write-down does not meet the definition
of a Transaction Accounting Adjustment under Rule 11-02(a)(6) of Regulation S-X (i.e., it does not reflect the accounting for the Transaction
and would otherwise constitute a normalization of the Target's historical operating results). Had the $750,588 charge been excluded
from the Target's historical Cost of Goods Sold, the Target's historical Gross Profit and Loss from operations for the trailing
twelve months ended February 28, 2026 would each have been higher by $750,588 on a pre-tax basis, and the pro forma combined Loss from
continuing operations before income taxes for the year ended December 31, 2025 would have been reduced accordingly. This disclosure is
provided for transparency with respect to the comparability of the Target's historical results of operations and is not, and should
not be construed as, a pro forma adjustment under Article 11 of Regulation S-X.

&nbsp;&nbsp;&nbsp;&nbsp;(d) Other items not reflected. The unaudited pro forma condensed
combined statement of operations does not reflect adjustments for amortization of identifiable intangible assets, depreciation of the
property and equipment fair value step-up, or recognition of inventory fair value step-up in cost of goods sold, in each case because
the Company has not yet completed the valuation work necessary to determine the useful lives of the identifiable intangible assets, the
remaining useful life of the stepped-up property and equipment, or the timing of inventory turnover. These adjustments will be reflected
upon finalization of the purchase price allocation and may have a material impact on future periods.

## Exhibit 99.4

**Exhibit 99.4**

**PMGC Holdings (NASDAQ: ELAB) Acquires A&B Aerospace, Inc.**

● Precision machining and aerospace, defense manufacturing company contracted by long standing Tier 1 customers that include Boeing, Honeywell International Inc., and Moog Inc.\*

● AS9100D and ISO 9001:2015 certified

**NEWPORT BEACH, CA, May 13, 2026 (GLOBE NEWSWIRE) –** PMGC Holdings Inc. (Nasdaq: ELAB) ("PMGC" or the "Company"), a diversified holding company currently executing a targeted roll-up strategy in U.S.-based precision manufacturing companies, has acquired A&B Aerospace, Inc. ("A&B Aerospace" or "A&B"),

Founded in 1948, A&B Aerospace is a precision machining and aerospace manufacturing company specializing in high-tolerance parts and assemblies for the aerospace industry. Headquartered in Azusa, California, the company provides advanced CNC machining, honing, grinding, and precision deburring services, supporting a wide range of aerospace and defense applications. A&B Aerospace operates more than twenty modern CNC machines with full 5-axis machining capabilities and maintains AS9100 and ISO 9001 certifications. Known for its long-standing reputation for quality, reliability, and on-time delivery, the company serves leading aerospace customers with both metal and non-metal machining solutions while maintaining tolerances as tight as ±0.0001".

The acquisition of A&B Aerospace marks PMGC's fifth acquisition in the past twelve months and advances the Company's previously announced roll-up strategy focused on assembling a U.S. precision manufacturing platform of AS9100D-certified CNC machining businesses serving the aerospace, defense, and industrial end markets.

**A&B Summary Financial Information**

For the trailing twelve-month period ended February 28, 2026, A&B Aerospace recorded approximately $5.0M in revenue and approximately $610K in management-adjusted EBITDA\*\*.

 

*\*\* Management-adjusted EBITDA is a non-GAAP financial measure. The figures above are unaudited and have not been audited or reviewed by an independent registered public accounting firm. See "Non-GAAP Financial Measures and Unaudited Financial Information" below.*

**Summary of Transaction**

PMGC acquired 100% of the issued and outstanding shares of A&B Aerospace from its selling shareholders, on a cash-free, debt-free basis. The base purchase price is $4,500,000 in cash, consisting of $4,275,000 paid at closing and a $225,000 indemnification holdback retained by PMGC at closing. The purchase price is subject to a customary post-closing adjustment based on a final cash balance and a net working capital adjustment relative to a net working capital target, as set forth in the acquisition agreement. In connection with the closing, Jack Badeau, the current President and long-tenured leader of A&B Aerospace, will continue serving in his role pursuant to an employment agreement. A&B Aerospace will also continue operating from its existing facility in Azusa, California under a lease entered into at closing.

**Strategic Rationale: A&B Aerospace Fits PMGC's Platform Thesis**

PMGC's acquisition strategy targets businesses positioned within durable, high-value industrial verticals. PMGC believes A&B Aerospace exemplifies the core attributes the Company seeks in its precision manufacturing platform: high technical barriers to entry, mission-critical applications, an established blue-chip customer base, and direct exposure to U.S. industrial and defense supply chain demand. As prime defense contractors and Tier 1 aerospace customers increasingly prioritize onshoring and supply chain security, demand for certified, U.S.-based precision shops continues to grow. The Company believes that once a precision machining supplier is qualified on a customer program, customer retention is materially reinforced by the rigorous requalification processes and first article inspection requirements associated with changing manufacturers, creating durable, hard-to-displace customer relationships. PMGC believes A&B Aerospace, with 76 years of continuous operating history, AS9100D and ISO 9001:2015 certifications, and entrenched relationships with Tier 1 customers including Boeing, Honeywell, and Moog, reflects exactly this profile.

**Aerospace and Defense Market Tailwinds**

Commercial aerospace is in the midst of a multi-year production ramp. Boeing's 2025 Commercial Market Outlook forecasts global demand for approximately 43,600 new commercial aircraft over the 20-year period from 2025 through 2044, with the global commercial fleet projected to nearly double to approximately 49,600 aircraft.<sup>¹</sup> Sustained backlog growth at the major airframers is translating into higher build rates and a corresponding step-up in demand across the aerospace component supply chain.

On the defense side, U.S. budget authority continues to expand. Congress enacted approximately $839 billion in discretionary FY2026 appropriations for the U.S. Department of Defense under the Department of Defense Appropriations Act, 2026.<sup>²</sup> PMGC believes federal reshoring and onshoring initiatives, supply chain security priorities, and continued procurement and sustainment funding for legacy and next-generation programs are driving a structural increase in demand for certified, U.S.-based precision manufacturers.

On the supply side, qualified domestic manufacturers holding AS9100D certification represent a narrow segment of the broader U.S. machining industry. OEMs and Tier 1 aerospace and defense customers are increasingly consolidating onto a smaller number of reliable, scalable, qualified suppliers, and the rigorous requalification and first article inspection requirements associated with changing manufacturers create durable, hard-to-displace customer relationships. PMGC believes the combination of expanding aerospace and defense demand and a structurally constrained supply of qualified domestic precision manufacturers creates a favorable long-term backdrop for the Company's precision manufacturing platform.

**About A&B Aerospace, Inc.**

Founded in 1948, A&B Aerospace is a precision aerospace manufacturing company specializing in high-tolerance machining, complex assemblies, and engineered components for the aerospace and defense industries. Headquartered in Azusa, California, the company provides advanced CNC machining, grinding, honing, and precision deburring services for mission-critical applications. With decades of manufacturing expertise, A&B Aerospace supports leading aerospace customers through a commitment to quality, reliability, and on-time delivery. The company operates a modern manufacturing platform with advanced multi-axis machining capabilities and maintains AS9100 and ISO 9001 certifications to meet the rigorous standards of the global aerospace industry.

For more information, visit https://www.abaerospace.com.

**About PMGC Holdings Inc.**

PMGC Holdings Inc. is a diversified holding company that manages and grows its portfolio through strategic acquisitions, investments, and development across various industries. We are committed to exploring opportunities in multiple sectors to maximize growth and value. For more information, please visit https://www.pmgcholdings.com.

**Non-GAAP Financial Measures and Unaudited Financial Information**

This press release contains certain financial information that has not been prepared in accordance with U.S. generally accepted accounting principles ("GAAP"), including a reference to "management-adjusted EBITDA." Management-adjusted EBITDA is a non-GAAP financial measure that reflects customary adjustments, including normalizations for non-recurring items, owner-related compensation and benefits, and other adjustments customary in private company transactions. The financial figures presented in this press release are preliminary, unaudited, and have not been audited or reviewed by an independent registered public accounting firm. The trailing twelve-month period presented does not necessarily correspond to A&B Aerospace's fiscal year. Non-GAAP financial measures are not intended as a substitute for, or superior to, financial measures prepared in accordance with GAAP, may differ from similarly titled measures used by other companies, and are subject to inherent limitations. Actual results, including those that will be reflected in PMGC's subsequent SEC filings under purchase accounting and on a GAAP basis, may differ materially from the figures presented above. Investors should not place undue reliance on the preliminary, unaudited figures contained in this press release and should refer to PMGC's filings with the U.S. Securities and Exchange Commission for financial information prepared in accordance with GAAP.

**Forward-Looking Statements**

Statements contained in this press release regarding matters that are not historical facts are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. Words such as "believes," "expects," "plans," "potential," "would" and "future" or similar expressions such as "look forward" are intended to identify forward-looking statements. Forward-looking statements are made as of the date of this press release and are neither historical facts nor assurances of future performance. Instead, they are based only on our current beliefs, expectations and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy, activities of regulators and future regulations and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Although the Company believes that the expectations expressed in these forward-looking statements are reasonable, it cannot assure you that such expectations will turn out to be correct, and the Company cautions investors that actual results may differ materially from the anticipated results. Therefore, you should not rely on any of these forward-looking statements. These and other risks are described more fully in PMGC's filings with the United States Securities and Exchange Commission ("SEC"), including the "Risk Factors" section of the Company's Annual Report on Form 10-K for the year ended December 31, 2025, filed with the SEC on March 30, 2026, and its other documents subsequently filed with or furnished to the SEC. Investors and security holders are urged to read these documents free of charge on the SEC's web site at www.sec.gov. All forward-looking statements contained in this press release speak only as of the date on which they were made. Except to the extent required by law, the Company undertakes no obligation to update such statements to reflect events that occur or circumstances that exist after the date on which they were made.

IR Contact: IR@pmgcholdings.com

**Sources**

 

---

| | |
|:---|:---|
| *¹* | *Boeing, 2025 Commercial Market Outlook, June 2025. Available at https://www.boeing.com/commercial/market/commercial-market-outlook.*<br>|
| *²* | *U.S. Senate Committee on Appropriations, "Congress Approves FY 2026 Defense Appropriations Bill," February 3, 2026; Department of Defense Appropriations Act, 2026 (Division A of P.L. 119-75).*<br>|
| *\** | *As referenced in the company's financial statements and company website, www.abaerospace.com, A&B is contracted by Tier 1 customers that include Boeing, Honeywell, and Moog.* |

---

The acquisition was previously announced in the Company's press release dated June 24, 2025, regarding the signing of a non-binding letter of intent to acquire the target company.