PMGC Holdings Secures Five-Year Royalty Stream from Elevai Skincare Sale
News related to:PMGC Holdings Inc · 2 min read
PMGC Holdings Inc, a diversified holding company, has secured a five-year royalty stream from the sale of its Elevai Skincare business to Longevity Health Holdings Inc. This agreement, which converts PMGC’s 5% net sales royalty into scheduled monthly cash payments, is set to create recurring, non-dilutive cash flow for the company.
The agreement, detailed in a fully executed payment plan, covers the 2025 royalty and all future royalty and earnout payments. Under the terms of the payment agreement, Longevity Health Holdings Inc. has acknowledged its obligation to pay its 2025 royalty in the amount of $94,937, with interest accruing at the Wall Street Journal Prime Rate plus 1.00% per annum from the royalty’s original April 2026 due date until paid in full.
The structured monthly payments will begin on October 15, 2026, with installments of $10,000 per month, ensuring that all amounts are due no later than August 28, 2031. This forward-looking agreement not only provides PMGC with a steady stream of income but also ensures full coverage of every future royalty and earnout payment that becomes due under the sale agreement, all on the same interest-bearing terms.
Moreover, the agreement includes mandatory prepayments tied to Longevity’s capital events. Specifically, Longevity must make payments equal to 15% of net cash proceeds it or the buyer receives from qualifying capital raises exceeding $350,000, asset sales outside the ordinary course of business, and settlements, judgments, or insurance recoveries, subject to limited exclusions. These provisions are designed to ensure that PMGC receives timely and adequate payments, thereby enhancing the company’s financial stability.
Annual audit rights are also a part of the agreement, providing PMGC with transparency and enforcement mechanisms. These rights allow for the submission of net sales statements within five business days of Longevity’s Annual Report on Form 10-K, ensuring that PMGC can verify the accuracy of the payments it receives. Additionally, the agreement includes acceleration and cost recovery rights upon payment default or insolvency, further safeguarding PMGC’s financial interests.
For PMGC, this payment agreement represents a significant step in its strategy to convert earnout consideration into visible, recurring, interest-bearing cash flow. The five-year royalty structure allows the company to continue participating in the commercial performance of the Elevai Skincare product line long after the sale, while its capital and management focus remain on building its precision manufacturing, biosciences, and defense technology businesses.
The agreement underscores PMGC’s commitment to structuring transactions to capture value at closing and for years afterward. By protecting contractual receivables with creditor-grade terms, PMGC ensures that its financial strategy supports its acquisition-driven growth strategy without issuing equity or incurring debt. This approach is a testament to the company’s strategic vision and its ability to create long-term value for its shareholders.
In summary, PMGC Holdings Inc’s agreement with Longevity Health Holdings Inc secures a five-year royalty stream, providing the company with recurring, non-dilutive cash flow. This strategic move aligns with PMGC’s broader financial and growth objectives, ensuring a steady income stream and enhanced financial stability.