10-Q: Longevity Health Reports Q2 Growth, Pursues True Health Merger

Longevity Health Holdings, Inc. reported significant revenue growth in Q2 2025, driven by the Elevai acquisition, while announcing a definitive merger agreement with True Health Inc. and addressing ongoing financial challenges.

Summary

• Net sales for the six months ended June 30, 2025, surged to $1,013,965, an 8,130% increase from $12,320 in the same period of 2024, primarily due to the Elevai Acquisition.
• Gross profit for the six months ended June 30, 2025, increased to $572,481, up 4,660% from $12,028 in the prior year period.
• Net loss for the six months ended June 30, 2025, improved by 48% to $(3,392,305) compared to $(6,575,497) in the same period of 2024.
• The company had negative net working capital of $(3,672,761) as of June 30, 2025, and a net loss of $(3,392,305) with negative net cash flow from operations of $(1,589,143) for the six months ended June 30, 2025.
• A definitive merger agreement with True Health Inc. was entered into on July 14, 2025, which, if completed, would result in current Longevity shareholders owning approximately 10% of the combined company on a fully-diluted basis.
• The company completed a 1:30 reverse stock split on May 12, 2025, and raised approximately $1.96 million through an at-the-market (ATM) equity offering in May 2025.
• A private placement closed on January 2, 2025, generated approximately $1.85 million in gross proceeds, and warrant exercises in July 2025 brought in an additional $1.0 million.
• The previously announced merger agreement with 20/20 Biolabs, Inc. was terminated on July 8, 2025, without any termination fees.
• An ongoing lawsuit by Puritan Partners LLC claims damages totaling $2,725,000 related to Convertible Notes and Warrants, with four of eight claims dismissed without prejudice in July 2024.
• A material weakness in internal controls over financial reporting was identified in 2024, which has been addressed by adopting a policy for formal documentation of material transactions.

Sentiment

Score: 4

Explanation: While the company shows impressive revenue growth driven by acquisitions and has successfully raised capital, it continues to operate at a significant loss with negative working capital and a 'going concern' warning. The proposed merger with True Health involves substantial dilution for existing shareholders, and ongoing litigation adds uncertainty. The material weakness in internal controls is also a concern. The positive growth is overshadowed by significant financial and operational risks.

Positives

• Net sales for the six months ended June 30, 2025, increased significantly by 8,130% to $1,013,965, primarily driven by the Elevai Acquisition.
• Gross profit for the six months ended June 30, 2025, rose by 4,660% to $572,481.
• Net loss for the six months ended June 30, 2025, improved by 48% to $(3,392,305) compared to the prior year.
• Net cash used in operating activities decreased by 28% to $(1,589,143) for the six months ended June 30, 2025, indicating improved cash burn.
• Successfully raised capital through a $1.85 million private placement in January 2025, a $1.96 million ATM financing in May 2025, and $1.0 million from warrant exercises in July 2025.
• The termination of the 20/20 Biolabs merger agreement incurred no termination fees or other payments.
• The Elevai Skincare acquisition, completed in January 2025, contributed approximately $2.5 million in revenue in 2024 (pro forma) and is a key driver of current sales growth.

Negatives

• The company reported a substantial net loss of $(3,392,305) for the six months ended June 30, 2025, and negative net working capital of $(3,672,761) as of June 30, 2025.
• A 'going concern' warning is present, indicating substantial doubt about the company's ability to continue operations for at least 12 months without additional financing.
• Total liabilities increased to $7,456,876 as of June 30, 2025, from $6,186,642 at December 31, 2024.
• Loss from operations worsened by 31% to $(3,365,355) for the six months ended June 30, 2025, compared to the prior year, despite significant revenue growth.
• General and administrative expenses increased by 43% to $2,840,128 for the six months ended June 30, 2025, due to higher professional fees and services.
• Selling and marketing expenses increased significantly by 5,568% to $626,054 for the six months ended June 30, 2025, due to Elevai product marketing.
• An ongoing legal proceeding with Puritan Partners LLC claims damages of $2,725,000, and the company carries an accrual for interest payable of $1,175,845 related to Convertible Notes.
• A material weakness in internal controls over the accounting treatment for a complex transaction in 2024 was identified, though a policy has been adopted to address it.
• The proposed THPlasma Merger will result in significant dilution, with current Longevity securityholders expected to own approximately 10% of the combined company.

Risks

• Failure to complete, or delays in completing, the THPlasma Merger could materially and adversely affect results of operations, business, financial results, and common stock price.
• The THPlasma Merger could cause substantial disruptions in, and create uncertainty surrounding, the business, affecting employee recruitment and retention.
• Uncertainty about the THPlasma Merger's completion could adversely affect relationships with collaborators, suppliers, vendors, regulators, and other business partners.
• The Merger Shares will not change based on the market price of Common Stock, meaning the Merger Consideration at closing may have a greater or lesser value than at the time the THPlasma Agreement was signed.
• The THPlasma Agreement does not include a price-based termination right, meaning the merger may proceed even if a material adverse effect occurs.
• The combined company may need to raise additional capital by issuing equity securities or additional debt, causing significant dilution or restricting operations.
• Longevity directors and executive officers may have interests in the THPlasma Merger that differ from stockholders, potentially influencing their support for the merger.
• Longevity stockholders may not realize a benefit from the THPlasma Merger commensurate with the ownership dilution they will experience.
• If the THPlasma Merger is not completed, Longevity's stock price may decrease significantly due to market volatility and uncertainty.
• Lawsuits may be filed against Longevity, True Health, or their boards of directors arising from the THPlasma Merger, potentially delaying or preventing it.
• Longevity is substantially dependent on its remaining ten full-time employees to facilitate the THPlasma Merger and run day-to-day operations.
• Financial projections regarding Longevity and True Health may not prove accurate, impacting the combined company's financial position.
• Global macroeconomic factors, such as the Russia-Ukraine war, Israel-Hamas war, US-China tensions, inflation, and high interest rates, could reduce the company's ability to access capital and negatively affect liquidity.

Future Outlook

The company anticipates continued revenue growth from the commercialization of its cosmetic products, particularly those acquired in the Elevai Acquisition, and expects cost savings from restructuring activities to extend its cash runway. The proposed THPlasma Merger with True Health Inc. is a key strategic move aimed at future growth and regaining Nasdaq compliance. Management is actively exploring out-licensing research and development programs and raising additional capital to enhance liquidity.

Management Comments

• Management believes its obligations under the Convertible Notes and Convertible Note Warrants have been satisfied and that no additional payments are due to the Holders.
• Management intends to defend itself vigorously against the litigation filed by Puritan Partners LLC.
• Management anticipates that revenue from the continued commercialization of its cosmetic products and the anticipated cost savings from the restructuring activities will assist in extending its cash runway.
• Management believes that the THPlasma Merger and the Reverse Stock Split provide a path to regaining compliance with Nasdaq's listing requirements, but no guarantee can be provided that it will be successful in doing so.

Industry Context

The company operates in the bio-aesthetics market, focusing on longevity and healthy aging with cosmetic skincare and haircare products. The Elevai acquisition and the proposed True Health merger indicate a strategy of growth through M&A to expand its product portfolio and market reach. The industry is competitive, and the company's ability to integrate acquisitions, manage costs, and secure financing will be critical for its long-term success, especially given the current macroeconomic uncertainties and high interest rates affecting capital access.

Comparison to Industry Standards

• The significant revenue growth (8,130% year-over-year for six months) is exceptional, largely driven by the Elevai acquisition, which brought in approximately $2.5 million in 2024 revenue. This level of growth is typically seen in early-stage, rapidly expanding companies or those undergoing transformative acquisitions, and far exceeds average growth rates for established cosmetic or biotech firms.
• The company's negative net working capital of $(3,672,761) and ongoing 'going concern' warning are below industry standards for financially stable public companies. This indicates a high reliance on external financing, which is a common characteristic of early-stage biotech or high-growth companies that are not yet profitable, but it poses a significant risk compared to more mature, cash-flow positive industry peers.
• The proposed THPlasma Merger, where current Longevity shareholders would own approximately 10% of the combined entity, represents substantial dilution. While common in reverse mergers or strategic acquisitions of larger private entities, this level of dilution is significant and would be considered unfavorable compared to mergers where existing shareholders retain a more substantial stake, such as those seen in more balanced M&A transactions involving companies like Estée Lauder or L'Oréal acquiring smaller brands, where the target's valuation might be lower relative to the acquirer.

Corporate Governance

Legal Proceedings

• Puritan Partners LLC filed a complaint on November 8, 2023, alleging breach of obligations under Convertible Notes and Convertible Note Warrants, and untimely provision of freely tradable shares. Claims include damages totaling $2,725,000, additional fees, interest, costs, attorneys' fees, and foreclosure of security interest.
• The company carries an accrual for interest payable of $1,175,845 as of June 30, 2025, related to the Convertible Notes.
• In July 2024, the court dismissed four of the eight claims in the complaint without prejudice. The case is currently in the discovery phase, expected to last into the fourth quarter of 2025.
• The company intends to defend itself vigorously, but an adverse outcome could materially affect its financial condition.

Related Party Transactions

• A member of the company's board of directors is a managing partner of Brookline Capital Markets, the sales agent for the ATM Financing and the placement agent for the 2025 Private Placement. Brookline received fees of $0.06 million from the ATM Financing and $0.19 million from the 2025 Private Placement.

Stakeholder Impact

• **Shareholders**: Will experience significant dilution from the proposed True Health merger (expected to own ~10% of combined company). Potential for stock price volatility due to merger uncertainty, Nasdaq compliance issues, and ongoing litigation. However, the merger could offer long-term growth potential if successful.
• **Employees**: Uncertainty regarding roles and retention due to the pending THPlasma Merger. The company is substantially dependent on its remaining ten full-time employees.
• **Customers**: Potential for expanded product offerings and market reach through acquisitions (Elevai) and mergers (True Health), potentially leading to more diverse bio-aesthetics products.
• **Creditors**: The 'going concern' warning and negative working capital indicate elevated risk. The ongoing legal dispute with Puritan Partners LLC and the associated $1,175,845 accrual for interest payable represent a significant liability.
• **Suppliers/Vendors/Collaborators**: Uncertainty surrounding the THPlasma Merger could affect existing business relationships, potentially leading to deferred decisions or changes in terms.

Next Steps

• Complete the THPlasma Merger with True Health Inc., subject to various conditions including regulatory effectiveness, stockholder approvals, and Nasdaq listing approval.
• Satisfy the conditions for the License Purchase, including securing at least $5 million in equity or debt financing.
• Regain and maintain compliance with Nasdaq's listing requirements (MVLS and Minimum Bid Price) by September 2, 2025.
• Continue commercialization of cosmetic products, including those from the Elevai Acquisition, to drive revenue.
• Explore out-licensing of certain research and development programs to enhance liquidity.
• Defend vigorously against the ongoing legal proceedings with Puritan Partners LLC, with the discovery phase expected to last into Q4 2025.
• Implement and ensure effectiveness of the new policy for formal documentation of material transactions to address the identified material weakness in internal controls.

Key Dates

Recommendation

The company presents a mixed financial picture. While it has achieved substantial revenue growth through the Elevai acquisition and successfully raised capital, it continues to operate at a significant net loss and carries a 'going concern' warning. The proposed merger with True Health Inc. is a transformative event that could provide a path to Nasdaq compliance and future growth, but it comes with substantial dilution for existing shareholders (expected to own ~10% of the combined entity) and inherent integration risks. The ongoing litigation and identified material weakness in internal controls add further uncertainty. For a seasoned investor, the high growth potential is offset by significant financial instability, execution risks of the merger, and the dilution. A 'hold' recommendation acknowledges the strategic moves and growth potential but advises caution due to the substantial risks and the need for successful execution and further capital to achieve profitability and long-term stability.

Keywords

Bio-aesthetics, Longevity Health Holdings, XAGE, SEC Filing, 10-Q, Quarterly Report, Elevai Skincare, True Health Inc., Merger Agreement, Reverse Stock Split, ATM Financing, Private Placement, Nasdaq Listing, Going Concern, Financial Results, Skincare, Haircare, Biotechnology, Regenerative Medicine