Limitless X Holdings Inc 10-K for FY2024
Limitless X Holdings Inc. (LIMX)
About this 10-K
Limitless X Holdings Inc filed this 10-K on May 9, 2025, covering the fiscal year ended December 31, 2024 (FY2024).
Headline figures
Fiscal year ended December 31, 2024, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $3.36M
- down 78.3% from $15.5M a year earlier
- Net loss
- $4.2M
- compared with a net loss of $13.87M a year earlier
- Diluted EPS
- -$0.83
- compared with -$3.51 a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
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the fiscal year ended
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for shares of the registrant’s common stock as reported by the OTCQB, was approximately $
The registrant had outstanding shares of common stock, par value $, as of April 29, 2025.
Documents Incorporated by Reference
TABLE OF CONTENTS
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LIMITLESS X HOLDINGS, INC.
CAUTIONARY STATEMENT REGARDING FORWARD LOOKING STATEMENTS
This Annual Report on Form 10-K (“Annual Report”) contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All statements other than statements of historical fact included in this Annual Report are forward-looking statements. These forward-looking statements may include projections and estimates concerning the timing and success of specific projects and our future construction, revenues, income, cost of sales, expenses, and capital spending. Our forward-looking statements are generally accompanied by words such as “estimate,” “project,” “predict,” “believe,” “expect,” “intend,” “anticipate,” “potential,” “plan,” “goal,” “foresee,” “likely,” “target,” “may,” “should,” “could,” or other words that convey the uncertainty of future events or outcomes. The Company will continue to file annual, quarterly and current reports, proxy statements and other information with the Securities and Exchange Commission (the “SEC”). The forward-looking statements in this Annual Report speak only as of the date of this document, and we disclaim any obligation to update these statements unless required by law, and we caution you not to rely on them unduly. We have based these forward-looking statements on our current expectations and assumptions about future events. While our management considers these expectations and assumptions to be reasonable, they are inherently subject to significant business, economic, competitive, regulatory, and other risks, contingencies, and uncertainties, most of which are difficult to predict and many of which are beyond our control.
These forward-looking statements reflect our management’s beliefs and views with respect to future events and are based on estimates and assumptions as of the date of this Annual Report and are subject to risks and uncertainties. Moreover, we operate in a very highly competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. Given these uncertainties, you should not place undue reliance on forward-looking statements contained herein.
You should read this Annual Report and the documents that we reference and have filed as exhibits with the understanding that our actual future results, levels of activity, performance and achievements may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements.
The forward-looking statements made in this Annual Report relate only to events as of the date on which such statements are made. We undertake no obligation to update any forward-looking statements after the date of this Annual Report or to conform such statements to actual results or revised expectations, except as required by law.
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PART I
Throughout this Annual Report, references to the “Company,” “LIMX,” “we,” “us,” and “our” refer to Limitless X Holdings, Inc. and its subsidiaries, unless the context requires otherwise.
ITEM 1. BUSINESS.
Company Overview
Limitless X Holdings Inc., incorporated in Delaware and based in California, along with its subsidiaries is building a dynamic, value-driven, and recession-proof ecosystem designed to help individuals “Look Good and Feel Great” by integrating health, wellness, entertainment, fintech, community building, and brand development. The Company provides direct-to-consumer e-commerce, offering innovative products that empower people to reinvent themselves and become the best versions of themselves through Limitless X Inc., a Nevada corporation, its wholly-owned subsidiary (“Limitless X”). The Company’s current products are focused on brain health, weight management and recovery.
In December 2024 and January 2025, the Company announced that it planned to make a significant impact in television and film, regenerative skin care, fintech, entertainment and real estate. Although the Company is optimistic about its expansion into these new industries, the endeavor is aspirational and there is no guarantee that such ventures will come to fruition and prove successful.
As of April 1, 2025, the Company has the following subsidiaries. A detailed description of each and the Company’s expansion plans may be found in the “Other Business Divisions” section of this Business Section of this Offering Circular:
| ● | Limitless X, Inc., a Nevada corporation, provides direct to consumer e-commerce services for the Company’s health and wellness products, with a primary emphasis on dietary supplements. The Company’s current lead products are NZT-48, NZT-48 Lions mane, NZT-48 For Her and Oneshot Nootropic Pre-Workout. | |
| ● | Limitless Films, Inc., a Florida corporation (“Limitless Films”), is a dynamic television and film production company committed to crafting compelling visual stories in collaboration with acclaimed producers and directors that engage global audiences. In January 2025, Limitless Films advanced a $1 million bridge loan to a film producer to finance part of the pre-production budget for Borrower’s upcoming film with an A-list actor. The bridge loan is secured by a copyright in the film and the script. | |
| ● | XocelForte Therapeutics Inc., a Delaware corporation (“Xocel”), is an emerging direct-to-consumer e-commerce brand which will be specializing in developing and marketing regenerative skin care products, harnessing the latest advancements in biotechnology and natural ingredients to promote skin health and rejuvenation. | |
| ● | Limitless Entertainment, Inc., a Florida corporation (“Limitless Entertainment”) is set to revolutionize the entertainment industry by creating an AI-powered platform for live and on-demand streaming of various sporting events, with advanced fan interaction tools elevate user engagement to new heights. With our Chief Executive Officer’s strong foothold in the boxing, mixed martial arts, and wrestling industries, Limitless Entertainment expects to specialize in producing and licensing content related to combat sports. | |
| ● | Limitless Digital Assets, Inc., a Florida corporation (“Limitless Digital”), is focused on developing and investing in digital assets that are set to revolutionize industries across the board. From e-commerce to film production, music, real estate, and beyond, the Company recognizes that the future of nearly every sector will be intertwined with digital assets. Limitless Digital is currently exploring a partnership with a strategic partner in which they would create an investment fund focusing on digital assets. These negotiations are still in their initial stages and there can be no assurances or certainty that the fund will be created and launched. | |
| ● | Limitless Living Inc., a Florida corporation (“Limitless Living”), is evaluating a variety of real estate investment projects including creating a residential complex designed to inspire and elevate your life with innovative amenities that foster both physical vitality and mental clarity, or financing real estate projects. Put differently, Limitless Living is company that intends to be involved in real estate investments that are related to health, wellness and community living. |
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Leadership
Jas Mathur, our Chairman and Chief Executive Officer, is a Transformational Health Entrepreneur with over 14 years of experience within the health, wellness, and dietary supplements industry and 25+ years of experience as a webmaster and internet marketer. He is the owner of Emblaze One, a global interactive and web development agency with a team of 100+. Mr. Mathur founded Limitless X in 2021, drawing upon his own personal battles with health and his transformative journey that resulted in a remarkable weight loss of over 250 lbs. His extraordinary achievements across multiple industries serve as a powerful source of motivation, inspiration, and empowerment for all those who cross paths with him, igniting their dreams, fostering belief, and empowering them to achieve greatness.
Our Nutritional Supplement Products
The current products offered by Limitless X are:
NZT-48
NZT-48 is a nootropic supplement designed to enhance cognitive abilities, including memory, speed, and focus, and improves mood. NZT-48’s formula is crafted from over 20 premium ingredients. Notable ingredients include (a) ginkgo biloba, which increases blood flow to the brain to improve cognitive function and memory and contains neuroprotective properties that help protect the brain from age-related decline and damages, and (b) alpha GPC, which increases the production of acetylcholine, a neurochemical that plays a key role in memory and learning. With this state-of-the-art formula, NZT-48 sharpens focus, supports mental endurance, and provides supercharged energy with no crash, thereby helping consumers achieve and maintain peak productivity levels throughout the day.
NZT-48 Lions Mane
NZT-48 Lions Mane is the perfect everyday nootropic supplement that is formulated to support all cognitive functions, including memory, mental speed, and focus, and improves mood. This product is 100% vegan, non-GMO, and gelatin-free. This product helps consumers “get in the zone” and stay productive through enhanced mental clarity and creativity and sustained energy with no crash. Among the other 20+ clinically coordinated ingredients such as ginkgo biloba, theobromine, and alpha GPC, the namesake ingredient in this product’s formula is Lion’s Mane. Scientific studies have shown that this medicinal mushroom, renowned for its neuroprotective properties, promotes the synthesis of nerve growth factor (NGF), a protein essential for the maintenance, survival, and regeneration of neurons and mitigate age-related cognitive decline.
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NZT-48 For Her
NZT-48 For Her is a nootropic supplement comprising a specially tailored blend for women. This product contains 23+ essential nutrients, including the perfect blend of GABA and DHA, to elevate mood, enhance creativity, increase energy and “happy hormones”, and reduce stress and anxiety. DHA, a type of Omega-3 fatty acid primarily found in fish oil that has been extensively researched, is a fundamental building block of brain tissue, contributing to mental clarity, focus, and cognitive agility. GABA, a naturally occurring amino acid and a dual-purpose compound, plays a crucial role in promoting relaxation and reducing neural excitability, serving as the brain’s “brake pedal” to help calm overactive mind states.
OneShot Nootropic Pre-Workout
This product is a tasty, nootropic, pre-workout supplement that helps consumers unlock explosive gym performance. Packed with natural nitric oxide, L-Arginine, and BCAAs, this product causes consumers to experience high levels of focus, endurance, and power during their workouts without any jitters. Additionally, the essential amino acids contained in this product fuel the breakdown, repair, and building of muscle tissue to achieve muscle growth.
Licensing of Nutritional Products
All of our nutritional products are licensed from Limitless Performance, Inc. (“LPI”), a company wholly-owned by Jas Mathur, our Chief Executive Officer, pursuant to a Manufacturing & Distribution License Agreement dated December 1, 2021 (the “NZT-48 License Agreement”). The NZT-48 License originally contemplated a license that covered multiple products, but was partially terminated on November 1, 2023, where the only product to be licensed currently under the NZT-48 License Agreement is NZT-48. In January 2025, we filed the First Amendment to Manufacturing and Distributorship Licensing Agreement, whereunder Mr. Mathur agreed to waive all royalty payments under the NZT-48 Licensing Agreement for a period of three years. Under the NZT-48 License Agreement (and under amendments thereto), LPI granted a non-exclusive license to the Company to design, manufacture, promote, sell, and distribute NZT-48, a nootropic supplement designed to enhance cognitive abilities, including memory, speed, and focus, and improves mood. The term of the NZT-48 License Agreement is for 5 years and automatically renews for fiver-year terms unless either party provides notice of termination no later than six months prior to the end of the term. LPI may only terminate for cause prior to the end of the term. After December 31, 2027, and if Mr. Mathur does not extend the waiver of royalty payments, the Company will be obligated to pay Mr. Mathur royalties of 4% on the gross sales of NZT-48.
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Our Services
Leveraging our top-notch business know-how, deep insights in the health and nutrition industry and a broad network in the industry to identify and boost unique investment opportunities, we help design, build, and grow successful e-commerce brands that have unique capabilities in each of their respective markets while enriching people’s lives. We empower founders by fostering connections with customers, strategic partners, and investors, using our unique direct-to-consumer model to maximize profits.
Product Development
We help create and grow strong, memorable brands. We help our partners at all stages of product development level, including with market research and product, label, and packaging design. On the market research side, we examine the competitive landscape of industries by analyzing competitors’ products, conducting surveys, finding relevant partners, and researching resources. We then create an actionable plan to break into the relevant market. We also facilitate key introductions to strategic partners in the PR, IT, finance and legal industries and we help design and implement the product fulfilment process.
Product Manufacturing
We maintain complete control over the manufacturing process, from start to finish, including with the sourcing of high-quality ingredients, identifying reliable supply chain, distribution and manufacturers networks, and the designing of quality assurance and compliance processes.
Product Distribution and Fulfilment
Our streamlined omni-channel approach to product distribution prioritizes consumer interests to help deliver better conversion rates. It includes e-commerce websites, social media, shipping, distributed warehousing, payment processing and product returns. Reliable fulfilment and logistics process allows a fast delivery. Product orders are fulfilled via online, direct to consumer, retail, wholesale, and big box retail channels.
Marketing, Advertising, and Consumer Outreach
In 2023, we shifted our business model from working with third-party affiliates and affiliate networks to now include an in-house, full service digital marketing team to decrease our customer acquisition costs, increase customer retention, satisfaction and build brand trust and loyalty. This shift allows us to control the content and marketing creatives, mitigate chargebacks, decrease refunds, lower customer acquisition costs, impact average order values, and create direct relationships with advertisement platforms.
Our marketing efforts are designed to increase consumer awareness of and demand for the brands we work with or own. Our marketing team helps design, form and generate the right content for each brand, and devises the best strategy for its distribution. We employ a broad mix of traditional marketing strategies, from: product sampling to exhibiting at consumer trade events and hosting celebrity-rich events where our company and brand(s) are prominently highlighted. Our primary driver is the use of social media platforms to communicate with consumers and build interest in the respective brand(s) and product(s). Our advertising and use of online resources are aimed at increasing consumer preference and usage of our products. Operating as an integrated marketing agency, we plan to offer global marketing services across all areas of the sales process in the near future.
Our Competitive Strengths
Our strength has been in the relationships that have been developed over the last three decades particularly the network and partnerships that our Chairman & CEO, Jas Mathur, has developed through his success in running businesses. Jas has assembled a team of people with the same vision and goals, to work together as a unified and focused team. These influential relationships that have taken many years to develop are invaluable in helping to build the brand, drive sales and boost profitability through targeted marketing initiatives.
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We strive to find gaps in the market and produce innovative products not only to fill those gaps but also to exceed consumer expectations. This is due to the fact that we have streamlined our approach, enabling us to quickly and effectively bring new products to market and of course, keep abreast of industry trends and the ever changing needs of the health and wellness sector.
With our solid industry knowledge and extensive network, we are well-suited to grow our ecosystem of wellness-based brands. We work with an elite group of influencers, who are credible and have a large following, and who are willing to promote our products and services. These relationships, in addition to our strategic marketing efforts, are crucial to our ability to expand and grow our brand worldwide.
Our Clients
Currently, all of the brands in our portfolio are with affiliated companies that are owned 100% by our Chief Executive Officer, Jas Mathur.
Market for Global Health and Wellness
The market for global health and overall wellness is rapidly expanding due to growing public attention on fitness, mental health and overall wellness. The size of the global health and wellness market is expected to grow to $8,946 billion by the end of 2030 at a compound annual growth rate (“CAGR”) of 6.9% in the year 2023-2030, according to Zion Market Research. This increase indicates the growing demand for health-oriented products and services around the world.
Market Overview & Drivers
As of 2022 the market was at $5,244 billion and the major sub sectors such as dietary supplements, fitness services, organic food, mental wellness, and wearable health technology have a good pace. This change has been spurred on further by a shift in consumer behavior, particularly among millennials and Gen Z, who are now major drivers of this expansion as they place greater emphasis on self-care, living long and holistic well-being. As people become more conscious of the fact that most lifestyle factors affect both the body and the mind, spending on wellness products and services increases.
The Direct-to-Consumer & E-commerce Opportunity
This growth in the health and wellness market is also accompanied by an unprecedented growth in the e-commerce and direct-to-consumer (“DTC”) industry. The global e-commerce market reached $5.7 trillion in 2022 and is expected to grow to more than $8.1 trillion by 2026 because of the growing popularity of online shopping and direct-to-consumer sales channels. The DTC model has changed the way brands reach out to customers, allowing companies to cut out the middlemen, i.e., traditional retail channels, and allowing companies to build a direct relationship with their customers. This transition to digital-first strategies and direct-to-consumer models has opened up new opportunities for health and wellness brands to scale and reach a global audience.
Taking advantage of the dual growth of health and wellness and e-commerce and DTC there is huge opportunity for companies in the sector. As more brands move to direct-to-consumer models there is a real opportunity to leverage digital marketing, influencers, and logistics to take your brand to a global audience and capitalize on increasing consumer demand for personalized, health focused products and services.
Factors Driving Market Growth
Increased Health Consciousness: Consumers are increasingly aware of the long-term benefits of healthy living and are investing in products that support wellness, from fitness supplements to mental health support tools.
Technological Advancements: The rise of wearable devices, mobile health apps, and digital platforms for virtual fitness and wellness coaching has made it easier for individuals to track and optimize their health and fitness routines.
Rise in Preventative Healthcare: As healthcare costs continue to rise, more individuals are turning to preventative measures such as nutrition supplements, fitness regimens, and mindfulness practices to avoid long-term health issues.
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Aging Population: As the global population ages, there’s a growing demand for health and wellness products that support longevity, mobility, mental health, and cognitive function, further boosting market demand.
Geographic Insights
North America and Europe continue to dominate the health and wellness market due to the higher disposable income, advanced healthcare systems, and strong consumer awareness. However, the Asia Pacific region is expected to experience the highest growth rate, fueled by increasing health-consciousness in countries like China and India, along with a growing middle class that seeks better living standards and wellness solutions.
Market Trends to Watch
Personalization & Customization: With advancements in AI and data analytics, there is a growing trend toward personalized wellness products, from custom vitamins to tailored fitness plans. Consumers are looking for solutions that are aligned with their specific health goals and preferences.
Sustainability & Clean Label Products: Eco-consciousness continues to shape consumer purchasing decisions. Brands that prioritize sustainability, ethical sourcing, and transparency in their ingredient lists are gaining consumer loyalty.
Mental Wellness: The demand for products supporting mental clarity, stress relief, and cognitive function is on the rise, reflecting growing concerns over mental health and the need for stress management in fast-paced, high-pressure lifestyles.
E-commerce Growth: The global shift toward online shopping is significantly affecting the health and wellness market, with more consumers turning to digital platforms for convenience and product availability. This has led to the rise of DTC health brands that offer personalized health solutions and direct access to wellness products.
Conclusion
The global health and wellness market is poised for exponential growth in the coming years. As consumers prioritize self-care, mental and physical well-being, and longevity, the market will continue to evolve with innovative products, services, and technologies that cater to these demands. With an expected CAGR of 6.9% from 2023 to 2030, the health and wellness industry represents a dynamic and lucrative opportunity for brands and entrepreneurs who understand the changing landscape of consumer needs.
Our Network of Influencers
We have made a list of our favorite and most credible influencers who are popular and influential in their respective fields and who are also passionate about the theme of our blog: Look Good and Feel Great. This diverse group includes music artists, movie stars, professional athletes, social media influencers, political figures, fitness experts, nutrition coaches, wellness advocates, lifestyle bloggers and experts from other industries. What sets our influencers apart is that, regardless of their professional status or the field they operate in, they all share the same passion for personal well-being and transformation.
These influencers are dedicated to the promotion of health, wellness and personal growth and urging people to take care of themselves and enjoy the process of changing for the better — all this, both physically and mentally. Whether they are in the limelight or heading a specific audience, all of them want to inspire other people to Look Good and Feel Great.
Our network is strategically utilized, with compensation terms tailored to each individual and product, as determined by our management team. We don’t use long-term formal contracts so we are in a position to be able to choose the influencer that will best fit the brand for the given campaign and ensure that the brand message is going to the right audience.
Our marketing team works closely with the brands to identify the target audience and then contact the appropriate persons in our network. These influencers then post the product or service promoted by the brand on their social media pages in the pre-approved content, which helps in creating a connection between the brand and its audience. They receive a commission based on the sales made through their promotion.
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Our network of influencers is diverse and includes Instagram, YouTube, podcasting, and personal appearances to ensure that the message is out there to the masses, from the fitness community to the high-net-worth individuals. All products promoted by our influencers are available for purchase through our website, so consumers can easily acquire the products they need to look and feel their best.
However, please note that the response is not simply a direct replication of the input. It may require additional context or explanation to ensure that the response is proportional to the length of the input. Specifically for shorter inputs, responses can benefit from being more concise to strike a balance between providing valuable information and avoiding lengthy explanations.
Other Business Divisions
Limitless X
Limitless X Inc., a Nevada corporation (“Limitless X”), provides direct-to-consumer e-commerce services for its innovative health and wellness product lines, with a core emphasis on dietary supplements. The company’s flagship products—NZT-48, NZT-48 Lion’s Mane, NZT-48 For Her, and Oneshot Nootropic Pre-Workout—are formulated to enhance cognitive performance, energy, and overall wellness.
With the help of a data driven approach, influencer marketing and digital marketing, Limitless X expects to grow its customer base and brand presence rapidly. In 2025, Limitless X is strategically entering the Consumer Packaged Goods (CPG) space, beginning with the launch of a proprietary Coffee Concentrate, set to debut within the next several months. The cost to date of launching this Coffee Concentrate has been $50,000 and we expect to incur another $250,000 in costs as we initiate the launch of the Coffee Concentrate.
Our Coffee Concentrate is designed not just for taste and convenience, but also with functional health benefits that consumers may have in mind such as energy, focus, or clean fuel. We believe that our Coffee Concentrate caters to today’s wellness-conscious consumer, thus making it an important addition to our product portfolio. As part of this expansion, we plan to develop a line of specialty coffee concentrates—including nootropic blends, adaptogenic formulas, and wellness-focused infusions—that align with our core mission of optimizing mind and body. This move marks the first step in a broader CPG rollout. Backed by our CEO’s strategic relationships and direct access to major retail partners, Limitless X aims to scale across multiple verticals—from functional beverages to nutritional snacks, and beyond.
As part of its two-year growth strategy, Limitless X is focused on scaling direct-to-consumer (DTC) sales, leveraging our core strength: digital marketing. Our DTC model will be primarily driven through high-converting digital platforms such as Facebook, TikTok, Taboola, and through traditional influencer outreach campaigns. This channel remains a key growth engine for the business as we expect our revenue and returns to increase in conjunction with our ad spend.
Currently, we retain approximately 35% of our customers through recurring billing, giving us an average lifetime value (LTV) of about $90 per customer. With the strategic addition of more SKUs and product bundles throughout 2025, we project a doubling of our LTV to $180. By 2026, we aim to increase this figure by an additional 50%, bringing LTV to approximately $270, driven by continued customer retention efforts, subscription optimization, and upsell opportunities. While we are optimistic about the projected increase in LTV, these figures are estimates and there is no guarantee or assurance that we will achieve these targets.
In parallel with our DTC push, Limitless X is pursuing big-box retail distribution to further diversify our sales channels and amplify brand visibility. This retail expansion will work hand-in-hand with our digital growth, offering consumers multiple touchpoints to engage with our brand. On a global scale, Limitless X aims to expand into key international markets such as Canada, Latin America, and the MENA region. These targeted markets offer substantial growth potential and align with our mission to make premium health and wellness products accessible worldwide.
Together, these strategic initiatives—DTC acceleration, retail expansion, and international market penetration—will better position Limitless X to enhance operations, increase market share, and achieve sustainable, long-term revenue growth. As we execute on this vision, we aspire to build the reputation of Limitless X in the global health and wellness industry.
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Limitless Films
Limitless Films, Inc., a Florida corporation (“Limitless Films”), is a dynamic television and film production company committed to crafting compelling visual stories in collaboration with acclaimed producers and directors that engage global audiences. In January 2025, Limitless Films advanced a $1 million bridge loan to a film producer to finance part of the pre-production budget for the producer’s upcoming film starring an A-list actor. This loan is secured by copyright ownership in both the film and its script.
Over the next two years, Limitless Films will concentrate on developing, producing, and releasing a slate of global films. Each production will strategically incorporate high-converting influencers, streamers, and brands—many of which are either wholly or partially owned by Limitless X—into the creative process to market Limitless X products.
Film Financing Strategy
We plan to produce films with total budgets ranging from $3 million to $10 million, starting with mid-budget films in the $3–5 million range. These projects are ideal for showcasing new talent alongside A-list actors while balancing creative ambition and commercial sensibility.
Our film financing model is structured for maximum leverage and return on investment. We expect to finance approximately 10–15% of a film’s total budget in-house, which acts as the seed capital needed to initiate full financing. The remaining 85–90% will be sourced through traditional film finance channels, including:
| ● | Bank loans secured by state and international tax credits; | |
| ● | Strategic partnerships with studios; and | |
| ● | Private movie financiers who co-invest based on creative and commercial viability. |
This capital structure enables us to maintain significant creative input and backend participation while minimizing our upfront risk. To further de-risk and ensure capital recovery, we are aligning with major distribution partners early in the development process. This includes both theatrical distribution deals and direct-to-streaming (VOD) releases with potential target platforms such as Amazon Prime, Netflix, or both, depending on the target audience and genre.
Additionally, owning or co-owning key IP assets in the films—including scripts, characters, and brand integrations—combined with our capital strategy, will promote our ability to procure and preserve long-term royalty streams and profit participation.
Film Revenue Generation Strategy
We plan to generate revenue from our films through a multi-channel monetization strategy that includes:
| ● | Domestic and international box office receipts; | |
| ● | Global streaming rights sales; | |
| ● | Licensing and syndication to TV and VOD platforms; | |
| ● | Third-party brand sponsorships and product placement; | |
| ● | Royalties from soundtrack and merchandise sales; | |
| ● | International territory sales and pre-sales; and | |
| ● | Ancillary rights (airlines, hotels, inflight entertainment, etc.) |
Led by CEO Jas Mathur and Director Arthur Sarkissian, we are leveraging an extensive network of entertainment and brand industry relationships. Our strategy blends high-impact storytelling with viral influencer marketing, to create content that aims not only entertains but also drives real-world product awareness and conversion.
Currently, we have four completed scripts, several A-list actors committed, and are positioned to begin production pending receipt of financing from this Offering or other sources. As we scale, we will continue to finalize international rights deals, expand our digital and physical distribution pipelines, and elevate promotional campaigns driven by our network of influencers—amplifying visibility, boosting corporate valuation, and achieving long-term, sustainable revenue growth.
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XocelForte Therapeutics
XocelForte Therapeutics Inc., a Delaware corporation (“Xocel”), is an emerging direct-to-consumer and e-commerce brand specializing in the development and marketing of regenerative skincare products. Harnessing advancements in biotechnology and natural ingredients, Xocel is on a mission to redefine skin health and rejuvenation through science-backed innovation.
What sets Xocel apart is its focus on exosome-based skincare solutions—a biotechnology that utilizes nano-sized extracellular vesicles to support cell-to-cell communication and regeneration. Unlike conventional skincare products that primarily address surface-level concerns, Xocel’s formulations are designed to work at the cellular level, promoting deep tissue repair, increased collagen production, reduced inflammation, and visibly improved skin texture and elasticity. These are not just cosmetic enhancements; they represent true regenerative therapy for the skin.
To promote scalability and product readiness, Xocel has established strategic partnerships with world-class doctors, researchers, and manufacturers who specialize in unique, proprietary formulations. These collaborators bring decades of experience in dermatology, biotech, and pharmaceutical-grade skincare manufacturing. As a result, fully developed and tested serum and topical prototypes are ready for market launch while we work with our manufacturers and suppliers on packaging and design needs, which may take an estimated 4-6 months. The formulations have undergone clinical evaluations and user testing to validate both efficacy and safety. The cost of developing the products thus far has been less than $10,000, and we expect to have about $100,000 in inventory as we begin the initial rollout of the products.
Xocel will launch exclusively through a direct-to-consumer model, leveraging the same high-performance infrastructure and proven go-to-market strategy pioneered by Limitless X Inc. This includes:
| ● | Precision-targeted digital advertising on platforms like Facebook, Instagram, and TikTok; | |
| ● | Strategic influencer outreach and ambassador programs; | |
| ● | Branded content campaigns across streaming, podcasts, and social media; and | |
| ● | Conversion-optimized eCommerce funnels for high LTV customers. |
By eliminating traditional retail markups and going directly to the consumer, Xocel can offer premium, clinically proven skincare solutions at competitive pricing, while retaining full control over customer experience and brand image.
In addition to topical products, Xocel plans to roll out injectables and in-clinic treatments in partnership with licensed practitioners and medspas. These offerings will allow the brand to enter the luxury skincare and aesthetic markets, further expanding the brand’s impact and revenue potential.
Exosome-based treatments are often considered as the real anti-aging solution which many celebrities use for glowing skin and hence, this technique is commonly known as Hollywood’s best kept secret. Xocel is on a mission to provide a large number of people with the opportunity to benefit from these innovative products, thus allowing consumers to get the same regenerative technologies that are currently used by the elite figures in entertainment, fashion and beauty to achieve the best results in skincare. The Company is positioned to redefine the future of anti-aging and skin health through innovation and a commitment to excellence.
Limitless Entertainment
Limitless Entertainment, Inc., a Florida corporation (“Limitless Entertainment”) is set to revolutionize the entertainment industry by creating an AI-powered platform for live and on-demand streaming of various sporting events, with advanced fan interaction tools to elevate user engagement to new heights. With our Chief Executive Officer’s strong foothold in the boxing, mixed martial arts, and wrestling industries, the Company plans to produce, license, and distribute high-quality combat sports content while integrating advanced engagement features such as real-time commentary, voting, gamification, and social interactivity to enhance the viewing experience. We intend to leverage our CEO’s extensive industry relationships to secure exclusive content rights and create high-profile events featuring major influencers, celebrities, and athletes.
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We are in preliminary discussions to enter into a strategic alliance with a major wrestling organization (name withheld due to confidentiality), as well as partnering with a UFC Hall of Famer to launch a new combat sports league. The league will operate on an event-to-event basis, with a projected cost of no more than $250,000 USD per event. Importantly, we do not intend to be the sole broadcaster—our strategy includes multi-platform distribution to maximize reach, visibility, and monetization.
We have access to multiple streaming platforms and source code options that we can acquire and fully customize, eliminating the need for expensive proprietary builds. Our estimated cost to develop and launch apps across all major smart TVs and set-top boxes is under $250,000, with a projected timeline of less than six months and a monthly maintenance cost not exceeding $5,000 USD.
We expect the backend infrastructure to utilize Amazon AWS for servers and load balancing, allowing us to keep the cost per active user negligible. For instance, even with 100,000 concurrent viewers during a live event, the total operational cost is estimated at only $5,000–$6,000 USD per month—making the platform efficient and scalable.
Over the next two years, the Company will focus on hosting and owning rights to premium sporting events, monetizing them through pay-per-view sales, monthly subscriptions, and brand-integrated sponsorships.
By controlling both the streaming technology and consumer data, Limitless Entertainment seeks to maximize its advertising revenue potential while building a direct-to-consumer entertainment ecosystem. The Company also plans to collaborate with Limitless Films Inc. to produce culturally resonant and localized content—especially for the Latin American market—to strengthen its global footprint and solidify its position as a leader in premium digital sports entertainment.
Limitless Digital Assets
Limitless Digital Assets, Inc., a Florida corporation (“Limitless Digital”), is focused on developing and investing in digital assets that are set to revolutionize industries across the board. From e-commerce to film production, music, real estate, and beyond, the Company recognizes that the future of nearly every sector will be increasingly intertwined with digital assets and blockchain-based innovations.
To stay ahead of the curve, Limitless Digital is bringing on several strategic partners with over a decade of experience in both the gaming and blockchain industries. These individuals have a proven track record in successfully launching blockchain games, cryptocurrencies, and digital ecosystems, which we believe will support the long-term growth and sustainability of our projects.
The blockchain gaming market is projected to surpass $600 billion by 2030, making it one of the fastest-growing sectors globally. We have conducted significant due diligence to identify game types and mechanics that encourage meaningful interaction, competitiveness, and community-building—core elements that align with our broader mission of creating an engaged ecosystem. These interactive games have potential to serve as a key driver in promoting not just our digital asset initiatives, but also the broader Limitless X product lines, services, and subsidiaries.
Each game is expected to have a development cost ranging from $200,000 to $500,000, with a monthly maintenance and ongoing development cost between $10,000 and $25,000, depending on complexity and future feature expansions. We expect to launch our first game toward year’s end. Assuming the launch of our first title is successful, we plan to enter into a strategic partnership with the game development studio to reduce upfront costs and establish a dedicated development team exclusively focused on building our games. This shift will significantly reduce long-term costs and enable rapid iteration of new features and titles.
Furthermore, we will leverage our deep bench of influencers, celebrities, streamers, and athletes—many of whom already promote our health and wellness products—to also promote our games across social media and streaming platforms. Additionally, our film division, Limitless Films Inc., will be used to amplify the visibility of our games through creative storytelling, trailers, integrations, and multimedia exposure.
Limitless Digital is also in early discussions with a strategic partner to launch a digital asset investment fund, targeting promising opportunities in the blockchain space. While these negotiations are ongoing and no assurances can be made at this time, the potential fund would serve as a vehicle to further diversify Limitless X Holdings Inc.’s exposure to this emerging sector.
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Over the next two years, we will focus on launching and tokenizing blockchain-based games that allow users to earn rewards tied to Limitless X Holdings Inc. securities, creating a value-generating loop between gameplay, ownership, and the broader Limitless X ecosystem. By applying blockchain innovations across multiple verticals, Limitless Digital aims to unlock new revenue streams, improve operational efficiencies, and deliver tangible value to both users and shareholders.
Limitless Living
Limitless Living, a Florida corporation, is reimagining real estate through a transformative lens—one where residential development is no longer just about buildings, but about building better lives. The company is actively evaluating a variety of real estate investment opportunities, with a core focus on developing residential communities that inspire and elevate their residents through innovative wellness-centered amenities, lifestyle design, and community curation.
As health and wellness continue to dominate global priorities, a clear trend has emerged in the real estate sector: people want to look good, feel great, and live in environments that support their journey toward optimal well-being. Most developers focus on amenities as a checklist—gyms, yoga rooms, wellness spas—but fail to recognize that wellness is a lifestyle built on intentionality: who you live around, the air you breathe, the water you drink, the food you eat, and the energy you surround yourself with.
That’s why Limitless Living’s vision is not just to construct beautiful spaces, but to build like-minded, supportive communities that empower residents to become the best version of themselves. Our developments will screen for alignment with wellness values, creating an intentional living ecosystem that fosters connection, growth, accountability, and vitality. Every detail—from air filtration systems and water purification to circadian lighting, soundscaping, and onsite nutrition education—will be thoughtfully designed to support physical, emotional, and mental health.
We are currently in discussions with a major residential and commercial real estate development firm based in Southern Florida, who would come on board as a strategic partner and advisor. They bring not only a wealth of experience and expertise but also a network of financial partners and a portfolio of high-net-worth clients—key components to promoting the project’s success from both a development and capital perspective. While we are optimistic regarding the timeline for these ambitious projects, such developments may take many months to several years, and we cannot, at this point in time, provide a concrete estimate as to when any given project may come to fruition.
Depending on the location, the estimated total cost for each development is projected between $20 million and $30 million. In the U.S., we anticipate needing between $5 million and $7.5 million in capital on hand to effectively carry and complete a project. Funding for such projects will be sourced from the proceeds of this Offering and from traditional avenues such as bank loans and other private investors with whom we have existing relationships. These figures are scalable based on geographic market, with potential to expand to international wellness living communities once the model proves successful.
In parallel to developing its own branded properties, Limitless Living is also actively exploring strategic financing opportunities in the real estate sector, specifically projects that align with its mission of integrating wellness and lifestyle with contemporary construction. Whether as developer or capital partner, the company is committed to contributing to a global shift in how people live—intentionally, holistically, and limitlessly.
Our Compliance Team
As a company, all of our compliance matters are managed in-house by our Chief Operating Officer and our VP of Legal Affairs, who work closely together to make sure that all aspects of our operations are in compliance with the relevant legal and regulatory requirements. This includes supervising data security, privacy rights and making sure that our products meet or exceed the standards of applicable government regulations. Our team believes in upholding the highest levels of transparency, accountability, and ethical practices throughout all departments. They also keep a close eye on any changes in the regulatory landscape, and they implement the necessary changes to maintain compliance. We believe protecting customer information and their privacy is important, and we also want to stay ahead of changing legal standards to avoid any risks to the business.
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Regulatory Compliance
FDA and FTC
We are subject to various federal, state, and local laws, regulations and administrative practices that affect our business. The safety, formulation, manufacturing, processing, packaging, importation, labeling, promotion, advertising, and distribution of our dietary supplements, are subject to regulation by several federal agencies, including the FDA, the FTC, the USDA and the CPSC.
The FDA exercises broad jurisdiction over the labeling and promotion of dietary supplements. Labeling is a broad concept that, under most circumstances, extends even to product-related claims and representations made on package inserts, and in some cases, a company’s website and printed or digital media. All dietary supplements, must bear labeling that provides consumers with specific information with respect to standards of product identity, net quantity/weight, nutrition or supplement facts labeling, ingredient statements, contact information for the manufacturer/packer/distributor, allergens, and certain other disclosures.
The FDA has comprehensive authority to regulate the safety of dietary supplements, dietary ingredients, labeling and current good manufacturing practices. The DSHEA, enacted in 1994, greatly expanded the FDA’s regulatory authority over dietary supplements. Through DSHEA, dietary supplements became a separately regulated subcategory of food, and the FDA was empowered to establish good manufacturing practice regulations governing key aspects of the production of dietary supplements, including quality control, record keeping, packaging, and labeling. DSHEA also expressly permits dietary supplements to make label claims and promotional statements describing how a product affects the structure, function or general well-being of the body if adequate scientific evidence exists to substantiate the claim, although no statement may expressly or implicitly represent that a dietary supplement will diagnose, cure, treat or prevent a disease, which are claims reserved for drug products that are regulated separately by the FDA.
The FDA has broad authority to enforce the provisions of the FDCA applicable to the safety, labeling, manufacturing, transport, and promotion of dietary supplements, including powers to issue a public warning letter to a company, publicize information about illegal, misbranded, or adulterated products, instituting a seizure action, an injunction action, or a criminal prosecution. In the past few years, the FDA has commenced enforcement actions against dietary supplement companies by issuing warning letters regarding products that make impermissible claims related to treatments and cures for various diseases.
In addition to the FDA’s regulatory control over product labeling, the FTC also exercises jurisdiction over the advertising of foods and dietary supplements, including health benefit claim, as well as deceptive advertising methods. The FTC has the power to levy monetary sanctions and demand “consent decrees” or seek judgments that include penalties and restitution to consumers that can severely limit a company’s business practices. In recent years, the FTC has instituted numerous enforcement actions against dietary supplement companies for failure to have adequate substantiation for claims made in advertising or for the use of false or misleading advertising claims. In December of 2022, FTC issued its Health Products Compliance Guidance that suggests that at least one randomized clinical trial may be necessary for any claim regarding the health benefits of a product. In addition to FTC warning letters and enforcement actions, private parties are increasingly initiating broad consumer class actions against food and dietary supplement manufacturers for false or misleading labeling and/or advertising.
As is common in our industry, we rely on our suppliers and contract manufacturers to ensure that the products they manufacture and sell to us comply with all applicable regulatory and statutory requirements. In general, we seek certifications of compliance, representations and warranties, indemnification and insurance from our suppliers and contract manufacturers, directly or through our distributor. However, even with adequate certifications, representations and warranties, insurance and indemnification, any claims of non-compliance could significantly damage our reputation and consumer confidence in the products we sell. In addition, the failure of such products to comply with applicable regulatory and legislative requirements could prevent us from marketing the products or require us to recall or withdraw such products from our stores.
Data Privacy
In the ordinary course of our business, we might collect and store in our internal and external data centers, cloud services and networks sensitive data, including our proprietary business information and that of our customers, suppliers, and business collaborators, as well as personal information of our customers and employees. The secure processing, maintenance and transmission of this information is critical to our operations and business strategy. The number and sophistication of attempted attacks and intrusions that companies have experienced from third parties has increased over the past few years. Despite our security measures, it is impossible for us to eliminate this risk.
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A number of states in the United States have enacted data privacy and security laws and regulations that govern the collection, use, disclosure, transfer, storage, disposal, and protection of personal information, such as social security numbers, financial information, and other sensitive personal information. For example, all 50 states and several U.S. territories now have data breach laws that require timely notification to affected individuals, and at times regulators, credit reporting agencies and other bodies, if a company has experienced the unauthorized access or acquisition of certain personal information. Other state laws, particularly the California Consumer Privacy Act, as amended (“CCPA”), among other things, contain disclosure obligations for businesses that collect personal information about residents in their state and afford those individuals new rights relating to their personal information that may affect our ability to collect and/or use personal information. Further, the California Privacy Rights Act (“CPRA”) was recently voted into law by California residents. The CPRA significantly amends the CCPA and imposes additional data protection obligations on covered companies doing business in California, including additional consumer rights processes and opt outs for certain uses of sensitive data. It also creates a new California data protection agency specifically tasked to enforce the law, which would likely result in increased regulatory scrutiny of California businesses in the areas of data protection and security. The substantive requirements for businesses subject to the CPRA went into effect on January 1, 2023, and became enforceable on July 1, 2023. Meanwhile, several other states and the federal government have considered or are considering privacy laws like the CCPA. We will continue to monitor and assess the impact of these laws, which may impose substantial penalties for violations, impose significant costs for investigations and compliance, allow private class-action litigation and carry significant potential liability for our business.
Outside of the United States, data protection laws, including the European Union General Data Protection Regulation (the “GDPR”), also might apply to some of our operations or business collaborators. Legal requirements in these countries relating to the collection, storage, processing, and transfer of personal data/information continue to evolve. The GDPR imposes, among other things, data protection requirements that include strict obligations and restrictions on the ability to collect, analyze and transfer personal data/information of persons located in the European Union, a requirement for prompt notice of data breaches to data subjects and supervisory authorities in certain circumstances, and possible substantial fines for any violations (including possible fines for certain violations of up to the greater of €20 million or 4% of total company revenue). Other governmental authorities around the world have enacted or are considering similar types of legislative and regulatory proposals concerning data protection.
The interpretation and enforcement of the laws and regulations described above are uncertain and subject to change, and may require substantial costs to monitor and implement and maintain adequate compliance programs. Failure to comply with United States and international data protection laws and regulations could result in government enforcement actions (which could include substantial civil and/or criminal penalties), private litigation and/or adverse publicity and could negatively affect our operating results and business.
We rely on a variety of marketing techniques and practices, including email and social media marketing, online targeted advertising, cookie-based processing, and postal mail to sell our products and services and to attract new consumers, and we and our vendors, are subject to various current and future data protection laws and data protection obligations that govern marketing and advertising practices. Governmental authorities continue to evaluate the privacy implications inherent in the use of third-party “cookies” and other methods of online tracking for behavioral advertising and other purposes, such as by regulating the level of consumer notice and consent required before a company can employ cookies or other electronic tracking tools or the use of data gathered with such tools. Additionally, some providers of consumer devices, web browsers and application stores have implemented, or announced plans to implement, means to make it easier for Internet users to prevent the placement of cookies or to block other tracking technologies, require additional consents, or limit the ability to track user activity, which could if widely adopted result in the use of third-party cookies and other methods of online tracking becoming significantly less effective. Laws and regulations regarding the use of these cookies and other current online tracking and advertising practices or a loss in our ability to make effective use of services that employ such technologies could increase our costs of operations and limit our ability to acquire new consumers on cost-effective terms, which, in turn, could have an adverse effect on our business, financial condition, results of operations, and prospects.
Seasonality
We do not experience seasonal variations in our quarterly operating results and capital requirements.
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Human Capital
As of the date of this Offering Circular, we have 9 full-time employees and 5 sub-contractors. None of our employees are members of a labor union or covered by a collective bargaining agreement.
Our human capital resources objectives include, as applicable, identifying, recruiting, retaining, incentivizing, and integrating our existing and new employees, advisors, and consultants. The principal purposes of our equity incentive plans are to attract, retain and reward personnel through the granting of equity-based compensation awards in order to increase shareholder value and the success of our business by motivating such individuals to perform to the best of their abilities and achieve our objectives.
Legal Proceedings
From time to time, the Company is involved in legal proceedings. arising in the ordinary course of our business, the resolution of which we do not anticipate would have, individually or in the aggregate, a material adverse effect on our business, financial condition, or results of operations. For more detail regarding litigation matters, please see Item 8. Financial Statements which contains Company’s audited financial statements for fiscal 2024 and 2023 – Footnote 12 – Commitments and Contingencies.
Properties
We have a lease for our corporate headquarters located at 9777 Wilshire Blvd., #400, Beverly Hills, CA 90212.
Corporate History and Background
The Company was formed in the State of Nevada on June 3, 1996, as Vyta Corp. On November 5, 2010, the Company changed its name to Bio Lab Naturals, Inc. On May 11, 2022, Bio Lab Naturals, Inc., a Delaware corporation (“Bio Lab”), entered into a Share Exchange Agreement (the “Share Exchange Agreement”) with Limitless X, Inc., a Nevada corporation (“Limitless X”), and its 11 shareholders (the “Limitless X Nevada Acquisition”). The parties completed and closed the Limitless X Acquisition on May 20, 2022. Concurrently with the Limitless X Nevada Acquisition, Jaspreet Mathur, the founder, and principal shareholder of Limitless X, also purchased from Helion Holdings LLC, shares of Bio Lab’s Class A Stock, which at all times have a number of votes equal to 60% of all of the issued and outstanding shares of common stock of Bio Lab. On June 10, 2022, the Company changed its name to Limitless X Holdings Inc.
Corporate Information
We are a Delaware corporation. Our corporate headquarters are located at 9777 Wilshire Blvd., #400, Beverly Hills, CA 90212. Our telephone number is (855) 413-7030. We maintain a website at https://www.limitlessx.com/.
We conduct business through our six active subsidiaries companies.
Reports to Security Holders
We provide an annual report that includes audited financial information to our shareholders. We will make our financial information equally available to any interested parties or investors through compliance with the disclosure rules for a small business issuer under the Exchange Act. We are subject to disclosure filing requirements including filing Form 10-K annually and Form 10-Q quarterly. In addition, we will file Form 8-K and other proxy and information statements from time to time as required. We do not intend to voluntarily file the above reports in the event that our obligation to file such reports is suspended under the Exchange Act. The public may read and copy any materials that we file with the SEC at the SEC’s Public Reference Room at 100 F Street NE, Washington, DC 20549. The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC maintains a website (http://www.sec.gov) that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC.
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ITEM 1A. RISK FACTORS.
Our business, results of operations, and financial condition are subject to numerous risks and uncertainties. In connection with making any investment decision with respect to our securities, you should carefully consider the following risk factors, which address the material risks concerning our business and an investment in our securities, together with the other information contained in this filing. The risks described below are material risks currently known, expected, or reasonably foreseeable by us. However, the risks described below are not the only ones that we face. Additional risks not presently known to us or that we currently deem immaterial may also affect our business, operating results, prospects, or financial condition. If any of the risks discussed in this filing occur, our business, prospects, liquidity, financial condition, and results of operations could be materially and adversely affected, in which case the trading price of our common stock could decline significantly. You should read these Risk Factors in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Item 7 and our consolidated financial statements and related notes in Item 8. Additionally, some statements herein constitute forward-looking statements. (See “Cautionary Note Concerning Forward-Looking Statements.”)
Summary of Risk Factors
| ● | We have incurred significant losses, we expect to incur losses in the future, and we may not be able to generate sufficient revenue to achieve and maintain profitability. | |
| ● | The report of the independent registered public accounting firm includes a going concern uncertainty explanatory paragraph. | |
| ● | All of the current brands and products that we sell and promote are owned or controlled by our Chief Executive Officer and we may lose all of our business at any time. | |
| ● | We are in the process of expanding into a variety of different industries through our subsidiaries, any one of which ventures may prove to be unsuccessful. | |
| ● | If we fail to cost-effectively acquire new consumers or retain our existing consumers, our business could be adversely affected. | |
| ● | Use of social media and influencers may materially and adversely affect our reputation or subject us to fines or other penalties. | |
| ● | If we fail to retain existing customers, or fail to maintain average order value levels, we may not be able to maintain our revenue base and margins, which would have a material adverse effect on our business and operating results. | |
| ● | We rely on third parties for some essential business operations and services, and disruptions or failures in service or changes in terms may adversely affect our ability to deliver goods and services to our customers. | |
| ● | Shipping is a critical part of our business and any changes in our shipping arrangements or any interruptions in shipping could adversely affect our operating results. | |
| ● | Increases in labor costs, including wages, could adversely affect our business, financial condition, and results of operations. | |
| ● | If we fail to maintain and enhance awareness of our brand, our business and financial results could be adversely affected. | |
| ● | We could face liability for information displayed via our e-commerce webpages and our other websites. | |
| ● | Advertising inaccuracies or product mislabeling may have an adverse effect on our business by exposing us to lawsuits, product recalls or regulatory enforcement actions, increasing our operating costs and reducing demand for our product offerings. | |
| ● | We are subject to a number of other laws and regulations, which could impact our business. | |
| ● | Our future financial performance and our ability to commercialize our products and services and to compete effectively will depend, in part, on our ability to manage any future growth effectively. | |
| ● | We have authorized and designated Class A Preferred Convertible Stock, which have voting rights of 60% of our common stock at all times. | |
| ● | Jaspreet Mathur, our Chief Executive Officer, owns greater than 50% of our voting securities which will cause us to be deemed a “controlled company” under the rules of NYSE American. |
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| ● | Because insiders control our activities, that may cause us to act us in a manner that is most beneficial to them and not to outside shareholder which could cause us not to take actions that outside shareholders might view favorably. | |
| ● | We are dependent upon our management, founders, key personnel, and consultants to execute our business plan, and many of them have concurrent responsibilities at other companies. | |
| ● | There are limitations on the liability of our directors. | |
| ● | We can issue future series of shares of preferred stock without shareholder approval which could adversely affect the rights of common shareholders. | |
| ● | Our securities are considered a penny stock, and therefore are subject to the penny stock rules, as such, U.S. broker-dealers may be discouraged from effecting transactions in our securities. | |
| ● | We have not paid dividends in the past and do not expect to pay dividends in the foreseeable future. |
RISKS RELATED TO OUR BUSINESS
Our future profitability is uncertain.
We have incurred losses in recent quarters. Because we operate in the highly competitive nutritional supplement industry and are or expect to expand into film and television, regenerative skin care, digital assets, entertainment and real estate, we have difficulty predicting our future operating results, and we cannot be certain that our revenue will grow at rates that will allow us to reach or maintain profitability on a quarterly or annual basis.
We have incurred recurring losses and may not be profitable in the future. Our plans to maintain and increase liquidity may not be successful. The report of the independent registered public accounting firm includes a going concern uncertainty explanatory paragraph.
We have a history of operating losses and negative cash flow in operating activities. We have incurred recurring net losses, including net losses from operations before income taxes of $4.2 million for the year ended December 31, 2024 and we had an accumulated deficit of $38.8 million at December 31, 2024. These factors raise substantial doubt as to our ability to continue as a going concern, and our independent registered public accounting firm has included a going concern uncertainty explanatory paragraph in their report for 2024. Our cash needs will depend on numerous factors, including our revenues, completion of our product development activities, customer and market acceptance of our product, and our ability to reduce and control costs. We expect to devote substantial capital resources to, among other things, fund operations and continue development plans. To support our existing and planned business model, the Company needs to raise additional capital to fund our future operations. The Company has not experienced any difficulty in raising funds through loans, and has not experienced any liquidity problems in settling payables in the normal course of business and repaying loans when they fall due. Successful renewal of our loans, however, is subject to numerous risks and uncertainties. In addition, the increasingly competitive industry conditions under which we operate may negatively impact our results of operations and cash flows. Additional debt financing is anticipated to fund the Company’s operations in the near future. However, there are no current agreements or understandings with regard to the form, time or amount of such financing and there is no assurance that any of this financing can be obtained or that the Company can continue as a going concern.
We have incurred significant losses, we expect to incur losses in the future, and we may not be able to generate sufficient revenue to achieve and maintain profitability.
For the year ended December 31, 2024, we incurred net losses of $3 million. We expect to continue to incur significant expenses and operating losses for the foreseeable future as we (i) expand our business into new areas, which includes film and television, regenerative skin-care, entertainment and fin-tech, and which may not come to fruition and prove successful (ii) broaden our customer base, (iii) develop our retail and wholesale distribution platforms, and (iv) make expenditures in an effort to enhance our existing online direct-to-consumer website. Historically, we have devoted most of our financial and other resources on sales and marketing; continued expansion of our business; and general administration expenses, including legal, accounting, and other expenses. We may not succeed in increasing our revenues, which historically have been reliant on our online direct-to-consumer website, in a manner that will be sufficient to offset these higher expenses. Any failure to increase our revenues as we implement initiatives to grow our business could prevent us from achieving profitability. We cannot be certain that we will be able to achieve profitability on a quarterly or annual basis, if at all. If we are unable to address these risks and difficulties as we encounter them, our business, financial condition, and results of operations may suffer.
All of the current brands and products that we sell and promote are licensed from Limitless Performance, Inc., an entity owned by our Chief Executive Officer and we may lose all of our business at any time.
All of the current brands and products, including the NZT-48 products, that we sell and promote are licensed from Limitless Performance, Inc. (“LPI”), an entity owned by Jas Mathur, our Chief Executive Officer. If Mr. Mathur chooses, on behalf of LPI, to terminate our licensing agreement, we will effectively lose all of our current business. We entered into the licensing agreement with LPI for our current marketed brands in 2021 and it has a five-year term with automatic renewal for five years, whereby the licensor is not able to terminate the agreement with us before the end of a given term except “for cause.” However, the licensing agreement only grants us a non-exclusive license to manufacture, market, and distribute the brand’s products. Therefore, there is a possibility that LPI could work with other companies to manufacture, market, and distribute its products or replace us entirely. If this occurs, our revenues will significantly decline or stop completely. In addition, the trademarks for our name, “Limitless X,” and logo, are owned by entities that are owned or controlled by Mr. Mathur. In the event that he chooses, on behalf of LPI, to restrict our use of these trademarks, we will not be able to use our name and logo and would have to change our name.
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If we fail to cost-effectively acquire new consumers or retain our existing consumers, our nutritional supplements business could be adversely affected.
Our success in our nutritional supplements business depends on our ability to attract new customers and engage existing customers cost-effectively. To acquire and engage customers, we must, among other things, promote and sustain our platform, and provide high-quality products, user experiences, and customer service. If customers do not perceive our e-commerce service or products to be reliable and of high quality, if we fail to introduce new and improved products, or if we introduce new products that are not favorably received by the market, we may not be able to attract or retain customers.
We have historically acquired a significant number of our customers through digital advertising on social media. The advertisers we utilize may terminate their agreements with us at any time or introduce factors beyond our control, such as such as adjustments to algorithms that may decrease user engagement or negatively affect our ability to reach a broad audience; increases in pricing; and changes in policies that may delay or prevent our advertising through these channels, all of which could impact our ability to attract new customers.
We have marketing initiatives designed to acquire customers through increased search engine optimization and streaming digital video services. These new acquisition channels may not perform as well as our historical social media advertising channels. Our efforts to diversify customer acquisition channels may not be effective, which could negatively affect our results of operations.
Customer acquisition costs may fluctuate and rise on the channels that have been successful for us historically and on new channels that we are introducing. Rising costs may limit our ability to expand or maintain our customer acquisition efforts which could negatively affect our results of operations.
Other factors may reduce our ability to acquire, maintain, and further engage with customers, including the effectiveness of our marketing efforts and other expenditures we make to continue to acquire new customers and maintain and increase engagement with existing customers; system updates to advertising platforms; changes in search algorithms by search engines; the development of new search engines or social media sites that reduce traffic on existing search engines and social media sites; and consumer behavior changes as a result of the COVID-19 pandemic or otherwise.
Moreover, consumer preferences may change, and customers may not purchase through our marketplace as frequently or spend as much with us as historically has been the case. As a result of these potential changes, the revenue generated from customer transactions may not be as high as revenue generated from transactions historically.
We must expend resources to maintain consumer awareness of our current nutritional supplement brands, to develop new business divisions in television and film, regenerative skin-care, fintech, entertainment and real estate and generate interest in our current and new products. Our marketing strategies and channels will evolve, and our efforts may or may not be successful.
To remain competitive and expand and keep market share for our current nutritional products (including new and advanced versions of these products) and to develop our new businesses in television and film, regenerative skin care, fintech, entertainment and real estate, across our various channels, we need to increase our marketing and advertising spending. Substantial advertising and promotional expenditures will be required to maintain or improve our brands’ market position and to develop our new business divisions, which includes our television and entertainment, regenerative skin care, fintech, entertainment and real estate divisions. An increase in our marketing and advertising efforts may not maintain our current reputation, lead to increased brand awareness, or attract new customers. If we are unable to maintain and promote a favorable perception of our brand and products on a cost-effective basis, our business, financial condition, results of operations, and prospects could be adversely affected.
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Use of social media and influencers may materially and adversely affect our reputation or subject us to fines or other penalties.
We use third-party social media platforms as, among other things, marketing tools. We also maintain relationships with many social media influencers and engage in sponsorship initiatives. As existing e-commerce and social media platforms continue to rapidly evolve and new platforms develop, we must continue to maintain a presence on these platforms and establish presences on new or emerging popular social media platforms. If we are unable to cost-effectively use social media platforms as marketing tools or if the social media platforms that we use change their policies or algorithms, we may not be able to fully optimize such platforms, and our ability to maintain and acquire customers and our financial condition may suffer.
Furthermore, as laws and regulations and public opinion rapidly evolve to govern the use of these platforms and devices, the failure by us, our employees, our network of social media influencers, our sponsors or third parties acting at our direction to abide by applicable laws and regulations in the use of these platforms and devices or otherwise could subject us to regulatory investigations, class action lawsuits, liability, fines or other penalties and have a material adverse effect on our business, financial condition and operating results.
In addition, an increase in the use of social media for product promotion and marketing may cause an increase in the burden on us to monitor compliance of such materials and increase the risk that such materials could contain problematic product or marketing claims in violation of applicable regulations. For example, in some cases, the FTC has sought enforcement action where an endorsement has failed to clearly and conspicuously disclose a financial relationship or material connection between an influencer and an advertiser.
We do not prescribe what our influencers post, and if we were held responsible for the content of their posts or their actions, we could be fined or forced to alter our practices, which could have an adverse impact on our business.
Negative commentary regarding us, our products, or influencers and other third parties who are affiliated with us may be posted on social media platforms and may be adverse to our reputation or business. Influencers with whom we maintain relationships could engage in behavior or use their platforms to communicate directly with our customers in a manner that reflects poorly on our brand and may be attributed to us or otherwise adversely affect us. It is not possible to prevent such behavior, and the precautions we take to detect this activity may not be effective in all cases. Our target consumers often value readily available information and often act on such information without further investigation and without regard to its accuracy. The harm may be immediate without affording us an opportunity for redress or correction.
If we fail to retain existing customers, or fail to maintain average order value levels, we may not be able to maintain our revenue base and margins, which would have a material adverse effect on our business and operating results.
A significant portion of our net sales is generated from sales to existing customers. If existing customers no longer find our product offerings appealing, or if we are unable to timely update our product offerings to meet current trends and customer demands, our existing customers may make fewer or smaller purchases in the future. A decrease in the number of our customers who make repeat purchases or a decrease in their spending on the merchandise we offer could negatively impact our operating results. Further, we believe that our future success will depend in part on our ability to increase sales to our existing customers over time, and if we are unable to do so, our business may suffer. If we fail to generate repeat purchases or maintain high levels of customer engagement and average order value, our growth prospects, operating results, and financial condition could be materially adversely affected.
Traffic to our e-commerce webpages and conversion rates may decline.
In order to generate online customer traffic, we depend heavily on e-mailed catalogs, outbound emails, and an affiliate program. Our sales volume and e-commerce webpages traffic generally may be adversely affected by, among other things, a change in any of the above-mentioned dependencies as well as economic downturns, system failures, competition from other internet retailers, and non-internet retailers. A reduction in traffic to the e-commerce webpages as a result of these or any other factors could have a material adverse effect on our business, results of operations, and financial condition. In addition, e-commerce webpages sales conversion rates may decline due to, among other things, system failures and our ability to effectively predict and respond to changing trends and consumer demands, and to translate market trends into appropriate, saleable product offerings in a timely manner, all of which could also have a material adverse effect on our business, results of operations, and financial condition.
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We must effectively manage our vendors to minimize inventory risk and maintain our margins.
We seek to avoid maintaining high inventory levels in an effort to limit the risk of outdated merchandise and inventory write-downs. If we underestimate quantities demanded by our customers and our vendors cannot restock, then we may disappoint customers who may then turn to our competitors. We require many of our vendors to meet minimum restocking requirements, but if our vendors cannot meet these requirements and we cannot find alternative vendors, we could be forced to carry more inventory than we have in the past. Our risk of inventory write-downs would increase if we were to hold large inventories of merchandise that prove to be unpopular.
We rely on third parties for some essential business operations and services, and disruptions or failures in service or changes in terms may adversely affect our ability to deliver goods and services to our customers.
We currently depend on third parties for important aspects of our business, such as printing, shipping, paper supplies, and operation of our e-commerce webpages and customer support. We have limited control over these third parties, and we are not their only client. In addition, we may not be able to maintain satisfactory relationships with any of these third parties on acceptable commercial terms. Further, we cannot be certain that the quality or cost of products and services that they provide will remain at currents levels or the levels needed to enable us to conduct our business efficiently and effectively.
Our business, including our costs and supply chain, is subject to risks associated with sourcing, manufacturing, warehousing, distribution, infrastructure, and logistics to third-party providers, and the loss of any of our key suppliers or logistical service providers could negatively impact our business.
All of the products we offer are supplied or manufactured by a limited number of third-party suppliers and manufacturers, and as a result we may be subject to price fluctuations or supply disruptions. Our operating results would be negatively impacted by increases in the costs of our products, and we have no guarantees that costs will not rise. In addition, as we expand into new categories and product types, we expect that we may not have strong purchasing power in these new areas, which could lead to higher costs than we have historically seen in our current categories. We may not be able to pass increased costs on to consumers, which could adversely affect our operating results. Moreover, in the event of a significant disruption in the supply of the materials used in the manufacture of the products we offer, we and the vendors that we work with might not be able to locate alternative suppliers of materials of comparable quality at an acceptable price.
In addition, products and merchandise we receive from manufacturers and suppliers may not be of sufficient quality or free from damage, or such products may be damaged during shipping, while stored in our warehouse fulfillment centers or with third-party e-commerce or retail customers or when returned by consumers. We may incur additional expenses, and our reputation could be harmed if consumers and potential consumers believe that our products do not meet their expectations, are not properly labelled, or are damaged. Quality control problems could also result in regulatory action, such as FDA Warning Letters, restrictions on importation, product liability litigation, product seizures, products of inferior quality or product stock outages or shortages, harming our sales and creating inventory write-downs for unusable products.
We purchase significant amounts of product from a limited number of suppliers with limited supply capabilities. There can be no assurance that our current suppliers will be able to accommodate our anticipated growth or continue to supply current quantities at preferential prices. We generally do not maintain long-term supply contracts with any of our suppliers and any of our suppliers could discontinue selling to us at any time. An inability of our existing suppliers to provide materials in a timely or cost-effective manner could impair our growth and have an adverse effect on our business, financial condition, results of operations, and prospects.
We rely or may rely on software-as-a-service (“SaaS”) technologies from third parties in order to operate critical functions of our business, including financial management services, payment processing, customer relationship management services, website platform services, e-commerce services, email services, supply chain services, and data storage services. If these services become unavailable due to extended outages or interruptions or because they are no longer available on commercially reasonable terms or prices or for any other reason, or if we fail to migrate successfully to new services, our expenses could increase, our ability to manage our finances could be interrupted, our processes for managing sales of our offerings and supporting our consumers could be impaired, our ability to communicate with our suppliers could be weakened and our ability to access or save data stored to the cloud may be impaired until equivalent services, if available, are identified, obtained, and implemented, all of which could have an adverse effect on our business, financial condition, results of operations, and prospects.
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We utilize cloud services from third-party data center facilities operated by AWS and Cloudflare. Any damage to, failure of, or interference with our cloud service that is hosted by us, AWS, Cloudfare, or by third-party providers we may utilize in the future, whether as a result of our actions, actions by the third-party data centers, actions by other third parties, or acts of nature, could result in interruptions in our cloud service and/or the loss of our or our customers’ data, including personal information. Impairment of, or interruptions in, our cloud services may subject us to claims and litigation and adversely affect our ability to attract new customers. Our business will also be harmed if our customers and potential customers believe our services are unreliable. Additionally, any limitation of the capacity of our data centers could impede our ability to scale, onboard new customers, or expand the usage of existing customers, which could adversely affect our business, financial condition, and results of operations. While we have disaster recovery arrangements in place, our preparations may not be adequate to account for disasters or similar events that may occur in the future and may not effectively permit us to continue operating in the event of any problems with respect to our systems or those of our third-party data centers or any other third-party facilities. Our disaster recovery and data redundancy measures may be inadequate, and our business interruption insurance may not be sufficient to compensate us for the losses that could occur.
If any of our key suppliers becomes insolvent, ceases, or significantly reduces its operations, or experiences financial distress, or if any environmental, economic, or other outside factors impact their operations, our operations could be substantially disrupted. If we are unable to identify or enter into distribution relationships with new suppliers or to replace the loss of any of our existing suppliers, we may experience a competitive disadvantage, our business may be disrupted and our business, financial condition, results of operations, and prospects could be adversely affected.
If our third-party suppliers and manufacturers do not comply with ethical business practices or with applicable laws and regulations, our reputation, business, financial condition, results of operations, and prospects could be harmed.
We continually seek to expand our base of suppliers, especially as we identify new products that necessitate new or additional materials. We also require our new and existing suppliers to meet our ethical and business partner standards. Suppliers may also have to meet governmental and industry standards and any relevant standards required by our consumers, which may require additional investment and time on behalf of suppliers and us.
Our reputation and our consumers’ willingness to purchase our products depend in part on our suppliers’, manufacturers’, and retail partners’ compliance with ethical employment practices, such as with respect to child labor, wages, and benefits, forced labor, discrimination, safe and healthy working conditions, and with all legal and regulatory requirements relating to the conduct of their businesses. We do not exercise control over our suppliers, manufacturers, and retail partners and cannot guarantee their compliance with ethical and lawful business practices. If our suppliers, manufacturers, or retail partners fail to comply with applicable laws, regulations, safety codes, employment practices, human rights standards, quality standards, environmental standards, production practices, or other obligations, norms, or ethical standards, our reputation and brand image could be harmed, and we could be exposed to litigation, investigations, enforcement actions, monetary liability, and additional costs that would harm our reputation, business, financial condition, results of operations, and prospects.
Shipping is a critical part of our business and any changes in our shipping arrangements or any interruptions in shipping could adversely affect our operating results.
We rely on several vendors for our shipping requirements. If we are not able to negotiate acceptable pricing or other terms with these vendors or if they experience performance problems or other difficulties, it could negatively impact our operating results and our consumer experience. Rising shipping costs and the imposition of surcharges from time to time could negatively impact our operating results. In addition, our ability to receive inbound inventory and ship products to consumers and retailers may be negatively affected by inclement weather, fire, flood, power loss, earthquakes, labor disputes, acts of war or terrorism, trade embargoes, customs and tax requirements, and similar factors. We are also subject to risks of damage or loss during delivery by our shipping vendors. If our products are not delivered in a timely fashion or are damaged or lost during delivery, our consumers could become dissatisfied and cease shopping on our site or retailer, which could have an adverse effect on our business, financial condition, operating results, and prospects.
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We are subject to risks related to online payment methods, including third-party payment processing-related risks.
We currently accept payments using a variety of methods, including credit card, debit card, and gift cards. As we offer new payment options to consumers, we may be subject to additional regulations, compliance requirements, fraud, and other risks. We also rely on third parties to provide payment processing services, and for certain payment methods, we pay interchange and other fees, which may increase over time and raise our operating costs and affect our ability to achieve or maintain profitability. We are also subject to payment card association operating rules and certification requirements, including the Payment Card Industry Data Security Standard, or PCI-DSS, and rules governing electronic funds transfers, which could change or be reinterpreted to make it difficult or impossible for us to comply. If we (or a third party processing payment card transactions on our behalf) suffer a security breach affecting payment card information, we may have to pay onerous and significant fines, penalties and assessments arising out of the major card brands’ rules and regulations, contractual indemnifications, or liability contained in merchant agreements and similar contracts, and we may lose our ability to accept payment cards for payment for our goods and services, which could materially impact our operations and financial performance.
Furthermore, as our business changes, we may be subject to different rules under existing standards, which may require new assessments that involve costs above what we currently pay for compliance. As we offer new payment options to consumers, including by way of integrating emerging mobile and other payment methods, we may be subject to additional regulations, compliance requirements, and fraud. If we fail to comply with the rules or requirements of any provider of a payment method we accept, if the volume of fraud in our transactions limits or terminates our rights to use payment methods we currently accept, or if a data breach occurs relating to our payment systems, we may, among other things, be subject to fines or higher transaction fees and may lose, or face restrictions placed upon, our ability to accept credit card payments from consumers or facilitate other types of online payments. In addition, our customers could lose confidence in certain payment types, which may result in a shift to other payment types or potential changes to our payment systems that may result in higher costs.
We also occasionally receive orders placed with fraudulent data and we may ultimately be held liable for the unauthorized use of a cardholder’s card number in an illegal activity and be required by card issuers to pay charge-back fees. Charge-backs result not only in our loss of fees earned with respect to the payment, but also leave us liable for the underlying money transfer amount. If our charge-back rate becomes excessive, card associations also may require us to pay fines or refuse to process our transactions. In addition, we may be subject to additional fraud risk if third-party service providers or our employees fraudulently use consumer information for their own gain or facilitate the fraudulent use of such information. Overall, we may have little recourse if we process a criminally fraudulent transaction. If we fail to adequately control fraudulent credit card transactions, we may face civil liability, diminished public perception of our security measures, and significantly higher credit card-related costs, each of which could harm our business, results of operations and financial condition.
Merchandise returns could harm our business.
We allow our customers to return products, subject to our return policy. If the rate of merchandise returns increases significantly or if merchandise return economics become less efficient, our business, financial condition, and operating results could be harmed. Further, we modify our policies relating to returns from time to time, which may result in customer dissatisfaction or an increase in the number of product returns. From time to time our products are damaged in transit, which can increase return rates and harm our brands.
Our operations are currently dependent on a single warehouse and distribution center, and the loss of, or disruption in, the warehouse and distribution center and other factors affecting the distribution of merchandise could have a material adverse effect on our business and operations.
Our warehouse and fulfillment/distribution functions are currently primarily handled from a single facility. Our current fulfillment/distribution operations are dependent on the continued use of this facility. Any significant interruption in the operation of the warehouse and fulfillment/ distribution center due to COVID-19 restrictions, natural disasters, accidents, system issues or failures, or other unforeseen causes that materially impair our ability to access or use our facility, could delay, or impair the ability to distribute merchandise and fulfill online orders, which could cause sales to decline.
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We also depend upon third-party carriers for shipment of a significant amount of merchandise directly to our customers. An interruption in service by these third-party carriers for any reason could cause temporary disruptions in business, a loss of sales and profits, and other material adverse effects.
Our revenues and income could decline due to general economic trends and declines in consumer spending.
Our revenues are largely generated by discretionary consumer spending. Consumer spending tends to decline during recessionary periods and may also decline at other times. Accordingly, our revenues could decline during any general economic downturn.
We face risks related to recession, inflation, weak growth, and other economic conditions.
Customer demand for our products may be impacted by weak economic conditions, inflation, weak growth, recession, equity market volatility, or other negative economic factors in the United States or other nations. For example, under these conditions, potential customers may delay or cancel purchases of our products. Further, in the event of a recession, our manufacturing partners, suppliers, and other third-party partners may suffer their own financial and economic challenges and as a result they may demand pricing accommodations, delay payment, or become insolvent, which could harm our ability to meet our customer demands or otherwise could harm our business, financial condition, and results of operations. Similarly, disruptions in financial and credit markets may impact our ability to manage normal commercial relationships with our customers, suppliers, and lenders and might cause us to not be able to access sources of liquidity, and our borrowing costs could increase. If general macroeconomic conditions deteriorate, our business, financial condition, and results of operations could be materially and adversely affected.
In addition, we are also subject to risk from inflation and increasing market prices of certain supplies and raw materials, which are incorporated into our products or used by our suppliers to manufacture our products. These components, supplies, and commodities may from time to time become restricted, or general market factors and conditions may affect pricing of such components, supplies, and commodities, such as inflation or supply chain constraints.
Changes in the economy could have a detrimental impact on our business.
Changes in the general economic climate could have a detrimental impact on our revenue. It is possible that recessionary pressures and other economic factors (such as declining incomes, future potential rising interest rates, higher unemployment, and tax increases) may adversely affect our business. Any of such events or occurrences could have a material adverse effect on our financial results.
Increases in labor costs, including wages, could adversely affect our business, financial condition, and results of operations.
Labor is a significant portion of our cost structure and is subject to many external factors, including unemployment levels, prevailing wage rates, minimum wage laws, potential collective bargaining arrangements, health insurance costs and other insurance costs, and changes in employment and labor legislation or other workplace regulation. From time to time, legislative proposals are made to increase the federal minimum wage in the United States, as well as the minimum wage in California and a number of other states and municipalities, and to reform entitlement programs, such as health insurance and paid leave programs. As minimum wage rates increase or related laws and regulations change, we may need to increase not only the wage rates of our minimum wage employees, but also the wages paid to our other hourly or salaried employees. Any increase in the cost of our labor could have an adverse effect on our business, financial condition, and results of operations or if we fail to pay such higher wages, we could suffer increased employee turnover. Increases in labor costs could force us to increase prices, which could adversely impact our sales. If competitive pressures or other factors prevent us from offsetting increased labor costs by increases in prices, our profitability may decline and could have a material adverse effect on our business, financial condition, and results of operations.
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We face competition in our market from various companies, most of which have greater financial, technical, and other resources than us.
We face significant competition from other companies operating in the health and wellness space and other industries into which we intend to expand such as film and entertainment, fintech, and real estate. Our operating results could suffer if we fail to compete effectively. These industries are intensely competitive and subject to rapid and significant change. We have competitors both in the United States and internationally. Many of our competitors have substantially greater financial, technical, and other resources, such as larger staff and experienced marketing departments and manufacturing wings. These companies may obtain market acceptance more rapidly than we can and may be more effective in selling and marketing their products and services as well. Smaller or early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large, established companies. Our ability to compete depends, in part, upon a number of factors outside our control, including the ability of our competitors to develop products and services that are superior. Competition may increase further as a result of greater availability of capital for investment in these industries. Our competitors may succeed in developing, acquiring, or licensing similar products or services that we may develop. If we fail to successfully compete in our market, or if we incur significant expenses in order to compete, it could have a material adverse effect on our results of operations.
Our business model is evolving.
Our business model is unproven and is evolving. In December 2024 and January 2025, we announced that we were entering into new industries, including television and film, entertainment, fintech, real estate and regenerative skin care. Accordingly, our initial business model may not be successful and may need to be changed. Our ability to generate significant revenues will depend, in large part, on our ability to successfully market our products to potential users who may not be convinced of the need for our products and services or who may be reluctant to rely upon third parties to develop and provide these products. We intend to continue to develop our business model as our market continues to evolve.
If we fail to maintain and enhance awareness of our brand, our business and financial results could be adversely affected.
We believe that maintaining and enhancing awareness of our brand is critical to achieving widespread acceptance and success of our business. We also believe that the importance of brand recognition will increase due to the relatively low barriers to entry in our market. Maintaining and enhancing our brand awareness may require us to spend increasing amounts of money on, and devote greater resources to, advertising, marketing, and other brand-building efforts and these investments may not be successful. Further, even if these efforts are successful, they may not be cost-effective. If we are unable to continuously maintain and enhance our media presence, our market may decrease and we may fail to attract advertisers and subscribers, which could in turn result in lost revenues and adversely affect our business and financial results.
An inability to maintain and enhance product image could harm our business.
It is important that we maintain and enhance a positive perception of any new products. The image and reputation of our products may be impacted for various reasons including, but not limited to, bad publicity, litigation, and complaints from regulatory bodies. Such problems, even when unsubstantiated, could be harmful to our image and the reputation of our products. These claims may not be covered by our insurance policies. Any resulting litigation could be costly for us, divert management attention, and could result in increased costs of doing business, or otherwise have a material adverse effect on our business, results of operations, and financial condition. Any negative publicity generated could damage our reputation and diminish the value of our brand, which could have a material adverse effect on our business, results of operations, and financial condition. Deterioration in our brand equity (brand image, reputation, and product quality) may have a material adverse effect on our financial results.
Our future financial performance and our ability to commercialize our products and services and to compete effectively will depend, in part, on our ability to manage any future growth effectively.
If our operations expand as planned, we will need to manage additional relationships with various strategic partners, suppliers, and other third parties. Our future financial performance and our ability to commercialize our products and services and to compete effectively will depend, in part, on our ability to manage any future growth effectively. To that end, we must be able to manage our development efforts effectively and hire, train, and integrate additional management, administrative and sales and marketing personnel. Our projected growth will place a significant strain on our administrative, operational, and financial resources. If we are unable to successfully manage our future growth, establish and continue to upgrade our operating and financial control systems, recruit and hire necessary personnel, or effectively manage unexpected expansion difficulties, our financial condition and results of operations could be materially and adversely affected.
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Our operating plan relies in large part upon our assumptions and analyses. If these assumptions or analyses prove to be incorrect, our actual operating results may be materially different from our forecasted results.
Whether actual operating results and business developments will be consistent with our expectations and assumptions as reflected in our operating plan depends on a number of factors, many of which are outside our control, including, but not limited to:
| ● | whether we can obtain sufficient capital to sustain and grow our business; | |
| ● | our ability to manage our growth; | |
| ● | results of our research and development activity; | |
| ● | demand for our current and proposed products; | |
| ● | competition; | |
| ● | our ability to retain existing key management and consultants, to integrate recent hires, and to attract, retain, and motivate qualified personnel; and | |
| ● | the overall strength and stability of domestic and international economies. |
Unfavorable changes in any of these or other factors, most of which are beyond our control, could materially and adversely affect our business, results of operations, and financial condition.
Acts of war or terrorism may seriously harm our business.
Acts of war, any outbreak or escalation of hostilities between the United States and any foreign power, or acts of terrorism may cause disruption to the U.S. economy or the local economies of the markets in which we operate, cause shortages of materials, increase costs associated with obtaining materials, affect job growth and consumer confidence, or cause economic changes that we cannot anticipate, all of which could reduce demand for our products and services and adversely impact our business, prospects, liquidity, financial condition, and results of operations.
We could face liability for information displayed via our e-commerce webpages and our other websites.
We may be subjected to claims for defamation, negligence, copyright, or trademark infringement, or based on other theories relating to the information we publish on our e-commerce webpages and on any of our websites. These types of claims have been brought, sometimes successfully, against similar companies in the past. We are currently involved in a lawsuit related to this issue as noted “Item 8. Financial Statements which contains Company’s audited financial statements for fiscal 2024 and 2023 – Footnote 12 – Commitments and Contingencies.” In addition, based on links we provide to third-party websites, we could also be subjected to claims based upon online content we do not control that is accessible from our e-commerce webpages.
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RISKS RELATING TO GOVERNMENT REGULATION AND POLICIES
Government regulation of the internet and e-commerce is evolving and unfavorable changes or failure by us to comply with these regulations could have an adverse effect on our business, financial condition, results of operations, and prospects.
We are subject to general business regulations and laws as well as regulations and laws specifically governing the internet and e-commerce, including consumer protection regulations that regulate retailers and govern the promotion and sale of merchandise. Existing and future regulations and laws could impede the growth of the Internet, e-commerce, or mobile commerce, which could in turn adversely affect our growth. These regulations and laws may involve taxes, tariffs, privacy and data security, anti-spam, content protection, electronic contracts and communications, consumer protection, sales practices, subscription programs, and internet neutrality. It is possible that general business regulations and laws, or those specifically governing the internet or e-commerce, may be interpreted and applied in a manner that is inconsistent from one jurisdiction to another and may conflict with other rules or our practices. We cannot be sure that our practices have complied, comply, or will comply fully with all such laws and regulations.
Any failure, or perceived failure, by us to comply with any of these laws or regulations could result in damage to our reputation, a loss in business, and proceedings or actions against us by governmental entities, customers, suppliers, or others. Any such proceeding or action could hurt our reputation, force us to spend significant amounts in defense of these proceedings, distract our management, increase our costs of doing business, decrease the use of our website and mobile applications by customers and suppliers, and may result in the imposition of monetary liabilities and burdensome injunctions that could, for example, require changes to our business practices. We may also be contractually liable to indemnify and hold harmless third parties from the costs or consequences of noncompliance with any such laws or regulations. As a result, adverse developments with respect to these laws and regulations could have an adverse effect on our business, financial condition, results of operations, and prospects.
We are subject to a number of other laws and regulations, which could impact our business.
We are subject to a broad range of federal, state, local, and foreign laws and regulations intended to protect public and worker health and safety, natural resources, the environment, and consumers. Our operations are subject to regulation by the Occupational Safety and Health Administration (“OSHA”), the Food and Drug Administration (“FDA”), the Consumer Product Safety Commission (“CPSC”), the United States Department of Agriculture (“USDA”), the Federal Trade Commission (“FTC”), and by various other federal, state, local and foreign authorities regarding the manufacture, processing, packaging, storage, sale, order fulfillment, advertising, labeling, import and export of our products. In addition, we and our manufacturing partners are subject to additional regulatory requirements, including state, local and foreign environmental, health and safety legislative and regulatory authorities and the National Labor Relations Board, covering such areas as discharges and emissions to air and water, the use, management, disposal and remediation of, and human exposure to, hazardous materials and wastes, and public and worker health and safety, and current Good Manufacturing Practice requirements (“GMPs”) enforced by the FDA.
In addition, as the provider of products with a subscription-based element, a variety of laws and regulations govern the ability of users to cancel subscriptions and auto-payment renewals. California’s automatic renewal law in particular has been the basis for both consumer class actions and government enforcement.
Violations of or liability under any of these laws and regulations may result in administrative, civil, or criminal fines, penalties, or sanctions against us, revocation or modification of applicable permits, licenses, or authorizations, environmental, health and safety investigations or remedial activities, voluntary or involuntary product recalls, warning or untitled letters or cease and desist orders against operations that are not in compliance, among other things. Such laws and regulations generally have become more stringent over time and may become more so in the future, and we may incur (directly or indirectly through our manufacturing partners) material costs to comply with current or future laws and regulations or in any required product recalls.
Liabilities under, and/or costs of compliance, and the impacts on us of any non-compliance, with or investigations under any such laws and regulations could have an adverse effect on our business, financial condition, results of operations, and prospects.
Failure by our network of retail and e-commerce partners, suppliers, or manufacturers to comply with product safety, environmental, or other laws and regulations, or with the specifications and requirements of our products, may disrupt our supply of products and adversely affect our business.
If our network of retail and e-commerce partners, suppliers, or manufacturers fail to comply with environmental, health and safety, or other laws and regulations, or face allegations of non-compliance, their operations may be disrupted, and our reputation could be harmed. Additionally, our retail and e-commerce partners, suppliers, and manufacturers are required to maintain the quality of our products and to comply with our standards and specifications. In the event of actual or alleged non-compliance, we might be forced to find alternative retail or e-commerce partners, suppliers, or manufacturers and we may be subject to lawsuits and/or regulatory enforcement actions related to such non-compliance by the suppliers and manufacturers. As a result, our supply of products could be disrupted or our costs could increase, which could adversely affect our business, financial condition, results of operations, and prospects. The failure of any partner or manufacturer to produce products that conform to our standards could adversely affect our reputation in the marketplace and result in product recalls, product liability claims, government, or third-party actions, or economic loss. For example, a manufacturer’s failure to meet GMPs could result in the delivery of a product that is subject to a product recall, product liability litigation, or government investigations and enforcement. Additionally, actions we may take to mitigate the impact of any disruption or potential disruption in our supply of materials or finished inventory, including increasing inventory in anticipation of a potential supply or production interruption, could have an adverse effect on our business, financial condition, results of operations, and prospects.
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We, as well as our suppliers, are subject to numerous federal, state and local laws and regulations and our compliance with these laws and regulations, as they currently exist or as modified in the future, may increase our costs, limit or eliminate our ability to sell certain products, require recalls of certain products, raise regulatory enforcement risks not present in the past or otherwise adversely affect our business, results of operations and financial condition.
We are subject to various federal, state, and local laws, regulations and administrative practices that affect our business. Our suppliers and contract manufacturers are also subject to such laws and regulations. The safety, formulation, manufacturing, processing, packaging, importation, labeling, promotion, advertising, and distribution of products we sell in our stores, including private label products, are subject to regulation by several federal agencies, including the FDA, the FTC, the USDA, the CPSC and the EPA, as well as by various state and local agencies.
Our sale of dietary supplements is subject to the FDA’s comprehensive regulatory authority under the FDCA, as amended by the Dietary Supplement Health and Education Act (“DSHEA”). DSHEA greatly expanded the FDA’s regulatory authority over dietary supplements and empowered the FDA to establish good manufacturing practice regulations governing key aspects of the production of dietary supplements, including quality control, packaging, and labeling. Under DSHEA, a person or firm that markets a dietary supplement with structure, function, general well-being or nutrient deficiency claims on the product labeling must notify FDA about the claim within thirty days after first marketing the dietary supplement with the claim and no dietary supplement may bear a statement that expressly or implicitly represents that such supplement will diagnose, cure, treat or prevent a disease. If these laws and regulations were violated by our management, suppliers, distributors or vendors, we could be subject to regulatory enforcement action, public warning letters, product recalls, fines, penalties and sanctions, including injunctions against the future shipment and sale of products, seizure and confiscation of products, prohibition on the operation of our stores, restitution and disgorgement of profits, operating restrictions and even criminal prosecution in some circumstances. In addition, other public and private actors are increasingly targeting dietary supplement retailers and manufacturers with class action lawsuits for selling products that allegedly fail to adhere to the requirements of FDCA, DSHEA, and other federal and state statutes and requirements, including for failing to adhere to current GPMs, making false or misleading product statements, providing inaccurate ingredient identity and potency, and failing to control or disclose allergens, contaminants, residues and adulterants, as well as for state common and statutory laws regarding deceptive trade practices.
The storage, processing, and use of data, some of which contain personal information, are subject to complex and evolving privacy and data protection laws and regulations that could adversely affect our business and financial condition.
Some data we store, process, and use, contains personal information, which subjects us to a variety of privacy, rights of publicity, data protection, content, protection of minors, and consumer protection laws and regulations in the United States. These laws and regulations are constantly evolving, can be particularly restrictive, and may impose significant fines or penalties. The application and interpretation of these laws and regulations are often uncertain and could result in investigations, claims, changes to our business practices, and/or increased cost of operations, any of which could have a material adverse effect on our results of operations and financial condition.
A number of states have enacted laws or are considering the enactment of laws governing the protection of credit card or other personal information received from consumers. If we fail to comply with these laws, it could adversely affect our business and financial performance.
We face significant risks relating to cybersecurity threats.
We face significant risks related to cybersecurity threats, which could adversely affect our business, financial condition, and results of operations. Cybersecurity incidents, including but not limited to unauthorized access, data breaches, and other malicious activities, could result in the loss or theft of sensitive information, disruption of our operations, and damage to our reputation. While we have implemented measures to protect our information systems, there can be no assurance that these measures will effectively prevent all cybersecurity incidents.
Government regulation of the internet and ecommerce is evolving and unfavorable changes or failure by us to comply with these regulations could have an adverse effect on our business, financial condition, results of operations, and prospects.
We are subject to general business regulations and laws as well as regulations and laws specifically governing the internet and ecommerce, including consumer protection regulations that regulate retailers and govern the promotion and sale of merchandise. Existing and future regulations and laws could impede the growth of the Internet, ecommerce, or mobile commerce, which could in turn adversely affect our growth. These regulations and laws may involve taxes, tariffs, privacy and data security, anti-spam, content protection, electronic contracts and communications, consumer protection, sales practices, subscription programs, and internet neutrality. It is not clear how existing laws governing issues such as property ownership, sales and other taxes and consumer privacy apply to the Internet as the vast majority of these laws were adopted prior to the advent of the Internet and do not contemplate or address the unique issues raised by the internet or ecommerce. It is possible that general business regulations and laws, or those specifically governing the internet or ecommerce, may be interpreted and applied in a manner that is inconsistent from one jurisdiction to another and may conflict with other rules or our practices. We cannot be sure that our practices have complied, comply, or will comply fully with all such laws and regulations. Any failure, or perceived failure, by us to comply with any of these laws or regulations could result in damage to our reputation, a loss in business, and proceedings or actions against us by governmental entities, customers, suppliers or others. Any such proceeding or action could hurt our reputation, force us to spend significant amounts in defense of these proceedings, distract our management, increase our costs of doing business, decrease the use of our website and mobile applications by customers and suppliers, and may result in the imposition of monetary liabilities and burdensome injunctions that could, for example, require changes to our business practices. We may also be contractually liable to indemnify and hold harmless third parties from the costs or consequences of noncompliance with any such laws or regulations. As a result, adverse developments with respect to these laws and regulations could have an adverse effect on our business, financial condition, results of operations, and prospects.
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Corporate Headquarters
Our executive offices are located in Beverly Hills, California. We do not own any real property, but lease an office space consisting of approximately 1,900 square feet for all of our corporate and subsidiary locations. We believe that substantially all of our property and equipment is in good condition, subject to normal wear and tear, and that our facilities have sufficient capacity to meet the current needs of our business.
Legal Proceedings
From time to time, the Company may become involved in legal proceedings arising in the ordinary course of our business, the resolution of which we do not anticipate would have, individually or in the aggregate, a material adverse effect on our business, financial condition, or results of operations.
RISKS RELATED TO OUR ORGANIZATION AND STRUCTURE
We have authorized and designated Class A Stock, which have voting rights of 60% of our common stock at all times.
We have 500,000 shares of our Class A Stock authorized and outstanding. The Class A Stock have a number of votes equal to 60% of all of the issued and outstanding shares of common stock of the Company. At this time, all shares of the Class A Stock are issued to Jaspreet Mathur, our Chief Executive Officer and majority shareholder. Therefore, at all times, our CEO will have voting control over all decisions requiring majority vote or consent.
Jaspreet Mathur, our Chief Executive Officer, owns greater than 50% of our voting securities which will cause us to be deemed a “controlled company” under the rules of NYSE American.
As a result of his ownership of all issued and outstanding shares of our Class A Stock, as well as ownership of our common stock, Mr. Mathur, our Chief Executive Officer currently holds approximately 87% of our voting securities (and will continue to own at least 60% of our voting stock at all times, including after our offering), and as such, we are a “controlled company” under the NYSE American Listing Rules. Under these rules, a company of which more than 50% of the voting power is held by an individual, a group, or another company is a “controlled company” and, as such, may elect to be exempt from certain corporate governance requirements.
Accordingly, should the interests of Mr. Mathur differ from those of other shareholders, the other shareholders may not have the same protections afforded to shareholders of companies that are subject to all of the NYSE American corporate governance standards. Even if we do not avail ourselves of these exemptions, our status as a controlled company could make our common stock less attractive to some investors or otherwise harm our stock price.
Because insiders control our activities, that may cause us to act us in a manner that is most beneficial to them and not to outside shareholder which could cause us not to take actions that outside shareholders might view favorably.
Our officers, directors, and holders of 5% or more of our issued and outstanding common stock beneficially own approximately 92% of our issued and outstanding common stock and our CEO owns all of the Class A Stock. As a result, insiders and particularly our CEO effectively control all matters requiring shareholder approval, including the election of directors, the approval of significant corporate transactions, such as mergers and related party transactions. These insiders also have the ability to delay or perhaps even to block, by their ownership of our stock, an unsolicited tender offer. This concentration of ownership could have the effect of delaying, deterring, or preventing a change in control that you might view favorably.
We are dependent upon our management, founders, key personnel, and consultants to execute our business plan, and many of them have concurrent responsibilities at other companies.
Our success is heavily dependent upon the continued active participation of our current executive officers as well as other key personnel and consultants. Many of them have concurrent responsibilities at other entities . Some of the advisors and consultants, and others to whom our ultimate success may be reliant have not signed contracts with us and may not ever do so. Loss of the services of one or more of these individuals could have a material adverse effect upon our business, financial condition, or results of operations. Further, our success and achievement of our growth plans depend on our ability to recruit, hire, train, and retain other highly qualified personnel. Competition for qualified employees and consultants among companies in the applicable industries is intense, and the loss of any of such persons, or an inability to attract, retain, and motivate any additional highly skilled employees and consultants required for the initiation and expansion of our activities, could have a materially adverse effect on it.
We do not have any key person life insurance policies on any of our officers or employees.
We are dependent upon our officers and key employees to conduct our operations and execute our business plan. However, we have not purchased any life insurance policies for any individuals in the event of their death or disability. Therefore, should any of those officers and key employees die or become disabled, we will not receive any compensation that would assist with such person’s absence. The loss of such person could negatively affect us and our operations.
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There are limitations on the liability of our directors.
Delaware General Corporation Laws exclude personal liability of our directors and our shareholders for monetary damages for breach of fiduciary duty except in certain specified circumstances. Accordingly, we will have a much more limited right of action against our directors than otherwise would be the case. This provision does not affect the liability of any director under federal or applicable state securities laws. Our charter documents also provide for the indemnification of directors to the fullest extent permitted by law and, to the extent permitted by such law, eliminate or limit the personal liability of directors for monetary damages for certain breaches of fiduciary duty. Insofar as indemnification for liabilities arising under the Securities Act of 1933, as amended (“the “Securities Act”) may be permitted to directors, officers, or persons controlling us pursuant to the foregoing provisions, we have been informed that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.
We have agreed to indemnification of officers and directors as is allowed by Delaware General Corporation Law.
Delaware General Corporation Law provides for the indemnification of our directors, officers, employees, and agents, under certain circumstances, against attorney’s fees and other expenses incurred by them in any litigation to which they become a party arising from their association with us or activities our behalf. We will also bear the expenses of such litigation for any of our directors, officers, employees, or agents, upon such person’s promise to repay us therefore if it is ultimately determined that any such person shall not have been entitled to indemnification. This indemnification policy could result in substantial expenditures by us that we will be unable to recoup.
Our officers and directors may have conflicts of interests as to corporate opportunities which we may not be able or allowed to participate in.
Presently there is no requirement contained in our charter documents or minutes which requires officers and directors of our business to disclose to us business opportunities which come to their attention. Our officers and directors do, however, have a fiduciary duty of loyalty to us to disclose to us any business opportunities which come to their attention, in their capacity as an officer and/or director or otherwise. Excluded from this duty would be opportunities which the person learns about through his involvement as an officer and director of another company. See “Certain Relationships and Related Party Transactions”.
RISKS RELATED TO OWNERSHIP OF OUR SECURITIES
We can issue future series of shares of preferred stock without shareholder approval which could adversely affect the rights of common shareholders.
Our Certificate of Incorporation, as amended, permits our board of directors to establish the rights, privileges, preferences and restrictions, including voting rights, of future series of preferred stock and to issue such stock without approval from our shareholders. The rights of holders of common stock may suffer as a result of the rights granted to holders of preferred stock that may be issued in the future. In addition, we could issue preferred stock to prevent a change in control, depriving common shareholders of an opportunity to sell their stock at a price in excess of the prevailing market price.
A significant number of additional shares of our common stock may be issued under the terms of existing securities, which issuances would substantially dilute existing stockholders and may depress the market price of our common stock.
As of April 1, 2025, we have 14,205,965 shares of our common stock issued and outstanding. In addition, we have outstanding stock options allowing for the purchase of 450,000 shares of our common stock. Also, we have an aggregate of 33,129,601 shares of our common stock that are issuable upon conversion of our Class A Stock, Class B Stock and Class C Stock. If these shares are issued pursuant to exercise of the options or conversion of the Class A, Class B or Class C Stock into common shares, it would substantially dilute our existing shareholders and could depress the market price of our common stock.
If we are unable to implement and maintain effective internal control over financial reporting, investors may lose confidence in the accuracy and completeness of our financial reports, which could adversely affect the market price of our common stock.
We have identified material weaknesses in our internal control over financial reporting. These material weaknesses relate to the fact that we do not maintain a comprehensive policies and procedures manual designed to establish internal controls over financial reporting to reduce the risk of publishing materially misstated financial statements, as well as define responsibilities and segregate incompatible duties to reduce the risk of unauthorized transactions.
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As a public company, we are required to maintain internal control over financial reporting and to report any material weaknesses in such internal controls. A material weakness is defined in the standards established by the Public Company Accounting Oversight Board (United States) as a deficiency, or an acquisition of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. The process of designing, implementing and testing the internal control over financial reporting required to comply with this obligation is time consuming, costly, and complex. If we fail to increase and maintain the number and expertise of our staff for our accounting and finance functions and to improve and maintain internal control over financial reporting adequate to meet the demands upon us as a public company, including the requirements of the Sarbanes-Oxley Act, we may be unable to report our financial results accurately and prevent fraud. In addition, we cannot be certain that any such steps we undertake will successfully remediate any material weaknesses or that other material weaknesses and control deficiencies will not be discovered in the future. If our remediation efforts are not successful or other material weaknesses or control deficiencies occur in the future, we may be unable to report our financial results accurately or on a timely basis, which could cause our reported financial results to be materially misstated and result in the loss of investor confidence or delisting and cause our stock price to decline. As a result of such failures, we could also become subject to investigations by any over-the-counter market where our stock may trade, the SEC, or other regulatory authorities, and become subject to litigation from investors and shareholders, any of which could harm our reputation and financial condition, and divert financial and management resources. Even if we are able to report our consolidated financial statements accurately and timely, if we do not make all the necessary improvements to address the material weaknesses, continued disclosure of our material weaknesses will be required in future filings with the SEC, which could reduce investor confidence in our reported results and our cause our stock price to decline.
Our stock price may be volatile.
Our common stock may be subject to rapid and substantial price volatility. Contributing to this risk of volatility are a number of factors. First, our shares of common stock are likely to be more sporadically and thinly traded than that of larger, more established companies. As a consequence of this lack of liquidity, the trade of relatively small quantities of shares by our shareholders may disproportionately influence the price of those shares in either direction. The price of our common stock could, for example, decline precipitously in the event that a large number of our shares are sold on the market without commensurate demand as compared to a seasoned issuer that could better absorb those sales without adverse impact on its stock price. Second, we are a speculative investment due to our limited operating history, not being profitable, and engaging in a new business strategy with no guarantee of its success. As a consequence of this enhanced risk, shareholders, under the fear of losing all or most of their investment in the event of negative news or lack of progress, be more inclined to sell their shares on the market more quickly and at greater discounts than would be the case with the stock of a larger, more established company that has a relatively large public float.
In addition, the market price of our common stock is also subject to significant fluctuations in response to, among other factors:
| ● | quarterly variations in our results of operations or those of our competitors; | |
| ● | announcements by us or our competitors of acquisitions, new products, significant contracts, commercial relationships or capital commitments; | |
| ● | disruption to our operations or those of other sources critical to our operations; | |
| ● | the emergence of new competitors or new products; | |
| ● | our ability to develop and market new and enhanced products on a timely basis; | |
| ● | seasonal or other variations in our subscriber base; | |
| ● | commencement of, or our involvement in, litigation; | |
| ● | dilutive issuances of our stock or the stock of our subsidiaries, or the incurrence of additional debt; | |
| ● | changes in our board or management; | |
| ● | adoption of new or different accounting standards; | |
| ● | changes in earnings estimates or recommendations by securities analysts; and | |
| ● | general economic conditions and slow or negative growth of related markets. |
Many of these factors are beyond our control and may decrease the market price of our common stock. Such volatility, including any stock run-ups, may be unrelated or disproportionate to our actual or expected operating performance and financial condition or prospects, making it difficult for prospective investors to assess the rapidly changing value of our common stock.
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Furthermore, the stock market in general, has experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of those companies. Broad market and industry factors, as well as general economic, political and market conditions such as recessions or interest rate changes, may seriously affect the market price of our common stock, regardless of our actual operating performance.
Further, in the past, following periods of volatility in the overall market and the market prices of particular companies’ securities, securities class action litigations have often been instituted against these companies. Litigation of this type, if instituted against us, could result in substantial costs and a diversion of our management’s attention and resources. Any adverse determination in any such litigation or any amounts paid to settle any such actual or threatened litigation could require that we make significant payments.
There has been a limited public market for our common stock and there is no assurance that a more active, liquid and orderly trading market will develop for our common stock or what the market price of our common stock will be.
There is and has been a limited public market for shares of our common stock on the OTCQB. Until our common stock is listed on a national market or a broader exchange, we anticipate that it will remain quoted on the OTCQB. In this venue, investors may find it difficult to obtain accurate quotations as to the market value of our common stock. In addition, if we fail to meet the criteria set forth in SEC regulations, various requirements would be imposed by law on broker-dealers who sell our securities to persons other than established customers and accredited investors. Consequently, such regulations may deter broker-dealers from recommending or selling our common stock, which may further affect liquidity. This could also make it more difficult to raise additional capital.
Our stock is thinly traded.
The shares of our common stock are thinly-traded. We are a small company which is relatively unknown to stock analysts, stockbrokers, institutional shareholders and others in the investment community that generate or influence sales volume, and that even if we came to the attention of such persons, they tend to be risk-averse and would be reluctant to follow an unproven, early stage company such as ours or purchase or recommend the purchase of any of our securities until such time as we became more seasoned and viable. As a consequence, there may be periods of several days or more when trading activity in our securities is minimal or non-existent, as compared to a seasoned issuer which has a large and steady volume of trading activity that will generally support continuous sales without an adverse effect on securities prices. We cannot give you any assurance that a broader or more active public trading market for our securities will develop or be sustained, or that any trading levels will be sustained. Due to these conditions, we can give shareholders no assurance that they will be able to sell their shares at or near ask prices or at all if they need money or otherwise desire to liquidate their securities.
Our securities are considered a penny stock, and therefore are subject to the penny stock rules, as such, U.S. broker-dealers may be discouraged from effecting transactions in our securities.
Our securities are subject to the penny stock rules under the Exchange Act. The SEC rules define a “penny stock,” as any equity security that has a market price of less than $5.00 per share or with an exercise price of less than $5.00 per share, subject to certain exceptions. For any transaction involving a penny stock, unless exempt, Rule 15g-9 requires broker-dealers that derive more than 5% of their customer transaction revenues from transactions in penny stocks to deliver a standardized risk disclosure document that provides information about penny stocks and the nature and level of risks in the penny stock market to any non-institutional customer to whom the broker-dealer recommends a penny stock transaction. The broker-dealer must also provide the customer with the current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson, and monthly account statements showing the market value of each penny stock held in the customer’s account. The bid and offer quotations and the broker-dealer and salesperson compensation information must be given to the customer orally or in writing before completing the transaction and must be given to the customer in writing before or with the customer’s confirmation. In addition, the penny stock rules require that before a transaction, the broker and/or dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written agreement to the transaction. The transaction costs associated with penny stocks are high, reducing the number of broker-dealers who may be willing to engage in the trading of our securities. These additional penny stock disclosure requirements are burdensome and may reduce all the trading activity in the market for our securities. As long as our securities are subject to the penny stock rules, holders of our securities may find it more difficult to sell their securities and cause a decline in the market value of our stock.
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Our shareholders may suffer future dilution due to issuances of shares for our convertible securities and various considerations in the future.
We currently have convertible preferred B shares in the amount of $1,742,953. Upon conversion of the preferred B shares to common stock, there will be substantial dilution of the current shareholders. There may also be substantial dilution to our shareholders as a result of future decisions of the board of directors to issue shares without shareholder approval for cash, services, or acquisitions.
We have not paid dividends in the past and do not expect to pay dividends in the foreseeable future.
We have never paid cash dividends on our securities and do not anticipate paying cash dividends in the foreseeable future. We currently intend to retain our future earnings, if any, to finance the development and expansion of our business. The determination to pay dividends will be at the discretion of our board of directors and will depend on our financial condition, results of operations, capital requirements, restrictions contained in any financing instruments, and such other factors as our board of directors deems relevant in its discretion.
We rely significantly on information technology and any failure, inadequacy, or security lapse of that technology, including any cybersecurity incidents, could harm us.
We believe that companies have been increasingly subject to a wide variety of security incidents, cyberattacks and other attempts to gain unauthorized access. These threats can come from a variety of sources, ranging in sophistication from an individual hacker to a state-sponsored attack. Cyber threats may be generic, or they may be custom-crafted against our information systems. Over the past few years, cyber-attacks have become more prevalent and much harder to detect and defend against. Several key areas of our business depend on the use of information technologies, including production, manufacturing, marketing, and logistics, as well as clinical and regulatory matters. We also utilize systems that allow for the secure storage and transmission of proprietary or confidential information regarding our customers, employees, and others, including personal information. If we fail to maintain or protect our information systems and data integrity effectively, we could have problems in determining product cost estimates and establishing appropriate pricing, have difficulty preventing, detecting, and controlling fraud, have disputes with physicians, and other health care professionals, have regulatory sanctions or penalties imposed, have increases in operating expenses, incur expenses or lose revenues as a result of a data privacy breach, or suffer other adverse consequences and reputational damages. While we have invested in the protection of data and information technology, there can be no assurance that our efforts or those of our third-party collaborators, if any, or manufacturers, to implement adequate security and quality measures for data processing would be sufficient to protect against data deterioration or loss in the event of a system malfunction, or to prevent data from being stolen or corrupted in the event of a security breach. Any such loss or breach could harm our business, operating results, and financial condition. For a discussion of our management of cybersecurity risks, see Item 1C. “Cybersecurity-Risk Management” and “Governance.”
Provisions in our Charter and under Delaware law could make an acquisition of Limitless X more difficult, which acquisition may be beneficial to stockholders.
Provisions in our Charter and Amended and Restated Bylaws (“Bylaws”), as well as provisions of the General Corporation Law of the State of Delaware (the “DGCL”), which may discourage, delay or prevent a merger with, acquisition of or other change in control of Limitless X, even if such a change in control would be beneficial to our stockholders, include the following:
| ● | only our board of directors may call special meetings of our stockholders; | |
| ● | a director of the board may be removed only for cause and only by the affirmative vote of at least 75% of the shares then entitled to vote at a meeting of the stockholders called for that purpose; | |
| ● | we have designated preferred stock in the form of Class A Stock, which requires the Company to obtain the written consent of at least 51% of the outstanding shares of such Class A Stock before the company may liquidate, wind-up or effect any Liquidation Event (as defined in the Charter, a Liquidation Event includes a transaction such as a merger with another entity); and | |
| ● | we have authorized, undesignated preferred stock, the terms of which may be established and shares of which may be issued without stockholder approval. |
Additionally, Section 203 of the DGCL prohibits a person who owns in excess of 15% of our outstanding voting stock from merging or combining with us for a period of three years after the date of the transaction in which the person acquired in excess of 15% of our outstanding voting stock, unless the merger or combination is approved in a prescribed manner. We have not opted out of the restriction under Section 203, as permitted under the DGCL.
ITEM 1B. UNRESOLVED STAFF COMMENTS.
Not applicable.
ITEM 1C. CYBERSECURITY.
Risks related to Cybersecurity Incidents
We face significant risks related to cybersecurity threats, which could adversely affect our business, financial condition, and results of operations. Cybersecurity incidents, including but not limited to unauthorized access, data breaches, and other malicious activities, could result in the loss or theft of sensitive information, disruption of our operations, and damage to our reputation. While we have implemented measures to protect our information systems, there can be no assurance that these measures will effectively prevent all cybersecurity incidents.
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Specific risks include, but are not limited to:
| 1. | Data Breaches: A breach of our information systems could lead to unauthorized access to customer or employee data, resulting in reputational harm and legal liabilities. | |
| 2. | Operational Disruption: Cybersecurity incidents could disrupt our operations, leading to delays in production, delivery, or fulfillment of customer orders. | |
| 3. | Intellectual Property Theft: Unauthorized access to our proprietary information could result in intellectual property theft, impacting our competitive position in the market. | |
| 4. | Regulatory and Legal Compliance: Cybersecurity incidents may subject us to regulatory investigations, legal claims, and penalties, affecting our compliance with applicable laws and regulations. | |
| 5. | Third-Party Relationships: Our reliance on third-party vendors and service providers exposes us to additional cybersecurity risks, and a security breach affecting these entities could impact our operations. |
Refer to “Item 1A. Risk factors” in this Annual Report for additional information about cybersecurity-related risks.
Assessing, Identifying, and Managing Material Cyber Threats
We have in place certain infrastructure, systems, policies, and procedures that are designed to proactively and reactively address circumstances that arise when unexpected events such as a cybersecurity incident occur. These include processes for assessing, identifying, and managing material risks from cybersecurity threats. We consult with external parties, such as cybersecurity firms and risk management and governance experts, on risk management and strategy. We use a team of outside vendors and government services specializing in IT and cybersecurity that provide expertise, tools, and methodologies to identify and assess vulnerabilities and potential threats. Automated tools and
AI-based user behavior analytics also support identification and management of cyber threats. Response to a broad category of threats is immediate and automatic. Security personnel and members of our management are alerted when cyber threats or anomalies are detected. Persistent threats or issues that, in the opinion of management, are material are immediately brought to the attention of our board of directors.
In the event of a detected cyber incident by 24/7 monitoring software or employee notification, our IT and cybersecurity provider performs a detailed assessment of the incident, identifies the source of the problem, and resolves the issue as appropriate. If they are unable to resolve the issue, the problem is escalated to our cybersecurity monitoring and detection software provider for resolution. Events which are not routinely resolved by our IT and cybersecurity provider are brought to the attention of the board.
In order to mitigate risks of cybersecurity incidents, critical business and operational data are backed up at night and stored offsite for security purposes and to restore data in the event of a breach. Additionally, we provide cybersecurity awareness training of our employees, incident response personnel, and senior management.
Governance
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| ● | Governance and Strategy: Management and the board ensure that our cybersecurity strategy is aligned with our business strategy. | |
| ● | Risk Management and Oversight: Our board, as part of the board’s enterprise risk management oversight, actively oversee our cybersecurity risk management framework, ensuring that material risks are identified, assessed, and mitigated. | |
| ● | Resource Allocation: |
| ○ | Budget Approval: The board reviews and approves cybersecurity budgets and resource allocations to ensure we have adequate resources to implement and maintain effective cybersecurity measures. | |
| ○ | Investment Decisions: The board, based upon recommendation of management or our external vendors and consultants, evaluates and approves significant investments in cybersecurity technologies, training, and talent. |
| ● | Compliance and Legal Obligations: |
| ○ | Regulatory Compliance: Management and the board both play a role in overseeing compliance with relevant cybersecurity regulations and legal requirements. | |
| ○ | Legal Oversight: Management and the board ensure we have appropriate legal counsel to address cybersecurity-related issues, including breach notification requirements. |
| ● | Education and Awareness: |
| ○ | Training and Awareness: Members of management and members of our board take reasonable steps to stay informed about cybersecurity trends, threats, and best practices through ongoing education and training. Management reviews Company employee training programs to ensure employees are being trained appropriately and kept up to date on evolving cyber trends. | |
| ○ | Board Training: Certain of our board members have received training to understand cybersecurity risks and their role in overseeing cybersecurity. |
| ● | Reporting and Communication: |
| ○ | Periodic Updates: The board receives periodic updates from management, responsible staff regarding the Company’s cybersecurity posture, incidents, and risk management efforts. | |
| ○ | Communication Strategy: Management, together with the board, are in the process of establishing a communication strategy for addressing cybersecurity disclosures with stakeholders, including customers, employees, and the public. |
| ● | Performance Evaluation: Included in the board’s annual evaluation of the performance of the Company’s chief executive officer is the effectiveness of implementing cybersecurity policy and measures, ensuring that cybersecurity policies and practices are effective and aligned with organizational goals. | |
| ● | Cybersecurity Culture: The board fosters a cybersecurity-aware culture throughout the organization, supporting management’s efforts to build risk management including cyber into the fabric of the operating culture. |
Despite these efforts, the rapidly evolving nature of cybersecurity threats requires ongoing vigilance, and there can be no assurance that our efforts will prevent all incidents.
In
addition to the foregoing, management and the board are evaluating, and intend to implement, further cybersecurity related measures,
including without limitation developing a more robust internal policy framework, incident response plan, crisis management planning,
and third-party vendor assessments and contractual obligations for
ITEM 2. PROPERTIES
Our executive offices are located in Beverly Hills, California. We do not own any real property, but lease an office space consisting of approximately 1900 square feet for all of our corporate and subsidiary locations. We believe that substantially all of our property and equipment is in good condition, subject to normal wear and tear, and that our facilities have sufficient capacity to meet the current needs of our business.
ITEM 3. LEGAL PROCEEDINGS
There are currently no actions, suits, proceedings, inquiries or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the executive officers of our company or any of our subsidiaries, threatened against or affecting our company, our common stock, any of our subsidiaries or of our companies or our subsidiaries’ officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect other than disclosed in Item 8. Financial Statements which contains Company’s audited financial statements for fiscal 2024 and 2023 – Footnote 12 – Commitments and Contingencies.
From time to time, the Company is involved in legal proceedings. The Company records a liability for those legal proceedings when it determines it is probable that a loss has been incurred, and the amount of the loss can be reasonably estimated. The Company also discloses when it is reasonably possible that a material loss may be incurred, however, the amount cannot be reasonably estimated. From time to time, the Company may enter into discussions regarding settlement of these matters, and may enter into settlement agreements, if it believes settlement is in the best interest of the Company and its shareholders.
The following is a summary of our current outstanding litigation:
| ● | Mentom Eyewear Inc. – A legal action was filed in the Los Angeles Superior Court against Limitless X Holdings Inc., four of its officers, and an unrelated company, alleging the breach of an Implied In-Fact Agreement and other causes of action related to it. We argued that there was no such agreement and demanded a dismissal of the action. The case was dismissed with an entry of dismissal filed by Mentom Eyewear Inc. on May 28, 2024. | |
| ● | Harpo Inc. – A legal action was filed in the Central District of California against Limitless X Inc. and two of its officers along with Emblaze One, Inc., alleging trademark infringement and dilution, unfair competition, false advertising, and violation of the right of publicity, all based on allegations that one of our advertisements contained the unauthorized use of a celebrity’s name and intellectual property, Harpo Inc. and OW Licensing Company LLC v. Emblaze One, Inc., et al., Case Number 2:23-cv-04459 VAP (ASx). Any exposure stemming from this action would be subject to indemnity from the advertising network responsible for the ads in question. We filed an answer and are currently engaging in the discovery process, including investigating the third-party liability. No liability has been recorded for this litigation because the Company believes that any such liability is not reasonably estimable at this time. | |
| ● | Lace Marketing LLC – A new case was filed and just served on us in early April 2025. The case is titled Lace Marketing LLC dba Leisurepay v. Limitless X Holdings Inc, et al, (with 9 other unrelated parties named as defendants), Case number 2024L014194 in Circuit Court of Cook County, Illinois. Liability is not estimable but the Company believes Limitless was wrongfully named and have a full defense as no contract or business relationship exists with this plaintiff and we are planning to file a motion to dismiss. |
ITEM 4. MINE SAFETY DISCLOSURE
Not applicable.
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PART II
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
Market Information
Our common stock is currently trading on the OTCQB under the symbol “LIMX” The closing price of our common stock on the OTCQB on April 10, 2024 was $0.51.
Holders
As of the date of this Annual Report, there are approximately 618 record holders of 14,430,965 shares of our common stock and 500,000 shares of Class A Preferred Stock.
Transfer Agent and Registrar
Our transfer agent is Mountain Share Transfer, Inc., 2030 Powers Ferry Rd. SE, Suite # 212, Atlanta, Georgia 30339. Their telephone number is (404) 474-3110.
Unregistered Sales of Equity Securities
None, except as previously disclosed.
Dividends
We have never paid cash dividends on our common stock. The board of directors presently intends to retain all earnings for use in our business and does not anticipate paying cash dividends in the foreseeable future. We do not have a dividend reinvestment plan or a direct stock purchase plan
Securities Authorized for Issuance Under Equity Compensation Plans.
The information required by this Item regarding equity compensation plans is incorporated by reference to the information set forth in Part III, Item 12 of this Annual Report on Form 10-K.
Purchases of Equity Securities by the Issuer and Affiliated Purchasers
There were no issuer purchases of equity securities during the year ended December 31, 2024.
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ITEM 6. RESERVED
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Forward-Looking Statements and Associated Risks.
This Annual Report contains certain statements that are forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995. For this purpose, any statements contained in this Annual Report that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the foregoing, words such as “may,” “expect,” “believe,” “anticipate,” “estimate,” or “continue,” or comparable terminology are intended to identify forward-looking statements. These statements by their nature involve substantial risks and uncertainties, and actual results may differ materially depending on a variety of factors, many of which are not within our control. These factors include but are not limited to economic conditions generally and in the industries in which we may participate; competition within our chosen industry, including competition from much larger competitors; technological advances and failure to successfully develop business relationships. (See “Cautionary Note Concerning Forward-Looking Statements.”)
OVERVIEW AND HISTORY
We are a multinational consumer packaged goods company that specializes in developing and offering ‘Look Good, Feel Great’ products, specifically within the nutrition and beauty industry, through direct response advertising and our distinctive and highly successful celebrity-backed brand awareness strategies. We possess unique capabilities to greatly enhance the reputation and impact of brands, due to our extensive knowledge and expertise in digital marketing and our successful track record in launching new consumer products.
On May 11, 2022, Bio Lab Naturals, Inc. (“Bio Lab”), entered into a Share Exchange Agreement (the “Share Exchange Agreement”) with Limitless X, Inc., a Nevada corporation (“LimitlessX”), and its 11 shareholders (the “LimitlessX Acquisition”) on May 11, 2022 (the “Merger”). The parties completed and closed the LimitlessX Acquisition on May 20, 2022 by issuing an aggregate of 3,233,334 shares of common stock of Bio Lab to the LimitlessX shareholders (the “Acquisition Closing”). According to the terms of the Share Exchange Agreement, Bio Lab then issued an additional 300,000 shares of common stock to the LimitlessX shareholders pro rata to their interests in approximately six months from the Acquisition Closing as part of the Limitless Acquisition. Concurrently with the LimitlessX Acquisition, Jaspreet Mathur, the founder and principal shareholder of LimitlessX, also purchased from Helion Holdings LLC, 500,000 shares of Bio Lab’s Class A Preferred Convertible Stock, which at all times have a number of votes equal to 60% of all of the issued and outstanding shares of common stock of Bio Lab.
For accounting purposes, the Merger was accounted for as a “reverse merger” with LimitlessX as the accounting acquiror (legal acquiree) and Bio Lab as the accounting acquiree (legal acquiror). and, consequently, the transaction was treated as a recapitalization of Bio Lab. Since LimitlessX was deemed to be the accounting acquiror in the Merger, the historical financial information for periods prior to the Merger reflect the financial information and activities solely of LimitlessX and not of Bio Lab. No step-up in basis or intangible assets or goodwill was recorded in this transaction.
On June 10, 2022, Bio Lab changed its name to Limitless X Holdings Inc. From March 2022 through December 31, 2024, the Company’s revenues were generated from the sale of its nutritional supplements.
In December 2024 and January 2025, the Company announced that it planned to make a significant impact in television and film, regenerative skin care, fintech, entertainment and real estate. As of April 1, 2025, the Company will conduct business through its 6 active subsidiary companies.
Supply Chain Disruption / COVID-19 Business Update
Due to the residual impact of the global COVID-19 pandemic, we have taken measures to secure our research and development activities, while work in facilities has been organized to reduce the risk of COVID-19 transmission. The extent of the impact of the COVID-19 pandemic on our business, operations and clinical development timelines and plans remains uncertain, and will depend on certain developments, including the duration and spread of the outbreak and its impact on development, manufacturing process, supply chain, and other third parties with whom we do business, as well as its impact on regulatory authorities and our key management personnel. While we are experiencing limited financial impacts at this time, given the global economic slowdown, the overall disruption of global supply chains and the other risks and uncertainties associated with the pandemic, our business, financial condition, and results of operations ultimately could be materially adversely affected. Some of our suppliers have experienced delays in securing critical raw materials; while this has not materially impacted their services, we have observed delays in certain activities. Therefore, we continue to closely monitor the COVID-19 pandemic as we evolve our business continuity plans, clinical development plans and response strategy.
General and Administrative Expenses
General and administrative expenses consist of administrative functions, as well as fees paid for legal, consulting fees and facilities costs not otherwise included in research and development expense. Legal costs include general corporate legal fees and patent costs. We expect to incur additional expenses as a result of becoming a public company, including expenses related to compliance with the rules and regulations of the SEC and NYSE, additional insurance, investor relations and other administrative expenses and professional services.
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RESULTS OF OPERATION
For the Year Ended December 31, 2024 Compared to the Year Ended December 31, 2023.
| Years Ended December 31, | ||||||||||||||||||||||||
| 2024 | 2023 | Changes | ||||||||||||||||||||||
| % of | % of | |||||||||||||||||||||||
| Amount | Sales | Amount | Sales | Amount | % | |||||||||||||||||||
| Revenue | ||||||||||||||||||||||||
| Product sales | $ | 3,355,961 | 100.0 | % | $ | 15,484,495 | 99.9 | % | $ | (12,128,534 | ) | -78.3 | % | |||||||||||
| - | 0.0 | % | 15,000 | 0.1 | % | (15,000 | ) | -100.0 | % | |||||||||||||||
| Total revenue | 3,355,961 | 100.0 | % | 15,499,495 | 100.0 | % | (12,143,534 | ) | -78.3 | % | ||||||||||||||
| Cost of sales | ||||||||||||||||||||||||
| Cost of sales | 1,105,879 | 33.0 | % | 4,672,408 | 30.1 | % | (3,566,529 | ) | -76.3 | % | ||||||||||||||
| Total cost of sales | 1,105,879 | 33.0 | % | 4,672,408 | 30.1 | % | (3,566,529 | ) | -76.3 | % | ||||||||||||||
| Gross profit | 2,250,082 | 67.0 | % | 10,827,087 | 69.9 | % | (8,577,005 | ) | -79.1 | % | ||||||||||||||
| Operating expenses: | ||||||||||||||||||||||||
| General and administrative | 379,771 | 11.3 | % | 2,826,652 | 18.2 | % | (2,446,881 | ) | -86.6 | % | ||||||||||||||
| Advertising and marketing | 1,997,123 | 59.5 | % | 9,944,457 | 64.2 | % | (7,947,334 | ) | -79.9 | % | ||||||||||||||
| Professional fees | 876,243 | 26.1 | % | 1,514,516 | 9.8 | % | (638,273 | ) | -42.1 | % | ||||||||||||||
| Salaries and compensation | 2,879,870 | 85.8 | % | 2,880,398 | 18.6 | % | (528 | ) | 0.0 | % | ||||||||||||||
| Total operating expenses | 6,133,007 | 182.7 | % | 17,166,023 | 110.8 | % | (11,033,016 | ) | -64.3 | % | ||||||||||||||
| Income (loss) from operations | (3,882,925 | ) | -115.7 | % | (6,338,936 | ) | -40.9 | % | 2,456,011 | -38.7 | % | |||||||||||||
| Other income (expense) | ||||||||||||||||||||||||
| Interest expense | (512,619 | ) | -15.3 | % | (897,287 | ) | -5.8 | % | 384,668 | -42.9 | % | |||||||||||||
| Other income | 10,477 | 0.3 | % | 17,056 | 0.1 | % | (6,579 | ) | -38.6 | % | ||||||||||||||
| Other expense | (7,825 | ) | -0.2 | % | (30,000 | ) | -0.9 | % | 22,175 | -73.9 | % | |||||||||||||
| Gain (Loss) on debt settlement | 216,914 | 6.5 | % | (6,624,457 | ) | -197.4 | % | 6,841,371 | -103.3 | % | ||||||||||||||
| Gain (loss) on disposal of assets | (26,035 | ) | -0.8 | % | - | 0.0 | % | (26,035 | ) | n/a | ||||||||||||||
| Total other income (expense), net | (319,088 | ) | -9.5 | % | (7,534,688 | ) | -48.6 | % | 7,215,600 | -95.8 | % | |||||||||||||
| Net loss from continuing operations | (4,202,013 | ) | -125.2 | % | (13,873,624 | ) | -89.5 | % | 9,671,611 | -69.7 | % | |||||||||||||
| Loss from discontinued operations | - | 0.0 | % | (1,854 | ) | 0.0 | % | 1,854 | -100.0 | % | ||||||||||||||
| Income (loss) before income tax provision | (4,202,013 | ) | -125.2.0 | % | (13,875,478 | ) | -89.5 | % | 9,671,611 | -69.7 | % | |||||||||||||
| Income tax provision | 915 | 0.0 | % | - | 0.0 | % | 915 | n/a | ||||||||||||||||
| Net income (loss) | $ | (4,202,928 | ) | -125.2 | % | $ | (13,875,478 | ) | -89.5 | % | $ | 9,672,550 | -69.7 | % | ||||||||||
Product Sales - Our product sales decreased by $12.1 million to $3.4 million for the year ended December 31, 2024 as compared to $15.5 million for the year ended December 31, 2023. The sales decrease was primarily attributable to changing affiliate marketing strategy to in-house sales through digital marketing. In 2023 partially and full year in 2024, there was a shift in our marketing strategies, including strategic advertisement placements with celebrities rather than depending on affiliate marketers who charge significant amount of marketing and affiliate costs.
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Cost of Sales
Our cost of sales decreased by $3.6 million to $1.1 million, for the year ended December 31, 2024 compared to $4.7 million. This increase was primarily due to decrease in product revenue and a result of operations decreasing during the period.
Gross Profit
Gross profit for the year ended December 31, 2024 was $2.3 million or 67.0% of total revenue compared to $10.8 million and 69.9% of total revenue for the year ended December 31, 2023. The decrease in gross profit of $8.5 million was primarily due to decrease product revenue due to decrease in number of customer transactions and volume resulting from reduction in using affiliate third-party marketing. Our gross margin decrease was primarily due to slight increase in product costs.
Operating Expenses
During the year ended December 31, 2024, we recognized $6.1 million in operating expenses compared to $17.2 million for the year ended December 31, 2023. The decrease of $11.1 million was due to decrease in advertising and marketing, payroll, professional and legal fees, and bad debt expense.
| ● | Our advertising and marketing expense decreased by $7.9 million due to a shift in marketing strategies to bring digital marketing in-house and decrease in spendings to performance marketers (affiliate marketing). | |
| ● | Professional and legal fees decreased by $0.6 million due to higher fees for our audits and security counsel legal fees in 2023 compared to 2022. | |
| ● | Bad debt was $1.6 million in year 2023 compared to none in 2024. |
Other Income (Expense)
For the year ended December 31, 2024, the Company incurred $0.5 million related to interest expense compared to $0.9 million of interest expense for the year ended December 31, 2023. The Company recorded loss on extinguishment of debt of $6.6 million for the year ended December 31, 2023 compared to gain of $0.2 million for the year ended December 31, 2024.
LIQUIDITY AND CAPITAL RESOURCES
We have a history of operating losses and negative cash flow in operating activities. We have incurred recurring net losses, including net losses from operations before income taxes of $4.2 million for the year ended December 31, 2024. We used $0.7 million of cash for operating activities the year ended December 31, 2024 and we had an accumulated deficit of $38.8 million at December 31, 2024. As of December 31, 2024, we had $53,549 in cash on hand. We expect our existing cash resources will not be sufficient to meet our anticipated cash resources during the next 12 months. These factors raise substantial doubt as to our ability to continue as a going concern, and our independent registered public accounting firm has included a going concern uncertainty explanatory paragraph in our report for 2024.
We intend to meet the balance of our cash requirements for the next 12 months through advances from related parties as well as a combination of equity financing through private placements or a registered public offering, subject to SEC approval. Regardless, there is no assurance that we will be successful in completing any private placement or other financings. If we are unsuccessful in obtaining sufficient funds through our capital raising efforts, we may review other financing options.
Cash Used in Operating Activities
During the year ended December 31, 2024, net cash used in operating activities was $0.7 million. The cash used in operating activities was primarily due to a net loss of $4.2 million off-set by increase and decrease in accounts payable, inventories, accrued expenses and royalty payable. During the year ended December 31, 2023 net cash used in operating activities was $6.9 million. The cash used in operating activities was primarily due to a net loss of $13.9 million off-set by changes in accounts payable and accrued expenses, royalty payable and inventories.
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Cash Provided by Investing Activities
Net cash used in financing activities for the years ended December 31, 2024 and 2023 was $1,604.
Cash Provided by Financing Activities
Net cash provided by financing activities for the year ended December 31, 2024 was $0.6 million. This amount was incurred by increased borrowings from related parties, and shareholders. Net cash provided by financing activities for the year ended December 31, 2023 was $1.2 million. This amount was incurred by increased borrowings from shareholders and convertible debt.
CRITICAL ACCOUNTING ESTIMATES
The preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America requires management to make judgments, assumptions and estimates that affect the amounts reported in our financial statements and the accompanying notes. The amounts of assets and liabilities reported on our balance sheet and the amounts of revenues and expenses reported for each of our fiscal periods are affected by estimates and assumptions, which are used for, but not limited to, the accounting for revenue recognition, stock-based compensation and the valuation of deferred taxes. Actual results could differ from these estimates. The following critical accounting policies are significantly affected by judgments, assumptions and estimates used in the preparation of the financial statements:
Revenue Recognition
We recognize revenue when performance obligations under the terms of a contract with our customers are satisfied. We have determined that fulfilling and delivering products is a single performance obligation. Revenue is recognized at the point in time when we have satisfied our performance obligation, and the customer has obtained control of the products. This generally occurs when the product is delivered to or picked up by the customer based on applicable shipping terms, which is typically within 15 days. Revenue is measured as the amount of consideration expected to be received in exchange for fulfilled product orders,
While customers generally have a right to return defective or non-conforming products, past experience has demonstrated that product returns have been immaterial. Customer remedies for defective or non-conforming products may include a refund or exchange. As a result, the right of return is estimated and recorded as a reduction in revenue at the time of sale, if necessary.
Our customer contracts identify product quantity, price, and payment terms. Payment terms are granted consistent with industry standards. Although some payment terms may be more extended, the majority of the payment terms are less than 30 days. As a result, revenue is not adjusted for the effects of a significant financing component. Amounts billed and due from customers are classified as Accounts Receivables on the Balance Sheet.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The consolidated financial statements required by this item begin on page F-1 of this Annual Report and are incorporated herein by reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
Effective May 9, 2024, Limitless X Holdings Inc. (the “Company”) dismissed BF Borgers CPA PC (“BF Borgers”) as its independent registered public accounting firm. On May 9, 2024, the Company engaged M&K CPAS, PLLC (“M&K”) as BF Borgers’ replacement. The decision to change independent registered public accounting firms was made with the recommendation and approval of the Board of Directors of the Company.
BF Borgers’ audit reports on the Company’s consolidated financial statements as of and for the fiscal year ended December 31, 2023 did not contain an adverse opinion or a disclaimer of opinion and were not qualified or modified as to audit scope or accounting principles.
During the fiscal years ended December 31, 2024 and 2023, and the subsequent interim period through the date of this report, there were no reportable events within the meaning of Item 304(a)(1)(v) of Regulation S-K.
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ITEM 9A. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported, within the time period specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed or submitted under the Securities Exchange Act of 1934 is accumulated and communicated to management including our principal executive officer and principal financial officer as appropriate, to allow timely decisions regarding required disclosure.
In connection with this annual report, as required by Rule 15d-15 under the Securities Exchange Act of 1934, we have carried out an evaluation of the effectiveness of the design and operation of our company’s disclosure controls and procedures. Under the supervision of our Board of Directors, our Chief Executive Officer and Chief Financial Officer, acting as our principal executive officer and principal financial officer respectively, we conducted an evaluation of the effectiveness of our internal control over financial reporting as of December 31, 2024 based on the framework in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on our evaluation under the framework in Internal Control - Integrated Framework (2013), our management concluded that our internal control over financial reporting was not effective as of December 31, 2024. Subject to the inherent limitations noted in this Part II, Item 9A as of December 31, 2024, our disclosure controls and procedures were not effective due to the existence of material weaknesses in our internal controls over financial reporting as discussed below. It is management’s responsibility to establish and maintain adequate internal control over financial reporting.
This annual report does not include an attestation report of our independent registered public accounting firm regarding our internal control over financial reporting. Management’s report on internal control over financial reporting was not subject to attestation by our independent registered public accounting firm pursuant to the rules of the SEC because we are neither an accelerated filer nor a larger accelerated filer.
We have implemented a framework used by management to evaluate the effectiveness of our internal control over financial reporting, which incorporates a quarterly review by our Board of Directors of the recording of transactions and whether questions of accuracy and authorization may arise as the accounting may be reviewed by our auditors.
Our Management’s assessment of the effectiveness of internal controls over financial reporting as of the end of the most recent fiscal year, including a statement as to whether or not internal control over financial reporting is effective is contained in the section immediately following this paragraph.
Management’s Report of Internal Control Over Financial Reporting
It is Management’s responsibility to establish and maintain adequate internal control over financial reporting. The matters involving internal controls and procedures that our Company’s management considered to be material weaknesses and may have been ineffective under the standards of the Public Company Accounting Oversight Board were: (1) lack of a functioning audit committee and lack of a majority of outside directors on our board of directors, resulting in ineffective oversight in the establishment and monitoring of required internal controls and procedures; (2) inadequate segregation of duties consistent with control objectives; (3) insufficient written policies and procedures for accounting and financial reporting with respect to the requirements and application of US GAAP and SEC disclosure requirements; and (4) ineffective controls over period end financial disclosure and reporting processes.
Management has assessed the effectiveness of its internal controls over financial reporting at the end of the most recent fiscal year and has determined several weaknesses and has determined that its internal controls have not been effective due, in part, to lack of full-time financial accounting professionals.
Management believes that the material weaknesses and ineffectiveness set forth in items (2), (3) and (4) above resulted in restatements in the financial statements as of and for the years ended December 31, 2024 and 2023. However, management believes that the lack of a functioning audit committee and lack of a majority of outside directors on our Company’s board of directors, resulting in ineffective oversight in the establishment and monitoring of required internal controls and procedures may result in our Company’s financial statements for the future years being subject to error and inaccurate if controls, procedures, and professional financial officers are not maintained.
We are committed to improving our financial organization. As part of this commitment, we intend to create a position to segregate duties consistent with control objectives and intend to increase our personnel resources and technical accounting expertise within the accounting function when funds are available to our Company: i) Appointing one or more outside directors to our board of directors who shall be appointed to the audit committee of our Company resulting in a fully functioning audit committee who will undertake the oversight in the establishment and monitoring of required internal controls and procedures; and ii) preparing and implementing sufficient written policies and checklists which will set forth procedures for accounting and financial reporting with respect to the requirements and application of US GAAP and SEC disclosure requirements.
Management believes that the appointment of one or more outside directors, who shall be appointed to a fully functioning audit committee, will remedy the lack of a functioning audit committee and a lack of a majority of outside directors on our Company’s Board. In addition, management believes that preparing and implementing sufficient written policies and checklists will remedy the following material weaknesses (i) insufficient written policies and procedures for accounting and financial reporting with respect to the requirements and application of US GAAP and SEC disclosure requirements; and (ii) ineffective controls over period end financial close and reporting processes. Further, management believes that the hiring of additional personnel who have the technical expertise and knowledge will result proper segregation of duties and provide more checks and balances within the department. Additional personnel will also provide the cross training needed to support our Company if personnel turn over issues within the department occur. This coupled with the appointment of additional outside directors will greatly decrease any control and procedure issues our Company may encounter in the future.
Due to insufficient funds during the year ended December 31, 2024, the Company has been unable to implement many of the remedies to the ineffective oversight. The Company will continue to implement the changes as laid out above as soon as funds are available to the Company.
We will continue to monitor and evaluate the effectiveness of our internal controls and procedures and our internal controls over financial reporting on an ongoing basis and are committed to taking further action and implementing additional enhancements or improvements, as necessary and as funds allow.
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ITEM 9B. OTHER INFORMATION
Rule 10b5-1 Plan and Non-Rule 10b5-1 Trading Arrangement Adoptions, Terminations, and Modifications
During the three months ended December 31, 2024, none of our directors or “officers” (as defined in Rule
16a-1(f) under the Exchange Act)
ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
Not applicable.
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE
Information About our Executive Officers and Directors
Our business and affairs are organized under the direction of our board of directors, which currently consists of nine members. Our directors will serve for one-year terms or until their successors are duly elected and qualified. There will be no cumulative voting in the election of directors. Consequently, at each annual meeting, the successors to each of our directors will be elected by a plurality of the votes cast at that meeting.
The following table and paragraphs set forth information regarding our executive officers and directors, including the business experience for the past five years (and, in some instances, for prior years) of each such executive officer and director.
| Name | Age | Position with the Company | Date Joined the Company | |||
| Jaspreet Mathur | 40 | Chief Executive Officer and Chairman | May 20, 2022 | |||
| Benjamin Chung | 48 | Chief Financial Officer | May 20, 2022 | |||
| Danielle Young | 35 | Chief Operating Officer | May 20, 2022 | |||
| Rob Cucher | 46 | VP of Legal Affairs | May 20, 2022 | |||
| Bharat Raj Mathur | 67 | Director | May 20, 2022 | |||
| Amanda Saccomanno | 31 | Director | May 20, 2022 | |||
| Dan Fleyshman | 40 | Director | October 3, 2022 | |||
| Leon Anderson | 36 | Director | October 3, 2022 | |||
| Michael Braun | 38 | Director | January 11, 2023 | |||
| Hassan Iddrissu | 45 | Director | January 11, 2023 | |||
| Arthur Sarkissian | 75 | Director | December 31, 2024 |
Biographical Information
Executive Officers
Jaspreet Mathur– Chief Executive Officer and Chairman of the Board of Directors
Jas Mathur is a renowned investor and tech entrepreneur with a proven track record of developing successful brands in the health and wellness industry. Over the years, he has garnered the backing of major figures in sports and entertainment, generating tens to hundreds of millions in revenue annually. As a trendsetter with over 10 million Instagram followers (@Limitless), Jas is driven by a passion for helping individuals achieve their health, wellness, and business goals—drawing inspiration from his own transformative journey of losing over 250lbs in his twenties.
On May 20, 2022, Jas became the Chairman and CEO of the company and joined its Board of Directors. His entrepreneurial journey began in January 2011 when he founded Kore Fit Living, a chain of retail stores in Canada specializing in vitamins, supplements, sports nutrition, athletic apparel, and fitness/MMA training equipment. In 2013, Jas launched Emblaze One, a global interactive web agency designed to serve the growing demand for e-commerce. Later, in November 2018, he introduced the Limitless brand, which manufactures health and wellness products while offering B2B services for brand development and digital marketing. In January 2022, Jas partnered with Dr. Mehmet Oz and HealthCorps, a nonprofit organization, to initiate health and wellness programs focused on empowering teens and young adults.
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Benjamin Chung – Chief Financial Officer
On May 20, 2022, Benjamin Chung was appointed as our Chief Financial Officer. Mr. Chung has been in public accounting for over 24 years. From 1999 through 2004, Mr. Chung was an Audit Manager at PricewaterhouseCoopers. From May 2004 through June 2007, Mr. Chung was an audit manager at Ernst & Young. He then went on to become the Director of Internal Audit for Big 5 Sporting Goods. In January 2012, Mr. Chung was the founder and managing partner at Benjamin & Ko, a public accounting and consulting firm. In May 2021, Mr. Chung became the CFO of RYVYL Inc. (formerly Greenbox POS) (Nasdaq: RYVL). Additionally, over the last five years, Mr. Chung has also served on the board for multiple public companies, the most recent being Franklin Wireless, which trades on Nasdaq. Mr. Chung resigned from that board in December 2019 and currently does not serve on the board of directors of any publicly traded company.
Danielle Young – Chief Operating Officer
On May 20, 2022, Danielle Young was appointed our Chief Operating Officer. Ms. Young has been in public accounting for over twelve years. In January 2015, she was hired by Benjamin & Young, LLP, a mid-size CPA firm in Orange County, California as part of their tax department. In May 2019, she left Benjamin & Young and joined Benjamin & Ko, as the Director of Internal Audit, spearheading their operations as well as working with major public companies such as The Habit Burger, Aerovironment, and Ducommun Aerospace. After leaving Benjamin & Ko in July 2021, she started her own consulting firm, Irvine Advisory Services which focuses on IPO readiness preparation, internal audit, Sarbanes-Oxley, and corporate management. In June 2022, she was elected to the board of trustees of The Miss America Foundation.
Rob Cucher – VP of Legal Affairs
On May 20, 2022, Rob Cucher was appointed as our VP of Legal Affairs. Mr. Cucher is a seasoned attorney with 20 years of courtroom practice and experience representing clients on a wide range of legal matters including civil litigation, corporate governance, labor and employment, and commercial transactions, with a concentration in business law and health care. Since April 2017, Mr. Cucher has served as an officer and director of a technology company finding solutions to tracking chronic care and behavioral health conditions for patients throughout California. In February 2010, Mr. Cucher co-founded Sports for All Children, a non-profit providing athletic opportunities for children with special needs. Additionally, Mr. Cucher became a director in May 2019 of Better Housing Solutions, an affordable housing non-profit currently servicing Palmdale, California. Mr. Cucher graduated cum laude from UCLA and Loyola Law School in Los Angeles and is a current member of the California State Bar and United States District Courts.
Non-Employee Directors
Bharat Raj Mathur – Director
Bharat Raj Mathur joined our board of directors on May 20, 2022. Since July 2016, he has been a columnist and featured contributor at www.bizcatalyst360.com. From March 2014 to April 2016, he was chief operating officer at KORE Fit Living. From August 2004 through April 2016, Mr. Mathur was Vice President, Distribution Channel Management at Incredible Entertainment.
Amanda Saccomanno – Director
Amanda Saccomanno joined our board of directors on May 20, 2022. Ms. Saccomanno is an American professional wrestler, television personality, and fitness and figure competitor. In 2015, Ms. Saccomanno gained major attention from World Wrestling Entertainment (WWE) after scoring second place in its Tough Enough reality show – a competition of contenders vying for a WWE wrestling contract. In May 2015, she signed with the WWE as a Sports Entertainer and starring in their E! Hit Reality Series, Total Divas. Since May 2017, Ms. Saccomanno has developed multiple health platforms and launched an iOS application called “Fit with Mandy.” In 2020, Ms. Saccomanno co-founded and continues to help market and develop a skin care line, with our CEO, Jaspreet Mathur, called Amarose.
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Dan Fleyshman – Director
Dan Fleyshman is the CIO and a director of Blockchain Consulting Group, Inc. He founded Elevator Studios in 2015 and is currently its CEO. From 2012 through 2015, he was the CEO of One Penny Ad Agency. Between 2010 and 2012, Mr. Fleyshman consulted for a casino in Nevada. He was the CEO of Victory Poker from 2009 through April 2010. From 1999 through 2009, he was the president of WYD, Inc. located in San Diego, California.
Leon Anderson – Director
From 2002 through 2012, Mr. Anderson became a partner in a London based night club. Mr. Anderson went on to develop public relations and marketing services for major brand deals while in the U.K. for a number of celebrities. Mr. Anderson was recognized for a “first of its kind” buyout on a brand that had no previous history but secured a buyout by ASOS. Since September 2021, Mr. Anderson has continued to run his company, Due Diligence Apparel Ltd.
Michael Braun – Director
Since 2010, Michael Braun has been the Director of Marketing and Sales of Westbank Pacific Realty Corp., a mixed-use real estate development company. Prior to Westbank, Mr. Braun worked for Rennie, a real estate marketing and sales firm in Vancouver. He graduated from the University of British Columbia in 2007 with a Science Major and Commerce Minor. Mr. Braun holds a real estate license in Vancouver, British Columbia.
Hassan Iddrissu – Director
Since 2014, Mr. Iddrissu has been the CFO of First Pinnacle Capital Group, Inc., a real estate company in West Los Angeles. Since 2003, Mr. Iddrissu has also been the co-Founder, Chairman, and CEO of RoadStarr Motorsports, a market leader in the auto boutique with various entities across the luxury car industry including an exotic car rental company Starr Auto Rentals. Mr. Iddrissu is also an active mentor and motivational speaker for various inner-city youth, including the Los Angeles Sheriff Foundation. Mr. Iddrissu has his Bachelor of Business Administration from Loyola Marymount University.
Arthur Sarkissian – Director
On December 31, 2024, our board of directors elected Arthur Sarkissian to the board of directors, effective as of January 1, 2025. His term will expire at our next annual shareholders meeting. Mr. Sarkissian, 75 years old, is an established Hollywood producer. Over the course of his career, Mr. Sarkissian has developed and produced feature films that have dominated the domestic and global landscape, with box office receipts totaling close to one billion dollars. His biggest hits include the $900 million Rush Hour franchise, While You Were Sleeping, Last Man Standing, The Foreigner, The Protégé, Kill the Irishman, Memory, Vegas TV Series on CBS and many more. Since March 2014, Mr. Sarkissian has been the sole owner of Fourteen Films Inc. Mr. Sarkissian is well known for his entrepreneurial spirit and creativity, and we are confident that his experience and skillsets make him an appropriate fit to serve as a director of Limitless X Holdings, Inc.
Family Relationships
Except for Bharat Raj Mathur, who is the father of our CEO, Jaspreet Mathur, there are no family relationships with any of the executive officers or directors of the Company and the above referenced individuals. Other than as may be contemplated by the Share Exchange Agreement there are no arrangements or understandings between the above referenced individuals and any other persons pursuant to which he or she was selected as a director.
Board Composition
Our board of directors currently consists of eight persons.
Our board of directors believes its members collectively have the experience, qualifications, attributes and skills to effectively oversee our management, including a high degree of personal and professional integrity, an ability to exercise sound business judgment on a broad range of issues, sufficient experience and background to have an appreciation of the issues facing us, a willingness to devote the necessary time to board duties, a commitment to representing our best interests and the best interests of our shareholders, and a dedication to enhancing shareholder value.
We held one board of directors meeting in 2021, two board of directors’ meetings in 2022, and no board of directors’ meetings in 2024. All other board actions were taken by unanimous written consent of the directors.
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Delinquent Section 16(a) Reports
Section 16(a) of the Securities Exchange Act of 1934 (the “Exchange Act”), as amended, requires the Company’s directors and executive officers, and persons who own more than 10% of a registered class of the Company’s equity securities, to file reports of securities ownership and changes in such ownership with the SEC.
Based solely upon a review of such forms filed electronically with the SEC or written representations that no Form 5s were required, the Company believes that all Section 16(a) filing requirements were timely met during the year ended December 31, 2024, except Mr. Mathur filed 1 late Form 4 reporting 3 transactions and Mr. Cucher and Mr. Haller each filed 1 Form 4 late reporting 1 transaction.
Director Independence
While we are not required to do so, we adhere to the rules of NYSE American in determining whether a director is independent. The NYSE American listing standards generally define an “independent director” as a person, other than an executive officer of a company or any other individual having a relationship which, in the opinion of the issuer’s board of directors, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director.
Our Board of Directors has affirmatively determined, after considering all the relevant facts and circumstances, that each of Leon Anderson, Michael Braun, Dan Fleyshman, Amanda Saccomanno and Arthur Sarkissian, are independent, as “independence” is defined under the applicable rules and regulations of the NYSE American, and does not have a relationship with us (either directly or as a partner, stockholder, or officer of an organization that has a relationship with us) that would interfere with their exercise of independent judgment in carrying out their responsibilities as directors. Accordingly, a majority of our directors are independent, as required under the applicable NYSE American Rules.
Audit, Compensation and Nominating Committees
On January 24, 2025, our board of directors authorized the creation of an Audit Committee, a Compensation Committee, and a Nominating Committee (the “Committees”). The Audit Committee consists of three (3) independent directors: Amanda Saccomanno, Dan Fleyshman, and Hassan Iddrissu, with Hassan Iddrissu serving as the chair. The Compensation Committee consists of three (3) independent directors: Leon Anderson, Arthur Sarkissian, and Amanda Saccomanno, with Amanda Saccomanno serving as the chair. The Nominating Committee will consist of three (3) independent directors: Amanda Saccomanno, Hassan Iddrissu, and Leon Anderson, with Leon Anderson serving as the chair.
Role of Our Board of Directors in Risk Oversight
One of the key functions of our board of directors is informed oversight of our risk management process. Our board of directors administers this oversight function directly, along with our Audit Committee, Compensation Committee, and Nominating which support the board of directors by addressing risks specific to its respective areas of oversight. Our Compensation Committee will assess and monitor whether any of our compensation policies and programs has the potential to encourage excessive risk-taking. Our Nominating Committee will seek to nominate candidates for the board who exhibit a care for corporate governance and ethical conduct. In the future, we plan to create a Corporate Governance Committee that monitors the effectiveness of our corporate governance and ethical guidelines, including whether such guidelines are successful in preventing illegal or improper liability-creating conduct.
Code of Business Conduct and Ethics
Our Board has adopted a Code of Business Conduct and Ethics that applies to all of our employees, including our executive officers and directors. The Company will provide a copy of its Code of Business Conduct and Ethics, to any person, without charge, upon written request by sending an email to help@limitlessx.com or a written request to the Limitless X, Attn. Corporate Secretary, 9454 Wilshire Blvd., Suit 300, Beverly Hills, CA 90212. If we amend or grant a waiver of one or without charge, to any more of the provisions of our Code of Ethics and Business Conduct, we intend to satisfy the requirements under Item 5.05 of Form 8-K regarding the disclosure of amendments to or waivers from provisions of our Code of Ethics and Business Conduct that apply to our principal executive officer, financial and accounting officers by posting the required information on our website at the above address within four business days of such amendment or waiver. The information on our website is not part of this Annual Report.
Insider Trading Policy
We
have
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ITEM 11. EXECUTIVE COMPENSATION.
Summary Compensation
The following table summarizes information regarding the compensation for fiscal years 2024 and 2023 for our named executive officers (“NEO’s”).
| Name and Principal Position | Year | Salary ($) | Stock Awards ($)(1) | Option Awards ($) | All Other Compensation ($)(2) | Total ($) | ||||||||||||||||||
Jaspreet Mathur, Chief Executive Officer and Chairman | 2024 | 23,780 | 1,844,104 | - | $ | 17,634 | $ | 1,885,518 | ||||||||||||||||
| of the Board of Directors(3) | 2023 | 320,925 | - | - | $ | 16,399 | 337,324 | |||||||||||||||||
| Kenneth Haller, | 2024 | 12,900 | 932,171 | - | $ | 10,247 | 955,318 | |||||||||||||||||
| Former President and Director(4) | 2023 | 22,115 | - | - | $ | 16,385 | 38,500 | |||||||||||||||||
| Benjamin Chung, | 2024 | 177,083 | 52,082 | - | $ | 17,634 | 246,529 | |||||||||||||||||
| Chief Financial Officer(5) | 2023 | 231,975 | - | - | $ | 20,841 | 270,841 | |||||||||||||||||
| Danielle Young, | 2024 | 141,666 | 58,333 | - | $ | 517 | 252,816 | |||||||||||||||||
| Chief Operating Officer(6) | 2023 | 186,142 | - | - | $ | 707 | 186,849 | |||||||||||||||||
| Rob Cucher, | 2024 | 23,870 | 731,388 | - | $ | 17,634 | 755,258 | |||||||||||||||||
| VP of Legal Affairs(7) | 2023 | 33,655 | - | - | $ | 23,227 | 56,882 | |||||||||||||||||
| (1) | Represents equity-based compensation expense calculated in accordance with the provisions of the Accounting Standards Codification Section 718 - Compensation - Stock Compensation. |
| (2) | Represents the payment of health care premiums for medical, dental and vision. All NEO’s received full insurance benefits, except Ms. Young only received premium payments for dental and vision. |
| (3) | Mr. Mathur received $23,870 and $320,925 of salary in cash in fiscal 2024 and 2023, respectively. The Company issued 2,281,597 shares of the Company’s common stock in fiscal 2024 for accrued salaries for fiscal years 2021, 2022, 2023, and 2024 with common stock valued between $0.40 and $1.00 per share. |
| (4) | Mr. Haller received $12,900 and $22,115 of salary in cash for fiscal 2024 and fiscal 2023, respectively. The Company issued 932,171 shares of the Company’s common stock in fiscal 2024 for accrued salaries for fiscal years 2021, 2022, 2023, and 2024 with common stock valued at $1.00 per share. |
| (5) | Mr. Chung received $177,083 and $231,975 of salary in cash for fiscal 2024 and fiscal 2023, respectively. The Company issued 130,205 shares of the Company’s common stock in fiscal 2024 for accrued salaries for fiscal 2024 with common stock valued at $0.40 per share |
| (6) | Ms. Young received $141,666 and $186,142 of salary in cash for fiscal 2024 and fiscal 2023, respectively. The Company issued 145,833 shares of the Company’s common stock in fiscal 2024 for accrued salaries for fiscal 2024 with common stock valued at $0.40 per share. |
| (7) | Mr. Cucher received $23,870 and $33,655 of salary in cash for fiscal 2024 and fiscal 2023, respectively. The Company issued 840,756 shares of the Company’s common stock in fiscal 2024 for accrued salaries for fiscal years 2021, 2022, 2023, and 2024 with common stock valued between $0.40 and $1.00 per share. |
Executive Compensation
We believe that the primary goal of executive compensation is to align the interests of our executive officers with those of our shareholders in a way that allows us to attract and retain the best executive talent.
| ● | Annual Base Salary. Base salary will be designed to compensate our named executive officers at a fixed level of compensation that will be designed to serve as a retention tool throughout the executive’s career. In determining base salaries, our board of directors (or, when enacted, our compensation committee) considers each executive’s role and responsibility, unique skills, future potential with us, salary levels for similar positions in our market and internal pay equity. |
| ● | Equity Incentive Plan. We plan to offer option awards, restricted stock awards and other equity grants to executives and other employees, in the discretion of the board of directors, considering the executive’s role and other compensation. |
| ● | Health/Welfare Plans. All of our full-time employees are eligible to participate in health and welfare plans, including medical, dental and vision benefits, maintained by the Company. The Company pays 100% of health and welfare plans for all executives and 50% of health and welfare plans for all full-time employees. |
| ● | PTO Plan. We offer paid time off, which may be used for vacations, rest and relaxation and personal business, and sick days. The PTO varies amongst type of employee and is between two and three weeks. |
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Settlement Agreements with Named Executive Officers for Accrued Compensation in Fiscal 2023 and 2024
The Company did not have sufficient cash flow to satisfy its obligations to its executive officers in fiscal 2023 and 2024. Effective as of September 10, 2024, the Company entered into a Settlement Agreement and Release of Claims (each, a “September Settlement Agreement”) with each of (a) Jaspreet Mathur, the Company’s Chief Executive Officer; (b) Kenneth Haller, the Company’s President; and (c) Rob D. Cucher, the Company’s Vice President of Legal Affairs.
Under each September Settlement Agreement, the Company issued to (a) to Mr. Mathur, 1,552,442 shares of the Company’s common stock, the equivalent of $1,552,442.00; (b) to Mr. Haller, 932,171 shares of the Company’s common stock, the equivalent of $932,171.00; and (c) to Mr. Cucher, 658,476 shares of the Company’s common stock, the equivalent of $658,476.00. The shares of the Company’s common stock comprising each Settlement Payment were deemed to have a value of $1.00 per share, are subject to a one-year lock-up period commencing on the effective date of each September Settlement Agreement and ending on the anniversary date of such effective date.
Effective as of January 13, 2025, the Company entered into a Settlement Agreement and Release of Claims (each, a “January Settlement Agreement”) with each of (a) Jaspreet Mathur, the Company’s Chief Executive Officer; (b) Rob D. Cucher, the Company’s Vice President of Legal Affairs; (c) Danielle Young, the Company’s Chief Operating Officer; and (d) Benjamin Chung, the Company’s Chief Financial Officer.
Under each January Settlement Agreement, the Company issued to (a) to Mr. Mathur, 729,155 shares of the Company’s common stock, the equivalent of $291,662; (b) to Mr. Cucher, 182,280 shares of the Company’s common stock, the equivalent of $72,912; (c) to Ms. Young, 145,833 shares of the Company’s common stock, the equivalent of $58,333 and (d) to Mr. Chung, 130,205 shares of the Company’s common stock, the equivalent of $52,082. The shares are deemed to have a value of $0.40 per share and are subject to restrictions on transfer and sale under applicable state and federal securities laws.
Employment Agreements and Equity Compensation
Jaspreet Mathur, Chief Executive Officer
We entered into an employment agreement with Jaspreet Mathur, effective as of May 1, 2022, pursuant to which Mr. Mathur serves as our Chief Executive Officer. Under his employment agreement, Mr. Mathur devotes his full business time and effort to the business affairs of the Company. Mr. Mathur employment agreement provides that his employment is on an at-will basis and can be terminated by either Mr. Mathur or the Company at any time, for “Cause”. Under the agreement, Mr. Mathur receives an annual salary of $1,000,000. In the event that Mr. Mathur’s employment is terminated by the Company without “Cause” or is terminated by Mr. Mathur for “Good Reason”, Mr. Mathur will be entitled to a predetermined severance compensation package which will be negotiated in good faith and be in compliance with all SEC regulations. “Cause” is defined to include dishonesty, misappropriation, willful misconduct, breach of the agreement, and other customary matters. “Good Reason” is defined to include a material adverse change in Mr. Mathur’s compensation or duties and level of responsibility. Mr. Mathur is eligible to participate in the Company’s Equity Incentive Plans (as defined below herein). The employment agreement also contains customary confidentiality and invention-assignment covenants to which Mr. Mathur is subject.
During fiscal 2023 and 2024, Mr. Mathur receive a significant portion of his salary in stock, rather than cash. See “Executive Compensation - Summary Compensation Table.”
Rob D. Cucher, Esq., VP of Legal Affairs
We entered into an employment agreement with Rob D. Cucher, Esq., effective as of May 1, 2022, pursuant to which Mr. Cucher serves as our Vice President of Legal Affairs. Under his employment agreement, Mr. Cucher devotes his full business time and effort to the business affairs of the Company. Mr. Cucher’s employment agreement provides that his employment is on an at-will basis and can be terminated by either Mr. Cucher or the Company at any time, for “Cause”. Under the agreement, Mr. Cucher receives an initial base salary of $250,000 per year. Mr. Cucher’s employment may be terminated by our company for “Good Reason” or without “Cause.” “Cause” is defined to include dishonesty, misappropriation, willful misconduct, breach of the agreement, and other customary matters. “Good Reason” is defined to include a material adverse change in Mr. Cucher’s compensation or duties and level of responsibility. Mr. Cucher is eligible to participate in the Company’s Equity Incentive Plans. The employment agreement also contains customary confidentiality and invention-assignment covenants to which Mr. Cucher is subject.
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Benjamin Chung, Chief Financial Officer
We entered into an employment agreement with Benjamin Chung, effective as of July 27, 2022, pursuant to which Mr. Chung serves as our Chief Financial Officer. Under his employment agreement, Mr. Chung devotes his full business time and effort to the business affairs of the Company. Mr. Chung employment agreement provides that his employment is on an at-will basis and can be terminated by either Mr. Chung or the Company at any time, for “Cause”. Under the agreement, Mr. Chung receives an initial base salary of $250,000 per year. Mr. Chung’s employment may be terminated by our company for “Good Reason” or without “Cause.” “Cause” is defined to include dishonesty, misappropriation, willful misconduct, breach of the agreement, and other customary matters. “Good Reason” is defined to include a material adverse change in Mr. Chung’s compensation or duties and level of responsibility. Mr. Chung is eligible to participate in the Company’s Equity Incentive Plans. The employment agreement also contains customary confidentiality and invention-assignment covenants to which Mr. Chung is subject.
During fiscal 2024, Mr. Chung receive a portion of his salary in stock, rather than cash. See “Executive Compensation - Summary Compensation Table.”
Danielle Young, Chief Operating Officer
We entered into an employment agreement with Danielle Young, effective as of May 1, 2022, pursuant to which Ms. Young serves as our Chief Operating Officer. Under her employment agreement, Ms. Young devotes her full business time and effort to the business affairs of the Company. Ms. Young’s employment agreement provides that her employment is on an at-will basis and can be terminated by either Ms. Young or the Company at any time, for “Cause”. Under the agreement, Ms. Young receives an initial base salary of $200,000 per year. Ms. Young’s employment may be terminated by our company for “Good Reason” or without “Cause.” “Cause” is defined to include dishonesty, misappropriation, willful misconduct, breach of the agreement, and other customary matters. “Good Reason” is defined to include a material adverse change in Ms. Young’s compensation or duties and level of responsibility. Ms. Young is eligible to participate in the Company’s Equity Incentive Plans. The employment agreement also contains customary confidentiality and invention-assignment covenants to which Ms. Young is subject.
During fiscal 2024, Ms. Young receive a portion of his salary in stock, rather than cash. See “Executive Compensation - Summary Compensation Table.”
Retirement Plans
We do not currently maintain any retirement plans for our employees.
Director Compensation
We did not provide any cash or equity compensation to any of our directors during the year ended December 31, 2024, in their capacity as directors, and we have not yet adopted a compensation program for our directors. However, we did provide equity compensation in the first quarter of 2025 to directors in connection with their services on the board of directors from their respective date of appointment until the present.
| Name | Accrued Compensation | Shares of Common Stock Issued | Date Appointed | |||||||
| Jaspreet Mathur | $ | 157,500 | 315,000 | May 20, 2022 | ||||||
| Bharat Raj Mathur | $ | 157,500 | 315,000 | May 20, 2022 | ||||||
| Amanda Saccomanno | $ | 157,500 | 315,000 | May 20, 2022 | ||||||
| Dan Fleyshman | $ | 130,000 | 260,000 | October 3, 2022 | ||||||
| Leon Anderson | $ | 130,000 | 260,000 | October 3, 2022 | ||||||
| Michael Braun | $ | 120,000 | 240,000 | January 11, 2023 | ||||||
| Hassan Iddrissu | $ | 120,000 | 240,000 | January 11, 2023 | ||||||
Director Agreements
We do not have any written agreements with our directors. However, we have agreed to reimburse the directors for any Company-related expenses.
Outstanding Equity Awards at Fiscal Year End
There were no equity awards held by any of our appointed executive officers and directors as of December 31, 2023 or 2024.
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2020 Stock Incentive Plan
On January 15, 2020, a Stock Option and Award Incentive Plan (the “2020 Stock Incentive Plan”) was approved by our board of directors. There are 2,222 shares of common stock reserved for the 2020 Stock Option Plan. No options or awards were granted under the 2020 Stock Incentive Plan during fiscal 2023 or 2024.
2022 Stock Option Plan
Effective August 9, 2022, we adopted our 2022 Incentive and Nonstatutory Stock Option Plan (the “2022 Stock Option Plan”). Under the 2022 Stock Option Plan, our board of directors may grant options to purchase common stock to officers, employees, and other persons who provide services to us. A total of 833,333 shares of common stock is reserved for the 2022 Stock Option Plan. No options were granted or outstanding to any employees or other persons during fiscal 2023 or 2024.
2022 Restricted Stock Plan
Effective August 9, 2022, we adopted our 2022 Restricted Stock Plan (the “2022 Restricted Stock Plan”, and together with the 2020 Stock Incentive Plan and the 2022 Stock Option Plan, the “Equity Incentive Plans”). Under the 2022 Restricted Stock Plan, our board of directors may grant restricted stock to officers, directors, and key employees. A total of 833,333 shares of common stock is reserved for the 2022 Restricted Stock Plan. No awards of restricted stock were made to any officers, directors, or key employees during fiscal 2023 or 2024.
Policies and Practices Related to the Grant of Certain Equity Awards Close in Time to the Release of Material Nonpublic Information
During 2024, we did not grant any stock options or similar awards as part of our equity compensation program. If stock options or similar awards are granted in the future, we intend to not grant stock options or similar awards in anticipation of the release of material nonpublic information that is likely to result in changes to the price of our common stock, such as a significant positive or negative earnings announcement, and not time the public release of such information based on stock option grant dates.
Grants of Equity Compensation in Fiscal 2025
On January 29, 2025, the Company’s Board of Directors approved an award of stock options (“Options”) pursuant to its 2022 Stock Option Plan to purchase shares of common stock, $0.0001 par value per share (“Common Stock”), to the Company’s executive officers and directors as follows: 200,000 Options to Jaspreet Mathur, the Company’s Chief Executive Officer and Chairman; 75,000 Options to Rob Cucher, the Company’s VP of Legal Affairs; 25,000 Options to Benjamin Chung, the Company’s Chief Financial Officer; 75,000 Options to Danielle Young, the Company’s Chief Operating Officer; 50,000 Options to Bharat Raj Mathur, a member of the Board; and 50,000 Options to Arthur Sarkissian, a member of the Board. These Options, which have an exercise price of $0.52 per share, vested immediately upon grant.
Restricted Stock Awards
On January 29, 2025, the Board also approved an award of shares of Common Stock restricted under Rule 144 of the Securities Act of 1933, as amended (“Restricted Stock”) to the Company’s executive officers as follows: 333,333 shares of Restricted Stock to Jaspreet Mathur, the Company’s Chief Executive Officer and Chairman; 150,000 shares of Restricted Stock Options to Rob Cucher, the Company’s VP of Legal Affairs; 50,000 shares of Restricted Stock to Benjamin Chung, the Company’s Chief Financial Officer; and 150,000 shares of Restricted Stock to Danielle Young, the Company’s Chief Operating Officer. The shares of Restricted Stock were awarded pursuant to the Company’s 2022 Restricted Stock Plan (the “Restricted Stock Plan”).
Equity Compensation Plan Information
The following table sets forth information as of December 31, 2024, regarding shares of common stock that may be issued under our equity compensation plans, consisting of our 2020 Stock Incentive Plan, 2022 Equity Incentive Plan, and our 2022 Restricted Stock Plan. We do not have any non-shareholder approved equity compensation plans.
| Plan Category | Number of securities to be issued upon exercise of outstanding options, warrants and rights | Weighted-average exercise price of outstanding options, warrants and rights | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) | |||||||||
| (a) | (b) | (c) | ||||||||||
| Equity compensation plans approved by security holders | - | $ | - | 1,668,888 | (1) | |||||||
| Equity compensation plans not approved by security holders | - | - | - | |||||||||
| Total | 0 | 1,668,888 | ||||||||||
(1) Includes 2,222 options under the 2020 Stock Incentive Plan; 833,333 options under the 2022 Equity Incentive Plan; and 833,333 shares of common stock under the 2022 Restricted Stock Plan.
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ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
Security Ownership of Certain Beneficial Owners and Management
As of the April 1, 2025, there are 14,205,965 shares of our common stock issued and outstanding. The following table sets forth, as of April 1, 2025, the record and beneficial ownership of our common stock by:
| ● | each of our directors; | |
| ● | each of our named executive officers; | |
| ● | all of our directors and executive officers as a group; and | |
| ● | each person known by us to be the beneficial owner of 5% or more of our outstanding common stock. |
Beneficial ownership is determined according to the rules of the SEC. Generally, it means that a person has beneficial ownership of a security if he or she possesses sole or shared voting or investment power of that security and includes options, warrants, and other securities convertible or exercisable into shares of common stock, provided that such securities are currently exercisable or convertible or exercisable or convertible within 60 days of February 4, 2025. As of April 1, 2025, there were 14,205,965 shares of our common stock issued and outstanding and 500,000 shares of our Class A Stock issued and outstanding. Each share of our Class A Stock is convertible into 2 shares of the Company’s common stock. In addition, as of April 1, 2025, the Company has 320,094 shares of its Class C Stock issued and outstanding, and each share of Class C Stock is convertible into 100 shares of the Company’s common stock.
Except as otherwise indicated, all persons listed below have (i) sole voting power and investment power with respect to their stock, except to the extent that authority is shared by spouses under applicable law, and (ii) record and beneficial ownership with respect to their securities. The mailing address of each of the officers and directors as set forth above is c/o Limitless X Holdings Inc., 9777 Wilshire Blvd. #400, Beverly Hills, California 90212.
| Class A | Class C | |||||||||||||||||||||||||||
| Common Stock | Preferred Stock | Preferred Stock | Percent of | |||||||||||||||||||||||||
| Name of Beneficial Owner | Number of Shares | % of Class | Number of Shares | % of Class | Number of Shares | % of Class | Combined Voting Power (8) | |||||||||||||||||||||
| Officers and Directors: | ||||||||||||||||||||||||||||
| Jaspreet Mathur, Chief Executive Officer, and Chairman (1) | 36,308,663 | 80.45 | % | 500,000 | 100 | % | 304,264 | 95.0 | % | 83.92 | % | |||||||||||||||||
| Benjamin Chung, Chief Financial Officer (2) | 240,538 | 1.66 | % | - | - | - | - | * | ||||||||||||||||||||
| Robby Cucher, VP of Legal Affairs (3) | 1,083,423 | 7.43 | % | - | - | - | - | 2.02 | % | |||||||||||||||||||
| Danielle Young, Chief Operating Officer (4) | 370,833 | 2.54 | % | - | - | - | - | * | ||||||||||||||||||||
| Leon Anderson, Director | 260,000 | 1.79 | % | - | - | - | - | * | ||||||||||||||||||||
| Michael Braun, Director | 240,000 | 1.65 | % | - | - | - | - | * | ||||||||||||||||||||
| Dan Fleyshman, Director | 260,000 | 1.79 | % | - | - | - | - | * | ||||||||||||||||||||
| Hassan Iddrissu, Director | 240,000 | 1.65 | % | - | - | - | - | * | ||||||||||||||||||||
| Bharat R. Mathur, Director (5) | 506,333 | 3.48 | % | - | - | - | - | * | ||||||||||||||||||||
| Amanda Saccomanno, Director (6) | 1,210,200 | 7.91 | % | - | - | 7,892 | 2.4 | % | 2.26 | % | ||||||||||||||||||
| Arthur Sarkissian, Director (7) | 150,000 | 1.03 | % | - | - | - | - | * | ||||||||||||||||||||
| Directors and Officers as a Group (11 persons) | 41,164,213 | 91.61 | % | 500,000 | 100 | % | 312,156 | 97.52 | % | 92.43 | % | |||||||||||||||||
| 5% Shareholders | ||||||||||||||||||||||||||||
| Ken Haller | 1,083,423 | 7.47 | % | - | - | - | - | 2.02 | % | |||||||||||||||||||
* less than 1%
| (1) | Amount includes (i) 5,682,263 shares of common stock held directly by Mr. Mathur, (ii) options to purchase 200,000 shares of common stock, which are immediately exercisable, and (iii) 304,264 shares of Class C Preferred Stock, which are owned indirectly by Mr. Mathur through the following entities as follows: 291,372 shares of Class C Stock owned by EM1 Capital, LLC, a company controlled by Mr. Mathur; 5,000 shares of Class C Stock owned by LPI, a company controlled by Mr. Mathur; and, 7,892 shares of Class C Stock owned by Amarose, Inc., a company in which Mr. Mathur has a 50% ownership interest. The shares of Class C Stock owned by Mr. Mathur are convertible into an aggregate of 30,426,400 shares of common stock. | |
| (2) | Amount includes 215,538 shares of common stock held directly by Mr. Chung, and options to purchase up to 25,000 shares of common stock, which are immediately exercisable. | |
| (3) | Amount includes 1,008,423 shares of common stock held directly by Mr. Cucher, and options to purchase 75,000 shares of common stock, which are immediately exercisable. | |
| (4) | Amount includes 295,833 shares of common stock held directly by Ms. Young, and options to purchase 75,000 shares of common stock, which are immediately exercisable. | |
| (5) | Amount includes 456,333 shares of common stock held directly by Mr. Mathur, and options to purchase 50,000 shares of common stock which, are immediately exercisable. | |
| (6) | Amount includes (i) 421,000 shares of common stock held directly by Ms. Saccomanno, and (ii) 7,892 shares of Class C Preferred Stock owned by Amarose, Inc., a company in which Ms. Saccomanno has a 50% ownership interest. The shares of Class C Stock are convertible into an aggregate of 789,200 shares of common stock. | |
| (7) | Amount includes 100,000 shares of common stock held directly by Mr. Sarkissian, and options to purchase 50,000 shares of common stock, which are immediately exercisable. | |
| (8) | Each share of common stock is entitled to one vote per share, and each share of Class C Stock carries a number of votes equal to the number of shares of common stock into which such Class C Stock may then be converted. The Class A Stock has a number of votes equal to 60% of all of the issued and outstanding shares of the Company’s common stock. The Class A Stock and Class C Stock generally will vote together with the common stock and not as a separate class. |
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ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.
Review, Approval or Ratification of Transactions with Related Parties
The Company has established policies and other procedures regarding approval of transactions between the Company and any employee, officer, director, and certain of their family members and other related persons. These policies and procedures are generally not in writing but are evidenced by long standing principles adhered to by our Board. The disinterested members of the Board review, approve and ratify transactions that involve “related persons” and potential conflicts of interest. Related persons must disclose to the disinterested members of the Board any potential related person transactions and must disclose all material facts with respect to such transaction. All such transactions will be reviewed by the disinterested members of the Board and, in their discretion, approved or ratified. In determining whether to approve or ratify a related person transaction the disinterested members of the Board will consider the relevant facts and circumstances of the transaction, which may include factors such as the relationship of the related person with the Company, the materiality or significance of the transaction to the Company and the related person, the business purpose and reasonableness of the transaction, whether the transaction is comparable to a transaction that could be available to the Company on an arms-length basis, and the impact of the transaction on the Company’s business and operations.
We had the following transactions with related parties during the last two fiscal years:
Sale of Class A Preferred Convertible Stock
Concurrently with the LimitlessX Acquisition, Jaspreet Mathur, our current Chief Executive Officer purchased from Helion Holdings, LLC, a company beneficially owned by our former Chief Executive Officer, 500,000 shares of our Class A Preferred Convertible Stock for consideration of $400,000.
Settlement Agreements with NEOs for Accrued Compensation
Mr. Mathur, Mr. Chung, Mr. Cucher and Ms. Young entered into settlement agreements with the Company for accrued compensation payable to them pursuant to employment agreements on September 2024 and January 2024. For additional information, please see “Executive Compensation – Settlement Agreements with NEOs for Accrued Compensation.”
License Agreements and Royalty Payments to Affiliated Parties
From the date on which the Limitless X Nevada Acquisition of BioLabs was completed through November 1, 2023, Limitless X, the Company’s wholly-owned subsidiary, had manufacturing and distribution license agreements with (i) Limitless Performance Inc. (“LPI”), SMILZ INC. (“Smilz”), and DIVATRIM INC. (“Divatrim”), which are all companies owned by Jas Mathur, our Chief Executive Officer, Chairman of the Board of Directors, and majority shareholder, and (ii) AMAROSE INC. (“Amarose”), which is owned 50% by Mr. Mathur and 50% by Amanda Saccomanno, one of our directors. LPI, Smilz, Divatrim and Amarose may be collectively referred to as the “Licensors.”
Pursuant to the License Agreements, and each of them, the Company agreed to pay to each Licensor royalty payments equal to 4.00% of gross sales, excluding returns, chargebacks, and other such allowances. On October 1, 2023, the Company terminated each of the License Agreements with Smilz, Divatrim and Amarose; however, the Company maintained its license for NZT-48 with LPI. As of October 1, 2023, the Company had accrued liabilities for royalty payments in the amount of $436,528 to Smilz, $2,860 to Divatrim, $673,004 to LPI and $320,261 to Amarose, respectively. In the third quarter of 2023, the Company and each of the Licensors agreed to convert their royalty payments into accrued liabilities of the Company in the same amount.
As of November 1, 2023, Limitless X amended its license agreement with LPI, terminating its rights to license two nutritional supplements.
In January 2025, LPI amended the License Agreement for NZT-48 to waive all royalty payments from the Company for the next 3 years. The term of the License Agreement for NZT-48 is for 5 years and automatically renews for 5 years unless either party gives notice of its intent not to renew, and LPI can only terminate for the end of a term for cause. The License Agreement for NZT-48 only gives the Company a non-exclusive license to design, redesign, manufacture, promote, sell and distribute NZT-48.
Notes Payable to the Majority Shareholder
The Company had various notes payable with its shareholder who is the Chief Executive Officer of the Company. As of September 30, 2024 and December 31, 2023, the Company had $5,144,460 and $5,152,028 outstanding. Refer to Note 7 – Notes Payable to Shareholder in the Company’s unaudited financial statements for the nine months ended September 30, 2024, which are included in this Offering Circular.
On December 10, 2024, Mr. Mathur advanced $145,000 to the Company pursuant to a promissory note accruing interest at the rate of 12% per annum, which matures on the earlier of (i) June 10, 2025, or (ii) the date on which the Company secures funding of at least $1 million in an offering. As consideration for advancing these funds, the Company issued 50,000 shares of its common stock to Mr. Mathur. These shares are “restricted securities” under Rule 144 of the Securities Act, have not been registered and cannot be resold or otherwise transferred without registration or an exemption therefrom.
On December 31, 2024, Mr. Mathur advanced $200,000 to the Company pursuant to a promissory note accruing interest at the rate of 12% per annum, which matures on the earlier of (i) June 27, 2025, or (ii) the date on which the Company secures funding of at least $1 million in an offering, whichever comes first. As consideration for advancing these funds, the Company issued 70,000 shares of the Company’s common stock to Mr. Mathur. The shares are “restricted securities” under Rule 144 of the Securities Act, have not been registered and cannot be resold or otherwise transferred without registration or an exemption therefrom.
On March 21, 2025, Mr. Mathur entered into a promissory note with the Company in the amount of $500,000.00 accruing at the rate of 12.5% per annum, which matures the earlier of (i) September 21, 2025 or (ii) the date on which the Company secures funding of at least $1 million in an offering, whichever comes first. As consideration for advancing these funds, the Company issued 225,000 shares of its common stock and 10,000 shares of the Series D Preferred Stock to Mr. Mathur. These shares are “restricted securities” under Rule 144 of the Securities Act, have not been registered and cannot be resold or otherwise transferred without registration or an exemption therefrom.
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Notes Payable to Related Parties
The Company entered into various notes payable with shareholders of the Company. As of September 30, 2024, and December 31, 2023, the Company had $433,544 and $80,000 outstanding, respectively. Refer to Note 8 of the Company’s unaudited financial statements for the three and nine months ended September 30, 2024, which are included in this Offering Circular.
Mr. Mathur entered into a promissory note dated December 10, 2024 with the Company in the amount of $145,000.00 plus accrued interest at the agreed upon rate of 12% fixed equaling the total sum of $153,700.00. The Company will pay Mr. Mathur the full balance on or before the earlier of (i) June 10, 2025 or (ii) the date on which the Company secures funding of at least $1 million. As consideration for advancing the loan, the Company issued 50,000 shares of its common stock to Mr. Mathur.
Mr. Mathur entered into a promissory note dated December 31, 2024 with the Company in the amount of $200,000 plus accrued interest at the agreed upon rate of 12% fixed equaling the total sum of $212,000. The Company will pay Mr. Mathur the full balance on or before the earlier of (i) June 27, 2025 or (ii) the date on which the Company secures funding of at least $1 million in an offering, whichever comes first. As consideration for advancing the loan, the Company issued 70,000 shares of its common stock to Mr. Mathur.
On March 21, 2025, Mr. Mathur entered into a promissory note with the Company in the amount of $500,000.00 accruing at the rate of 12.5% per annum, which matures the earlier of (i) September 21, 2025 or (ii) the date on which the Company secures funding of at least $1 million in an offering, whichever comes first. As consideration for advancing these funds, the Company issued 225,000 shares of its common stock and 10,000 shares of the Series D Preferred Stock to Mr. Mathur. These shares are “restricted securities” under Rule 144 of the Securities Act, have not been registered and cannot be resold or otherwise transferred without registration or an exemption therefrom.
Debt Conversion Agreements with Mr. Mathur
On January 3, 2025, the Company entered into a debt conversion transaction with Jaspreet Mathur to settle outstanding debt in the amount of $2,152,000, plus accrued interest in the amount of $227,601. In exchange for cancelling this debt, the Company issued an aggregate of 193,680 shares of Class C Stock to Mr. Mathur. The Class C Stock was priced at 12.5% of the total amount of the debt portion settled, plus agreed upon interest of 12%. The shares of the Company’s Class C Stock are “restricted securities” as defined in Rule 144 of the Securities Act and are subject to restrictions on transfer and sale under applicable federal and state securities laws.
On February 7, 2025, the Company entered into a debt conversion transaction with Jaspreet Mathur to settle outstanding debt in the amount of $3,000,000, plus accrued interest the amount of $375,000, for an aggregate debt in the amount of $3,3750,000. In exchange for cancelling this debt, the Company issued an aggregate of 135,000 shares of Series D Stock to Mr. Mathur. The Series D Preferred Stock was priced to 12.5% of the total amount of the debt owed to each vendor plus agreed upon interest at 12.5%. The shares of the Company’s Series D Preferred Stock are “restricted securities” as defined in Rule 144 of the Securities Act and are subject to restrictions on transfer and sale under applicable federal and state securities laws.
Holders of the Series D Stock are entitled to receive cumulative cash dividends at the rate of 15% on the stated value of $25.00 per share of the Series D Preferred Stock per annum (equivalent to $3.75 per annum per share) (the “Series D Stock Dividend”). The Series D Stock Dividend is payable every quarter as and if declared by the Company’s board of directors and as permitted by law. The Series D Preferred Stock has no voting rights, other than as set forth in the Certificate of Designation or as required by law.
In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Corporation, the holders of shares of Series D Stock will be entitled to be paid out of the assets the Company has legally available for distribution to its stockholders, with respect to the distribution of assets upon liquidation, dissolution or winding up, a liquidation preference of $25.00 per share, plus an amount equal to any accumulated and unpaid dividends up until, but not including, the date of payment, subject to the Series D Stock Distribution Ranking.
The Company may, at its option, redeem the Series D Stock (i) on or after the second anniversary of the date of the issuance of the Series D Stock, or (ii) at any time upon a Change of Control (as defined in the Certificate). The Series D Stock is not redeemable by the holders of the Series D Stock under any circumstances. The cash redemption price of the Series D Stock is $25.00 per share, plus any accumulated and unpaid dividends thereon up to, but not including, the redemption date. The Series D Stock is not convertible into or exchangeable for any shares of Common Stock or other capital stock of the Company.
Notes Payable to Prime Time Live, Inc.
As of December 31, 2023, and 2024, Prime Time Live owed affiliates of the Company $80,000 and $80,000, respectively. These loans each bear interest at the rate of 10% per annum and is due upon demand.
Loan and Sale of Vybe Labs, Inc. to Emblaze One, LLC
On December 31, 2022, the Company entered into a Loan Authorization and Agreement for a loan of $929,401 from Emblaze One, LLC, (“Emblaze’) an affiliated entity of Mr. Mathur, the proceeds of which were to be used for working capital purposes. The loan had an interest rate of 8% per annum and was due on December 1, 2023.
On June 1, 2023, the Company entered into an Agreement for Purchase and Sale of Stock with Emblaze wherein the Company sold all 5,000 of its shares of common stock of Vybe Labs, Inc., as full payment, and settlement of a debt in the principal amount of $929,401 owed by the Company to Emblaze.
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Policies and Procedures for Transactions with Related Persons
All future related party transactions will be voted upon by the disinterested board of directors. The Audit Committee of the Board is responsible for evaluating each related party transaction and making a recommendation to the disinterested members of the Board as to whether the transaction at issue is fair, reasonable and within our policy and whether it should be ratified and approved. The Board or the Audit Committee, as applicable, in making its recommendation, will consider various factors, including the benefit of the transaction to us, the terms of the transaction and whether they are at arm’s-length and in the ordinary course of our business, the direct or indirect nature of the related person’s interest in the transaction, the size and expected term of the transaction and other facts and circumstances that bear on the materiality of the related party transaction under applicable law and listing standards. The Board and the Audit Committee will review, at least annually, a summary of our transactions with our directors and officers and with firms that employ our directors, as well as any other related person transactions.
Limitations on Liability and Indemnification of Officers and Directors
Our Charter and Bylaws limit the liability of our officers and directors and provide that we will indemnify our officers and directors, in each case, to the fullest extent permitted by Delaware law.
Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors or executive officers, we have been informed that in the opinion of the Commission such indemnification is against public policy and is therefore unenforceable.
Charter and Bylaw Provisions
Our Charter and Bylaws include a number of anti-takeover provisions that may have the effect of encouraging persons considering unsolicited tender offers or other unilateral takeover proposals to negotiate with our Board rather than pursue non-negotiated takeover attempts. These provisions include:
Advance Notice Requirements. Our Bylaws establish advance notice procedures with regard to stockholder proposals relating to the nomination of candidates for election as directors or new business to be brought before meetings of stockholders. These procedures provide that notice of stockholder proposals must be timely and given in writing to our corporate Secretary. Generally, to be timely, notice must be received at our principal executive offices not fewer than 75 calendar days nor more than 125 calendar days prior to the first anniversary date of the previous year’s annual meeting of stockholders. The notice must contain the information required by the bylaws, including information regarding the proposal and the proponent.
Removal of Directors. A director may only be removed for cause and upon the affirmative vote of at least 75% of the holders of shares then entitled to vote at a meeting called for that purpose.
Special Meetings of Stockholders. Our Bylaws provides that special meetings of stockholders may only be called by the Board.
Amendment of Bylaws. The Board has the power to amend or repeal any provisions of our Bylaws by an affirmative vote of a majority of the directors then in office. The stockholders may only amend or repeal the Bylaws at a regular or special meeting of the stockholders with a vote of at least 75% of the shares present in person or represented by proxy at such meeting and entitled to vote on such amendment or repeal, voting together as a single class; provided, however, that only a majority of the shares present or represented by proxy at such a meeting is required if the Board recommends that the stockholders approve such amendment or repeal at such meeting of stockholders.
Preferred Stock. Our Charter authorizes our Board to create and issue rights entitling our stockholders to purchase shares of our stock or other securities. The ability of our Board to establish the rights and issue substantial amounts of preferred stock without the need for stockholder approval may delay or deter a change in control of us. See “Preferred Stock” below in “Securities Offered.”
Delaware Takeover Statute
We are subject to Section 203 of the DGCL which, subject to certain exceptions, prohibits a Delaware corporation from engaging in any “business combination” (as defined below) with any interested stockholder for a period of three years following the date that such stockholder became an interested stockholder, unless: (1) prior to such date, the board of directors of the corporation approved either the business combination or the transaction that resulted in the stockholder becoming an interested stockholder; (2) on consummation of the transaction that resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, excluding for purposes of determining the voting stock outstanding those shares owned (a) by persons who are directors and also officers and (b) by employee stock plans in which employee participants do not have the right to determine confidentially whether shares held subject to this plan will be tendered in a tender or exchange offer; or (3) on or subsequent to such date, the business combination is approved by the board of directors and authorized at an annual or special meeting of stockholders, and not by written consent, by the affirmative vote of at least 66 2⁄3% of the outstanding voting stock that is not owned by the interested stockholder.
Section 203 of the DGCL defines generally “business combination” to include: (1) any merger or consolidation involving the corporation and the interested stockholder; (2) any sale, transfer, pledge or other disposition of 10% or more of the assets of the corporation involving the interested stockholder; (3) subject to certain exceptions, any transaction that results in the issuance or transfer by the corporation of any stock of the corporation to the interested stockholder; (4) any transaction involving the corporation that has the effect of increasing the proportionate share of the stock of any class or series of the corporation beneficially owned by the interested stockholder; or (5) the receipt by the interested stockholder of the benefit of any loans, advances, guarantees, pledges or other financial benefits provided by or through the corporation. In general, Section 203 defines an “interested stockholder” as any entity or person beneficially owning 15% or more of the outstanding voting stock of the corporation and any entity or person affiliated with or controlling or controlled by such entity or person.
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES.
The following table summarizes the aggregate fees billed to us by M&K CPAS, PLLC (“M&K”), our principal accounts, for professional services during the years ended December 31, 2023 and 2022 for re-audit:
| Fees | 2024 | 2023 | ||||||
| Audit Fees (1) | $ | 50,000 | $ | 50,000 | ||||
| All Other Fees | - | - | ||||||
| Total Fees | $ | 50,000 | $ | 50,000 | ||||
(1) Audit Fees.
Fees for audit services billed in 2024 and 2023 consisted of:
| ● | Progress billings for the audits of the Company’s financial statements for 2024 and 2023; and | |
| ● | Review of the Company’s quarterly financial statements for 2024 and 2023. |
Audit fees consist of fees billed for professional services rendered for the audit of our consolidated financial statements, the review of interim consolidated financial statements included in quarterly reports, services that are normally provided in connection with statutory and regulatory filings or engagements and attest services, except those not required by statute or regulation.
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PART IV
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES.
The following documents are filed as part of this Annual Report on Form 10-K:
| a) | Financial Statements: |
Our financial statements and the Report of Independent Registered Public Accounting Firm are included herein on page F-1.
| b) | Financial Statement Schedules: |
The financial statement schedules are omitted as they are either not applicable or the information required is presented in the financial statements and notes thereto on page F-1.
| c) | Exhibits: |
| 55 |
| 56 |
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| LIMITLESS X HOLDINGS, INC. | ||
| By: | /s/ Jaspreet Mathur | |
| Name: | Jaspreet Mathur | |
| Dated: May 9, 2025 | Title: | Chief Executive Officer and Chairman of the Board of Directors |
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
| Signature | Title | Date | ||
| /s/ Jaspreet Mathur | Chief Executive Officer and Chairman of the Board of Director | May 9, 2025 | ||
| Jaspreet Mathur | (Principal Executive Officer) | |||
| /s/ Benjamin Chung | Chief Financial Officer | May 9, 2025 | ||
| Benjamin Chung | (Principal Financial Officer and Principal Accounting Officer) | |||
| /s/ Kenneth Haller | Director | May 9, 2025 | ||
| Kenneth Haller | ||||
| /s/ Bharat Raj Mathur | Director | May 9, 2025 | ||
| Bharat Raj Mathur | ||||
| /s/ Amanda Saccomanno | Director | May 9, 2025 | ||
| Amanda Saccomanno | ||||
| /s/ Leon Anderson | Director | May 9, 2025 | ||
| Leon Anderson | ||||
| /s/ Dan Fleyshman | Director | May 9, 2025 | ||
| Dan Fleyshman | ||||
| /s/ Michael Braun | Director | May 9, 2025 | ||
| Michael Braun | ||||
| /s/ Hassan Iddrissu | Director | May 9, 2025 | ||
| Hassan Iddrissu | ||||
| /s/ Arthur Sarkissian | Director | May 9, 2025 | ||
| Arthur Sarkissian |
| 57 |
LIMITLESS X HOLDINGS, INC.
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
| Index to Consolidated Financial Statements | |
| Report of Independent Registered Public Accounting Firm (PCAOB ID No. |
F-2 |
| Consolidated Balance Sheets | F-3 |
| Consolidated Statements of Operations | F-4 |
| Consolidated Statement of Changes in Stockholders’ Deficit | F-5 |
| Consolidated Statements of Cash Flows | F-6 |
| Notes to Consolidated Financial Statements | F-7 |
| F-1 |
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and
Stockholders of Limitless X Holdings, Inc.
Opinion on the Financial Statements
Going Concern
The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company has recurring net losses and negative cash flows from operations which raises substantial doubt about its ability to continue as a going concern. Management’s plans regarding those matters are also described in Note 2. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Basis for Opinion
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.
Critical Audit Matter
The critical audit matter communicated below 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 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 matter does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinions on the critical audit matter or on the accounts or disclosures to which it relates.
Going Concern
Due to recurring net losses and negative cash flows from operations for the year, the company evaluated the need for a going concern listed in Note 2. Auditing management’s evaluation of a going concern involves significant judgement given the fact that the Company uses management’s estimates on future revenues and expenses, which are not able to be easily substantiated. We evaluated the appropriateness of the going concern, we examined and evaluated the financial information along with management’s plans to mitigate the going concern and management’s disclosure on going concern.
/s/
We have served as the Company’s auditor since 2024.
May 9, 2025
| F-2 |
LIMITLESS X HOLDINGS INC.
CONSOLIDATED BALANCE SHEETS
| December 31, | December 31, | |||||||
| December 31, | 2024 | 2023 | ||||||
| ASSETS | ||||||||
| Current Assets: | ||||||||
| Cash | $ | $ | ||||||
| Accounts receivables, net | ||||||||
| Inventories | ||||||||
| Prepaid expenses | ||||||||
| Total current assets | ||||||||
| Non-Current Assets: | ||||||||
| Property and equipment, net | ||||||||
| Other assets | ||||||||
| Total non-current assets | ||||||||
| Total assets | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS’ DEFICIT | ||||||||
| Current Liabilities: | ||||||||
| Accounts payable and accrued expenses | $ | $ | ||||||
| Accrued interest | ||||||||
| Royalty payable | ||||||||
| Refunds and chargeback payable | ||||||||
| Note payable | ||||||||
| Notes payable to shareholder | ||||||||
| Notes payable to related parties | ||||||||
| Loan payable | ||||||||
| Total current liabilities | ||||||||
| Total liabilities | ||||||||
| Commitments and contingencies | ||||||||
| Preferred Stock B - $ par value; authorized shares; and shares issued and outstanding, respectively | ||||||||
| Stockholders’ deficit | ||||||||
| Preferred Stock A - $ par value; authorized shares; shares issued and outstanding | ||||||||
| Common Stock- $ par value; authorized shares; shares and shares issued and outstanding, respectively | ||||||||
| Common stock issuable, shares at December 31, 2024 | ||||||||
| Additional paid-in-capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total stockholders’ deficit | ( | ) | ( | ) | ||||
| Total liabilities and stockholders’ deficit | $ | $ | ||||||
The accompanying notes are an integral part of these consolidated financial statements.
| F-3 |
LIMITLESS X HOLDINGS INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
| Years Ended December 31, | 2024 | 2023 | ||||||
| Net Revenue | ||||||||
| Product sales | ||||||||
| Rentals | ||||||||
| Total net revenue | ||||||||
| Cost of Revenue | ||||||||
| Cost of revenue | ||||||||
| Total cost of sales | ||||||||
| Gross profit | ||||||||
| Operating expenses: | ||||||||
| General and administrative | ||||||||
| Advertising and marketing | ||||||||
| Professional fees | ||||||||
| Salaries and compensation | ||||||||
| Total operating expenses | ||||||||
| Loss from operations | ( | ) | ( | ) | ||||
| Other income (expense) | ||||||||
| Interest expense | ( | ) | ( | ) | ||||
| Other income | ||||||||
| Other expense | ( | ) | ( | ) | ||||
| Gain (Loss) on debt settlement | ( | ) | ||||||
| Gain on disposal of assets | ( | ) | ||||||
| Total other income (expense), net | ( | ) | ( | ) | ||||
| Net loss from continuing operations | ( | ) | ( | ) | ||||
| Loss from discontinued operations | ( | ) | ||||||
| Loss before income tax provision | ( | ) | ( | ) | ||||
| Income tax provision | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Earnings (Loss) Per Share: | ||||||||
| Net loss per common share - basic and diluted - continued | $ | ) | $ | ) | ||||
| Net loss per common share - basic and diluted - discontinued | $ | $ | ) | |||||
| Total | $ | ) | $ | ) | ||||
| Weighted average number of common shares | ||||||||
The accompanying notes are an integral part of these consolidated financial statements.
| F-4 |
LIMITLESS X HOLDINGS INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT
| Preferred Stock B | Preferred Stock A | Common Stock | Common Stock Issuable | Additional Paid-In | Accumulated | Total Stockholder’s | |||||||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | Capital | deficit | Deficit | |||||||||||||||||||||||||||||||||||
| Balance at December 31, 2022 (restated) | $ | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||||||||||||||||
| Issuance of common stock from common stock issuable | - | - | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||||||||
| Vybe deconsolidation | - | - | - | - | |||||||||||||||||||||||||||||||||||||||||
| Conversion of convertible notes and interest payable | - | - | - | ||||||||||||||||||||||||||||||||||||||||||
| Net loss | - | - | - | - | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||||||
| Balance at December 31, 2023 | $ | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||||||||||||||||
| Balance | $ | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||||||||||||||||
| Salaries conversion to common stock | - | - | - | ||||||||||||||||||||||||||||||||||||||||||
| Preferred B conversion to common stock | ( | ) | ( | ) | - | - | |||||||||||||||||||||||||||||||||||||||
| Vendor debt conversion to common stock | - | - | - | ||||||||||||||||||||||||||||||||||||||||||
| Consulting services - issuance of common stock | - | - | - | ||||||||||||||||||||||||||||||||||||||||||
| Shares issuable for consulting services | - | - | - | ||||||||||||||||||||||||||||||||||||||||||
| Net loss | - | - | - | - | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||||||
| Balance at December 31, 2024 | $ | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||||||||||||||||
| Balance | $ | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||||||||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
| F-5 |
LIMITLESS X HOLDINGS INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
| Years Ended December 31, | 2024 | 2023 | ||||||
| Cash flows from operating activities: | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Income (loss) from discontinued operations | ( | ) | ||||||
| Adjustments to reconcile net loss to net cash provided by operating activities: | ||||||||
| Depreciation | ||||||||
| Stock compensation for services | ||||||||
| Common stock issued for professional fees | ||||||||
| Loss from disposal of fixed assets | ||||||||
| Loss on settlement of debt | ( | ) | ||||||
| Changes in assets and liabilities: | ||||||||
| Accounts receivables, net | ||||||||
| Inventories | ||||||||
| Prepaid expenses | ( | ) | ||||||
| Other assets | ( | ) | ||||||
| Accounts payable and accrued expenses | ||||||||
| Royalty payable | ( | ) | ||||||
| Refunds and chargeback payable | ( | ) | ( | ) | ||||
| Net cash used in operating activities from continuing operations | ( | ) | ( | ) | ||||
| Net cash provided by operating activities from discontinued operations | ||||||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| Cash flows from investing activities: | ||||||||
| Purchases of equipment | ( | ) | ||||||
| Net cash used in investing activities | ( | ) | ||||||
| Cash flows from financing activities: | ||||||||
| Proceeds from convertible debt | ||||||||
| Borrowings from (repayments to) borrowings from stockholder | ( | ) | ||||||
| Proceeds from loan payable | ||||||||
| Proceeds from borrowings from related parties | ||||||||
| Net cash provided by financing activities | ||||||||
| Net increase(decrease) in cash | ( | ) | ( | ) | ||||
| Cash – beginning of period | ||||||||
| Cash – end of period | $ | $ | ||||||
| Supplemental disclosures of cash flow information | ||||||||
| Cash paid during the periods for: | ||||||||
| Interest | $ | $ | ||||||
| Income taxes | $ | $ | ||||||
| Non-cash investing and financing activities: | ||||||||
| Conversion of convertible notes and interest payables | $ | $ | ||||||
| Conversion of vendor debt to common stock | $ | $ | ||||||
| Conversion of accrued salaries to common stock | $ | $ | ||||||
| Conversion of Preferred B Shares to common stock | $ | $ | ||||||
| Decrease in due to Emblaze One, Inc. by Limitless X due to deconsolidation | $ | $ | ( | ) | ||||
| Increase in due from Vybe Labs, Inc. by Limitless X due to deconsolidation | $ | $ | ||||||
The accompanying notes are an integral part of these consolidated financial statements.
| F-6 |
LIMITLESS X HOLDINGS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 – ORGANIZATION AND HISTORY
On May 11, 2022, Bio Lab Naturals, Inc., a Delaware corporation (“Bio Lab”), entered into a Share Exchange Agreement (the “Share Exchange Agreement”) with Limitless X, Inc., a Nevada corporation (“LimitlessX”), and its 11 shareholders (the “LimitlessX Acquisition”). The parties completed and closed the LimitlessX Acquisition on May 20, 2022 by issuing an aggregate of shares of common stock of Bio Lab to the LimitlessX shareholders (the “Acquisition Closing”). According to the terms of the Share Exchange Agreement, Bio Lab then issued an additional shares of common stock to the LimitlessX shareholders pro rata to their interests approximately six months from the Acquisition Closing as part of the LimitlessX Acquisition. Concurrently with the LimitlessX Acquisition, Jaspreet Mathur, the founder and principal shareholder of LimitlessX, also purchased from Helion Holdings LLC, shares of Bio Lab’s Class A Preferred Convertible Stock, which at all times have a number of votes equal to % of all of the issued and outstanding shares of common stock of Bio Lab.
On June 10, 2022, Bio Lab changed its name to Limitless X Holdings Inc. (“Limitless”).
The LimitlessX Acquisition was accounted for as a “reverse merger” following the completion of the transaction. For accounting purposes, LimitlessX was deemed to be the accounting acquirer in the transaction and, consequently, the transaction was treated as a recapitalization of Bio Lab. Accordingly, LimitlessX’s assets, liabilities, and results of operations became the historical financial statements of the registrant. No step-up in basis or intangible assets or goodwill was recorded in this transaction.
The Company (as defined below) is a lifestyle brand, focused in the health and wellness industry. Initially, the Company focused on nutritional supplements, wellness studies, and interactive training videos and has since focused its business on performance marketing, sales of digital services, and sales of products. The Company’s mission is to provide businesses a turnkey solution to sell their products. Company teams include sales, marketing, user interface design (UI), user experience design (UX), fulfillment, customer support, labeling, product manufacturing, consulting, retailing, and payment processing, among others.
The Company currently offers products online only. The Company has manufacturing and distribution licensing agreements to market, manufacture, sell, and distribute branded products on behalf of its clients. The Company orders products from third party partner manufacturers that make the products according to the Company’s custom formulations, and brands them using the Company’s licensed trademarks. Products are then marketed and sold direct to consumers online. Orders are fulfilled and shipped directly from the Company’s licensors. The Company plans to offer global marketing services across all areas of the sales process, including market research, brand and product development, and digital advertising operating as an integrated marketing agency.
The Company operates in the following product and service sectors: (i) health products and (ii) digital marketing services. The health products sector included the sales of health products in two primary vertical markets: (1) health & wellness; and (2) beauty & skincare. The digital marketing service sector includes digital marketing; digital and print design; social media marketing; and direct-to-consumer marketing.
| F-7 |
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation and Reporting
The accompanying consolidated financial statements include the accounts of Limitless X Holdings Inc. (a holding company) and its wholly owned operating subsidiaries: Limitless X, Inc., Vybe Lab Inc. (for 2022 and deconsolidated on June 1, 2023), and Prime Time Live, Inc. (collectively, the “Company”). All intercompany balances have been eliminated during consolidation.
Going Concern
The
accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern, which
contemplates, among other things, the realization of assets and satisfaction of liabilities in the normal course of business. The
Company had an accumulated deficit of $
To support our existing and planned business model, the Company needs to raise additional capital to fund our future operations. The Company has not experienced any difficulty in raising funds through loans and has not experienced any liquidity problems in settling payables in the normal course of business and repaying loans when they fall due. Successful renewal of our loans, however, is subject to numerous risks and uncertainties. In addition, the increasingly competitive industry conditions under which we operate may negatively impacted our results of operations and cash flows. Additional debt financing is anticipated to fund the Company’s operations in near future. However, there are no current agreements or understandings with regard to the form, time or amount of such financing and there is no assurance that any of this financing can be obtained or that the Company can continue as a going concern.
Use of Estimates in the Preparation of Consolidated Financial Statements
The preparation of consolidated financial statements in conformity with generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. Estimates also affect the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.
Operating segments comprised of the components of an entity in which separate information is available for evaluation by the Company’s chief operating decision maker, or group of decision makers, in determining how to allocate resources in evaluating performance. The Company consists of a single reporting segment: wrestling entertainment. The wrestling entertainment segment is comprised of the Company’s developing, producing, promoting, and distributing female wrestling events in the United States under the LFC brand name through live entertainment events, digital home videos, broadcast television networks, video on demand, and digital media channels. The Company’s chief operating decision maker (“CODM”) is its Chief Executive Officer.
The accounting policies of the wrestling entertainment segment are as described in the summary of significant accounting policies. The CODM evaluates the performance of the wrestling entertainment segment based on the Company’s net income (loss) as reported in the Statements of Operations. The Company’s segment assets are reported on the Balance Sheets.
The CODM reviews performance based on gross profit, operating profit, net earnings and net earnings excluding the impact of the fair value adjustment, a non-GAAP financial measure. Operating profit is reviewed to monitor the operating and administrative expenses of the Company. Profitability is important to the Company’s ability to grow and expand operations and strategic initiatives. The Company does not have any operations or sources of revenue outside of the United States. The Company does not have any customer representing more than 10% of total revenues for any period presented.
Segment Reporting
Operating segments comprised of the components of an entity in which separate information is available for evaluation by the Company’s chief operating decision maker, or group of decision makers, in determining how to allocate resources in evaluating performance. The Company consists of a single reporting segment providing direct to consumer e-commerce services for the Company’s health and wellness products, with a primary emphasis on dietary supplements. The Company’s current lead products are NZT-48, NZT-48 Lions mane, NZT-48 For Her and Oneshot Nootropic Pre-Workout.
The Company’s other businesses Limitless Films, Inc. (formed December 2024), XocelForte Therapeutics Inc. (formed in Augusts 2024), Limitless Entertainment, Inc. (December 2024), Limitless Digital Assets, Inc. (formed in December 2024) and Limitless Living Inc. (formed in December 2024) did not have any transactions during 2024.
The Company’s chief operating decision maker (“CODM”) is its Chief Executive Officer. The accounting policies of the direct-to-consumer ecommerce services segment are as described in the summary of significant accounting policies. The CODM evaluates the performance of the direct-to-consumer ecommerce services segment based on the Company’s net income (loss) as reported in the Statements of Operations. The Company’s segment assets are reported on the Balance Sheets.
The CODM reviews performance based on gross profit, operating profit, net earnings and net earnings. Operating profit is reviewed to monitor the operating and administrative expenses of the Company. Profitability is important to the Company’s ability to grow and expand operations and strategic initiatives. The Company does not have any operations or sources of revenue outside of the United States. The Company does not have any customer representing more than 10% of total revenues for any period presented. Accordingly, the CODM considers the revenue, operating expenses, and other income (expenses) of our single operating segment as reported on the statement of operations and considers our current and total assets as recorded on the balance sheet. There are no additional expense or asset information that are supplemental to those disclosed in these consolidated financial statements that are regularly provided to the CODM.
Cash and Cash Equivalents
The Company considers all liquid investments purchased with an initial maturity of three months or less to be cash equivalents. Cash and cash equivalents include demand deposits carried at cost which approximates fair value. The Company maintains its cash in institutions insured by the Federal Deposit Insurance Corporation (“FDIC”).
Concentration of Credit Risk
The Company offers its services to a small number of clients. This risk of non-payment by these clients is considered minimal and the Company does not generally obtain collateral for sales. The Company continually monitors the credit standing of its clients.
Accounts Receivable, net
Accounts receivable, net consists primarily of trade receivables, net of allowances for doubtful accounts. The Company sells its products and services for cash or on credit terms, which are established in accordance with local and industry practices and typically require payment within 30 days of delivery. The Company estimates its allowance for doubtful accounts and the related expected credit loss based upon the Company’s historical credit loss experience, adjusted for asset-specific risk characteristics, current economic conditions, and reasonable forecasts. Accounts receivables are written off when determined to be uncollectible. The Company did not require and did not have an allowance for doubtful accounts.
| F-8 |
Inventories
Inventories are valued at the lower-of-cost or net realizable value on a first-in, first-out basis, adjusted for the value of inventory that is determined to be excess, obsolete, expired, or unsaleable. Inventories primarily consisted of finished goods.
Advertising and Marketing
Advertising
and marketing costs are charged to expense as incurred. Advertising and marketing costs were approximately $
Property and Equipment, net
Property
and equipment is recorded at cost. Expenditures for major additions and improvements are capitalized and minor replacements, maintenance,
and repairs are charged to expense as incurred. When property and equipment is retired or otherwise disposed of, the cost and accumulated
depreciation are removed from the accounts and any resulting gain or loss is included in the results of operations for the respective
period. Depreciation of property and equipment is over the estimated useful life of
SCHEDULE OF PROPERTY AND EQUIPMENT
| December 31, 2024 | December 31, 2023 | |||||||
| Machinery and equipment | $ | $ | ||||||
| Total | ||||||||
| Less: accumulated depreciation | ( | ) | ( | ) | ||||
| Total equipment, net | $ | $ | ||||||
Depreciation
expense was $
Revenue Recognition
Product Sales
The Company recognizes revenue when performance obligations under the terms of a contract with its customer are satisfied. The Company has determined that fulfilling and delivering products is a single performance obligation. Revenue is recognized at the point in time when the Company has satisfied its performance obligation and the customer has obtained control of the products or when the service is fully. This generally occurs when the product is delivered to or picked up by the customer based on applicable shipping terms, which is typically within 15 days. Revenue is measured as the amount of consideration expected to be received in exchange for fulfilled product orders,
While customers generally have a right to return defective or non-conforming products, past experience has demonstrated that product returns have been immaterial. Customer remedies for defective or non-conforming products may include a refund or exchange. As a result, the right of return is estimated and recorded as a reduction in revenue at the time of sale, if necessary.
The Company’s customer contracts identify product quantity, price, and payment terms. Payment terms are granted consistent with industry standards. Although some payment terms may be more extended, the majority of the Company’s payment terms are less than 30 days. As a result, revenue is not adjusted for the effects of a significant financing component. Amounts billed and due from customers are classified as Accounts Receivables on the Balance Sheet.
| F-9 |
The Company utilizes third-party contract manufacturers for the manufacture of its products. The Company has evaluated whether it is the principal or agent in these relationships. The Company has determined that it is the principal in all cases, as it retains the responsibility for fulfillment and risk of loss, as well as for establishing the price.
In accordance with Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers, the Company has elected the practical expedient to expense the incremental costs to obtain a contract, because the amortization period would be less than one year, and the practical expedient for shipping and handling costs. Shipping and handling costs incurred to deliver products to customers are accounted for as fulfillment activities, rather than a promised service, and as such are included in Cost of Goods Sold in the Statements of Operations.
Cost of Sales
Cost of goods sold includes the cost of inventory sold during the period as well as certain commission fees, returns, chargebacks, distribution and shipping and handling costs. The amount shown is net of various rebates from third-party vendors in the form of payments.
Refunds Payable
If
customers are not satisfied for any reason, they may request a full refund, processed to the original form of payment, within 30 days
from the order date. If the order has already been shipped, the Company charges a
Chargebacks Payable
Once customers successfully dispute chargebacks with the payment processor, the Company returns such funds to the payment processor to return to the customer.
Other Comprehensive Loss
The Company has no material components of other comprehensive loss and accordingly, net loss is equal to comprehensive loss for the period.
Income Taxes
The
accounting standard on accounting for uncertainty in income taxes addresses the determination of whether tax benefits claimed or expected
to be claimed on a tax return should be recorded in the financial statements. Under that guidance, the Company may recognize the tax
benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by taxing
authorities based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position
are measured based on the largest benefit that has a
The Company calculates earnings per share in accordance with Financial Accounting Standards Board (“FASB”) ASC 260, Earnings Per Share, which requires a dual presentation of basic and diluted earnings per share. Basic earnings per share (“EPS”) is computed by dividing earnings (losses) attributable to common shareholders by the weighted average number of common shares outstanding for the periods. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock. The Company had a loss for the years ended December 31, 2024 and 2023.
| F-10 |
The Company accounts for equity-based payment accruals under authoritative guidance as set forth in the Topics of the ASC. The guidance requires all equity-based payments to employees and non-employees, including grants of employee and non-employee stock options and warrants, to be recognized in the consolidated financial statements based at their fair values. The Company applies the provisions of ASC 718, “Compensation - Stock Compensation,” using a modified prospective application, and the Black-Scholes model to value stock options. Under this application, the Company records compensation expense for all awards granted. Compensation costs will be recognized over the period that an employee provides service in exchange for the award. During the year ended December 31, 2024 and the year ended December 31, 2023, the Company granted no options under the 2020 Stock Incentive Plan and 2022 Stock Option Plan.
General Concentrations of Risk
Financial instruments that potentially subject the Company to concentrations of credit risk are accounts receivable and other receivables arising from its normal business activities. The Company has a diversified customer base. The Company controls credit risk related to accounts receivable through credit approvals, credit limits, and monitoring procedures. The Company routinely assesses the financial strength of its customers and, based upon factors surrounding the credit risk, establishes an allowance, if required, for uncollectible accounts and, as a consequence, believes that its accounts receivable related credit risk exposure beyond such allowance is limited.
The
Company purchases merchandise from 6 suppliers, and the Company’s 2 largest suppliers accounted for
A substantial amount of the Company’s inventory is manufactured abroad. From time to time, shipping ports experience capacity constraints (such as delays associated with COVID-19), labor strikes, work stoppages or other disruptions that may delay the delivery of imported products. A contract dispute may lead to protracted delays in the movement of the Company’s products, which could further delay the delivery of products to the Company’s stores and impact net sales and profitability. In addition, other conditions outside of the Company’s control, such as adverse weather conditions or acts of terrorism or war, such as the current conflict in Ukraine, could significantly disrupt operations at shipping ports or otherwise impact transportation of the imported merchandise we sell, either through supply chain disruptions, or rising freight and fuel costs.
| F-11 |
Operating Lease
In accordance with ASC 842, Leases, the Company determines whether an arrangement contains a lease at inception. A lease is a contract that provides the right to control an identified asset for a period of time in exchange for consideration. For identified leases, the Company determines whether it should be classified as an operating or finance lease. Operating leases are recorded in the balance sheet as: right-of-use asset (“ROU asset”) and operating lease liability. ROU asset represents the Company’s right to use an underlying asset for the lease term and lease liability represents the Company’s obligation to make lease payments arising from the lease. ROU assets and operating lease liabilities are recognized at the commencement date of the lease and measured based on the present value of lease payments over the lease term. The ROU asset also includes deferred rent liabilities. The Company’s lease arrangement generally do not provide an implicit interest rate. As a result, in such situations the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The Company includes options to extend or terminate the lease when it is reasonably certain that it will exercise that option in the measurement of its ROU asset and liability. Lease expense for the operating lease is recognized on a straight-line basis over the lease term. The Company has a lease agreement with lease and non-lease components, which are accounted for as a single lease component and are month-to-month during the year ended December 31, 2024 and 2023.
Recent Accounting Pronouncements
In December 2019, FASB issued Accounting Standards Update (“ASU”) 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which amends existing guidance related to the accounting for income taxes. This ASU is intended to simplify the accounting for income taxes by removing certain exceptions to the general principles of accounting for income taxes and to improve the consistent application of GAAP for other areas of accounting for income taxes by clarifying and amending existing guidance. This ASU is effective for fiscal years beginning after December 15, 2020, with early adoption permitted. The Company evaluated the effects of adoption of this guidance on the financial statements and did not have any material impact on its consolidated financial statements.
In June 2016, the FASB issued an accounting standards update which changes the methodology for measuring credit losses on financial instruments and the timing of when such losses are recorded. This update replaces the existing incurred loss impairment model with an expected loss model (referred to as the Current Expected Credit Loss model, or “CECL”). The standard update, and its related amendments, will become effective for the fiscal year beginning on January 1, 2023. The Company evaluated the effects of adoption of this guidance on the financial statements and did not have any material impact on its consolidated financial statements.
In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280). The amendments in this update expand segment disclosure requirements, including new segment disclosure requirements for entities with a single reportable segment among other disclosure requirements. This update is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. The adoption of ASU 2023-07 has not had a material effect on the Company’s statements and disclosures.
Other recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force), the AICPA and the SEC did not or are not believed by management to have a material impact on the Company’s present or future consolidated financial statements.
NOTE 3 – FAIR VALUE MEASUREMENTS
The Company utilizes ASC 820-10, Fair Value Measurement and Disclosure, for valuing financial assets and liabilities measured on a recurring basis. Fair value is defined as the exit price, or the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date. The guidance also establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs market participants would use in valuing the asset or liability and are developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the factors market participants would use in valuing the asset or liability. The guidance establishes three levels of inputs that may be used to measure fair value:
| Level 1. | Observable inputs such as quoted prices in active markets; |
| Level 2. | Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and |
| Level 3. | Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions. |
The carrying value of financial assets and liabilities recorded at fair value is measured on a recurring or nonrecurring basis. Financial assets and liabilities measured on a non-recurring basis are those that are adjusted to fair value when a significant event occurs. There were no financial assets or liabilities carried and measured on a nonrecurring basis during the reporting periods. Financial assets and liabilities measured on a recurring basis are those that are adjusted to fair value each time a financial statement is prepared. There have been no transfers between levels.
| F-12 |
NOTE 4 – DISCONTINUED OPERATIONS
Discontinued Operations
The Company reports discontinued operations by applying the following criteria in accordance with ASC Topic 205-20, Presentation of Financial Statements – Discontinued Operations: (1) Component of an entity; (2) Held for sale criteria; and (3) Strategic shift.
On
June 1, 2023, the Company entered into an Agreement for Purchase and Sale of Stock (the “Vybe Sale Agreement”) with Emblaze
One, Inc., a Nevada corporation, (“Emblaze”) wherein the Company sold all
of its shares of common stock of its wholly owned subsidiary,
Vybe Labs, Inc., a Delaware corporation (“Vybe”). Emblaze is a company
Income and expense related to Vybe were as follows for year ended December 31, 2023:
SCHEDULE OF DISCONTINUED OPERATIONS OF INCOME AND EXPENSE
| Year Ended December 31, | 2023 | |||
| Net revenue | ||||
| Cost of revenue | ||||
| Gross profit (loss) | ||||
| Operating expenses: | ||||
| General and administrative | ||||
| Professional fees | ||||
| Total operating expenses | ||||
| Loss before income tax provision | ( | ) | ||
| Income tax provision | ||||
| Net loss | ( | ) | ||
| F-13 |
On
June 1, 2023, the Company entered into an Agreement for Purchase and Sale of Stock (the “Vybe Sale Agreement”) with Emblaze
One, Inc., a Nevada corporation, (“Emblaze”) wherein the Company sold all of its shares of common stock of its wholly
owned subsidiary, Vybe Labs, Inc., a Delaware corporation (“Vybe”). Emblaze is a company
On
June 1, 2023, the Company agreed to a settlement of a debt in the amount of $
The transaction is recorded as follows at the date of this transaction:
SCHEDULE OF DECONSOLIDATION
| June 1, | ||||
| 2023 | ||||
| Total assets and liabilities deconsolidated for Vybe: | ||||
| Total assets | $ | |||
| Total liabilities | ( | ) | ||
| Net assets (liabilities) | $ | ( | ) | |
| Net amount of additional paid in contribution due to deconsolidation and due to and due from between intercompany balance settlement | $ | |||
NOTE 6 – ROYALTY PAYABLES
Limitless
Performance Inc. (“LPI”), SMILZ INC. (“Smiles”), DIVATRIM INC. (“Divatrim”), and AMAROSE INC. (“Amarose,”
and collectively with LPI, Smiles, and Divatrim, the “Licensors”) are all companies at least 50% owned by a shareholder of
the Company. On December 1, 2021, the Company entered into manufacturing and distributorship license agreements (each, a “License
Agreement”) with each of the Licensors to distribute each of the Licensors’ respective products and for payments to such
Licensor for its product designs and distribution rights. Pursuant to the License Agreements, and each of them, the Company agreed to
pay to such Licensors royalty payments equal to
As
of December 31, 2024 and 2023, the royalty payable was $
On October 1, 2023, the Company terminated each of the License Agreements; however, the Company maintained its license for NZT-48 with LPI.
NOTE 7 – NOTE PAYABLE
On
March 1, 2021, an individual loaned the predecessor company $
| F-14 |
NOTE 8 – CLASS B PREFERRED STOCK
On
October 23, 2023, pursuant to certain Conversion Agreements, the Company issued an aggregate of shares of Class B Preferred
Stock and extinguished $
The
holders of the Class B Preferred Stock are entitled to a liquidation preference senior to common stock and junior to the Class A Preferred
Stock at a liquidation price of $
On January 3, 2017, the Company filed an Amendment to Certificate of Designation with the Nevada Secretary of State defining the rights and preferences of the Series A Convertible Preferred shares. Series A Convertible Preferred stock shall be convertible into common shares at the rate of the closing market price on the day of the conversion notice equal to the dollar amount of the value of the Series A Convertible Preferred shares, and holders shall have no voting rights on corporate matters, unless and until they convert their Series A Convertible Preferred shares into Common shares, at which time they will have the same voting rights as all Common Shareholders have; their consent shall not be required for taking any corporate action.
The
Class B Preferred Stock has been classified outside of permanent equity and liabilities since it embodies a conditional obligation that
the Company may settle by issuing a variable number of equity shares and the monetary value of the obligation is based on a fixed monetary
amount known at inception. The Company has recorded $
In October 2024, Series B Preferred Stock were converted into
shares of common stock. The Company recorded a reduction of $
SCHEDULE OF NOTES PAYABLE TO SHAREHOLDER
| December 31, | December 31, | |||||||
| 2024 | 2023 | |||||||
| December 6, 2021 ($50,000) | $ | $ | ||||||
| December 6, 2021 ($) | $ | $ | ||||||
| February 11, 2022 ($) | ||||||||
| May 8, 2022 ($) | ||||||||
| May 16, 2022 ($) | ||||||||
| May 18, 2022 ($) | ||||||||
| June 1, 2022 ($) | ||||||||
| June 30, 2022 ($) | ||||||||
| August 25, 2022 ($) | ||||||||
| November 15, 2022 ($) | ||||||||
| May 16, 2023 ($) | ||||||||
| May 18, 2023 ($) | ||||||||
| June 5, 2023 ($) | ||||||||
| June 20, 2023 ($) – Funding Commitment | ||||||||
| July 13, 2023 ($) – Funding Commitment | ||||||||
| August 1, 2023 ($) – Funding Commitment | ||||||||
| August 7, 2023 ($) – Funding Commitment | ||||||||
| Total notes payable to stockholder (current) | $ | $ | ||||||
| ● | December 6, 2021 – $50,000 |
On December 6, 2021, the Company entered into a Loan Authorization and Agreement for a loan of $ from a shareholder, the proceeds of which were used to be used for working capital purposes. Beginning on June 1, 2022, the loan required a payment of $ per month, which included principal and interest with an interest rate of % per annum. The total balance of principal and interest was due on May 1, 2023. As of December 31, 2024 and 2023, the loan is due upon demand.
| F-15 |
| ● | February 11, 2022 – $150,000 |
On February 11, 2022, the Company entered into a Loan Authorization and Agreement for a loan of $ from a shareholder, the proceeds of which were to be used for working capital purposes. Beginning on June 1, 2022, the loan required a payment of $ per month, which included principal and interest with an interest rate of % per annum. The total balance of principal and interest was due on May 1, 2023. As of December 31, 2024 and 2023, the loan is due upon demand.
| ● | May 8, 2022 – $550,000 |
On May 8, 2022, the Company entered into a Loan Authorization and Agreement for a loan of $ from a shareholder, the proceeds of which were to be used for working capital purposes. As of September 30, 2023 and December 31, 2022, the principal balance was $ and $, respectively. Beginning on June 1, 2022, the loan required a payment of $ per month, which included principal and interest with an interest rate of % per annum. The total balance of principal and interest was due on May 1, 2023. As of December 31, 2024 and 2023, the loan is due upon demand.
| ● | May 16, 2022 – $1,100,000 |
On May 16, 2022, the Company entered into a Loan Authorization and Agreement for a loan of $ from a shareholder, the proceeds of which were to be used for working capital purposes. Interest began accruing at the rate of % per annum on June 17, 2022 and was due on May 16, 2023. As of December 31, 2024 and 2023, the loan is due upon demand.
| ● | May 18, 2022 – $450,000 |
On May 18, 2022, the Company entered into a Loan Authorization and Agreement for a loan of $ from a shareholder, the proceeds of which were to be used for working capital purposes. Interest began accruing at the rate of % per annum on June 19, 2022 and was due on May 18, 2023. As of December 31, 2024 and 2023, the loan is due upon demand.
| ● | June 1, 2022 – $500,000 |
On June 1, 2022, the Company entered into a Loan Authorization and Agreement for a loan of $ from a shareholder, the proceeds of which were to be used for working capital purposes. Beginning on August 1, 2022, the loan required a payment of $ per month, which included principal and interest with an interest rate of % per annum. The total balance of principal and interest was due on July 1, 2023. As of December 31, 2024 and 2023, the loan is due upon demand.
| ● | June 30, 2022 – $922,028 |
On June 30, 2022, the Company entered into a Loan Authorization and Agreement for a loan of $ from a shareholder, the proceeds of which were to be used for working capital purposes. Beginning on August 1, 2022, the loan required a payment of $ per month, which included principal and interest with an interest rate of % per annum. The total balance of principal and interest was due on August 1, 2023. As of December 31, 2024 and 2023, the loan is due upon demand.
| ● | August 25, 2022 – $290,000 |
On August 25, 2022, the Company entered into a Loan Authorization Agreement for a loan of $ from a shareholder, the proceeds of which were to be used for working capital purposes. The loan has an interest rate of % per annum and is due on demand.
| ● | November 15, 2022 – $450,000 |
On November 15, 2022, the Company entered into a Loan Authorization and Agreement for a loan of $ from a shareholder, the proceeds of which were to be used for working capital purposes. The loan has an interest rate of % per annum and is due on demand.
| ● | May 16, 2023 – $150,000 |
On May 16, 2023, the Company entered into a Loan Authorization and Agreement for a loan of $ from a shareholder, the proceeds of which were to be used for working capital purposes. The loan has an interest rate of % per annum and is due on demand.
| ● | May 18, 2023 – $50,000 |
On May 18, 2023, the Company entered into a Loan Authorization and Agreement for a loan of $ from a shareholder, the proceeds of which were to be used for working capital purposes. The loan has an interest rate of % per annum and is due on demand.
| F-16 |
| ● | June 5, 2023 – $150,000 |
On June 5, 2023, the Company entered into a Loan Authorization and Agreement for a loan of $ from a shareholder, the proceeds of which were to be used for working capital purposes. The loan has an interest rate of % per annum and is due on demand.
| ● | Funding Commitment Agreement |
On
June 3, 2023, the Company entered into a Funding Commitment Agreement (the “Funding Commitment”) with its Chief Executive
Officer and Chairman of the Board of Directors, Jaspreet Mathur, wherein Mr. Mathur committed to provide up to $
| December 31, 2024 | December 31, 2023 | |||||||
| June 20, 2023 ($50,000) | $ | $ | ||||||
| June 20, 2023 ($) | $ | $ | ||||||
| July 13, 2023 ($) | ||||||||
| August 1, 2023 ($) | ||||||||
| August 7, 2023 ($) | ||||||||
| Total Funding Commitment | $ | $ | ||||||
As
of December 31, 2024 and 2023, the balance of notes payable to shareholder under the Funding Commitment was $
Total accrued interest related to notes payable to shareholder as of December 31, 2024 and 2023 was $ and $, respectively. Interest expense related to notes payable to shareholder for the year ended December 31, 2024 and 2023 was $ and $, respectively.
NOTE 10 – NOTES PAYABLE TO RELATED PARTIES
Notes payable to related party consisted of the following:
SCHEDULE OF NOTES PAYABLE TO RELATED PARTIES
| December 31, | December 31, | |||||||
| 2024 | 2023 | |||||||
| May 10, 2022 ($12,500) | $ | $ | ||||||
| May 10, 2022 ($ | $ | $ | ||||||
| May 10, 2022 ($ | ||||||||
| May 10, 2022 ($ | ||||||||
| May 31, 2022 ($ | ||||||||
| May 31, 2022 ($ | ||||||||
| June 9, 2022 ($ | ||||||||
| March 27, 2024 ($ | ||||||||
| April 22, 2024 ($ | ||||||||
| April 26, 2024 ($ | ||||||||
| June 25, 2024 ($ | ||||||||
| June 28, 2024, 2024 ($ | ||||||||
| March 15, 2024 ($ | ||||||||
| Total notes payable to related parties (current) | $ | $ | ||||||
| F-17 |
| ● | May 10, 2022 - $12,500 |
On
May 10, 2022, a related party of the Company loaned Prime Time Live, Inc. $
| ● | May 10, 2022 - $12,500 |
On
May 10, 2022, a related party of the Company loaned Prime Time Live, Inc. $
| ● | May 10, 2022 - $20,000 |
On
May 10, 2022, a related party of the Company loaned Prime Time Live, Inc. $
| ● | May 31, 2022 - $5,000 |
On
May 31, 2022, a related party of the Company loaned Prime Time Live, Inc. $
| ● | May 31, 2022 - $15,000 |
On
May 31, 2022, a related party of the Company loaned Prime Time Live, Inc. $
| ● | June 9, 2022 - $15,000 |
On
June 9, 2022, the Company loaned share holder of the company $
| ● | March 15, 2024 - $419,428 |
On
March 12, 2024, Emblaze One, a company owned by the shareholder of the company, a related party, provided $
| ● | March 27, 2024 - $100,000 |
On
March 12, 2024, EM1 Capital, a company owned by the shareholder of the company, a related party, provided $
| ● | April 22, 2024 - $49,139 |
On
April 22, 2024, EM1 Capital, a company owned by the shareholder of the company, a related party, provided $
| ● | April 26, 2024 - $45,000 |
On
April 26, 2024, EM1 Capital, a company owned by the shareholder of the company, a related party, provided $
| F-18 |
| ● | June 25, 2024 - $32,000 |
On
June 25, 2024, EM1 Capital, a company owned by the shareholder of the company, a related party, provided $
| ● | June 28, 2024 - $25,000 |
On
June 28, 2024, EM1 Capital, a company owned by the shareholder of the company, a related party, provided $
Total accrued interest related to notes payable to shareholder as of December 31, 2024 and 2023 was $ and $, respectively. Interest expense related to notes payable to shareholder for the year ended December 31, 2024 and 2023 was $ and $, respectively.
NOTE 11 – LOAN PAYABLE
In July 2024, the Company
entered into a merchant account loan payable with Shopify in the amount of $
NOTE 12 – CREDIT CARD SETTLEMENT
The Company had settled American Express credit card liability of $
NOTE 13 – STOCKHOLDERS’ EQUITY
Common Stock
As of December 31, 2024 and 2023, the Company had authorized shares of common stock par value $ per share and had shares and shares issued and outstanding, respectively.
| ● | Common Stock Issued for Services – In December 2024, the Company issued approximately shares of common stock for services provided to the Company. These shares were valued at fair value at the time of issuance and recorded stock compensation expense of $, for the year ended December 31, 2024. |
| ● | Common Stock Issuable for Services – In December 2024, the Company had common stock issuable of shares of common stock for services provided to the Company. These shares were valued at fair value at the time of issuance and recorded stock compensation expense of $ for the year ended December 31, 2024. | |
| ● | Vendor
Debt Conversion to Common Stock – In December 2024, the Company had vendor payable in the amount of $ | |
| ● | Salaries
Conversion to Common Stock – In December 2024, the Company had accrued compensation in the amount of $ |
Preferred Stock
As of December 31, 2024 and 2023, the Company has authorized shares of preferred stock, shares of which were designated as Class A Convertible Preferred Stock (“Class A Preferred Stock”).
| ● | Class
A Convertible Stock – As of December 31, 2024 and 2023, there were a total of shares of Class A Preferred Stock
issued and outstanding. The Class A Preferred Stock, when voting as a single class, has the votes of at least |
| ● | Class
B Convertible Stock – On October 23, 2023, pursuant to certain Conversion Agreements, the Company issued an aggregate
of shares of Class B Preferred Stock and extinguished $ | |
| ● | Class
B Convertible Stock – On September 9, 2024, pursuant to the conversion agreement, the convertible B shareholders converted
shares of Class B Preferred Stock in exchange for common stock. The conversion amount of Class B Preferred
Stock was $ |
| F-19 |
The Company had the following equity-based plan:
| ● | Stock Incentive Plans |
Effective January 15, 2020, the Company adopted its 2020 Stock Option and Award Plan (the “2020 Stock Incentive Plan”). Under the 2020 Stock Incentive Plan, the Board of Directors may grant options or purchase rights to purchase common stock to officers, employees, and other persons who provide services to the Company or any related company. The participants to whom awards are granted, the type of awards granted, the number of shares covered for each award, and the purchase price, conditions and other terms of each award are determined by the Board of Directors, except that the term of the options shall not exceed ten years. A total of shares of the Company’s common stock is reserved for the 2020 Stock Incentive Plan. The shares issued for the 2020 Stock Incentive Plan may be either treasury or authorized and unissued shares. During the year ended December 31, 2024 and 2023, the Company granted options under the 2020 Stock Incentive Plan.
Effective August 9, 2022, the Company adopted its 2022 Incentive and Non-statutory Stock Option Plan (the “2022 Stock Option Plan”). Under the 2022 Stock Option Plan, the Board of Directors may grant options to purchase common stock to officers, employees, and other persons who provide services to the Company. A total of shares of the Company’s common stock is reserved for the 2022 Stock Option Plan. During the year ended December 31, 2024 and 2023, the Company granted options under the 2022 Stock Option Plan.
NOTE 15 – RELATED PARTY TRANSACTIONS
The Company had the following related party transactions:
| ● | Royalty
Payables – Limitless Performance Inc. (“LPI”), SMILZ INC. (“Smiles”), DIVATRIM INC. (“Divatrim”),
and AMAROSE INC. (“Amarose,” and collectively with LPI, Smiles, and Divatrim, the “Licensors”) are all companies
at least 50% owned by a shareholder of the Company. On December 1, 2021, the Company entered into manufacturing and distributorship
license agreements (each, a “License Agreement”) with each of the Licensors to distribute each of the Licensors’
respective products and for payments to such Licensor for its product designs and distribution rights. Pursuant to the License Agreements,
and each of them, the Company agreed to pay to such Licensors royalty payments equal to |
| ● | Notes Payable to Shareholder – The Company had various notes payable with its shareholder who is the Chief Executive Officer of the Company. Refer to Note 9. |
| ● | Notes
Payable to Related Parties – The Company entered into various notes payable with shareholders of the Company. As of December
31, 2024 and 2023, the Company had $ |
| ● | On
June 1, 2023, the Company entered into an Agreement for Purchase and Sale of Stock (the “Vybe Sale Agreement”) with Emblaze
One, Inc., a Nevada corporation, (“Emblaze”) wherein the Company sold all of its shares of common stock of its
wholly owned subsidiary, Vybe Labs, Inc., a Delaware corporation (“Vybe”). Emblaze is a company |
| F-20 |
NOTE 16 – INCOME TAX PROVISION
Total income tax (benefit) expense consists of the following:
SCHEDULE OF INCOME TAX PROVISION (BENEFIT)
| Years ended December 31, | 2024 | 2023 | ||||||
| Current provision (benefits): | ||||||||
| Federal | $ | $ | ||||||
| State | ||||||||
| Total current provision (benefits): | $ | $ | ||||||
| Deferred provision (benefits): | ||||||||
| Federal | $ | $ | ||||||
| State | ||||||||
| Total deferred provision (benefits) | $ | $ | ||||||
| Total tax provision (benefits) | $ | $ | ||||||
A reconciliation of the Company’s effective tax rate to the statutory federal rate is as follows:
SCHEDULE OF RECONCILIATION OF STATUTORY FEDERAL INCOME TAX RATE AND EFFECTIVE INCOME TAX RATE
| Years ended December 31, | 2024 | 2023 | ||||||
| Effective tax rates: | ||||||||
| Statutory federal rate | % | % | ||||||
| State income taxes | % | % | ||||||
| Permanent differences for tax purposes and others | % | % | ||||||
| Change in valuation allowance | ( | )% | ( | )% | ||||
| Effective tax rate | % | % | ||||||
The
income tax benefit differs from the amount computed by applying the U.S. federal statutory tax rate of
SCHEDULE OF DEFERRED TAX ASSETS AND LIABILITIES
| Years ended December 31, | 2024 | 2023 | ||||||
| Deferred tax assets: | ||||||||
| Net operating loss | $ | $ | ||||||
| Other temporary differences | ||||||||
| Total deferred tax assets (liabilities) | $ | |||||||
| Less – valuation allowance | ( | ) | ( | ) | ||||
| Total deferred tax assets, net of valuation allowance | $ | $ | ||||||
Deferred income taxes reflect the temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The components of deferred tax assets and liabilities are as follows:
As
of December 31, 2024 and 2023, the Company had available net operating loss carryovers of approximately $
The Company files income tax returns in the U.S. federal jurisdiction and California and is subject to income tax examinations by federal tax authorities for tax year ended 2018 and later and subject to California authorities for tax year ended 2017 and later. The Company currently is not under examination by any tax authority. The Company’s policy is to record interest and penalties on uncertain tax positions as income tax expense. As December 31, 2024 and December 31, 2023, the Company has no accrued interest or penalties related to uncertain tax positions.
As
of December 31, 2024, the Company had cumulative net operating loss carryforwards for federal tax purposes of approximately $
| F-21 |
NOTE 17 – COMMITMENTS AND CONTINGENCIES
Commitments
Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Generally, the implicit rate of interest in arrangements is not readily determinable and the Company utilizes its incremental borrowing rate in determining the present value of lease payments. The Company’s incremental borrowing rate is a hypothetical rate based on its understanding of what its credit rating would be. The operating lease ROU asset includes any lease payments made and excludes lease incentives. The Company’s variable lease payments primarily consist of maintenance and other operating expenses from their real estate leases. Variable lease payments are excluded from the ROU assets and lease liabilities and are recognized in the period in which the obligation for those payments is incurred. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term.
The
Company does not have any long-term leases and leases are on a month-to-month basis as of December 31, 2024 and 2023. Total rent expense
was $
Contingencies
From time to time, the Company is involved in legal proceedings. The Company records a liability for those legal proceedings when it determines it is probable that a loss has been incurred, and the amount of the loss can be reasonably estimated. The Company also discloses when it is reasonably possible that a material loss may be incurred, however, the amount cannot be reasonably estimated. From time to time, the Company may enter into discussions regarding settlement of these matters, and may enter into settlement agreements, if it believes settlement is in the best interest of the Company and its shareholders.
The following is a summary of our current outstanding litigation:
| ● | Mentom Eyewear Inc. – A legal action was filed in the Los Angeles Superior Court against Limitless X Holdings Inc., four of its officers, and an unrelated company, alleging the breach of an Implied In-Fact Agreement and other causes of action related to it. We argued that there was no such agreement and demanded a dismissal of the action. The case was dismissed with an entry of dismissal filed by Mentom Eyewear Inc. on May 28, 2024. |
| ● | Harpo Inc. – A legal action was filed in the Central District of California against Limitless X Inc. and two of its officers along with Emblaze One, Inc., alleging trademark infringement and dilution, unfair competition, false advertising, and violation of the right of publicity, all based on allegations that one of our advertisements contained the unauthorized use of a celebrity’s name and intellectual property, Harpo Inc. and OW Licensing Company LLC v. Emblaze One, Inc., et al., Case Number 2:23-cv-04459 VAP (ASx). Any exposure stemming from this action would be subject to indemnity from the advertising network responsible for the ads in question. We filed an answer and are currently engaging in the discovery process, including investigating the third-party liability. No liability has been recorded for this litigation because the Company believes that any such liability is not reasonably estimable at this time. | |
| ● | Lace Marketing LLC - A new case was filed and just served on us in early April 2025. The case is titled Lace Marketing LLC dba Leisurepay v. Limitless X Holdings Inc, et al, (with 9 other unrelated parties named as defendants), Case number 2024L014194 in Circuit Court of Cook County, Illinois. Liability is not estimable but we believe Limitless was wrongfully named and have a full defense as no contract or business relationship exists with this plaintiff and we are planning to file a motion to dismiss. |
NOTE 18 – SUBSEQUENT EVENTS
The Company evaluated all events or transactions that occurred after December 31, 2024. During this period, the Company did not have any material recognizable subsequent events required to be disclosed other than the following:
| ● | January 2, 2025 – Effective as of January 2, 2025, the Company filed a Certification of Designation of Class C Convertible Preferred Stock (the “Certificate”) with the Delaware Secretary of State and in accordance with the Delaware General Corporation Law. The Company currently has shares of preferred stock (“Preferred Stock”) authorized. Of the authorized shares of Preferred Stock, shares are designated as Class A Convertible Preferred Stock (the “Class A Stock”), all of which are issued and outstanding. Additionally, shares of the Preferred Stock are designated as Class B Convertible Preferred Stock (the “Class B Stock”), of which shares are issued and outstanding. The Company has shares of common stock (“Common Stock”) authorized, of which shares are issued and outstanding. The Certificate designates shares of the Company’s Preferred Stock as Class C Convertible Preferred Stock with a par value of $ per share (“Class C Stock”). The Class C Stock ranks (i) junior to the Class A Stock and Class B Stock, (ii) senior to any other class or series of outstanding Preferred Stock or Common Stock, and (iii) prior to any other class or series of capital stock of the Company hereafter created, and in each case as to distributions of assets upon liquidation, dissolution, or winding up of the Company, whether voluntary or involuntary (the “Class C Stock Distribution Ranking”). The Class C Stock is not entitled to dividends except as required by law. The Class C Stock shall have no voting rights other than as set forth in the Certificate or as required by law. |
| ● | January
13, 2025 – Effective as of January 13, 2025, the Company entered into a Settlement
Agreement and Release of Claims (each, a “Settlement Agreement” together, the
“Settlement Agreements”) with each of (a) Jaspreet Mathur, the Company’s
Chief Executive Officer; (b) Rob D. Cucher, the Company’s Vice President of Legal Affairs;
(c) Danielle Young, the Company’s Chief Operating Officer, (d) Benjamin Chung, the
Company’s Chief Financial Officer, and (e) two (2) non-executive employees (each individual
in (a)-(e), an “Employee”). Under the Settlement Agreements, the Company issued
an aggregate of shares of its common stock to each Employee a party thereto (each
issuance, a “Settlement Payment”) in exchange and in full and complete consideration
for such Employee’s execution of the Settlement Agreement, and in full and complete
consideration for the resolution of any and all issues related to such Employee’s employment
(in particular, disputes or claims arising out of compensation allegedly owed and unpaid
to such Employee during the period beginning on September 1, 2024 and ending on December
15, 2024 (“Accrual Period”). Each Employee agreed that the Settlement Payment
payable to it was above-and-beyond any prior or deferred wages due to such Employee during
the Accrual Period. The number of shares issued to each Employee in the Settlement Agreement
was calculated using the Company’s average stock price during the Accrual Period, which
was $ per share. The Settlement Payment to each Employee was as follows: (a) to Mr. Mathur,
shares of the Company’s common stock, the equivalent of $ |
| ● | January
13, 2025 – On January 13, 2025, the Company entered into debt conversion agreements
with 4 vendors to settle outstanding debts in the aggregate amount of $ |
| F-22 |
| ● | January
13, 2025 – Effective as of January 13, 2025, the Company issued an aggregate
of shares of its common stock, which exceeds |
| ● | January
13, 2025 – Effective as of January 13, 2025, the Board granted in the aggregate
shares of the Company’s common stock to its directors in connection with
their services as directors of the Company between May 20, 2022, through December 31, 2024
(the “Director Payments”). The number of shares issued to the directors was calculated
using the Company’s average stock price during the last year, which was $ per share.
The Director Payments consisted of: (a) shares to Jaspreet Mathur for his accrued
director fees of $ |
| ● | January
23, 2025 – Effective as of January 23, 2025, the Company filed a Certificate
of Designation of Series D | |
| ● | January 24, 2025 – Effective as of January 24, 2025, the Company entered in consulting agreement with Limitless Performance Inc. (“LPI”) (the “Consulting Agreement”), an entity wholly-own by Jaspreet Mathur, a greater than 10% shareholder and the Chief Executive Officer (“CEO”) and Chairman of the board of directors (“Chairman”) of the Company. Under the Consulting Agreement, LPI is to assist the Company in identifying and securing cost-effective manufacturing processes, including international distribution and production, in the development of new products, including but not limited to different forms of brain supplements, coffee boosters, and other similar products. The term of the Consulting Agreement is three (3) years and automatically renews for succeeding terms of one (1) year unless either party gives notice to the other at least 30 days prior to the expiration of any term of their intention not to renew. The Company is to pay LPI on January 27, 2025, with a grant of immediately exercisable stock options per the Company’s 2022 Stock Option Incentive Plan. The Company may pay performance-based incentives in the form of additional stock issuances or cash equivalents to LPI at some later date upon the mutual agreement of the parties dependent upon the Company’s growth. |
| ● | January 24, 2025 – Effective as of January 24, 2025, Limitless X, Inc., a Nevada corporation (“Limitless X”) and wholly-owned subsidiary of the Company entered into an amendment (the “Amendment”) to the Manufacturing and Distributorship License Agreement, dated as of December 1, 2021, by and between Limitless X and LPI (the “Original License Agreement”). LPI is wholly-owned by Jaspreet Mathur, the Company’s CEO, Chairman and significant shareholder. In the Amendment, LPI agreed to waive its right to receive royalty payments under the License Agreement for a period of three (3) years, to end on December 31, 2027. All other terms of the Original License Agreement remained the same. |
| ● | January
24, 2025 – On January 24, 2025, Limitless Films, Inc. (“Lender”),
a subsidiary of Limitless X Holdings Inc. (the “Company”) entered into a Bridge
Loan Agreement with a film producer (the “Borrower”) to finance part of the pre-production
budget for Borrower’s upcoming film (the “Picture”) with an A-list actor.
The Lender agreed to loan to Borrower on a secured basis one million dollars ($ |
| ● | January
29, 2025 – On January 29, 2025, the Board of Directors (the “Board”)
of Limitless X Holdings Inc. (the “Company”) approved an award of stock options
(“Options”) to purchase shares of common stock, $ par value per share (“Common
Stock”), to the Company’s executive officers and directors as follows:
Options to Jaspreet Mathur, the Company’s Chief Executive Officer and Chairman;
Options to Rob Cucher, the Company’s VP of Legal Affairs; Options to Benjamin
Chung, the Company’s Chief Financial Officer; Options to Danielle Young, the
Company’s Chief Operating Officer; Options to Bharat Raj Mathur, a member of
the Board; and Options to Arthur Sarkissian, a member of the Board. These Options,
which have an exercise price of $ |
| ● | January 29, 2025 – On January 29, 2025, the Board also approved an award of shares of Common Stock restricted under Rule 144 of the Securities Act of 1933, as amended (“Restricted Stock”) to the Company’s executive officers as follows: shares of Restricted Stock to Jaspreet Mathur, the Company’s Chief Executive Officer and Chairman; shares of Restricted Stock Options to Rob Cucher, the Company’s VP of Legal Affairs; shares of Restricted Stock to Benjamin Chung, the Company’s Chief Financial Officer; and shares of Restricted Stock to Danielle Young, the Company’s Chief Operating Officer. The shares of Restricted Stock were awarded pursuant to the Company’s 2022 Restricted Stock Plan (the “Restricted Stock Plan”) previously filed by the Company as Exhibit 4.2 to the Company’s Registration Statement on Form S-1 as filed with the SEC on February 14, 2024, and the above summary of the terms of the Restricted Stock is qualified in its entirety by reference to the Restricted Stock Plan. |
| F-23 |
| ● | February
5, 2025 – Effective as of February 5, 2025, the Company, along with it wholly-owned
subsidiary, Limitless X Inc., a Nevada corporation (“LSX”), entered into an endorsement
agreement with Blowout Enterprises, LLC (“Blowout”), f/s/o Paul Michael DelVecchio
Jr., p/k/a “Pauly D” a/k/a “DJ Pauly D” (“Pauly D”) (the
“Endorsement Agreement”). The initial term of the endorsement agreement is three
years and shall automatically renew for successive one-year terms unless a party gives notice
of its intent not to renew at least 30 days prior to the expiration of any term. Under the
Agreement, Blowout agreed to cause Pauly D to endorse and exclusively promote LSX’s
dietary supplement products, specifically including the Company’s Oneshot Pre-Workout
and such other mutually approved products (the “Endorsement”). In exchange for
the Endorsement, the Company agreed to pay Blowout, on a pay-or-play basis, cash compensation
of $ | |
| ● | February
7, 2025 – On February 7, 2025, the Company entered into a debt conversion transaction
with Jaspreet Mathur to settle outstanding debt in the amount of $ |
| ● | March
21, 2025 – Effective as of March 21, 2025 (“Effective Date”), Jaspreet
Mathur (the “Holder”), Chief Executive Officer, Chairman, and a greater than
10% shareholder in Limitless X Holdings Inc. (the “Company”) entered into a promissory
note with the Company (the “Promissory Note”) in the amount of $ |
| F-24 |
Exhibit 3.1
Exhibit 31.1
Certification of Principal Executive Officer
Pursuant to Rule 13a-14(a) and 15d-14(a) Under the Securities Exchange Act of 1934, As Amended
As Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act
I, Jaspreet Mathur, certify that:
| 1. | I have reviewed this Annual Report on Form 10-K/A for the fiscal year ended December 31, 2024 of Limitless X Holdings Inc.; |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; | |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; | |
| 4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | |
| b. | Designed such internal controls over financial reporting, or caused such internal controls over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | |
| c. | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | |
| d. | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
| a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
| b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
| By: | /s/ Jaspreet Mathur | |
| Jaspreet Mathur | ||
| Chief Executive Officer | ||
| (Principal Executive Officer) | ||
| Date: May 9, 2025 |
Exhibit 31.2
Certification of Chief Financial Officer
Pursuant to Rule 13a-14(a) and 15d-14(a) Under the Securities Exchange Act of 1934, As Amended
As Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act
I, Benjamin Chung, certify that:
| 1. | I have reviewed this Annual Report on Form 10-K/A for the fiscal year ended December 31, 2024 of Limitless X Holdings Inc.; | |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; | |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; | |
| 4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | |
| b. | Designed such internal controls over financial reporting, or caused such internal controls over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | |
| c. | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | |
| d. | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
| a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and | |
| b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
| By: | /s/ Benjamin Chung | |
| Benjamin Chung | ||
| Chief Financial Officer | ||
| (Principal Financial Officer and Principal Accounting Officer) | ||
| Date: May 9, 2025 |
Exhibit 32.1
Certification of Principal Executive Officer Pursuant to
18 U.S.C. Section 1350 As Adopted Pursuant to
Section 906 of the Sarbanes-Oxley Act
In connection with the Annual Report of Limitless X Holdings Inc. (the “Company”) on Form 10-K for the year ended December 31, 2024 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Jaspreet Mathur, in the capacity and on the date indicated below, certify that, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § Section 906 of the Sarbanes-Oxley Act of 2002, that:
| 1. | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
| 2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
| By: | /s/ Jaspreet Mathur | |
| Name: | Jaspreet Mathur | |
| Title: | Chief Executive Officer | |
| (Principal Executive Officer) |
Date: May 9, 2025
Exhibit 32.2
Certification of Principal Financial and Accounting Officer Pursuant to
18 U.S.C. Section 1350 As Adopted Pursuant to
Section 906 of the Sarbanes-Oxley Act
In connection with the Annual Report of Limitless X Holdings Inc. (the “Company”) on Form 10-K for the year ended December 31, 2024 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Benjamin Chung, in the capacity and on the date indicated below, certify that, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § Section 906 of the Sarbanes-Oxley Act of 2002, that:
| 1. | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and | |
| 2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
| By: | /s/ Benjamin Chung | |
| Benjamin Chung | ||
| Chief Financial Officer | ||
| (Principal Financial Officer and Principal Accounting Officer) |
Date: May 9, 2025