UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM
(Mark One)
For
the quarterly period ended
For the transition period from __________ to ___________
Commission
file number:
(Exact name of registrant as specified in its charter)
| (State of Incorporation) | (IRS Employer ID Number) |
(Address of Principal Executive Offices)
(Registrant’s Telephone number)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
| N/A | N/A | N/A |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to the filing requirements for the past 90 days.
| ☒ | No | ☐ |
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 for Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
| ☒ | No | ☐ |
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☐ | Accelerated filer | ☐ |
| ☒ | Smaller reporting company | ||
| Emerging growth company | |||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
| Yes | ☐ | No |
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
As of December 23, 2024, there were shares of the registrant’s common stock, $ par value, issued and outstanding.
TABLE OF CONTENTS
| i |
LIMITLESS X HOLDINGS INC.
PART I – FINANCIAL INFORMATION
Item 1. Financial Statements
LIMITLESS X HOLDINGS INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
| (Unaudited) | ||||||||
| September 30, | 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 | ||||||||
| Additional paid-in-capital | ||||||||
| Retained earnings | ( | ) | ( | ) | ||||
| Total stockholders’ deficit | ( | ) | ( | ) | ||||
| Total liabilities and stockholders’ deficit | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| 1 |
LIMITLESS X HOLDINGS INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2023 | 2023 | |||||||||||||||
| 2024 | (As Restated) | 2024 | (As Restated) | |||||||||||||
| 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 | ||||||||||||||||
| Stock compensation for services | ||||||||||||||||
| Professional fees | ||||||||||||||||
| Payroll and payroll taxes | ||||||||||||||||
| Rent | ||||||||||||||||
| Bad debt | ||||||||||||||||
| Consulting fees, related party | ||||||||||||||||
| Total operating expenses | ||||||||||||||||
| Loss from operations | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other income (expense) | ||||||||||||||||
| Interest expense | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other income | ||||||||||||||||
| Other expense | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| 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 unaudited condensed consolidated financial statements.
| 2 |
LIMITLESS X HOLDINGS INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT
| Common Stock | Additional | Total | ||||||||||||||||||||||||||||||||||||||||||
| Preferred Stock B | Preferred Stock A | Common Stock | Issuable |
Pain-In | Retained | Stockholder’s | ||||||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | Capital | Earnings | Equity | ||||||||||||||||||||||||||||||||||
| Balance at December 31, 2023 (restated) | $ | | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||||||||||||||
| Conversion of Preferred Stock B to common stock | ( | ) | ( | ) | - | - | ||||||||||||||||||||||||||||||||||||||
| Conversion of accrued wages to common stock | - | - | - | |||||||||||||||||||||||||||||||||||||||||
| Net loss | - | - | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||
| Balance at September 30, 2024 | $ | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||||||||||||||||
| Balance at June 30, 2024 (restated) | $ | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||||||||||||||||
| Conversion of Preferred Stock B to common stock | ( | ) | ( | ) | - | - | ||||||||||||||||||||||||||||||||||||||
| Conversion of accrued wages to common stock | - | - | - | |||||||||||||||||||||||||||||||||||||||||
| Net loss | - | - | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||
| Balance at September 30, 2024 | $ | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||||||||||||||||
| Preferred Stock B | Preferred Stock A | Common Stock | Common Stock Issuable | Additional Pain-In | Retained | Total Stockholder’s | ||||||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | Capital | Earnings | Equity | ||||||||||||||||||||||||||||||||||
| Balance at December 31, 2022 (restated) | $ | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||||||||||||||||
| Issuance of common stock | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||
| Vybe deconsolidation | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||
| Net loss | - | - | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||
| Balance at September 30, 2023 | $ | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||||||||||||||||
| Balance at June 30, 2023 (restated) | $ | $ | $ | $ | $ | $ | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||
| Net loss | - | - | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||
| Balance at September 30, 2023 | $ | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||||||||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| 3 |
LIMITLESS X HOLDINGS INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
| Nine Months Ended September 30, | ||||||||
| 2023 | ||||||||
| Years Ended December 31, | 2024 | (As Restated) | ||||||
| Cash flows from operating activities: | ||||||||
| Net loss from continuing operations | $ | ( | ) | $ | ( | ) | ||
| Income (loss) from discontinued operations | ( | ) | ||||||
| Adjustments to reconcile net loss to net cash provided by operating activities: | ||||||||
| Depreciation | ||||||||
| 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 | ||||||||
| Proceeds from 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 Preferred Class B shares to common stock | $ | $ | ||||||
| Conversion of accrued wages 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 unaudited condensed consolidated financial statements.
| 4 |
LIMITLESS X HOLDINGS INC.
NOTES TO UNAUDITED CONDENSED 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 nine 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.
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accompanying unaudited interim consolidated financial statements as of and for the three and nine months ended September 30, 2024 and 2023 have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q. Accordingly, they do not include all of the information and notes required by US GAAP for complete financial statements. In the opinion of management, all adjustments (consisting only of normal recurring accruals) considered necessary for a fair presentation have been included. All intercompany balances and transactions have been eliminated in consolidation. Operating results for the three and nine months ended September 30, 2024 are not necessarily indicative of the results that may be expected for any future periods or the year ending December 31, 2024. The accompanying unaudited consolidated financial statements should be read in conjunction with the Company’s 2023 Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on April 18, 2024.
| 5 |
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 approximately $
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.
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. and Prime Time Live, Inc. (collectively, the “Company”). All intercompany balances have been eliminated during consolidation.
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.
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 products and services to a large number of customers. The risk of non-payment by these customers is considered minimal and the Company does not generally obtain collateral for sales. The Company continually monitors the credit standing of its customers.
Accounts Receivable, net
Accounts receivable, net consists primarily of trade receivables, net of allowances for doubtful accounts. The Company sells its products 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.
| 6 |
Holdback Receivables
The Company primarily sells its products online using various third-party sales affiliates. These affiliates (online marketing campaign companies) are paid certain commission based on their ability to provide the Company’s products through online sales. All payments are processed through various gateways and are settled through the Company’s payment gateway settler. The Company payment gateway settler is not responsible for settlements that are not paid due to processing bank failure. The Company holds responsibility for all the risk in all transactions and processing systems. The payment gateway settler charges a reserve fee to mitigate the risk on their end for any loss of funds or damages.
Distributions of the holdback receivables from the third-party payment gateway settler are based on several criteria, such as return and chargeback history, associated risk for the specific business vertical, average transaction amount, and so on. In order to mitigate processing risks, there are policies regarding reserve requirements and payment in arrears in place.
The
total holdback receivables balance reflects the
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
Property
and equipment are recorded at cost and consists of screen video and related equipment. Expenditures for major additions and improvements
are capitalized and minor replacements, maintenance, and repairs are charged to expense as incurred. When property and equipment are
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 to
| 7 |
Revenue Recognition
| ● | Product Sales | |
| The Company recognizes revenue when performance obligations under the terms of a contract with a 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. 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. | ||
| 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 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. | ||
| 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. | ||
| ● | Service Revenue | |
| Service revenue consists of digital marketing revenue. Revenue related to digital marketing is recognized over time as services are provided to the customer. The Company sells digital marketing, digital and print design, social media marketing, and direct-to-consumer marketing and thus uses standalone selling prices as the basis for revenue. Payment for digital marketing services is typically received at the point when control transfers to the customer or in accordance with payment terms customary to the business. There was no deferred revenue related to services revenue as of September 30, 2024 and December 31, 2023. |
Cost of Sales
Cost of sales includes the cost of inventory sold during the period, as well as 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
| 8 |
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.
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 upon 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 three and nine months ended September 30, 2024 and 2023.
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 three and nine months ended September 30, 2024 and 2023, the Company granted no securities under its 2020 Stock Incentive Plan, 2022 Restricted Stock 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 inventories from a few suppliers, and the Company’s one largest supplier accounted for
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 arrangements 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 month-to-month lease as of September 30, 2024.
| 9 |
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.
Recent Accounting Pronouncements
In December 2019, FASB issued 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. The Company is currently evaluating the effects the adoption of this guidance will have on the financial statements and does not expect that the adoption of this ASU will be material to its financial statements.
Other recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force) 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 – RESTATEMENT
The Company filed amended Form 10-K/A for the years ended December 31, 2023 and 2022, filed on December 3, 2024. The restatement adjustments for the year ended December 31, 2022 and 2023 had impact as of September 30, 2023 and for the three and nine months ended September 30, 2023.
A reconciliation from the amounts previously reported for the affected periods to the restated amounts in the restated consolidated financial statements is provided for the impacted financial statement line items below for the consolidated balance sheets as of September 30, 2023 and for the three and nine months ended September 30, 2023. The amounts labeled “Restatement” represent the effects of the restatement adjustments.
| Adjustment 1 | The
Company recorded holdback receivables of $ | |
| Adjustment 2 | The
Company wrote-off inventories of $ | |
| Adjustment 3 | The
Company wrote off inventory balance of $ |
| 10 |
| Adjustment 4 | The
Company recorded payroll liability as of December 31, 2022 in the amount of $ | |
| Adjustment 5 | The
Company recorded additional advertising and marketing liabilities as of December 31, 2022 in the amount of $ | |
| Adjustment 6 | The
Company netted service revenue with related marketing expenses for the nine months ended September 30, 2023 in the amount of $ | |
| Adjustment 7 | The Company classified Vybe subsidiary’s profit and loss for the year ended December 31, 2023 as net loss from discontinued operations. | |
| Adjustment 8 | The
Company recorded shares issued for services in the amount of $ | |
| Adjustment 9 | The
Company recorded gain from deconsolidation of Vybe of $ | |
| Adjustment 10 | The
Company wrote-off accounts receivables deemed uncollectable as of December 31, 2022 in the amount of $ | |
| Adjustment 11 | The
Company wrote-off inventories of $ | |
| Adjustment 12 | The
Company adjusted intercompany gain on deconsolidation in the amount of $ | |
| Adjustment 13 | The Company reclassified transaction fees, merchant fees, royalty fees to cost of revenue for the three and nine months ended September 30, 2024. | |
| Adjustment 14 | The Company wrote-off holdback receivables as of September 30, 2023 and June 30, 2023 brining to none as of September 30, 2023 and June 30, 2023. |
The changes in our consolidated financial statements are summarized below.
| 11 |
Limitless X Holdings, Inc.
Consolidated Balance Sheets
| (Previously | ||||||||||||
| September 30, 2023 | Reported) | Restatement | (As Restated) | |||||||||
| ASSETS | ||||||||||||
| Current Assets: | ||||||||||||
| Cash | $ | $ | $ | |||||||||
| Accounts receivables, net | ||||||||||||
| Holdback receivables, net | ( | ) | ||||||||||
| Inventories | ( | ) | ||||||||||
| Due to related parties | ||||||||||||
| 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 | $ | |||||||||||
| Royalty payable | ||||||||||||
| Refunds and chargeback payable | ||||||||||||
| Income | ||||||||||||
| Note payable | ||||||||||||
| Convertible notes payable | ||||||||||||
| Notes payable to shareholder | ||||||||||||
| Notes payable to related parties | ||||||||||||
| Total current liabilities | ||||||||||||
| Total liabilities | ||||||||||||
| Commitments and contingencies | ||||||||||||
| 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 | ||||||||||||
| Additional paid-in-capital | ||||||||||||
| Retained earnings | ( | ) | ( | ) | ( | ) | ||||||
| Total stockholders’ deficit | ( | ) | ( | ) | ( | ) | ||||||
| Total liabilities and stockholders’ deficit | $ | $ | ( | ) | $ | |||||||
| 12 |
Limitless X Holdings, Inc.
Consolidated Statements of Operations
Three Months Ended September 30, 2023
| Three Months Ended September 30, 2023 | ||||||||||||
| (Previously | ||||||||||||
| Reported) | Restatement | (As Restated) | ||||||||||
| Net Revenue | ||||||||||||
| Product sales | ||||||||||||
| Service revenue | ( | ) | ||||||||||
| Rentals | ||||||||||||
| Total net revenue | ( | ) | ||||||||||
| Cost of Revenue | ||||||||||||
| Cost of revenue | ||||||||||||
| Total cost of sales | ||||||||||||
| Gross profit | ( | ) | ||||||||||
| Operating expenses: | ||||||||||||
| General and administrative | ( | ) | ||||||||||
| Advertising and marketing | ( | ) | ||||||||||
| Transaction fees | ( | ) | ||||||||||
| Merchant fees | ( | ) | ||||||||||
| Royalty fees | ( | ) | ||||||||||
| Professional fees | ( | ) | ||||||||||
| Payroll and payroll taxes | ( | ) | ||||||||||
| Rent | ||||||||||||
| Total operating expenses | ( | ) | ||||||||||
| Loss from operations | ( | ) | ( | ) | ||||||||
| Other income (expense) | ||||||||||||
| Interest expense | ( | ) | ( | ) | ||||||||
| Other expense | ( | ) | ( | ) | ||||||||
| 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 | ||||||||||||
| 13 |
Limitless X Holdings, Inc.
Consolidated Statements of Operations
Nine Months Ended September 30, 2023
| Nine Months Ended September 30, 2023 | ||||||||||||
| (Previously | ||||||||||||
| Reported) | Restatement | (As Restated) | ||||||||||
| Net Revenue | ||||||||||||
| Product sales | ||||||||||||
| Service revenue | ( | ) | ||||||||||
| Rentals | ||||||||||||
| Total net revenue | ( | ) | ||||||||||
| Cost of Revenue | ||||||||||||
| Cost of revenue | ||||||||||||
| Total cost of sales | ||||||||||||
| Gross profit | ( | ) | ||||||||||
| Operating expenses: | ||||||||||||
| General and administrative | ( | ) | ||||||||||
| Advertising and marketing | ( | ) | ||||||||||
| Stock compensation for services | ||||||||||||
| Transaction fees | ( | ) | ||||||||||
| Merchant fees | ( | ) | ||||||||||
| Royalty fees | ( | ) | ||||||||||
| Professional fees | ( | ) | ||||||||||
| Payroll and payroll taxes | ||||||||||||
| Rent | ||||||||||||
| Bad debt expense | ||||||||||||
| Consulting fees, related party | ||||||||||||
| Total operating expenses | ( | ) | ||||||||||
| Loss from operations | ( | ) | ( | ) | ( | ) | ||||||
| Other income (expense) | ||||||||||||
| Interest expense | ( | ) | ( | ) | ||||||||
| Other expense | ( | ) | ( | ) | ||||||||
| Loss on debt settlement | ( | ) | ||||||||||
| Total other income (expense), net | ( | ) | ( | ) | ||||||||
| Net loss from continuing operations | ( | ) | ( | ) | ( | ) | ||||||
| Loss from discontinued operations | ( | ) | ( | ) | ||||||||
| Loss before income tax provision | ( | ) | ( | ) | ( | ) | ||||||
| Income tax provision | ||||||||||||
| Net loss before gain or loss on deconsolidation of subsidiary | ( | ) | ( | ) | ( | ) | ||||||
| Gain on deconsolidation of subsidiary | ( | ) | ||||||||||
| 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 | ||||||||||||
| 14 |
Limitless X Holdings, Inc.
Consolidated Statements of Cash Flows
Nine Months Ended September 30, 2023
| Nine Months Ended September 30, 2023 | ||||||||||||
| (Previously | ||||||||||||
| Reported) | Restatement | (As Restated) | ||||||||||
| Cash flows from operating activities: | ||||||||||||
| Net loss from continuing operations | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||
| Income (loss) from discontinued operations | ( | ) | ( | ) | ||||||||
| Adjustments to reconcile net loss to net cash provided by operating activities: | ||||||||||||
| Depreciation | ||||||||||||
| Common stock issued for professional services | ( | ) | ||||||||||
| Loss on settlement of debt | ( | ) | ||||||||||
| Gain on deconsolidation of subsidiary | ( | ) | ||||||||||
| Changes in assets and liabilities: | ||||||||||||
| Accounts receivables, net | ||||||||||||
| Holdback receivables | ( | ) | ||||||||||
| Inventories | ( | ) | ||||||||||
| Due from related party | ( | ) | ||||||||||
| Other assets | ||||||||||||
| Accounts payable and accrued expenses | ( | ) | ||||||||||
| Refunds and chargeback payable | ||||||||||||
| Royalty 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 financing activities | ( | ) | ( | ) | ||||||||
| Cash flows from financing activities: | ||||||||||||
| Proceeds from convertible debt | ||||||||||||
| Proceeds from borrowings from stockholder | ||||||||||||
| Net cash provided by financing activities | ||||||||||||
| Net increase(decrease) in cash | ( | ) | ( | ) | ||||||||
| Deconsolidation - cash | ( | ) | ||||||||||
| Cash – beginning of period | ( | ) | ||||||||||
| Cash – end of period | $ | $ | $ | |||||||||
| 15 |
NOTE 4 – PROPERTY AND EQUIPMENT
Property and equipment consisted of the following:
| September 30, | December 31, | |||||||
| 2024 | 2023 | |||||||
| Machinery and equipment | $ | $ | ||||||
| Total | ||||||||
| Less: accumulated depreciation | ( | ) | ( | ) | ||||
| Total equipment, net | $ | $ | ||||||
Depreciation
expense for the three months ended September 30, 2024 and 2023 was $
NOTE 5 – 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
On October 1, 2023, the Company terminated each of the License Agreements; however, the Company maintained its license for NZT-48 with LPI.
The
Company was required to start paying all earned royalties to each of the Licensors beginning on June 15, 2022. As of October 1, 2023,
the royalty payable was $
NOTE 6 – NOTE PAYABLE
On
March 1, 2021, an individual loaned Prime Time Live, Inc. $
| September 30, | December 31, | |||||||
| 2024 | 2023 | |||||||
| 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. As September 30, 2024 and December 31, 2023, 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 of $ was due on May 1, 2023.
| 16 |
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. As of September 30, 2024 and December 31, 2023, 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 of $ was due on May 1, 2023.
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, 2024 and December 31, 2023, 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 of $ was due on May 1, 2023.
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. As of September 30, 2024 and December 31, 2023, the principal balance was $ and $, respectively. Interest began accruing at the rate of % per annum on June 17, 2022 and was due on May 16, 2023.
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. As of September 30, 2024 and December 31, 2023, the principal balance was $ and $, respectively. Interest began accruing at the rate of % per annum on June 19, 2022 and was due on May 18, 2023.
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. As of September 30, 2024 and December 31, 2023, the principal balance was $ and $, respectively. 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 of $ was due on July 1, 2023.
June 30, 2022 – $922,028
On September 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. As of September 30, 2024 and December 31, 2023, the principal balance was $ and $, respectively. 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 of $ was due on August 1, 2023.
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. As of September 30, 2024 and December 31, 2023, the principal balance was $ and $, respectively.
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. As of September 30, 2024 and December 31, 2023, the principal balance was $ and $, respectively.
| 17 |
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. As of September 30, 2024 and December 31, 2023, the principal balance was $.
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. As of September 30, 2024 and December 31, 2023, the principal balance was $.
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. As of September 30, 2024 and December 31, 2023, the principal balance was $.
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 $
| September 30, | December 31, | |||||||
| 2024 | 2023 | |||||||
| June 20, 2023 ($) | $ | $ | ||||||
| July 13, 2023 ($) | ||||||||
| August 1, 2023 ($) | ||||||||
| August 7, 2023 ($ original) | ||||||||
| Total notes payable to related parties (current) | $ | $ | ||||||
As
of September 30, 2024 and December 31, 2023, the balance of the Funding Commitment was $
| 18 |
NOTE 8 – NOTES PAYABLE TO RELATED PARTIES
Notes payable to related parties consisted of the following:
| September 30, | December 31, | |||||||
| 2024 | 2023 | |||||||
| May 10, 2022 ($ | $ | $ | ||||||
| May 10, 2022 ($ | ||||||||
| May 10, 2022 ($ | ||||||||
| May 31, 2022 ($ | ||||||||
| May 31, 2022 ($ | ||||||||
| June 9, 2022 ($ | ||||||||
| March 12. 2024 ($ | ||||||||
| March 15, 2024 ($ | ||||||||
| March 27, 2024 ($ | ||||||||
| June 30, 2024 ($ | ||||||||
| Total notes payable to related parties (current) | $ | $ | ||||||
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
May 10, 2022, a related party of the Company loaned Prime Time Live, Inc. $
| 19 |
March 12, 2024 - $20,000
On
March 12, 2024, EM1 Capital, a company owned by the shareholder of the company, a related party, provided $
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 $
June 30, 2024 - $44,168
On
September 30, 2024, EM1 Capital, a company owned by the shareholder of the company, a related party, provided $
NOTE 9 – LOAN PAYABLE
The
Company entered into a loan payable agreement in July 2024 in the amount of $
NOTE 10 – STOCKHOLDERS’ DEFICIT
Common Stock
As of September 30, 2024 and December 31, 2023, the Company has authorized shares of common stock par value $ per share. As of September 30, 2024 and December 31, 2023, there was a total of and shares issued and outstanding, respectively.
Preferred Stock
As of September 30, 2024 and December 31, 2023, the Company has authorized shares of preferred stock, shares of which were designated as Class A Convertible Preferred Stock (“Class A Preferred Stock”). and shares of which were designated as Class B Convertible Preferred Stock.
Class A Convertible Stock
As
of September 30, 2024 and December 31, 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 $
On
October 23, 2023, pursuant to certain Conversion Agreements, the Company issued an aggregate of shares of Class
B Preferred Stock and extinguished $
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
September 2024, approximately Class B Convertible Stock was converted into common stock in accordance with the terms of the agreement. As a result, the Company
recorded common shares which was classified as common stock issuable as of September 30, 2024 as these shares were issued in October 2024. The conversion to
common stock resulted in reduction of Clas B Preferred Stock amount of $
| 20 |
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.
Stock Incentive Plans
Effective January 15, 2020, the Company adopted its 2020 Stock Option and Award Plan (the “2020 Stock Incentive Plan”). A total ofshares of the Company’s common stock were reserved for the 2020 Stock Incentive Plan. As of September 30, 2024, there were grants made under the 2020 Stock Incentive Plan. On May 4, 2023, the Company terminated 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. As of September 30, 2024, there have been options to purchase shares of common stock granted under the 2022 Stock Option Plan.
Effective August 9, 2022, the Company adopted its 2022 Restricted Stock Plan (the “2022 Restricted Stock Plan”). Under the 2022 Restricted Stock Plan, the Board of Directors may grant restricted stock to officers, directors, and key employees. A total of shares of common stock is reserved for the 2022 Restricted Stock Plan. As of September 30, 2024, there have been shares of common stock granted under the 2022 Restricted Stock Plan.
NOTE 12 – 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. As of September 30, 2024 and December 31, 2023, the Company had $ outstanding. Refer to Note 7. | |
| ● | 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 $ | |
| ● | Consulting
Fees – During the three and nine months ended September 30, 2024, the Company incurred consulting fees in the amount
of $ |
NOTE 13 – COMMITMENTS AND CONTINGENCIES
Contingencies
From time to time, the Company may be involved in certain legal actions and claims arising in the normal course of business. Management is of the opinion that such matters will be resolved without material effect on the Company’s financial condition or results of operations. The Company did not have any legal actions or claims that have a material effect on the results of operation or financial position of the Company.
NOTE 14 – SUBSEQUENT EVENTS
The Company evaluated all events or transactions that occurred after September 30, 2024. During this period, the Company did not have any material recognizable subsequent events required to be disclosed other than the following:
| ● | In September 2024, approximately Class B Convertible Stock was converted into common stock in accordance with the terms of the agreement. As a result, the Company recorded common shares which was classified as common stock issuable as of September 30, 2024. In October 2024, these shares were issued. |
| 21 |
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
Forward-Looking Statements and Associated Risks.
This Quarterly Report on Form 10-Q 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 Form 10-Q 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,” “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; and failure to successfully develop business relationships.
INTRODUCTION
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 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 nine 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 LimitlessX Acquisition 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 LimitlessX Acquisition, the historical financial information for periods prior to the LimitlessX Acquisition 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. (“we,” “us,” or “our”).
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RESULTS OF OPERATION
For the Three Months Ended September 30, 2024 Compared to the Three Months Ended September 30, 2023:
| Three Months Ended September 30, | ||||||||||||||||||||||||
| 2024 | 2023 | Changes | ||||||||||||||||||||||
| % of | % of | |||||||||||||||||||||||
| Amount | Sales | Amount | Sales | Amount | % | |||||||||||||||||||
| Revenue | ||||||||||||||||||||||||
| Product sales | $ | 607,161 | 100.0 | % | $ | 1,047,271 | 100.0 | % | $ | (440,110 | ) | -42.0 | % | |||||||||||
| Total revenue | 607,161 | 100.0 | % | 1,047,271 | 100.0 | % | (440,110 | ) | -42.0 | % | ||||||||||||||
| Cost of sales | ||||||||||||||||||||||||
| Cost of sales | 154,287 | 25.4 | % | 669,539 | 63.9 | % | (515,252 | ) | -77.0 | % | ||||||||||||||
| Total cost of sales | 154,287 | 25.4 | % | 669,539 | 69.9 | % | (515,252 | ) | -77.0 | % | ||||||||||||||
| Gross profit | 452,874 | 74.6 | % | 377,732 | 36.1 | % | 75,142 | 19.9 | % | |||||||||||||||
| Operating expenses: | ||||||||||||||||||||||||
| General and administrative | 7,888 | 1.3 | % | 31,883 | 3.0 | % | (23,995 | ) | -75.3 | % | ||||||||||||||
| Advertising and marketing | 542,081 | 89.3 | % | 611,799 | 58.4 | % | (69,718 | ) | -11.4 | % | ||||||||||||||
| Professional fees | 46,732 | 7.7 | % | 91,093 | 8.7 | % | (44,361 | ) | -48.7 | % | ||||||||||||||
| Payroll and payroll taxes | 358,250 | 59.0 | % | 859,511 | 82.1 | % | (501,261 | ) | -58.3 | % | ||||||||||||||
| Rent | - | 0.0 | % | 37,609 | 3.6 | % | (37,609 | ) | -100.0 | % | ||||||||||||||
| Total operating expenses | 954,951 | 157.3 | % | 1,631,895 | 155.8 | % | (676,944 | ) | -41.5 | % | ||||||||||||||
| Income (loss) from operations | (502,077 | ) | -82.7 | % | (1,254,163 | ) | -119.8 | % | 752,086 | -60.0 | % | |||||||||||||
| Other income (expense) | ||||||||||||||||||||||||
| Interest expense | (194,063 | ) | -32.0 | % | (275,856 | ) | -26.3 | % | 81,793 | -29.7 | % | |||||||||||||
| Other expense | (15,000 | ) | -2.5 | % | (132,000 | ) | -21.7 | % | 117,000 | N/A | ||||||||||||||
| Loss on debt settlement | (15,445 | ) | -2.5 | % | - | 0.0 | % | (15,445 | ) | N/A | ||||||||||||||
| Total other income (expense), net | (224,508 | ) | -37.0 | % | (407,856 | ) | -38.9 | % | 183,348 | -45.0 | % | |||||||||||||
| Net loss from continuing operations | (726,585 | ) | -119.7 | % | (1,662,019 | ) | -158.7 | % | 935,434 | -56.3 | % | |||||||||||||
| Loss from discontinued operations | - | 0.0 | % | (43,201 | ) | -4.1 | % | 43,201 | -100.0 | % | ||||||||||||||
| Income (loss) before income tax provision | (726,585 | ) | -119.7 | % | (1,705,220 | ) | -162.8 | % | 978,635 | -57.4 | % | |||||||||||||
| Income tax provision | - | 0.0 | % | (48 | ) | 0.0 | % | 48 | -100.0 | % | ||||||||||||||
| Net income (loss) | $ | (726,585 | ) | -119.7 | % | $ | (1,705,172 | ) | -162.8 | % | $ | 978,587 | -57.4 | % | ||||||||||
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Product Sales - Our product sales decreased by $0.4 million to $0.6 million for the three months ended September 30, 2024 as compared to 1.0 million for the three months ended September 30, 2023. In 2023, there was a shift in our marketing and selling strategies, including a change in performance marketers and platforms, which resulted in the decrease of product sales.
Cost of Sales - Our cost of sales decreased from $0.7 million, or 63.9% of sales, in the three months ended September 30, 2023 to $0.2 million, or 25.4% of sales, in the three months ended September 30, 2024. As operations decreased during the period, so did our costs for freight, inventory, and other supplies.
Gross Profit - Gross profit for the three months ended September 30, 2024 was $0.5 million compared to $0.4 million for the three months ended September 30, 2023. The decrease in gross profit of $0.1 million was primarily due to a shift in our marketing and selling strategies, including a change in performance marketers and platforms.
Operating Expenses - During the three months ended September 30, 2024, we recognized $1.0 million in operating expenses compared to $1.6 million for the three months ended September 30, 2023. The decrease of $0.6 million in operating expenses was primarily due to the decrease in our advertising, marketing, and payroll expenses, as well as a decrease in transaction fees, merchant fees, and royalty fees.
| ● | Our advertising and marketing expenses decreased by $0.1 million due to a shift in marketing strategies from relying on performance marketers and celebrity endorsements. | |
| ● | The decrease in payroll due to reduction in headcounts of $0.5 million. | |
| ● | The decrease in transaction fees and merchant fees are directly related to the decreased number of transactions during the nine months ended September 30, 2024 compared to the same period prior year. |
Other Income or Expense - During the three months ended September 30, 2024, we had interest expense of $0.2 million compared to $0.3 million. The decrease in interest expense was due to conversion of convertible debt to Preferred B Shares.
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For the Nine Months Ended September 30, 2024 Compared to the nine Months Ended September 30, 2023:
| Nine Months Ended September 30, | ||||||||||||||||||||||||
| 2024 | 2023 | Changes | ||||||||||||||||||||||
| % of | % of | |||||||||||||||||||||||
| Amount | Sales | Amount | Sales | Amount | % | |||||||||||||||||||
| Revenue | ||||||||||||||||||||||||
| Product sales | $ | 3,024,112 | 100.0 | % | $ | 13,893,798 | 99.9 | % | $ | (10,869,686 | ) | -78.2 | % | |||||||||||
| Rentals | - | 0.0 | % | 15,000 | 0.1 | % | (15,000 | ) | -100.0 | % | ||||||||||||||
| Total revenue | 3,024,112 | 100.0 | % | 13,908,798 | 100.0 | % | (10,884,686 | ) | -78.3 | % | ||||||||||||||
| Cost of sales | ||||||||||||||||||||||||
| Cost of sales | 797,565 | 26.4 | % | 7,179,430 | 51.6 | % | (6,381,865 | ) | -88.9 | % | ||||||||||||||
| Total cost of sales | 797,565 | 26.4 | % | 7,179,430 | 51.6 | % | (6,381,865 | ) | -88.9 | % | ||||||||||||||
| Gross profit | 2,226,547 | 73.6 | % | 6,729,368 | 48.4 | % | (4,502,821 | ) | -66.9 | % | ||||||||||||||
| Operating expenses: | ||||||||||||||||||||||||
| General and administrative | 252,642 | 8.4 | % | 1,042,436 | 7.5 | % | (789,794 | ) | -75.8 | % | ||||||||||||||
| Advertising and marketing | 1,939,391 | 64.1 | % | 14,466,470 | 104.0 | % | (12,527,079 | ) | -86.6 | % | ||||||||||||||
| Stock compensation for services | - | 0.0 | % | 141,020 | 1.0 | % | (141,020 | ) | -100.0 | % | ||||||||||||||
| Professional fees | 616,459 | 20.4 | % | 1,211,211 | 8.7 | % | (594,752 | ) | -49.1 | % | ||||||||||||||
| Payroll and payroll taxes | 1,345,835 | 44.5 | % | 2,931,357 | 21.1 | % | (1,585,522 | ) | -54.1 | % | ||||||||||||||
| Rent | 69,389 | 2.3 | % | 123,401 | 0.9 | % | (54,012 | ) | -43.8 | % | ||||||||||||||
| Bad debt | - | 0.0 | % | 342,539 | 2.5 | % | (342,539 | ) | -100.0 | % | ||||||||||||||
| Consulting fees, related party | - | 0.0 | % | 10,000 | 0.1 | % | (10,000 | ) | -100.0 | % | ||||||||||||||
| Total operating expenses | 4,223,716 | 139.7 | % | 20,268,434 | 145.7 | % | (16,044,718 | ) | -79.2 | % | ||||||||||||||
| Income (loss) from operations | (1,997,169 | ) | -66.0 | % | (13,539,066 | ) | -97.3 | % | 11,541,897 | -85.2 | % | |||||||||||||
| Other income (expense) | ||||||||||||||||||||||||
| Interest expense | (420,868 | ) | -13.9 | % | (731,616 | ) | -5.3 | % | 310,748 | -42.5 | % | |||||||||||||
| Other income | 7,902 | 0.3 | % | - | 0.0 | % | 7,902 | n/a | ||||||||||||||||
| Other expense | (7,825 | ) | -0.3 | % | (162,000 | ) | -1.2 | % | 154,175 | -95.2 | % | |||||||||||||
| Loss on debt settlement | (33,112 | ) | -1.1 | % | - | 0.0 | % | (33,112 | ) | n/a | ||||||||||||||
| Total other income (expense), net | (453,903 | ) | -15.0 | % | (893,616 | ) | -6.4 | % | 439,713 | -49.2 | % | |||||||||||||
| Net loss from continuing operations | (2,451,072 | ) | -81.1 | % | (14,432,682 | ) | -103.8 | % | 11,981,610 | -83.0 | % | |||||||||||||
| Loss from discontinued operations | - | 0.0 | % | (1,854 | ) | 0.0 | % | 1,854 | -100.0 | % | ||||||||||||||
| Income (loss) before income tax provision | (2,451,072 | ) | -81.1 | % | (14,434,536 | ) | -103.8 | % | 11,983,464 | -83.0 | % | |||||||||||||
| Income tax provision | 915 | 0.0 | % | - | 0.0 | % | 915 | n/a | ||||||||||||||||
| Net income (loss) | $ | (2,451,987 | ) | -81.1 | % | $ | (14,434,536 | ) | -103.8 | % | $ | 11,982,549 | -83.0 | % | ||||||||||
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Product Sales - Our product sales decreased by $10.9 million to $3.0 million for the nine months ended September 30, 2024 as compared to $13.9 million for the nine months ended September 30, 2023. In 2023, there was a shift in our marketing and selling strategies, including a change in performance marketers and platforms, which resulted in the decrease of product sales.
Cost of Sales - Our cost of sales decreased from $7.2 million, or 51.6% of sales, in the nine months ended September 30, 2023 to $0.8 million, or 26.4% of sales, in the nine months ended September 30, 2024. As operations decreased during the period, so did our costs for freight, inventory, and other supplies.
Gross Profit - Gross profit for the nine months ended September 30, 2024 was $2.2 million compared to $6.7 million for the nine months ended September 30, 2023. The decrease in gross profit of $4.5 million was primarily due to a shift in our marketing and selling strategies, including a change in performance marketers and platforms.
Operating Expenses - During the nine months ended September 30, 2024, we recognized $4.2 million in operating expenses compared to $20.2 million for the nine months ended September 30, 2023. The decrease of $16.0 million in operating expenses was primarily due to the decrease in our advertising, marketing, and payroll expenses, as well as a decrease in transaction fees, merchant fees, and royalty fees.
| ● | Our advertising and marketing expenses decreased by 12.5 million due to a shift in marketing strategies from relying on performance marketers and celebrity endorsements. | |
| ● | The decrease in payroll due to reduction in headcounts of $1.6 million | |
| ● | The decrease in transaction fees and merchant fees are directly related to the decreased number of transactions during the nine months ended September 30, 2024 compared to the same period prior year. |
Other Income or Expense - During the nine months ended September 30, 2024, we had interest expense of $0.4 million compared to $0.9 million. The decrease in interest expense was due to conversion of convertible debt to Preferred B Shares.
LIQUIDITY AND CAPITAL RESOURCES
Operating Activities
During the nine months ended September 30, 2024, net cash used in operating activities was $0.8 million. The cash used in operating activities was primarily due to net loss, timing of settlement of assets and liabilities, loss on settlement of debt, and was off-set by a gain in deconsolidation of a subsidiary.
Investing Activities
Net cash used in investing activities for the nine months ended September 30, 2024 and 2023 was $0 and $1,604 related to purchases of property and equipment.
Financing Activities
Net cash provided by financing activities for the nine months ended September 30, 2024 was $717,503. This amount was incurred by increased borrowings from investors and borrowings from a stockholder.
Off Balance Sheet Arrangements
None.
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ITEM 3. 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 4. CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
Our management, with the participation of our Chief Executive Officer and Chief Financial Officer evaluated the effectiveness of our disclosure controls and procedures pursuant to Rules 13a-15(e) and 15d-15(e) under the Exchange Act. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints, and that management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs.
Based on management’s evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as a result of the material weakness described below, as of September 30, 2024, our disclosure controls and procedures were not effective. Our disclosure controls were not designed at a reasonable assurance level and are ineffective to provide reasonable assurance that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.
The material weakness, which relates to internal control over financial reporting, that was identified is:
We did not have sufficient personnel in our accounting and financial reporting functions. As a result, we were not able to achieve adequate segregation of duties and were not able to provide for independent adequate reviewing of the financial statements. This control deficiency, which is pervasive in nature, results in a reasonable possibility that material misstatements of the financial statements will not be prevented or detected on a timely basis.
Management believes that the hiring of additional personnel who have the technical expertise and knowledge with the non-routine or technical issues we have encountered in the past will result in both proper recording of these transactions and a much more knowledgeable finance department as a whole. Due to the fact that our accounting staff consists of a Chief Financial Officer, a bookkeeper, and external accounting consultants, additional personnel will also ensure the proper segregation of duties and provide more checks and balances within the department. Additional personnel will also provide the cross training needed to support us if personnel turnover issues within the department occur. We believe this will eliminate or greatly decrease any control and procedure issues we may encounter in the future.
We will continue to monitor and evaluate the effectiveness of our disclosure 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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PART II – OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None.
ITEM 1A. RISK FACTORS
Our Annual Report on Form 10-K/A, filed with the SEC, on December 3, 2024, describes important risk factors that could cause our business, financial condition, results of operations, and growth prospects to differ materially from those indicated or suggested by forward-looking statements made in this Quarterly Report on Form 10-Q or presented elsewhere by management from time to time. There have been no material changes in the risk factors that appear in our Annual Report on Form 10-K. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial may also materially and adversely affect our business.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. MINE SAFETY DISCLOSURE
Not Applicable.
ITEM 5. OTHER INFORMATION
Our directors and executive officers may from time to time enter into plans or other arrangements for the purchase or sale of our common stock that are intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or may represent a non-Rule 10b5-1 trading arrangement under the Exchange Act. During the quarter ended September 30, 2024, no such plans or other arrangements were adopted or terminated.
ITEM 6. EXHIBITS
Exhibits. The following is a complete list of exhibits filed as part of this Form 10-Q. Exhibit numbers correspond to the numbers in the Exhibit Table of Item 601 of Regulation S-K.
*Filed herewith
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| LIMITLESS X HOLDINGS INC. | ||
| (Registrant) | ||
| Dated: December 23, 2024 | By: | /s/ Jaspreet Mathur |
| Jaspreet Mathur | ||
| (Chief Executive Officer, | ||
| Principal Executive Officer) | ||
| Dated: December 23, 2024 | By: | /s/ Benjamin Chung |
| Benjamin Chung | ||
(Chief Financial Officer, Principal Financial Officer and Principal Accounting Officer) | ||
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