EDGAR 10-K Filing

Company CIK: 1803977
Filing Year: 2024
Filename: 1803977_10-K_2024_0001493152-24-015181.json

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ITEM 1. BUSINESS
ITEM 1. BUSINESS.
Company Overview
Limitless X is 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.
Leadership
Jas Mathur, our Chairman and Chief Executive Officer, is an 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 staff 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 in the business world 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 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 fulfillment 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 Fulfillment
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 fulfillment 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
We constantly strive to find gaps in the relevant marketplace and help develop products that fill those gaps and meet or exceed the needs of the consumers. Because of our turnkey solution, we are able to launch products quickly and efficiently to meet consumer needs and cater to new advances in the health and wellness industry.
We believe that our experience has uniquely positioned us to scale and maintain an ecosystem of opinion leaders following wellness-focused brands. We believe we work with an “A-list” group of influencers who promote the products and services that are offered on our platform.
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.
Our Network of Influencers
We have brought together a network of high profile and influential individuals who have all have two things in common: Look Good and Feel Great. This includes: music artists, movie stars, professional athletes, popular social media influencers, fitness experts, and nutrition coaches. We utilize our network of influencers on an “as needed” basis and compensation terms vary depending on the influencer and product, as decided upon by our management. We do not have any formal long-term contracts with any one influencer. Our marketing team works with the brands to determine the appropriate audience for any given brand and reaches out to those persons in our network, who are then engaged to publicize on their media platforms a pre-approved post provided by our marketing team, and in turn, they receive commissions for sales of products they publicize. All of the products promoted are offered to consumers through our website.
Our Compliance Team
All of our compliance matters are managed in house by our Chief Operating Officer and our VP of Legal Affairs, including our data security, privacy rights, and ensuring that the products that we offer are in compliance with applicable government regulations. (See “Government Regulation” below.)
Our Strategy
We have manufacturing and distribution licensing agreements to market, manufacture, sell, and distribute the branded products on behalf of our licensors. The licensor retains the rights to continue its own use of these items under existing or new contracts in its discretion, and to develop new products. Our typical manufacturing and distribution licensing agreements allows us to:
(a) Design or redesign the products;
(b) Manufacture the products under such design specifications as may be mutually agreed upon by the licensor and us from time to time;
(c) Promote, sell, and distribute the products in the United States and its territories;
(d) Use the existing designs of the products and all intellectual property rights associated with or for such products, including all trademarks and patent rights, with the sale, promotion, and distribution of the products in the territory, including the display of any trademarks, and all other designs or marks which could be or that are actually later registered with the federal Patent and Trademark Office, on our vehicles and other merchandising equipment, and on stationery, packaging, and other advertising and promotional materials;
(e) Use the existing domain names, web addresses, telephone lines, third-party vendors, and any other operational element currently in use by the licensor that can be transferred to us; and
(f) Manufacture, promote, sell, and distribute new products designed or created by us that we deem preferable to sell under the licensor’s name; and in such case, we negotiate in good faith to agree on a royalty commission percentage or flat rate amount for the sale of new products using the licensor’s name.
Market Data and Research of Our Verticals
Health and Wellness
According to Zion Market Research, the global health and wellness market size is projected to reach $8,946 billion by the end of 2030, with a compound annual growth rate of approximately 6.9% between 2023 and 2030. In 2022, the market size was estimated to be $5,244 billion.
Intellectual Property
Currently, we do not own any registered trademarks, but we intend on acquiring some of the licenses we have worked with in the past and/or are working with today.
Seasonality
We do not experience seasonal variations in our quarterly operating results and capital requirements.
Human Capital
As of the date of this Annual Report, we have 12 full-time employees and no part-time employees. 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
There are no material proceedings to which any director or officer, or any associate of any such director or officer, is a party that is adverse to our Company or any of our subsidiaries or has a material interest adverse to our Company or any of our subsidiaries other than what is disclosed in the Company’s financial statements. No director or executive officer has been a director or executive officer of any business which has filed a bankruptcy petition or had a bankruptcy petition filed against it during the past ten years. No current director or executive officer has been convicted of a criminal offense or is the subject of a pending criminal proceeding during the past ten years. No current director or executive officer has been the subject of any order, judgment or decree of any court permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities during the past ten years. No current director or officer has been found by a court to have violated a federal or state securities or commodities law during the past ten years.
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 that alleged agreement such as conversion, fraud and unjust enrichment, Mentom Eyewear Inc. v. Limitless X Holdings Inc., et al., Case Number 23STCV24681. We believe that there was no such agreement, and that the plaintiff has no legal standing to bring such a matter against the Company or its officers. The case is moving into the discovery phase where we believe the true facts will lead to a dismissal; however, if the case continues, we will vigorously defend against such claims as it is our position that the allegations are not supported by the facts. No liability has been recorded for these litigations because the Company believes that any such liability is not probable and reasonably estimable at this time.
● 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 have not yet filed a responsive pleading in this action as we are attempting a global settlement; however, if unable to settle we will defend the case vigorously and will attempt a contractual and equitable indemnity claim against the advertiser. No liability has been recorded for this litigation because the Company believes that any such liability is not reasonably estimable at this time.
Properties
We own no property.
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 (“LimitlessX”), and its 11 shareholders (the “LimitlessX Acquisition”). The parties completed and closed the LimitlessX Acquisition on May 20, 2022. 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 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.
Subsidiaries
We have 2 subsidiaries, Limitless X, Inc, a Nevada corporation and Prime Time Live, Inc., a Colorado corporation.
Corporate Information
We are a Delaware corporation. Our corporate headquarters are located at 9454 Wilshire Blvd., #300, Beverly Hills, CA 90212. Our telephone number is (833) 888-8923. We maintain a website at www. https://www.limitlessx.com/.
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.
Our principal executive office located at 9454 Wilshire Blvd., #300, Beverly Hills, California 90212. Our main telephone number is 855-413-7030. Our website is https://limitlessx.com/. Our website or linked information included in our website are not incorporated into this Annual Report.

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ITEM 1A. RISK FACTORS
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.
● 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.
● 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 a highly competitive industry, 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 $16.1 million and $10.0 million for the years ended December 31, 2023 and 2022, respectively, and we had an accumulated deficit of $12.9 million at December 31, 2023. 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 2023. 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 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.
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, 2023, we incurred net losses of $16.1 million. We expect to continue to incur significant expenses and operating losses for the foreseeable future as we broaden our customer base, develop our retail and wholesale distribution platforms, and we 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 owned or controlled by our Chief Executive Officer and we may lose all of our business at any time.
All of the current brands and products that we sell and promote are owned or controlled by Jas Mathur, our Chief Executive Officer. If Mr. Mathur chooses, on behalf of his companies and/or brands, to terminate all of the agreements he has with us, we will effectively lose all of our current business. All of our licensing agreements with our current marketed brands were entered into in 2021 and have five-year terms, whereby the licensors are not able to terminate the agreement with us except “for cause.” However, all such licensing agreements only grant us a non-exclusive license to manufacture, market, and distribute the brand’s products. Therefore, there is a possibility that the brands could work with other companies to manufacture, market, and distribute their 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 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.
We may not be able to successfully continue the business of Prime Time Live.
As a result of the LimitlessX Acquisition, we also acquired the business of Prime Time Live, Inc. (“PTL”), a digital marketer and service provider in the event industry. A major part of our business plan is to integrate the PTL platform with our offered services so that we can establish a more robust in-house digital marketing arm that we can utilize when promoting our customers’ brands and products. If we are not able to manage the integration of the PTL business successfully or cost effectively incorporate PTL’s platform, systems, and workflow with our brands’ existing marketing plans, our business, financial condition, results of operations, and prospects could be adversely affected.
If we fail to cost-effectively acquire new consumers or retain our existing consumers, our business could be adversely affected.
Our success 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 brand, build brand loyalty and generate interest in our 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 products across our various channels, we need to increase our marketing and advertising spending. Substantial advertising and promotional expenditures may be required to maintain or improve our brands’ market position or to introduce new products to the market. 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.
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, 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 are 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.
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 ecommerce 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, ecommerce 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.
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.
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.
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.
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 marketing companies, and our operating results could suffer if we fail to compete effectively. The marketing industry is intensely competitive and subject to rapid and significant change. We have competitors both in the United States and internationally, including major marketing companies. Many of our competitors have substantially greater financial, technical, and other resources, such as larger staff and experienced marketing and manufacturing organizations. 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 likely to continue to evolve. 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.
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. 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.
The actual or perceived failure by us or our vendors to comply with applicable privacy and data protection laws, regulations, or industry standards could have an adverse effect on our business, financial condition, results of operations, and prospects.
We collect, store, share, use, retain, safeguard, transfer, analyze, and otherwise process, and our vendors process on our behalf, personal information, confidential information and other information necessary to provide and deliver our products through our e-commerce channel to operate our business, for legal and marketing purposes, and for other business-related purposes. Collection and use of this information might raise privacy and data protection concerns, which could negatively impact our business. Data privacy and information security has become a significant issue in the United States, Europe, and elsewhere. The legal and regulatory framework for privacy and security issues is rapidly evolving and is expected to increase our compliance costs and exposure to liability. There are numerous federal, state, local, and international laws, orders, codes, rules, regulations, and regulatory guidance regarding privacy, information security, and processing (collectively, “Data Protection Laws”), the number and scope of which is changing, subject to differing applications and interpretations, and which may be inconsistent among jurisdictions, or in conflict with other rules, laws, or obligations (collectively, “Data Protection Obligations”). Therefore, the regulatory framework for privacy and data protection worldwide is, and is likely to remain, uncertain and complex for the foreseeable future, and our actual or perceived failure to address or comply with applicable Data Protection Laws and Data Protection Obligations could have an adverse effect on our business, financial condition, results of operations, and prospects. We also expect that there will continue to be new Data Protection Laws and Data Protection Obligations, and we cannot yet determine the impact such future Data Protection Laws and Data Protection Obligations may have on our business. Any significant change to Data Protection Laws and Data Protection Obligations, including without limitation, regarding the manner in which the express or implied consent of consumers for processing is obtained, could increase our costs and require us to modify our operations, possibly in a material manner, which we may be unable to complete and may limit our ability to store and process consumer data and operate our business.
We are or may also be subject to the terms of our external and internal privacy and security policies, codes, representations, certifications, industry standards, publications, and frameworks (collectively, “Privacy Policies”) and contractual obligations to third parties related to privacy, information security and processing, including contractual obligations to indemnify and hold harmless third parties from the costs or consequences of non-compliance with Data Protection Laws or Data Protection Obligations.
We may not be successful in achieving compliance if our employees, partners, or vendors do not comply with applicable Data Protection Laws, Privacy Policies, and Data Protection Obligations. If we or our vendors fail (or are perceived to have failed) to comply with applicable Data Protection Laws, Privacy Policies, and Data Protection Obligations, or if our Privacy Policies are, in whole or part, found to be inaccurate, incomplete, deceptive, unfair, or misrepresentative of our actual practices, our business, financial condition, results of operations, and prospects could be adversely affected.
In the United States, our obligations include rules and regulations promulgated under the authority of the Federal Trade Commission (the “FTC”), the Electronic Communications Privacy Act, the Computer Fraud and Abuse Act, the California Consumer Privacy Act (the “CCPA”) and other state and federal laws relating to privacy and data security. The CCPA, which took effect on January 1, 2020, requires companies that process information of California residents to make new disclosures to consumers about their data collection, use and sharing practices, allows consumers to opt out of the sale of personal information with third parties, and prohibits covered businesses from discriminating against California residents (for example, charging more for services) for exercising any of their rights under the CCPA. The law also provides a private right of action and statutory damages for certain data breaches that result in the loss of personal information. This private right of action is expected to increase the likelihood of, and risks associated with, data breach litigation. However, it remains unclear how various provisions of the CCPA will be interpreted and enforced. Therefore, the CCPA may increase our compliance costs and potential liability.
In addition, California voters recently approved the California Privacy Rights Act of 2020 (the “CPRA”) that went into effect on January 1, 2023. The CPRA significantly modifies the CCPA and imposes additional data protection obligations on companies doing business in California, resulting in further complexity. The law, among other things, gives California residents the ability to limit the use of their sensitive information, provides for penalties for CPRA violations concerning California residents under the age of 16, and establishes a new California Privacy Protection Agency to implement and enforce the law. The effects of this legislation are far-reaching and may impact our business. Some observers have noted that the CCPA could mark the beginning of a trend toward more stringent privacy legislation in the United States, which could increase our potential liability and adversely affect our business, financial condition, results of operations, and prospects.
Other jurisdictions in the United States have already passed or are considering laws similar to the CCPA and CPRA, with potentially greater penalties and more rigorous compliance requirements relevant to our business. Many state legislatures have already adopted legislation that regulates how businesses operate online, including measures relating to privacy, data security, data breaches, and the protection of sensitive and personal information. For example, on March 2, 2021, Virginia enacted the Virginia Consumer Data Protection Act (the “CDPA”), a comprehensive privacy statute that shares similarities with the CCPA, CPRA, and legislation proposed in other states. The CDPA required us to incur additional costs and expenses to comply with it before it became effective on January 1, 2023. June 2021, Colorado also enacted a similar law, the Colorado Privacy Act (the “CPA”), which becomes effective on July 1, 2023. Many other states are currently considering proposed comprehensive data privacy legislation and all 50 states have passed at least some form of data privacy legislation (for example, all 50 states have enacted laws requiring disclosure of certain personal data breaches).
At the federal level, the United States Congress is also considering various proposals for comprehensive federal data privacy legislation and, while no comprehensive federal data privacy law currently exists, we are subject to applicable existing federal laws and regulations, such as the rules and regulations promulgated under the authority of the FTC, which regulates unfair or deceptive acts or practices, including with respect to data privacy and security. These state statutes, and other similar state or federal laws, may require us to modify our data processing practices and policies and incur substantial compliance-related costs and expenses.
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.
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.
(See also “Government Regulations” for additional risks.)
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.
Many products that we sell are labeled and advertised with claims as to their origin, ingredients, or health, wellness, environmental or other benefits, including, by way of example, the use of the term “natural” or “organic” or similar synonyms or implied statements relating to such benefits. The FTC’s Guides for The Use Of Environmental Marketing Claims (the “Green Guides”) provide guidance on how to use environmental marketing claims, provide specific guidance for certain terms (e.g., “recyclable”), and recommend against using unqualified statements about environmental benefits such as “eco-friendly.” Although the FDA and the USDA each have issued statements regarding the appropriate use of the word “natural,” there is no single, U.S. government regulated definition of the term “natural” for use in the consumer and personal care industry.
Consumer class actions, actions from industry groups such as the National Advertising Division of the Better Business Bureau, and public enforcement actions have been brought against numerous companies that market “natural,” “sustainable,” or other ecologically conscious products or ingredients, asserting false, misleading, and deceptive advertising and labeling claims.
These suits often identify ingredients or components of a product for which certain marketing claims may not be fully accurate and claim that their presence in the product renders the statements false and deceptive. For example, some actions concerning “natural” claims have focused on the presence of genetically modified and/or synthetic ingredients or components in products, including synthetic forms of otherwise natural ingredients.
(See “Government Regulations.”)
Many of our products are subject to regulatory enforcement.
- The FDA regulates product labels and other product claims for the consumer products subject to its jurisdiction and has the authority to challenge product labels and claims that it believes are non-compliant or false or misleading, through the use of a variety of enforcement tools (e.g., Warning Letters, untitled letters, and seizure actions). In limited circumstances, the FDA has taken regulatory action against products labeled “natural” but that nonetheless contain synthetic ingredients or components.
- The FTC has the authority to challenge claims made in product advertising and requires that such claims are adequately substantiated prior to use. The FTC similarly has enforcement tools that it uses to challenge advertising claims that it deems non-compliant with the law.
- The USDA enforces federal standards for organic production and use of the term “organic” on product labeling. These laws prohibit a company from selling or labeling products as organic unless they are produced and handled in accordance with the applicable federal law. Failure to comply with these requirements may subject us to liability or regulatory enforcement. Consumers may also pursue state law claims challenging use of the organic label as being intentionally mislabeled or misleading or deceptive to consumers.
State and local regulators also have the authority to prosecute false advertising cases, including relating to environmental marketing claims. Current and potential competitors may make similar claims, which may result in action and inquiries to us from state and federal regulators and governments.
Should we become subject to actions regarding our branding or product marketing, consumers may avoid purchasing products from us or seek alternatives, even if the basis for the claim is unfounded. Moreover, any regulatory or government enforcement actions may trigger class action lawsuits under state consumer protection laws.
Adverse publicity about these matters may discourage consumers from buying our products. The cost of defending against any such claims could be significant and we may incur substantial costs remediating product claims in labeling and advertising if we are unsuccessful in defending such actions. Any loss of confidence on the part of consumers in the truthfulness of our labeling, advertising or ingredient claims would be difficult and costly to overcome and may significantly reduce our brand value. Any of these events could adversely affect our reputation and brand and decrease our sales, which could have an adverse effect on our business, financial condition, results of operations, and prospects.
False or misleading marketing claims concerning a product’s registration or its efficacy may also create the risk for challenges under federal or state law.
(See “Government Regulations.”)
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 FDA, the CPSC, the USDA, the 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 ecommerce 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 ecommerce 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 ecommerce 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 ecommerce 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.
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.
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.
RISKS RELATED TO OUR ORGANIZATION AND STRUCTURE
We have authorized and designated Class A Preferred Convertible Stock, which have voting rights of 60% of our common stock at all times.
We have 500,000 shares of our Class A Preferred Convertible Stock authorized and outstanding. The Class A Preferred Convertible Stock have 60% super majority voting rights over our common stock. At this time, all shares of the Class A Preferred Convertible Stock are issued to our CEO, Jaspreet Mathur. 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 Preferred Convertible 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 78.2% of our issued and outstanding common stock and our CEO owns all of the Class A Preferred Convertible 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 transaction. These insiders also have the ability to delay or perhaps even 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.
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 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 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.
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.
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.
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.
Our shareholders may suffer future dilution due to issuances of shares for our convertible securities and various considerations in the future.
We currently have outstanding notes with the aggregate original principal amount of $12,175,000 with a 6% per annum interest rate, a maturity date of one year from issuance, and an automatic conversion upon the effectiveness of registration of such notes on a registration statement filed with the SEC. Upon conversion of the notes and the potential issuance of 49,065,120 shares of 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.”

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ITEM 1B. UNRESOLVED STAFF COMMENTS
ITEM 1B. UNRESOLVED STAFF COMMENTS.
Not applicable.

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ITEM 2. PROPERTIES
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.

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ITEM 3. LEGAL PROCEEDINGS
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 our financial statements.
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 that alleged agreement such as conversion, fraud and unjust enrichment, Mentom Eyewear Inc. v. Limitless X Holdings Inc., et al., Case Number 23STCV24681. We believe that there was no such agreement, and that the plaintiff has no legal standing to bring such a matter against the Company or its officers. The case is moving into the discovery phase where we believe the true facts will lead to a dismissal; however, if the case continues, we will vigorously defend against such claims as it is our position that the allegations are not supported by the facts. No liability has been recorded for these litigations because the Company believes that any such liability is not probable and reasonably estimable at this time.
● 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 have not yet filed a responsive pleading in this action as we are attempting a global settlement; however, if unable to settle we will defend the case vigorously and will attempt a contractual and equitable indemnity claim against the advertiser. No liability has been recorded for this litigation because the Company believes that any such liability is not reasonably estimable at this time.

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ITEM 4. MINE SAFETY DISCLOSURE
ITEM 4. MINE SAFETY DISCLOSURE
Not applicable.
PART II

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ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY
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 “VYBE.” 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 68 record holders of 3,977,497 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.
Performance Graph and Purchases of Equity Securities
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.
Dividends
As of the filing of this Annual Report, we have not paid any dividends to shareholders. There are no restrictions which would limit our current ability to pay dividends on common stock or that are likely to do so in the future. The Delaware General Corporation Law, however, does prohibit us from declaring dividends where, after giving effect to the distribution of the dividend, we would not be able to pay our debts as they become due in the usual course of business, or our total assets would be less than the sum of our total liabilities plus the amount that would be needed to satisfy the rights of shareholders who have preferential rights superior to those receiving the dividend.
Securities Authorized for Issuance Under Equity Compensation Plans.
In 2020, we adopted our 2020 Stock Incentive Plan. A total of 2,222 shares of common stock are reserved for the 2020 Stock Incentive 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, the 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. As of the date of this Annual Report, there have been no options granted under the 2022 Stock Option Plan.
Effective August 9, 2022, we adopted our 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 833,333 shares of common stock is reserved for the 2022 Restricted Stock Plan. As of the date of this Annual Report, there have been no shares of common stock granted under the 2022 Restricted Stock Plan.
Purchases of Equity Securities by the Issuer and Affiliated Purchasers
There were no issuer purchases of equity securities during the year ended December 31, 2023.
Recent Issuance of Unregistered Securities
Other than the below, we had no sales of unregistered securities in 2023 that have not been previously disclosed in a Current Report on Form 8-K or Quarterly Report on Form 10-Q.
The Company has received $9,175,000 from 12 accredited investors pursuant to the Convertible Note Offering during 2022 and additional one accredited investor for $500,000 during 2023. The convertible notes have a conversion rate of $0.25 per share of common stock. The notes have maturity dates of one year from issuance. The interest rate of the notes is 6% per annum. The notes are convertible into shares of common stock at the option of the holder. On October 1, 2023, the Company entered into Conversion Agreements with each of the convertible noteholders to convert their respective notes into shares of Class B Preferred Stock. Pursuant to the Conversion Agreements, each noteholder agreed to receive one share of Class B Preferred Stock for each $2.00 of principal and unpaid interest accrued through the closing date of the Conversion Agreement. As of the closing date of the Conversion Agreement, and each of them, no portion of any of the Notes had been converted into shares of the Company’s common stock. On October 23, 2023, pursuant to the Conversion Agreements, the Company planned to issue an aggregate of 10,349,097 shares of Class B Preferred Stock before the completion of this offering and extinguish $9,675,000 of convertible debt including accumulated interest as of October 23, 2023 in the amount of $674,097. As of December 31, 2023, Class B Preferred Stock has not been registered.
In connection with each of the following unregistered sales and issuances of securities, except as otherwise provided below, the Company relied upon the exemption from registration provided by Section 4(a)(2) of the Securities Act for transactions not involving a public offering.
Reverse Stock Split
On December 19, 2022, we filed a Certificate of Amendment of Amended and Restated Certificate of Incorporation effecting a 1-for-30 reverse stock split (the “Reverse Stock Split”).
As a result of the Reverse Stock Split, the total number of shares of common stock held by each shareholder was converted automatically into the number of whole shares of common stock equal to (i) the number of shares of common stock held by such shareholder immediately prior to the Reverse Split, divided by (ii) 30, and then rounded up to the nearest whole number. No fractional shares were issued, and no cash or other consideration was paid to any shareholder. Instead, we issued one whole share of the post-Reverse Stock Split common stock to any shareholder who otherwise would have received a fractional share as a result of the Reverse Stock Split.
Except for our historical financial statements and unless otherwise stated, all option, share, and per share information gives effect to the Reverse Stock Split.

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ITEM 6. SELECTED FINANCIAL DATA
ITEM 6. RESERVED

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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS
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
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. (“we,” “us,” or “our”).
Reverse Stock Split
Effective December 19, 2022, we completed a reverse stock split of our outstanding common stock upon the filing of our Certificate of Amendment of Amended and Restated Certificate of Incorporation effecting a 1-for-30 reverse stock split (the “Reverse Stock Split”). No fractional shares were or will be issued in connection with the reverse stock split, and all such fractional shares resulting from the reverse stock split were and will be rounded up to the nearest whole number. The shares issuable upon the exercise of our outstanding warrants, and the exercise prices of such warrants, have been adjusted to reflect the reverse stock split. Unless otherwise noted, the share and per share information in this Annual Report reflects the reverse stock split.
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.
RESULTS OF OPERATION
For the Year Ended December 31, 2023 Compared to the Year Ended December 31, 2022.
Years Ended December 31,
Changes
% of
% of
Amount Sales Amount Sales Amount %
Revenue
Product sales $ 15,443,148 77.0 % $ 40,364,955 68.8 % $ (24,921,807 ) -61.7 %
Service revenue 4,597,933 22.9 % 18,308,341 31.2 % (13,710,408 ) -74.9 %
Rentals 15,000 0.1 % 15,000 0.0 % - 0.0 %
Total revenue 20,056,081 100.0 % 58,688,296 100.0 % (38,632,215 ) -65.8 %
Cost of sales
Cost of sales 4,064,933 20.3 % 6,942,680 11.8 % (2,877,747 ) -41.5 %
Cost of sales - other - 0.0 % 0.0 % (358 ) -100.0 %
Total cost of sales 4,064,933 20.3 % 6,943,038 11.8 % (2,878,105 ) -41.5 %
Gross profit 15,991,148 79.7 % 51,745,258 88.2 % (35,754,110 ) -69.1 %
Operating expenses:
General and administrative 1,078,532 5.4 % 1,938,640 3.3 % (860,108 ) -44.4 %
Advertising and marketing 19,416,622 96.8 % 47,164,700 80.4 % (27,748,078 ) -58.8 %
Stock compensation for services 141,020 0.7 % 1,117,782 1.9 % (976,762 ) -87.4 %
Transaction fees 1,159,896 5.8 % 3,201,599 5.5 % (2,041,703 ) -63.8 %
Merchant fees 1,147,678 5.7 % 2,459,670 4.2 % (1,311,992 ) -53.3 %
Royalty fees 416,140 2.1 % 1,114,403 1.9 % (698,263 ) -62.7 %
Professional fees 1,515,065 7.6 % 1,647,787 2.8 % (132,722 ) -8.1 %
Payroll and payroll taxes 3,587,300 17.9 % 1,306,565 2.2 % 2,280,735 174.6 %
Rent 159,216 0.8 % 205,497 0.4 % (46,281 ) -22.5 %
Bad debt expense 2,666,835 13.3 % 1,300,855 2.2 % 1,365,980 105.0 %
Consulting fees, related party 10,000 0.0 % 43,500 0.1 % (33,500 ) -77.0 %
Total operating expenses 31,298,304 156.1 % 61,500,998 104.8 % (30,202,694 ) -49.1 %
Income (loss) from operations (15,307,156 ) -76.3 % (9,755,740 ) -16.6 % (5,551,416 ) 56.9 %
Other income (expense)
Interest expense (897,287 ) -4.5 % (348,017 ) -0.6 % (549,270 ) 157.8 %
Loss on debt settlement (142,551 ) -0.7 % - 0.0 % (142,551 ) N/A
Other income 17,056 0.1 % 57,756 0.1 % (40,700 ) -70.5 %
Other expense (30,000 ) -0.1 % - 0.0 % (30,000 ) N/A
Gain on disposal of assets - 0.0 % 28,397 0.0 % (28,397 ) -100.0 %
Total other income (expense), net (1,052,782 ) -5.2 % (261,864 ) -0.4 % (790,918 ) 302.0 %
Income (loss) before income tax provision and gain on deconsolidation (16,359,938 ) -81.6 % (10,017,604 ) -17.1 % (6,342,334 ) 63.3 %
Gain on deconsolidation of subsidiaries 241,365 1.2 % - 0.0 % 241,365 N/A
Income (loss) before income tax provision (16,118,573 ) -80.4 % (10,017,604 ) -17.1 % (6,100,969 ) 60.9 %
Income tax provision - 0.0 % 6,402 0.0 % (6,402 ) -100.0 %
Net income (loss) $ (16,118,573 ) -80.4 % $ (10,024,006 ) -17.1 % $ (6,094,567 ) 60.8 %
Product Sales - Our product sales decreased by $24.9 million to $15.4 million for the year ended December 31, 2023 as compared to $40.4 million for the year ended December 31, 2022. The sales decrease was primarily attributable to changing affiliate marketing strategy to in-house sales through digital marketing. In 2023, 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.
Service Revenue - Our service revenue decreased by $13.7 million to $4.6 million for the year ended December 31, 2023 as compared to $18.3 million for the year ended December 31, 2022. Our service revenue decrease was primarily due to a shift in our marketing strategies which resulted in less digital marketing services from a decrease in number of customer transactions.
Cost of Sales
Our cost of sales decreased by $2.9 million, 41.5% of sales, to $4.1 million, 20.2% of sales. This increase was primarily due to decrease in product revenue and a result of operations decreasing during the period. The Company’s costs for freight, inventory, and other supplies decreased as well. Going forward, management is expecting both the product sales and service revenue business to steadily improve in terms of volumes and to remain stable.
Gross Profit
Gross profit for the year ended December 31, 2023 was $16.0 million or 79.7% of total revenue compared to $51.7 million and 88.2% of total revenue for the year ended December 31, 2022. The decrease in gross profit of $35.7 million was primarily due to decrease product and service 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, 2023, we recognized $31.3 million in operating expenses compared to $61.5 million for the year ended December 31, 2022. The decrease of $30.2 million was due to decrease in advertising and marketing, transaction fees, merchant fees, royalty fees, and bad debt expense.
● Our advertising and marketing expense decreased by $27.8 million due to a shift in marketing strategies to bring digital marketing in-house and decrease in spendings to performance marketers (affiliate marketing).
● The decrease in transaction fees and merchant fees are directly related to the increased number of transactions during the year.
Income (Loss) from Operations
As a result of the above, the Company had net loss from operations of $15.3 million for the year ended December 31, 2023, as compared to a loss from operations of $9.8 million for the year ended December 31, 2022.
Other Income (Expense)
For the year ended December 31, 2023, the Company incurred other expense of $1.1 million related to interest expense of $0.9 million and loss on debt settlement of $1.4 million compared to $3.5 million of interest expense for the year ended December 31, 2022.
Net Income (Loss)
As a result of the above, the Company generated a net loss of $16.1 million for the year ended December 31, 2023, as compared to a net loss of $10.0 million for the year ended December 31, 2022.
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 $16.1 million and $10.0 million for the years ended December 31, 2023 and 2022, respectively. We used $0.1 million and $5.8 million of cash for operating activities the year ended December 31, 2023 and 2022, respectively, and we had an accumulated deficit of $12.9 million at December 31, 2023. 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 2023.
Cash Used in Operating Activities
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 net loss of $16.1 million off-set by increase in accounts payable, inventories and accrued expenses of $5.9 million and decrease royalty payable of $1.1 million. During the year ended December 31, 2022 net cash used in operating activities was $9.1 million. The cash used in operating activities was primarily due to net loss of $10.0 million off-set by increase in accounts payable and accrued expenses and royalty payable of $2.9 million and decrease of inventories of $1.9 million.
Cash Provided by Investing Activities
Net cash used in financing activities for the years ended December 31, 2023 and 2022 was nil.
Cash Provided by Financing Activities
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 related parties, shareholders, and convertible debt. Net cash provided by financing activities for the year ended December 31, 2022 was $14.9 million. This amount was incurred by increased borrowings from related parties, 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 our 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.

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ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
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.

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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The consolidated financial statements required by this item begin on page of this Annual Report and are incorporated herein by reference.

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ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
No events occurred requiring disclosure under Item 304 of Regulation S-K.

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ITEM 9A. CONTROLS AND PROCEDURES
ITEM 9A. CONTROLS AND PROCEDURES
Our management has evaluated, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act as of the end of the period covered by this Annual Report. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer has concluded that, as of December 31, 2023, our disclosure controls and procedures were effective in ensuring that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is (i) recorded, processed, summarized, and reported within the time periods specified in the rules and forms of the SEC and (ii) accumulated and communicated to our management, including our principal executive and principal financial and accounting officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING
Other than the hiring of a new Chief Financial Officer, there have been no changes in our internal controls over financial reporting identified in connection with the evaluation required by Rules 13a-15(d) and 15d-15(d) of the Exchange Act that occurred during the period covered by this Annual Report that has materially affected or are reasonably likely to materially affect our internal controls and procedures over financial reporting.
MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rule 13a-15(f) under the Exchange Act. Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles. Any system of internal control, no matter how well designed, has inherent limitations, including the possibility that a control can be circumvented or overridden and misstatements due to error or fraud may occur and not be detected. Also, because of changes in conditions, internal control effectiveness may vary over time. Accordingly, even an effective system of internal control will provide only reasonable assurance that the objectives of the internal control system are met.
Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting as of December 31, 2023, based on the criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). Based on this evaluation, our management concluded that our internal control over financial reporting was ineffective as of December 31, 2023.
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. We believe 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 currently consists only of a Chief Financial Officer, additional personnel will also create the proper segregation of duties and provide more checks and balances within the department. Additional personnel can also provide the cross training needed to support us if personnel turnover issues within the department occur. We believe that the hiring of additional accounting and financial personnel will eliminate or greatly decrease any control and procedure issues we may encounter in the future. However, 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. 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.
This Annual Report does not include an attestation report of our independent registered public accounting firm regarding internal control over financial reporting. Management’s assessment was not subject to attestation by our independent registered public accounting firm pursuant to rules of the SEC that permit us to provide only management’s assessment in this Annual Report.

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ITEM 9B. OTHER INFORMATION
ITEM 9B. OTHER INFORMATION
None.

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ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
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. We currently have five independent directors. 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.
Set forth below are the names, ages, and positions of our directors and executive officers as of the date of this Annual Report.
Name Age Position with the Company Date Joined the Company
Jaspreet Mathur Chief Executive Officer and Chairman May 20, 2022
Kenneth Haller President and Director May 20, 2022
Benjamin Chung Chief Financial Officer May 20, 2022
Danielle Young Chief Operating Officer May 20, 2022
Rob Cucher VP of Legal Affairs May 20, 2022
Bharat Raj Mathur Director May 20, 2022
Amanda Saccomanno Director May 20, 2022
Dov Konetz Director May 20, 2022
Dan Fleyshman Director October 3, 2022
Leon Anderson Director October 3, 2022
Michael Braun Director January 11, 2023
Hassan Iddrissu Director January 11, 2023
Biographical Information
Directors and Executive Officers
The following is a summary of certain biographical information of our current directors and executive officers.
Jaspreet Mathur- Chief Executive Officer and Chairman of the Board of Directors
On May 20, 2022, Jaspreet Mathur became our Chairman, Chief Executive Officer, and a member of our Board of Directors. In January 2011, Mr. Mathur launched Kore Fit Living, a chain of retail stores across Canada specializing in sales of vitamins and supplements, sports nutrition, athletic apparel and fitness/MMA training equipment. In 2013, he launched a web agency, Emblaze One, as a full-service interactive agency with global offices to accommodate a consumer market shift from brick and mortar to e-commerce. In November 2018, Mr. Mathur launched the Limitless brand, which manufactures and distributes health and wellness products and offers B2B services for brand development and digital marketing. In January 2022, he teamed up with Dr. Mehmet Oz and a nonprofit organization called HealthCorps to jumpstart health and wellness programs that are targeted to teens and young adults.
Kenneth Haller- President and Director
On May 20, 2022 Kenneth Haller was appointed our President and a Director of our Board. From January 2021 until April 2022, Mr. Haller was Vice President of Payments at RYVYL Inc. (formerly Greenbox POS) (Nasdaq: RYVL), a software company that designs and develops mobile applications for cash-free e-wallet payments. From May 2013 through May 2022, Mr. Haller was Managing Partner of SKY MIDS, a strategic merchant services company that focuses on high risk and international credit card processing. During this same period until 2021, he was Chief Executive Officer of ChargeSavvy, LLC, a table-side checkout POS system that streamlines information gathering and payment processing.
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. Mrs. 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.
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.
Dov Konetz- Director
For more than the past five years, Dov Konetz has been the Managing Director of DMK Capital, a company engaged in providing valuations in commercial real estate, intangibles and movable assets. Since 2008, Mr. Konetz has served as a Director of Mount Sinai Hospital in Miami, Florida. Mr. Konetz also served on the Miami Beach Police Relations Committee from 2010 through 2012. Mr. Konetz is a valued supporter of The Dream Catcher Foundation, a non-profit that is dedicated to combating human trafficking.
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 Starino 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 Bachelors of Business Administration from Loyola Marymount University.
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 nine 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 2023. All other board actions were taken by unanimous written consent of the directors.
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, 2023.
Director Independence
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 undertaken a review of the independence of each director and will review the independence of any new directors based on information provided by each director concerning his background, employment, and affiliations, in order to make a determination of independence. Our board of directors has determined that there are five independent directors on our board of directors.
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, and we plan to have supporting committees, including a Compensation Committee and a Nominating and Corporate Governance Committee, which will then support the board of directors by addressing risks specific to its respective areas of oversight. Until such time as those committees are formed, the board of directors will manage the process. Our Compensation Committee will assess and monitor whether any of our compensation policies and programs has the potential to encourage excessive risk-taking. Our Nominations and Corporate Governance Committee will provide oversight with respect to corporate governance and ethical conduct and monitors the effectiveness of our corporate governance 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. Code of Business Conduct and Ethics will be available on our website at www.limitlessx.com, upon the completion of a successful uplisting on the NYSE. If we amend or grant a waiver of one or 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.
Our Board, management and all employees of our Company are committed to implementing and adhering to the Code of Business Conduct and Ethics. Therefore, it is up to each individual to comply with the Code of Business Conduct and Ethics and to be in compliance of the Code of Business Conduct and Ethics. If an individual is concerned that there has been a violation of the Code of Business Conduct and Ethics, he or she will be able to report such violation in good faith to his or her superior. While a record of such reports will be kept confidential by our Company for the purposes of investigation, the report may be made anonymously and no individual making such a report will be subject to any form of retribution.
Audit Committee
We do not currently have an audit committee and we plan to form audit committee in the future.

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ITEM 11. EXECUTIVE COMPENSATION
ITEM 11. EXECUTIVE COMPENSATION.
Summary Compensation
The following table summarizes information regarding the compensation for fiscal years 2023 and 2022 for our named executive officers.
Name and Principal Position Year Salary
($) Stock
Awards
($) Option
Awards
($) All Other
Compensation
($) Total
($)
Jaspreet Mathur, Chief Executive Officer 1,000,000 - - - -
and Chairman of the Board of Directors(1) 291,667 - - 292,084
Kenneth Haller, 500,000 - - - -
President and Director(2) 145,833 - - 5,624 151,457
Benjamin Chung, 250,000 - - - -
Chief Financial Officer(3) 113,750 - - 5,112 118,862
Danielle Young, 200,000 - - - -
Chief Operating Officer(4) 91,000 - - 91,667
Rob Cucher, 250,000 - - - -
VP of Legal Affairs(5) 116,667 - - 7,924 124,591
(1) Mr. Mathur was appointed as CEO on May 20, 2022.
(2) Mr. Haller was appointed as President on May 20, 2022.
(3) Mr. Chung was appointed as CFO on May 20, 2022.
(4) Ms. Young was appointed as COO on May 20, 2022.
(5) Mr. Cucher was appointed VP of Legal Affairs on August 1, 2022.
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.
● Option Plan. We plan to offer option awards 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 can be used for 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.
Employment Agreements
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 will serve as our Chief Executive Officer. Under his employment agreement, Mr. Mathur has agreed to devote his full business time and effort to the business affairs of the Company. Mr. Mathur employment agreement provides that his employment will be 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 will receive an initial base salary of $500,000 per year. Thereafter, effective as of January 1, 2023, the Company agreed to increase Mr. Mathur’s annual salary to $1,000,000. In the event that Mr. Mathur’s employment is terminated by our 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 incompliance 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 will be eligible to participate in Stock Option plans or other incentive plans the Company will offer. The employment agreement also contains customary confidentiality and invention-assignment covenants to which Mr. Mathur is subject.
Kenneth Haller, President
We entered into an employment agreement with Kenneth Haller, effective as of May 1, 2022, pursuant to which Mr. Haller will serve as our President. Under his employment agreement, Mr. Haller has agreed to devote his full business time and effort to the business affairs of the Company. Mr. Mathur employment agreement provides that his employment will be 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 will receive an initial base salary of $250,000 per year. Mr. Haller’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. Haller’s compensation or duties and level of responsibility. Mr. Haller will be eligible to participate in Stock Option plans or other incentive plans the Company will offer. The employment agreement also contains customary confidentiality and invention-assignment covenants to which Mr. Haller is subject.
Rob D. Cucher, Esq., President
We entered into an employment agreement with Rob D. Cucher, Esq., effective as of May 1, 2022, pursuant to which Mr. Cucher will serve as our Vice President - Legal Affairs. Under his employment agreement, Mr. Cucher has agreed to devote his full business time and effort to the business affairs of the Company. Mr. Cucher’s employment agreement provides that his employment will be 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 will receive 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 will be eligible to participate in Stock Option plans or other incentive plans the Company will offer. The employment agreement also contains customary confidentiality and invention-assignment covenants to which Mr. Cucher is subject.
Karmandeep Munder, Operations Manager
We entered into an employment agreement with Karmandeep Munder, effective as of May 1, 2022, pursuant to which Mr. Munder will serve as our Operations Manager. Under his employment agreement, Mr. Munder has agreed to devote his full business time and effort to the business affairs of the Company. Mr. Munder employment agreement provides that his employment will be 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. Munder will receive an initial base salary of $150,000 per year. Mr. Munder’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. Munder’s compensation or duties and level of responsibility. Mr. Munder will be eligible to participate in Stock Option plans or other incentive plans the Company will offer. The employment agreement also contains customary confidentiality and invention-assignment covenants to which Mr. Munder is subject.
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 will serve as our Chief Financial officer. Under his employment agreement, Mr. Chung has agreed to devote his full business time and effort to the business affairs of the Company. Mr. Chung employment agreement provides that his employment will be 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 will receive 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 will be eligible to participate in Stock Option plans or other incentive plans the Company will offer. The employment agreement also contains customary confidentiality and invention-assignment covenants to which Mr. Chung is subject.
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 will serve as our Chief Operating Officer. Under her employment agreement, Ms. Young has agreed to devote her full business time and effort to the business affairs of the Company. Ms. Young’s employment agreement provides that her employment will be 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 will receive 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 will be eligible to participate in Stock Option plans or other incentive plans the Company will offer. The employment agreement also contains customary confidentiality and invention-assignment covenants to which Ms. Young is subject.
Base Salaries
The base salaries of our employed executive officers are specified in their respective employment agreements, as summarized above.
Bonuses
We did not pay any bonuses to any of our named executive officers during 2022 or 2023.
Equity Compensation
Through the date of this Annual Report, none of our officers, directors, or employees have received any equity compensation.
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, 2023, in their capacity as directors, and we have not yet adopted a compensation program for our directors.
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.
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.
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, the 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. As of the date of this Annual Report, there have been no options granted under the 2022 Stock Option Plan.
Restricted Stock Plan
Effective August 9, 2022, we adopted our 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 833,333 shares of common stock is reserved for the 2022 Restricted Stock Plan. As of the date of this Annual Report, there have been no shares of common stock granted under the 2022 Restricted Stock Plan.
Equity Compensation Plan Information
The following table sets forth information as of December 31, 2023 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
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
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
Security Ownership of Certain Beneficial Owners and Management
As of the date of this Annual Report, there are 3,930,333 shares of our common stock outstanding. The following table sets forth the beneficial ownership of our common stock:
● 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 the date hereof. Each director or officer, as the case may be, has furnished us with information with respect to their beneficial ownership. 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.
Name and Address (1) Title Shares Owned Percent of
Class (2)
Class A Preferred Stock
Jaspreet Mathur Chief Executive Officer and Chairman 500,000 100 %
Common Stock
Jaspreet Mathur Chief Executive Officer and Chairman 2,632,334 66.97 %
Bharat Raj Mathur Director 141,334 3.60 %
Kenneth Haller President and Director 141,334 3.60 %
Amanda Saccomanno Director 106,000 2.70 %
Benjamin Chung Chief Financial Officer 35,334 *
Rob Cucher VP of Legal Affairs 17,667 *
Danielle Young Chief Operating Officer - -
Dov Konetz Director - -
Dan Fleyshman Director - -
Leon Anderson Director - -
Michael Braun Director - -
Hassan Iddrissu Director - -
All executive officers and directors
3,074,003 78.21 %
* Less than 1%.
(1) The mailing address of each of the officers and directors as set forth above is c/o Limitless X Holdings Inc., 9454 Wilshire Blvd. #300, Beverly Hills, California 90212.
(2) As of the date hereof, there were 3,930,333 shares of our common stock issued and outstanding and 500,000 shares of our Class A Preferred Stock issued and outstanding.

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ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.
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.
Royalty Payables
Limitless Performance Inc. (“LPI”), SMILZ INC. (“Smiles”), and DIVATRIM INC. (“Divatrim”), are all companies owned by Jas Mathur, our Chief Executive Officer, Director, and majority shareholder. AMAROSE INC. (“Amarose”) is owned 50% by Mr. Mathur and 50% by Amanda Saccomanno, one of our directors.
As of November 1, 2023, we terminated our licensing agreement with Limitless Performance, Inc., Amarose, Inc., Divatrim, Inc., and SMILZ, Inc
As of December 31, 2023 and 2022, the royalty payable was $0 and $1,114,403, respectively.
Note Payables to Shareholder
Notes payable to shareholder consisted of the following:
December 31, December 31,
December 6, 2021 ($50,000) $ 50,000 $ 50,000
February 11, 2022 ($150,000) 150,000 150,000
May 8, 2022 ($550,000) 550,000 550,000
May 9, 2022 ($1,100,000) 1,100,000 1,100,000
May 16, 2022 ($450,000) 450,000 450,000
June 1, 2022 ($500,000) 500,000 500,000
June 30, 2022 ($922,028) 922,028 922,028
August 25, 2022 ($290,000) 290,000 290,000
November 15, 2022 ($450,000) 450,000 450,000
May 16, 2023 ($150,000) 150,000 -
May 18, 2023 ($50,000) 50,000 -
June 5, 2023 ($150,000) 150,000 -
June 20, 2023 ($50,000) - Funding Commitment 50,000 -
July 13, 2023 ($50,000) - Funding Commitment 50,000 -
August 1, 2023 ($190,000) - Funding Commitment 190,000 -
August 7, 2023 ($50,000) - Funding Commitment 50,000 -
Total notes payable to stockholder (current) $ 5,152,028 $ 4,462,028
● December 6, 2021 - $50,000
On December 6, 2021, the Company entered into a Loan Authorization and Agreement for a loan of $50,000 from a shareholder, the proceeds of which were used to be used for working capital purposes. As of September 30, 2023 and December 31, 2022, the principal balance was $50,000 and $50,000, respectively. Beginning on June 1, 2022, the loan required a payment of $4,303 per month, which included principal and interest with an interest rate of 6 % per annum. The total balance of principal and interest of $51,640 was due on May 1, 2023.
● February   11, 2022 - $150,000
On February 11, 2022, the Company entered into a Loan Authorization and Agreement for a loan of $150,000 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 $150,000 and $150,000, respectively. Beginning on June 1, 2022, the loan required a payment of $12,910 per month, which included principal and interest with an interest rate of 6% per annum. The total balance of principal and interest of $154,920 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 $550,000 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 $550,000 and $550,000, respectively. Beginning on June 1, 2022, the loan required a payment of $47,337 per month, which included principal and interest with an interest rate of 6% per annum. The total balance of principal and interest of $568,038 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 $1,100,000 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 $1,100,000 and $1,100,000, respectively. Interest began accruing at the rate of 8.5% 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 $450,000 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 $450,000 and $450,000, respectively. Interest began accruing at the rate of 8.5% 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 $500,000 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 $500,000 and $500,000, respectively. Beginning on August 1, 2022, the loan required a payment of $43,494 per month, which included principal and interest with an interest rate of 8% per annum. The total balance of principal and interest of $521,931 was due on July 1, 2023.
● September 30, 2022 - $922,028
On June 30, 2022, the Company entered into a Loan Authorization and Agreement for a loan of $922,028 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 $922,028 and $922,028, respectively. Beginning on August 1, 2022, the loan required a payment of $80,206 per month, which included principal and interest with an interest rate of 8% per annum. The total balance of principal and interest of $962,469 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 $290,000 from a shareholder, the proceeds of which were to be used for working capital purposes. The loan has an interest rate of 10% per annum and is due on demand. As of September 30, 2023 and December 31, 2022, the principal balance was $290,000 and $290,000, respectively.
● November 15, 2022 - $450,000
On November 15, 2022, the Company entered into a Loan Authorization and Agreement for a loan of $450,000 from a shareholder, the proceeds of which were to be used for working capital purposes. The loan has an interest rate of 10% per annum and is due on demand. As of September 30, 2023 and December 31, 2022, the principal balance was $450,000 and $450,000, respectively.
● May 16, 2023 - $150,000
On May 16, 2023, the Company entered into a Loan Authorization and Agreement for a loan of $150,000 from a shareholder, the proceeds of which were to be used for working capital purposes. The loan has an interest rate of 10% per annum and is due on demand. As of September 30, 2023, the principal balance was $150,000.
● May 18, 2023 - $50,000
On May 18, 2023, the Company entered into a Loan Authorization and Agreement for a loan of $50,000 from a shareholder, the proceeds of which were to be used for working capital purposes. The loan has an interest rate of 10% per annum and is due on demand. As of September 30, 2023, the principal balance was $50,000.
● June 5, 2023 - $150,000
On June 5, 2023, the Company entered into a Loan Authorization and Agreement for a loan of $150,000 from a shareholder, the proceeds of which were to be used for working capital purposes. The loan has an interest rate of 10% per annum and is due on demand. As of September 30, 2023, the principal balance was $150,000.
● 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 $1,000,000 of working capital to the Company over the next six months. Mr. Mathur agreed to the Funding Commitment in exchange for a one year convertible promissory note for each drawdown amount advanced to the Company with an annual interest rate of 10% and a balloon payment of principal and interest due at maturity, unless Mr. Mathur elects to convert the outstanding principal and interest into Class B Preferred Stock of the Company at the conversion price of $1.50 per share; provided, however, Mr. Mathur may only covert each note within the term of the Funding Commitment, in the event of the occurrence of the earlier of a public offering of securities of the Company pursuant to a registration statement filed with the SEC and declared effective pursuant to the Securities Act of 1933, upon completion of which the Company has a class of stock registered under the Securities Exchange Act of 1934 and that stock is listed on a national stock exchange, or a liquidation, merger, acquisition, sale of voting control or sale of substantially all of the assets of the Company in which the shareholders of the Company do not own a majority of the outstanding shares of the surviving corporation. For the avoidance of doubt, a national stock exchange includes Nasdaq, NYSE, and NYSE American, but excludes any over-the-counter quotation systems or trading platforms. The balance of the Funding Commitment are as follows:
December 31, 2023
June 20, 2023 ($50,000) $ 50,000
July 13, 2023 ($50,000) 50,000
August 1, 2023 ($190,000) 190,000
August 7, 2023 ($50,000) 50,000
Total Funding Commitment $ 340,000
As of December 31, 2023, the balance of the Funding Commitment was $340,000.
Notes Payable to Related Party
Notes payable to related party consisted of the following:
December 31, December 31,
May 10, 2022 ($12,500) $ 12,500 $ 12,500
May 10, 2022 ($12,500) 12,500 12,500
May 10, 2022 ($20,000) 20,000 20,000
May 31, 2022 ($5,000) 5,000 5,000
May 31, 2022 ($15,000) 15,000 15,000
June 9, 2022 ($15,000) 15,000 15,000
December 31, 2022 ($929,401) - 929,401
Total notes payable to related parties (current) $ 80,000 $ 1,247,011
● May 10, 2022 - $12,500
On May 10, 2022, a related party of the Company loaned Prime Time Live, Inc. $12,500 in exchange for a promissory note that includes interest at the rate of 10% per annum on the unpaid principal balance, with all unpaid principal and interest due on or before May 10, 2023. Interest began accruing on May 10, 2022. As of September 30, 2023 and December 31, 2022, the principal balance was $12,500 and $12,500, respectively.
● May 10, 2022 - $12,500
On May 10, 2022, a related party of the Company loaned Prime Time Live, Inc. $12,500 in exchange for a promissory note that includes interest at the rate of 10% per annum on the unpaid principal balance with all unpaid principal and interest due on or before May 10, 2023. Interest began accruing on May 10, 2022. As of September 30, 2023 and December 31, 2022, the principal balance was $12,500 and $12,500, respectively.
● May 10, 2022 - $20,000
On May 10, 2022, a related party of the Company loaned Prime Time Live, Inc. $20,000 in exchange for a promissory note that included interest at the rate of 10% per annum on the unpaid principal balance with all unpaid principal and interest due on or before May 10, 2023. Interest began accruing on May 10, 2022. As of September 30, 2023 and December 31, 2022, the principal balance was $20,000 and $20,000, respectively.
● May 31, 2022 - $5,000
On May 31, 2022, a related party of the Company loaned Prime Time Live, Inc. $5,000 in exchange for a promissory note that included interest at the rate of 10% per annum on the unpaid principal balance with all unpaid principal and interest due on or before May 31, 2023. Interest began accruing on May 31, 2022. As of September 30, 2023 and December 31, 2022, the principal balance was $5,000 and $5,000, respectively.
● May 31, 2022 - $15,000
On May 31, 2022, a related party of the Company loaned Prime Time Live, Inc. $15,000 in exchange for a promissory note that included interest at the rate of 10% per annum on the unpaid principal balance with all unpaid principal and interest due on or before May 31, 2023. Interest began accruing on May 31, 2022. As of September 30, 2023 and December 31, 2022, the principal balance was $15,000 and $15,000, respectively.
● June 9, 2022 - $15,000
On May 10, 2022, a related party of the Company loaned Prime Time Live, Inc. $15,000 in exchange for a promissory note that included interest at the rate of 10% per annum on the unpaid principal balance with all unpaid principal and interest due on or before May 10, 2023. Interest began accruing on May 10, 2022. As of September 30, 2023 and December 31, 2022, the principal balance was $15,000 and $15,000, respectively.
● December 31, 2022 - $929,401
On December 31, 2022, the Company entered into a Loan Authorization and Agreement for a loan of $929,401 from Emblaze, 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. As of September 30, 2023 and December 31, 2022, the balance was $0 and $929,401, respectively.
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, as full payment and settlement of a debt in the in the principal amount of $929,401 owed by the Company to Emblaze.
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 of directors is responsible for evaluating each related party transaction and making a recommendation to the disinterested members of the board of directors as to whether the transaction at issue is fair, reasonable and within our policy and whether it should be ratified and approved. If there is no Audit Committee at such time, then the evaluation will also be done by the disinterested board of directors. The board of directors 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 of directors or 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.

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ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES.
The following table summarizes the aggregate fees billed to us by BF Borgers CPA, PC, our principal accounts, for professional services during the years ended December 31, 2023 and December 31, 2022:
Fees
Audit Fees (1) $ 367,500 $ 71,000
All Other Fees - -
Total Fees $ 367,500 $ 70,600
(1) Audit Fees.
Fees for audit services billed in 2023 and 2022 consisted of:
● Progress billings for the audits of the Company’s financial statements for 2022 and 2023; and
● Review of the Company’s quarterly financial statements for 2023 and 2022.
Audit fees consists 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.
PART IV

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ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
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.
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.
c) Exhibits:
Exhibit Number
Description
Form
Exhibit
Filing Date
Filed Herewith
3.1
Amended and Restated Certificate of Incorporation filed October 31, 2022
8-K
3.1
11/01/2022
3.2
Amended and Restated Bylaws
S-1
3.2
02/14/2024
3.3
Certificate of Amendment of Amended and Restated Certificate of Incorporation filed December 19, 2022
8-K
3.1
12/21/2022
3.4
Class A Super Majority Convertible Preferred Shares Designation filed February 5, 2020
S-1
4.3
07/02/2020
3.5
Amended Certificate of Designation of Class A Preferred Convertible Stock
8-K
3.1
05/26/2022
3.6
Certificate of Designation of Class B Convertible Preferred Stock filed October 23, 2023
8-K
3.1
10/26/2023
3.7
Amended Certificate of Designation of Class B Preferred Convertible Stock
S-1
3.7
02/14/2024
4.1
2020 Stock Option Plan
S-1
4.1
07/02/2020
4.2
2022 Restricted Stock Plan
S-1
4.2
02/14/2024
4.3
2022 Stock Option Plan
S-1
4.3
02/14/2024
10.1
Manufacturing & Distributorship License Agreement between Limitless X Inc. and Divatrim Inc., dated December 1, 2021
8-K
10.3
05/26/2022
10.2
Manufacturing & Distributorship License Agreement between Limitless X Inc. and Smilz Inc., dated December 1, 2021
8-K
10.4
05/26/2022
10.3
Manufacturing & Distributorship License Agreement between Limitless X Inc. and Limitless Performance Inc., dated December 1, 2021
8-K
10.5
05/26/2022
10.4
Manufacturing & Distributorship License Agreement between Limitless X Inc. and Amarose Inc., dated December 1, 2021
8-K
10.6
05/26/2022
10.5
Promissory Note between Limitless X, Inc. and Jaspreet Mathur, dated December 6, 2021
8-K
10.7
05/26/2022
10.6
Promissory Note between Limitless X, Inc. and Jaspreet Mathur, dated February 11, 2022
8-K
10.8
05/26/2022
10.7
Promissory Note between Limitless X, Inc. and Jaspreet Mathur, dated May 8, 2022
8-K
10.9
05/26/2022
10.8
Share Exchange Agreement among Bio Lab Naturals, Inc., Limitless X, Inc., and Certain Shareholders, dated May 11, 2022
8-K
2.1
05/26/2022
10.9
Promissory Note between Limitless X, Inc. and Jaspreet Mathur, dated May 16, 2022
8-K
10.10
05/26/2022
10.10
Promissory Note between Limitless X, Inc. and Jaspreet Mathur, dated May 18, 2022
8-K
10.11
05/26/2022
10.11
Amendment to Share Exchange Agreement, dated August 2, 2022
8-K
10.1
08/05/2022
21.1
List of Subsidiaries
S-1
21.1
02/14/2024
31.1
Certification of Chief Executive Officer Pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934
X
31.2
Certification of Chief Financial Officer Pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934
X
32.1
Certification of Chief Executive Officer under Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
X
32.2
Certification of Chief Financial Officer under Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
X
101.INS
Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH
Inline XBRL Taxonomy Extension Schema Document
101.CAL
Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF
Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB
Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE
Inline XBRL Taxonomy Extension Presentation Linkbase Document
Cover Page Interactive Data File (formatted as Inline XBRL and contained within Exhibit 101)