LIMX 10-K & 10-Q changes, risk factors and insider trading

We have incurred losses in recent quarters. Because we operate in the highly competitive nutritional supplement industry and are or expect to expand into film and television, regenerative skin care, entertainment, real estate, and potentially even digital assets, entertainment and real estate, we have difficulty predicting our future operating results, and we cannot be certain that our revenue will grow at rates that will allow us to to reach or maintain profitability on a quarterly or annual basis.

We have a history of operating losses and negative cash flow in operating activities. We have incurred recurring net losses, including net losses from operations before income taxes of $4.2$46.1 million for the year ended December 31, 20242025 and we had an accumulated deficit of $38.8$84.9 million atas of December 31, 2024.2025. These factors raise substantial doubt as to our ability to continue as a going concern, and our independent registered public accounting firm has included a going concern uncertainty explanatory paragraph in their report for 2024.2025. 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 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 course of business and repaying loans when they fall due. Successful renewal of our loans, however, is subject to numerous risks and uncertainties. uncertainties. In addition, the increasingly competitive industry conditions under which we operate may negatively impact our results of operations and cash flows. Additional debt financing is anticipated to fund the Company’s operations in the near future. However, there are no current agreements or understandings with regard to the form, time or amount of such financing and there is no assurance that any of this financing can be obtained or that the Company can continue as a going concern.

All of the current brands and products that we sell and promote are licensed from Limitless Performance, Inc., an entity owned by our Chief Executive Officer and we may lose all of our business at any time.time, and royalties at a rate of 4% may begin to accrue as of December 31, 2027

To remain competitive and expand and keep market share for our current nutritional products (including new and advanced versions of these products) and to develop our new businesses in television and film, regenerative skin care, fintech, entertainment and real estate, across our various channels, we need to increase our marketing and advertising spending. Substantial advertising and promotional expenditures will be e required to maintain or improve our brands’ market position and to develop our new business divisions, which includes our television and entertainment, regenerative skin care, fintech, entertainment and real estate divisions. An increase in our marketing and advertising efforts may not maintain our current reputation, leadwhich leads 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, condition, results of operations, and prospects could be adversely affected.

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 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.

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,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 may be subjected to claims for defamation, negligence, copyright, or trademark infringement, or based on other theories relating to the information we publish on our e-commerce webpages and on any of our websites. These types of claims have been brought, sometimes successfully, against similar companies in the past. We are currently involved in a lawsuit related to this issue as noted “Item 8. Financial Statements which contains Company’s audited financial statements for fiscal 2024 and 2023 – Footnote 12 – Commitments and Contingencies.” In addition, based on links we provide to third-party websites, we could also be subjected to claims based upon online content we do not control that is accessible from our e-commerce webpages.

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.OTCQX.

As a result of his ownership of all issued and outstanding shares of our Class A Stock, as well as ownership of our common stock, Mr. Mathur, our Chief Executive Officer currently holds approximately 87% of our voting securities (and will continue to own at least 60% of our voting stock at all times, including after our offering), and as such, we are a “controlled company” under the NYSE AmericanOTCQX 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 AmericanOTCQX 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.

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 .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 can issue future series of shares of preferred stock without shareholder approval which could adversely affect the rights of common shareholders.shareholders or other classes or series of preferred stock.

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 and other classes or series of preferred may suffer as a result of the rights granted to holders of new classes or series 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.

As of AprilDecember 1,31, 2025, we have 14,205,96516,993,811 shares of our common stock issued and outstanding. In addition, we have outstanding stock options allowing for the purchase of 450,000 shares of our common stock. Also, we have an aggregate of 33,129,601 shares of our common stock that are issuable upon conversion of our Class A Stock, Class B Stock and Class C Stock. If these shares are issued pursuant to exercise of the options or conversion of the Class A, Class B or Class C Stock into common shares, it would substantially dilute our existing shareholders and could depress the market price of our common stock.

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 stageearly-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.

We have never paid cash dividends on our securitiessecurities. andWe do not anticipate paying cash dividends in the foreseeable future.future Weexcept with respect to our Series D Preferred Stock, subject to compliance with Delaware law. Except as required with respect to our Series D Preferred Stock, 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.

For the YearYears Ended December 31, 20242025 Compared to the Year Ended December 31, 2023.2024.

Product Sales - Our product sales decreased by $12.1$2.4 million to $0.9 million for the year ended December 31, 2025 as compared to $3.4 million for the year ended December 31, 2024 as compared to $15.5 million for the year ended December 31, 2023.2024. The sales decrease was primarily attributable to changing affiliate marketing strategy strategy to in-house sales through digital marketing. In 20232024 partially and full year in 2024,partially, 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.

During the year ended December 31, 2024,2025, we recognized $6.1$9.8 million in operating expenses compared to $17.2$6.1 million for the year ended December 31, 2023.2024. The decreaseincrease of $11.1$3.7 million was due to decrease in advertising and marketing, payroll, professionalmarketing and legal fees,payroll and bad debtoff-set expense.by increase in stock compensation expense of $5.3 million.

For the year ended December 31, 2024,2025, the Company incurred $0.5$1.0 million related to interest expense compared to $0.9$0.5 million of interest expense for the year ended December 31, 2023.2024. The Company recorded loss on extinguishment of debt of $6.6$35.5 million for the year ended December 31, 20232025 compared to gain of $0.2 million for the year ended December 31, 2024. The Company recognized loss on settlement of 0.6 million for the year ended December 31, 2025 and none in the previous year.

We have a history of operating losses and negative cash flow in operating activities. We have incurred recurring net losses, including net losses from operations before income taxes of $4.2$46.1 million for the year ended December 31, 2024. We used $0.7 million of cash for operating activities the year ended December 31, 20242025 and we had an accumulated deficit of $38.8$84.9 million at December 31, 2024.2025. As of December 31, 2024,2025, we had $53,549$7,169 in cash on hand. We expect our existing cash resources will not be sufficient to meet our anticipated cash resources during the next 12 months. These factors raise substantial doubt as to our ability to continue as a going concern, and our independent registered public accounting firm has included a going concern uncertainty explanatory paragraph in our report for 2024.2025.

During the year ended December 31, 2024,2025, net cash used in operating activities was $1.6 million. The cash used in operating activities was primarily due to a net loss of $46.1 million off-set by stock compensation and loss on settlement of debt add back and increase and decrease in accounts payable, inventories, accrued expenses and royalty payable. During the year ended December 31, 2024 net cash used in operating activities was $0.7 million. The cash used in operating activities was primarily due to a net loss of $4.2 million off-set by increase and decrease in accounts payable, inventories, accrued expenses and royalty payable. During the year ended December 31, 2023 net cash used in operating activities was $6.9 million. The cash used in operating activities was primarily due to a net loss of $13.9 million off-set by changes in accounts payable and accrued expenses, royalty payable and inventories.

Our Annual Report on Form 10-K for fiscal year ended December 31, 2025, filed with the SEC on April 15, 2026, on December 31, 2025, describes important risk factors that could cause our business, financial condition, results of operations, and growth prospects to differ materially from those indicated or suggested by forward-looking statements made in this Quarterly Report on Form 10-Q or presented elsewhere by management from time to time. There have been no material changes in the risk factors that appear in our Annual Report on Form 10-K. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial may also materially and adversely affect our business.

For the Three Months Ended MarchJune 31,30, 2026, Compared to the Three Months Ended MarchJune 31,30, 2025:

Product Sales – Our product sales decreased by $0.2$0.3 million to $0.1 millionnil for the three months ended MarchJune 31,30, 2026, as compared to $0.6$0.3 million for the three months ended MarchJune 31,30, 2025. In 2026, there was a shift in our marketing and selling strategies, including a change in performance marketers and platforms, which resulted in the decrease of product sales.

Cost of Sales – Our cost of sales decreased from $0.1 million, or 46.5%28.7% of sales, in the three months ended MarchJune 31,30, 2025, to $nil or 2.4%28.5% of sales, in the three months ended MarchJune 31,30, 2026. As operations decreased during the period, so did our costs for freight, inventory, and other supplies.

Operating Expenses – During the three months ended MarchJune 31,30, 2026, we recognized $1.2$2.9 million in operating expenses compared to $4.4$0.1 million million for the three months ended MarchJune 31,30, 2025. The decreaseincrease of $3.1$1.9 million was primarily due to salariesincrease andin compensation.stock compensation expense.

Other Income or Expense – During the three months ended MarchJune 31,30, 2026, thewe Companyrecognized recorded$nil interestin net other expense of approximately $0.1 million and loss on conversion of Preferred Ccompared to Preferred$3.9 Dmillion for ofthe $27.8three million.months ended June 30, 2025. During the three months ended MarchJune 31,30, 2025,2026, the Company recorded interesta expense of $0.5 million and loss on settlement of debt of $29.9$3.9 million.million and none in the previous same period.

During the threesix months ended MarchJune 31,30, 2026, net cash used in operating activities was $0.7$1.0 million. The cash used in operating activities was was primarily due to net loss of approximately $28.9$31.8 million and off-set by loss from conversion of Preferred C and Preferred D of $27.8 million.

Net cash used in investing activities for the threesix months ended MarchJune 31,30, 2026, was $0.5 million, which represented loans provided under loans loans receivables of $0.4 million and $0.1 million for purchases of property and equipment and none$1.0 million for loan receivables during the three six months ended March 31,June 30, 2025.

Net cash provided by financing activities for the threesix months ended MarchJune 31,30, 2026 was $1.3$1.5 million. This amount was incurred by increased borrowings from a stockholderstockholder. related parties and loans payable. Net cash provided by financing activities for the six months ended June 30, 2025 was $2.0 million. This amount was incurred by increased borrowings from a stockholder. related parties.parties and loans payable.