Forward-Looking Statements and Associated Risks.
This Form 10-Q contains certain statements that are forward-looking within the
meaning of the Private Securities Litigation Reform Act of 1995. For this
purpose, any statements contained in this Form 10-Q that are not statements of
historical fact may be deemed to be forward-looking statements. Without limiting
the foregoing, words such as "may," "expect," "believe," "anticipate,"
"estimate," "continue" or comparable terminology are intended to identify
forward-looking statements. These statements by their nature involve substantial
risks and uncertainties, and actual results may differ materially depending on a
variety of factors, many of which are not within our control. These factors
include but are not limited to economic conditions generally and in the
industries in which we may participate; competition within our chosen industry,
including competition from much larger competitors; and failure to successfully
develop business relationships.
INTRODUCTION
As previously reported on a Current Report on Form 8-K filed with the Securities
and Exchange Commission on May 13, 2022, the registrant, Bio Lab Naturals, Inc.
("Bio Lab"), entered into a Share Exchange Agreement (the "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 97,000,000 shares to the LimitlessX shareholders (the "Closing").
According to the terms of the Agreement, Bio Lab is obligated to issue an
additional 9,000,000 shares of common stock to the LimitlessX shareholders pro
rata to their interests in approximately six months from 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 the issued
and outstanding shares of common stock of Bio Lab.
On June 10, 2022, Bio Lab changed its name to Limitless X Holdings, Inc. ("we,"
"us," or "our").
The Merger was accounted for as a "reverse merger" following the completion of
the transaction. For accounting purposes, LimitlessX was deemed to be the
accounting acquirer in the transaction and, consequently, the transaction was
treated as a recapitalization of Bio Lab. Accordingly, LimitlessX's assets,
liabilities, and results of operations became the historical financial
statements of the registrant.
RESULTS OF OPERATION
For the Three Months Ended September 30, 2022 Compared to Three Months Ended
June 30, 2022
We were incorporated in the State of Nevada on September 27, 2021. Consequently,
we did not have any activity for the six and three months ended September 30,
2021.
Our net sales increased by 92.6% to $21.5 million for the three months ended
September 30, 2022 as compared to $11.2 million for the three months ended June
30, 2022. Sales increase was due to a shift in our marketing strategies,
including strategic advertisement placements with celebrities and more effective
product placement.
Gross profit for the three months ended September 30, 2022 was $18.4 million
compared to $9.2 million for the three months ended June 30, 2022. The increase
in gross profit of $9.2 million was due to a shift in our marketing strategies,
including strategic advertisement placements with celebrities and more effective
product placement.
During the three months ended September 30, 2022, we recognized $21.2 million in
operating expenses compared to $15.4 million for the three months ended June 30,
2022. The increase of $5.8 million was primarily from advertising and marketing,
transaction fees, and merchant fees.
LIQUIDITY AND CAPITAL RESOURCES
Operating Activities
During the nine months ended September 30, 2022, net cash used in operating
activities was $6,761,913. The cash used in operating activities was primary due
to net loss and timing of settlement of assets and liabilities including stock
compensation expenses.
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Investing Activities
Net cash provided by investing activities for the nine months ended September
30, 2022 was $28,397. During the nine months ended September 30, 2022, $28,397
was provided by proceeds from the disposition of an asset.
Financing Activities
Net cash provided by financing activities for the nine months ended September
30, 2022 was $7,574,638. This amount was incurred by increased borrowings from
related parties, shareholders, and investors and proceeds from issuance of
common stock.
Off Balance Sheet Arrangements
None.
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