ITEM 1A. RISK FACTORS
There were no material changes during the period covered by this report to the risk factors previously disclosed in our S-1 Registration filed on October 2, 2018 (as amended) and declared Effective on April 23, 2019. Additional risks not presently known, or that we currently deem immaterial, also may have a material adverse effect on our business, financial condition and results of operations.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
For the year ended December 31, 2023, the Company issued 73,000 shares in connection with the Regulation D offering in the amount of $73,000 valued at $1.00 per share.
For the year ended December 31, 2023, the Company issued 157,000 shares in the amount of $157,000 valued at $1.00 per share for consulting services.
For the year ended December 31, 2023, the Company issued 20,000 shares in the amount of $55,000 valued at $2.50 per share for the conversion of $55,000 principal of a convertible note payable made within the terms of the agreement and no gain or loss results from it. In addition, the Company issued 1,625 shares valued at $1.00 per share as consideration upon the execution of these agreements.
As of December 31, 2023 we had 13,039,755 common shares outstanding.
For the year ended December 31, 2024, the Company issued 1,059,257 shares in the amount of $1,059,257 valued at $1.00 per share for consulting services.
For the year ended December 31, 2024, the Company issued 299,572shares in the amount of $774,267 for the conversion of principal and accrued interest of convertible notes payable made within the terms of the agreement and no gain or loss results from it.
For the year ended December 31, 2024, the Company issued 160,300 shares in the amount of $663,000 for conversion of accounts payable.
For the year ended December 31, 2024, the Company issued 5,000 common shares in the amount of $5,000 as debt issuance cost.
For the year ended December 31, 2024, the Company retired 2,500,000 founder shares.
As of December 31, 2024, the Company had 12,063,884 common shares outstanding.
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FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
Elite Performance Holding Corp.
Report of Independent Registered Public Accounting Firm (PCAOB # 2738 )
Consolidated Balance Sheets as of December 31, 2024 and 2023
Consolidated Statements of Operations for the years ended December 31, 2024 and 2023
Consolidated Statements of Stockholders’ Deficit for the years ended December 31, 2024 and 2023
Consolidated Statements of Cash Flows for the years ended December 31, 2024 and 2023
Notes to the Consolidated Financial Statements
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and
Stockholders of Elite Performance Holdings, Corp.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Elite Performance Holdings, Corp. (the Company) as of December 31, 2024 and 2023, and the related consolidated statements of operations, shareholders’ equity (deficit), and cash flows for each of the years in the two-year period ended December 31, 2024, and the related notes (collectively referred to as the financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America.
Going Concern
The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the consolidated financial statements, the Company has an accumulated deficit and has a net working capital deficiency, which raises substantial doubt about its ability to continue as a going concern. Management’s plans regarding those matters are also described in Note 2. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinions on the critical audit matter or on the accounts or disclosures to which it relates.
Going Concern
As discussed in Note 2 to the financial statements, the Company had a going concern due to a working capital deficiency, and stockholders’ deficiency. Auditing management’s evaluation of a going concern can be a significant judgement given the fact that the Company uses manage estimates on future revenues and expenses, which are not able to be substantiated. To evaluate the appropriateness of the going concern, we examined and evaluated the financial information that was the initial cause along with management’s plans to mitigate the going concern and management’s disclosure of going concern.
/s/ M&K CPAS, PLLC
We have served as the Company’s auditor since 2018.
The Woodlands, Texas
April 15, 2025
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Elite Performance Holding Corp.
Consolidated Balance Sheets
December 31,
ASSETS
CURRENT ASSETS
Cash
Inventory
Prepaid expenses
Total Current Assets
Property and equipment, net
Right of use asset
TOTAL ASSETS
LIABILITIES AND STOCKHOLDERS’ DEFICIT
CURRENT LIABILITIES
Accounts payable
Accounts payable and accrued expenses related party
Accrued expenses
Lease liability - current
Advances
Convertible notes payable, net
Total Current Liabilities
Lease liability - long-term
PPP Loan
Total Long-Term Liabilities
Total Liabilities
Commitments and Contingencies
STOCKHOLDERS' DEFICIT
Preferred stock; $ 0.0001 par value, 35,000,000 shares authorized, 10,000,000 shares issued and outstanding as of December 31, 2024 and 2023, respectively
Common stock; $ 0.0001 par value, 465,000,000 shares authorized, 12,063,844 and 13,039,755 issued and outstanding as of December 31, 2024 and 2023, respectively
Shares to be issued
Additional paid-in capital
Accumulated deficit
Total Stockholders' Deficit
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT
The accompanying notes are an integral part of these consolidated financial statements
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Elite Performance Holding Corp.
Consolidated Statements of Operations
Years ended December 31,
REVENUES
REVENUES-RELATED PARTIES
COST OF GOODS SOLD
GROSS LOSS
OPERATING EXPENSES
Legal and accounting
Advertising
Consulting
General and administrative
Total Operating Expenses
OPERATING LOSS
OTHER INCOME (EXPENSE)
Other income
Interest expense
Total Other Expense
NET LOSS
BASIC AND DILUTED NET LOSS PER COMMON SHARE
BASIC AND DILUTED WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING
The accompanying notes are an integral part of these consolidated financial statements
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Elite Performance Holding Corp.
Consolidated Statements of Stockholders’ Deficit
For the years ended December 31, 2024 and 2023
Shares
Additional
Total
Common Stock
Preferred Stock
Paid-in
Accumulated
Stockholders’
Shares
Amount
Shares
Amount
Issued
Capital
Deficit
(Deficit)
Balance December 31, 2022
Shares to be issued for Reg D subscriptions
Shares issued for services
Shares issued in connection with convertible debt
Shares issued as debt issuance cost
Net loss
Balance December 31, 2023
Shares to be issued for Services
Retirement of founder shares
Warrants issued for services
Shares issued in connection with conversion of convertible debt
Shares issued for conversion of AP
Shares issued as debt issuance cost
Net loss
Balance December 31, 2024
The accompanying notes are an integral part of these consolidated financial statements
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Elite Performance Holding Corp.
Consolidated Statements of Cash Flows
Year ended December 31,
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss
Items to reconcile net loss to net cash used in operating activities:
Amortization of debt discount
Shares issued for services
Loss on inventory writedown
Warrants issued for services
Depreciation expense
Changes in operating assets and liabilities
(Increase) / decrease in accounts receivable
(Increase) / decrease in inventory
(Increase) / decrease in prepaid expenses
(Increase) / decrease in right of use assets
Increase in accounts payable - related party
Increase in accounts payable and accrued expenses
Net Cash Used in Operating Activities
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from convertible debt
Proceeds from notes payable
Repayments of notes payable
Bank overdraft
Payments on financing leases
Proceeds from advances
Proceeds from sale of common stock and shares to be issued
Net Cash Provided by Financing Activities
Decrease in Cash
CASH AT BEGINNING OF YEAR
CASH AT END OF YEAR
Supplemental Cash Flow Information:
Cash paid for:
Interest Paid
Taxes
Non-Cash Investing and Financing Activities:
Shares issued in conversion with convertible notes
Accounts payable in exchange for common stock payable
Convertible notes payable in exchange for common stock payable
Advances and accrued interest exchanged for convertible notes payable
Shares issued as debt issuance cost
Shares issued for conversion of Accounts Payable
Retirement of preferred stock
The accompanying notes are an integral part of these consolidated financial statements
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Elite Performance Holding Corp.
Consolidated Notes to the Financial Statements
For the years ended December 31, 2024 and 2023
NOTE 1 - GENERAL
Business Overview
Elite Performance Holding Corporation (“EPH”) was formed on January 30, 2018 (inception) and is a holding company with anticipated holdings in companies centered on innovative and proprietary nutritional and dietary fitness enhancement products, that are in the sports performance, weight loss, nutritional, functional beverage, and energy markets.
On February 2, 2018, a contribution and assignment agreement was executed by Joseph Firestone and Jon McKenzie (collectively, the “Assignors”), and Elite Performance Holding Corp., a Nevada corporation (the “Assignee”). Whereas Firestone and McKenzie were the owners of 5,000,000 shares of common stock, $ 0.0001 par value, for a total of 10,000,000 shares of common stock (collectively, the “Shares”) of Elite Beverage International Corp., a Nevada corporation (the “Company”), which shares represented all authorized, issued and outstanding shares of the Company.
Elite Beverage International is a 100 % wholly owned subsidiary of Elite Performance Holding Corp.
BYLT Performance, LLC is a wholly owned subsidiary of Elite Beverage International Corp. and currently holds all of the trademarks and intellectual property for the Company.
Our Products and Services
On August 01, 2020, the Company entered into an Exclusivity Agreement between its wholly owned subsidiary Elite Beverage International Corp. and Bruce Kneller for exclusive rights on a patent pending SmartCarb® technology (US tent Application No. 16/785,498.) This Agreement gives the Company first right of refusal to purchase the technology upon issuance of its patent for 20,000 shares in the Company.
On September 29, 2021, the Company entered into an Agreement between its wholly owned subsidiary Elite Beverage International Corp. and Bruce Kneller for the transfer and assignment of the SmartCarb® technology (US Patent No. 11,103,522 issued August 31, 2021.) This Agreement gives the Company the intellectual property and patent ownership for 40,000 shares valued at $ 20,000 that were issued October 1, 2021. For the year ended December 31, 2021, an impairment loss of $ 20,000 was recognized on the Patent acquisition and recorded to other income (expense).
NOTE 2 - ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
These consolidated financial statements have been prepared on a going concern basis, which implies that the Company will continue to realize its assets and discharge its liabilities in the normal course of business. As of December 31, 2024, the Company had an accumulated deficit of $ 11,183,774 . The continuation of the Company as a going concern is dependent upon the continued financial support from its management, its ability to generate profits from the Company’s future operations, identify future investment opportunities and obtain the necessary debt or equity financing. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern. These consolidated financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.
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Principles of Consolidation and Basis of Presentation
The consolidated financial statements include the operations of the Company and its wholly-owned subsidiary, Elite Beverage International Corp.
All significant intercompany accounts and transactions have been eliminated in consolidation.
The Company’s consolidated financial statements are prepared using the accrual method of accounting and are presented in accordance with U.S. Generally Accepted Accounting Principles (GAAP). The Company has elected a calendar year-end.
Going concern
The Company’s consolidated financial statements are prepared using Generally Accepted Accounting Principles applicable to a going concern that contemplates the realization of assets and liquidation of liabilities in the normal course of business. However, the Company has recently accumulated significant losses and has negative working capital. All of these items raise substantial doubt about its ability to continue as a going concern. Management’s plans with respect to alleviating the adverse financial conditions that caused management to express substantial doubt about the Company’s ability to continue as a going concern are as follows:
The Company is currently trying to raise new debt or equity to set up and market its line of sports drinks. If the Company is not successful in the development and implementation of a concept which produces positive cash flows from operations, the Company may be forced to continue to raise additional equity or debt financing to fund its ongoing obligations or risk ceasing doing business.
There can be no assurance that the Company will be able to achieve its business plans, raise any more required capital or secure the financing necessary to achieve its current operating plan. The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plan described in the preceding paragraph and eventually attain profitable operations.
Cash and Cash Equivalents
We maintain the majority of our cash accounts at a commercial bank. The total cash balance is insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $ 250,000 per commercial bank. For purposes of the statement of cash flows we consider all cash and highly liquid investments with initial maturities of one year or less to be cash equivalents.
Accounts Receivable
We grant credit to our customers located within the United States of America; and do not require collateral. Our ability to collect receivables is affected by economic fluctuations in the geographic areas and industries served by us. As of December 31, 2024 and 2023, we had $ 0 and $ 0 in accounts receivable respectively. The allowance for doubtful trade receivables was $ 0 as of December 31, 2024 and 2023, respectively.
Inventory
Inventories are valued at the lower of weighted average cost or net realizable value. Our industry experiences changes in technology, changes in market value and availability of raw materials, as well as changing customer demand. The Company makes provisions for estimated excess and obsolete inventories based on regular audits and cycle counts of our on-hand inventory levels and forecasted customer demands and at times additional provisions are made. Any inventory write offs are charged to the reserve account. During the year ending December 31, 2024, the Company wrote off $ 30,802 in damaged inventory. As of December 31, 2024 and 2023, the Company had $ 0 and $ 30,802 in inventory respectively. The Company had no reserve for potentially obsolete inventory as of December 31, 2024 and 2023, respectively.
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Prepaid Expenses
Prepaid expenses are expenditures that have not yet been consumed, and so are capitalized for a short period of time. They are initially recorded on the balance sheet as current assets, and are later charged to expense. As of December 31, 2024 and 2023, we had $ 14,069 and $ 0 in prepaid expenses, respectively.
Basic and Diluted Loss Per Share
The Company presents both basic and diluted earnings per share (EPS) on the face of the statement of operations. Basic EPS is computed by dividing net income (loss) available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period including convertible debt, stock options, and warrants, using the treasury stock method, and convertible securities, using the if-converted method. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti-dilutive. The Company had net losses as of December 31, 2024 and 2023, so then diluted EPS excluded all dilutive potential shares in the diluted EPS because their effect is anti-dilutive. As of December 31, 2024, the Company had $ 1,272,216 in convertible notes plus accrued interest of $ 300,283 that may be converted into 2,341,910 shares of common stock. As of December 31, 2023, the Company had $ 820,250 in convertible notes plus accrued interest of $ 368,881 that may be converted into 1,915,447 shares of common stock.
Fair Value of Financial Instruments
The carrying amount of accounts payable and accrued expenses are considered to be representative of their respective fair values because of the short-term nature of these financial instruments.
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Advertising
Advertising costs are expensed as incurred. For the years ended December 31, 2024 and 2023, we had $ 33,168 and $ 65,169 advertising expense, respectively.
Research and Development
Research and development costs are expensed as incurred. Research and development expenses primarily consist of salaries and benefits for research and development employees, stock-based compensation, consulting fees, lab supplies, and regulatory compliance costs. For the years ended December 31, 2024 and 2023, we had $ 0 research and development (R&D) expense, respectively.
Use of Estimates
The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Revenue Recognition
Effective January 1, 2018, the Company adopted ASC 606 — Revenue from Contracts with Customers. Under ASC 606, the Company recognizes revenue from the commercial sales of products by applying the following steps: (1) identify the contract with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to each performance obligation in the contract; and (5) recognize revenue when each performance obligation is satisfied. The Company’s performance obligation is to deliver the product(s) per the contract and the obligation is met upon receipt of the product by the purchaser. Prices are predetermined plus applicable taxes and shipping costs. The Company’s main source of revenue comes from distributors, retail stores and gyms, and online sales primarily coming from the company website and Amazon. Amounts invoiced or collected in advance of product delivery or providing services are recorded as deferred revenue. The Company accrues for warranty costs, sales returns, bad debts, and other allowances based on its historical experience.
For the year ended December 31, 2024 and 2023, we had $ 681 and $ 42,569 , respectively in revenue from the sale of our products.
Income Taxes
Federal Income taxes are not currently due since we have had losses since inception.
On December 22, 2017 H.R. 1, originally known as the Tax Cuts and Jobs Act, (the “Tax Act”) was enacted. Among the significant changes to the U.S. Internal Revenue Code, the Tax Act lowers the U.S. federal corporate income tax rate (“Federal Tax Rate”) from 35 % to 21 % effective January 1, 2018. The Company computes its income tax expense using a Federal Tax Rate of 21 %.
Income taxes are provided based upon the liability method of accounting pursuant to ASC 740-10-25 Income Taxes – Recognition. Under this approach, deferred income taxes are recorded to reflect the tax consequences in future years of differences between the tax basis of assets and liabilities and their financial reporting amounts at each year-end. A valuation allowance is recorded against deferred tax assets if management does not believe the Company has met the “more likely than not” standard required by ASC 740-10-25-5.
Deferred income tax amounts reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax reporting purposes.
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As of December 31, 2024 and 2023, we had a net operating loss carry-forward of approximately $ 8,000,000 and $ 8,789,000 and a deferred tax asset of approximately $ 1,675,000 and $ 1,846,000 using the statutory rate of 21%. The deferred tax asset may be recognized in future periods, not to exceed 20 years. However, due to the uncertainty of future events we have recorded a valuation allowance of approximately $ 1,675,000 and $ 1,846,000 . FASB ASC 740 prescribes recognition threshold and measurement attributes for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. FASB ASC 740 also provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. As of December 31, 2024 and 2023, the Company had not taken any tax positions that would require disclosure under FASB ASC 740.
Net deferred tax assets consist of the following components as of December 31, 2024, and 2023:
December 31, 2024
December 31, 2023
Deferred tax assets:
Deferred tax assets
Valuation allowance
Net deferred tax asset
Stock-Based Compensation
The Company records stock-based compensation using the fair value method. Equity instruments issued to employees and the cost of the services received as consideration are accounted for in accordance with ASC 718 “Stock Compensation” and are measured and recognized based on the fair value of the equity instruments issued.
Long Lived Assets
Periodically the Company assesses potential impairment of its long-lived assets, which include property, equipment and acquired intangible assets, in accordance with the provisions of ASC Topic 360, “Property, Plant and Equipment.” The Company recognizes impairment losses on long-lived assets used in operations when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the assets’ carrying values. An impairment loss would be recognized in the amount by which the recorded value of the asset exceeds the fair value of the asset, measured by the quoted market price of an asset or an estimate based on the best information available in the circumstances. For the years ended December 31, 2024 and 2023, we did not record any impairment on our previously announced Patent acquisition, resulting in no other income (expense) being recognized.
Property and Equipment
Property and equipment are carried at cost, less accumulated depreciation. Additions are capitalized and maintenance and repairs are charged to expense as incurred. Depreciation is recorded on the straight-line basis method over the estimated useful lives of the assets.
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Recently Issued Accounting Standards
Accounting Standards Issued
All other ASUs issued but not yet adopted were assessed and determined to be either not applicable or are not expected to have a material impact on our consolidated financial statements or financial statement disclosures.
Segment reporting policy
In November 2023, the FASB issued Accounting Standards Update 2023-07 – Segment Reporting (Topic ASC 280) Improvements to Reportable Segment Disclosures. The ASU improves reportable segment disclosure requirements, primarily through enhanced disclosure about significant segment expenses. The enhancements under this update require disclosure of significant segment expenses that are regularly provided to the Chief Operating Decision Maker (“CODM”) and included within each reported measure of segment profit or loss, require disclosure of other segment items by reportable segment and a description of the composition of other segment items , require annual disclosures under ASC 280 to be provided in interim periods, clarify use of more than one measure of segment profit or loss by the CODM, require that the title of the CODM be disclosed with an explanation of how the CODM uses the reported measures of segment profit or loss to make decisions, and require that entities with a single reportable segment provide all disclosures required by this update and required under ASC 280. The Company adopted ASU 2023-07 for the annual period ending December 31, 2024.
The Company’s Chief Executive Officer serves as the Chief Operating Decision Maker (“CODM”) and evaluates the financial performance of the business and makes resource allocation decisions on a consolidated basis. As a result, the Company operates as a single reportable segment under ASC 280, Segment Reporting, defined by the CODM as centered on innovative and proprietary nutritional and dietary fitness enhancement products, that are in the sports performance, weight loss, nutritional, functional beverage, and energy markets. The Company’s operations include a first to market functional sports beverage called B.Y.L.T.® (acronym for Beyond Your Limit Training), which is managed centrally.
The CODM assesses financial performance based on revenue, operating profit, and key operating expenses.
NOTE 3 - RELATED PARTY TRANSACTIONS
Accounts and Notes Payable related party
For the years ended December 31, 2024 and 2023, we had $ 0 and $ 36,000 , respectively, in consulting expense to “I Know a Dude, Inc.” owned by Laya Clark. Mr. Clark is a member of our Board of Directors. As of December 31, 2024 and 2023, we had an outstanding balance due of $ 122,922 and $ 113,922 , which is included in accounts payable related party.
For the years ended December 31, 2024 and 2023, we incurred $ 0 and $ 26,689 , respectively, for un-reimbursed business expenses. As of December 31, 2024 and 2023, we had outstanding balances due to Joey Firestone of $ 24,022 and $ 26,689 , respectively, for un-reimbursed business expenses. As of December 31, 2024 and 2023, we also had an outstanding balance due to Joey Firestone of $ 5,000 and $ 40,000 , respectively, for consulting services, and $ 97,187 and $ 448,203 for salary, respectively, which is included in accounts payable related party.
For the years ended December 31, 2024 and 2023, we had $ 0 in accounting expense respectively to “The Mosely Group.” owned by Reesa McKenzie. Ms. McKenzie is the sister of Jon McKenzie. As of December 31, 2024 and 2023, we had an outstanding balance due of $ 0 and $ 4,500 , respectively, which is included in accounts payable related party.
One February 1, 2021 the Company renewed the employment agreement with Joey Firestone with milestone performance bonuses in shares of restricted 144 stock.
On January 1, 2021, the Company entered into a royalty free trademark licensing agreement between Elite Beverage International Corp. and its subsidiary BYLT Performance LLC in consideration for 500,000 (valued at par $ 0.0001 per share) shares to be issued in the amount of $ 500 which were issued April 29, 2021.
On May 6, 2022, the Company entered into a lease agreement with its CEO, Joey Firestone, for three cargo vans to be used for delivery and distribution of its products. Mr. Firestone is the guarantor of these vehicles, which he acquired for the sole purpose of the operations of Elite Beverage International. Total initial payments for all three vehicles were $ 19,000 . Each vehicle has a purchase option upon the completion of the lease agreement. See Note 4 for additional details.
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NOTE 4 - LEASES
Our adoption of ASU 2016-02, Leases (Topic 842), and subsequent ASUs related to Topic 842, requires us to recognize substantially all leases on the balance sheet as an ROU asset and a corresponding lease liability. The new guidance also requires additional disclosures as detailed below. We adopted this standard on the effective date of January 1, 2019 and used this effective date as the date of initial application. Under this application method, we were not required to restate prior period financial information or provide Topic 842 disclosures for prior periods. We elected the ‘package of practical expedients,’ which permitted us to not reassess our prior conclusions related to lease identification, lease classification, and initial direct costs, and we did not elect the use of hindsight.
Lease ROU assets and liabilities are recognized at commencement date of the lease, based on the present value of lease payments over the lease term. The lease ROU asset also includes any lease payments made and excludes any lease incentives. When readily determinable, we use the implicit rate in determining the present value of lease payments. When leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at the lease commencement date, including the lease term.
We recognized a $ 70,075 right-of-use asset and $ 82,474 in a related party lease liability for our finance leases. For our finance leases, the asset is included in other long-term assets on the balance sheet and is amortized within operating income over the lease term. The long-term component of the lease liability is included in other long-term liabilities, net, and the current component is included in other current liabilities.
On May 6, 2022, the Company entered into a lease agreement with its CEO, Joey Firestone, for three cargo vans to be used for delivery and distribution of its products. Mr. Firestone is the guarantor of these vehicles, which he acquired for the sole purpose of the operations of Elite Beverage International. The monthly payment for each vehicle is 66 months of $706 (APR 8.99%) (2019 Mercedes Sprinter Van), 72 months of $807 (APR9.95%) (2019 Ford Transit Van), and 72 months of $797. (APR 10.59%) (2020 Ford Transit Van) Each vehicle has a purchase option upon the completion of the lease agreement . Total initial payments were $ 19,000 for all three vehicles which was $ 9,000 . $ 5,000 , and $ 5,000 for each one, respectively.
The Company incurred amortization expense, which is included as part of selling, general and administrative expenses, of $ 21,458 and $ 23,410 plus interest expense of $ 7,376 and $ 10,007 during the years ended December 31, 2024 and 2023, respectively.
The tables below present financial information associated with our leases.
Balance Sheet
December 31,
December 31,
Classification
Right-of-use assets
Other long-term assets
Current lease liabilities
Other current liabilities
Non-current lease liabilities
Other long-term liabilities
As of December 31, 2024, our maturities of our lease liabilities are as follows:
December 31,
Maturity of lease liabilities
Financing Leases
Thereafter
Total lease payments
Less: Imputed interest
Present value of lease liabilities
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NOTE 5 - PROPERTY AND EQUIPMENT
The following is a summary of property and equipment—at cost, less accumulated depreciation:
December 31,
Trucks
Total cost
Less accumulated depreciation
Net, property and equipment
Depreciation expense for the years ended December 31 2024 and 2023 was $ 10,970 and $ 11,001 , respectively. The trucks are being depreciated over a useful life of 5 years.
NOTE 6 - COMMON STOCK AND COMMON STOCK WARRANTS
Common Stock
The Company had authorized a total of 400,000,000 shares of Common Stock, par value of $ 0.0001 as of December 31, 2017 for Elite Beverage International. However, Elite Performance Holding Corp. is now the successor company and as of December 31, 2022 there are 465,000,000 (Four Hundred Sixty-Five Million) shares authorized, par value of $ 0.0001 , respectively.
On February 2, 2018, Elite Performance Holding Corp., owned and controlled by Firestone and McKenzie, acquired Elite Beverage International through a 1:2 common share exchange as follows: 50,000,000 common shares of Elite Performance Holding, Corp., in exchange for 100,000,000 common shares of Elite Beverage International, Inc .
The Company effected a one-for-ten reverse stock split on March 17, 2025. All share and per share information in this Annual Report on Form 10-K, including the consolidated financial statements and related notes thereto, has, where applicable, been retroactively adjusted to reflect the Reverse Stock Split.
Shares Registered in the S-1 Registration Statement
As of December 31, 2022, the Company has raised $1,250,000 (2,500,000 shares issued) through a registered offering for $1,250,000 which was registered with the SEC through an S1 registration statement which went effective on April 23, 2019 .
Restricted Shares issued
In the year ended December 31, 2023, we issued 157,000 shares for services in the amount of $ 157,000 valued at $ 1.00 per share.
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In the year ended December 31, 2023, we issued 20,000 common shares to accredited investors for notes in the amount of $ 55,000 .
In the year ended December 31, 2023, we issued 73,000 common subscription shares to accredited investors for subscription agreements in the amount of $ 73,000 .
In the year ended December 31, 2023, we issued 1,625 common shares in the amount of $ 1,625 as debt issuance cost.
As of December 31, 2023, we had 13,039,755 common shares outstanding.
For the year ended December 31, 2024, the Company issued 1,059,257 shares in the amount of $ 1,059,257 valued at $ 1.00 per share for consulting services.
For the year ended December 31, 2024, the Company issued 299,572 shares in the amount of $ 774,267 for the conversion of principal and accrued interest of convertible notes payable made within the terms of the agreement and no gain or loss results from it.
For the year ended December 31, 2024, the Company issued 160,300 shares in the amount of $ 663,000 for conversion of accounts payable.
For the year ended December 31, 2024, the Company issued 5,000 common shares in the amount of $ 5,000 as debt issuance cost.
For the year ended December 31, 2024, the Company retired 2,500,000 founder shares valued at $ 0 .
As of December 31, 2024, the Company had 12,063,884 common shares outstanding.
Common Stock Warrants
On March 18, 2024, the Company issued 80,000 five year warrants exercisable at $ 20.00 valued at $ 77,623 for consulting services. The Company used a Black-Scholes option pricing model with the following assumptions: stock price of $ 0.01 per share, volatility of 236 %, expected term of 5 years, and a risk free interest rate of 4.34 %.
On May 6, 2024, the Company issued 16,000 five year warrants exercisable at $ 20.00 valued at $ 15,884 for consulting services. The Company used a Black-Scholes option pricing model with the following assumptions: stock price of $ 0.01 per share, volatility of 276 %, expected term of 5 years, and a risk free interest rate of 4.50 %.
On August 20, 2024, the Company issued 10,000 five year warrants exercisable at $ 20.00 valued at $ 9,991 as part of a convertible note issued. The Company used a Black-Scholes option pricing model with the following assumptions: stock price of $ 0.01 per share, volatility of 329 %, expected term of 5 years, and a risk free interest rate of 3.69 %.
Transactions involving the Company’s warrant issuances are summarized as follows:
Weighted
Number of
Average
Exercise
Shares
Price
Outstanding at December 31, 2022
Issued
Exercised
Expired or cancelled
Outstanding at December 30, 2023
Issued
Exercised
Expired or cancelled
Outstanding at December 31, 2024
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The following table summarizes warrants outstanding as of December 31, 2024:
Weighted Average
Number
Remaining
Weighted
Outstanding
Contractual
Average
Exercise Price
and Exercisable
Life (years)
Exercise price
NOTE 7 - PREFERRED STOCK
The Company has authorized a total of 35,000,000 Shares of Preferred Stock, $ 0.0001 par value, which may be issued from time to time and bearing such rights, privileges and preferences as shall be designated by the Board of Directors. As of December 31, 2017, Elite Beverage International Corp had issued 10,000,000 Shares of Preferred Stock, designated as series A “Cumulative Preference ‘A’”, for $ 1,000 .
10,000,000 Series A preferred which carries super voting rights. Each preferred share carries 20 votes .
On February 2, 2018 Elite Performance Holding Corp., owned and controlled by Firestone and McKenzie, acquired Elite Beverage International through a 1:1 preferred share exchange as follows. 10,000,000 Series A preferred shares of Elite Performance Holdings Corp. in exchange for 10,000,000 Series A preferred shares of Elite Beverage International Inc .
On March 3, 2023, Jon McKenzie transferred his ownership of 5,000,000 Series A Preferred shares with super voting rights to Chairman and CEO Joey Firestone.
NOTE 8 - NOTE PAYABLE
On April 30, 2020 Elite Beverage International was approved for a loan for $ 201,352 through the Payment Protection Program (PPP) with an interest of 0.98 % per annum and a maturity date of April 23, 2022 . Forgiveness in the amount of $ 105,867 was given on September 2, 2021, which was recorded as a gain on forgiveness on debt in the statement of operations. As of February 9, 2022, The SBA has paid off the balance of the PPP loan with the lender. The Company is waiting for formal confirmation from the SBA on the status of the loan balance and once received will record the forgiveness of the debt. On the PPP loan, interest expense was $ 4,780 for the year ended December 31, 2024 and $ 3,826 for the year ended December 31, 2023, respectively. The balance of this PPP loan is $ 95,485 as of December 31, 2024 and 2023, respectively.
During the years ended December 31, 2024 and 2023, the Company entered into non-convertible, non-interest bearing advances for $ 90,000 , $ 50,000 , $ 75,000 , $ 20,000 , $ 20,000 , $ 12,000 , $ 11,000 , $ 7,500 and $ 2,000 , respectively from a third party and the monies will be paid back over the course of the next 12 months. During the year ended December 2024, the Company converted $ 205,000 in advances to convertible debt, received proceeds of $ 52,500 and made repayments of $ 51,500 . As of December 31, 2024 and 2023, the balance of this advance is $ 11,000 and $ 215,000 , respectively.
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In January of 2023, the Company entered into a refinance agreement with a third party that held the original agreement on July of 2022. In July of 2022, the Company entered into a receivables and sale note payable agreement with a third party. The funded amount by the third party was $ 50,460 , this amount is the purchase price less fees and is the net amount funded to the Company. This note will be paid back with 48 weekly installments of $ 1,332 , for a total amount of $ 63,960 to be paid back. The note contains Original Issue Discount (OID) of $ 13,500 at issuance. As of December 31, 2022, the Company owed $ 29,316 on this note payable and the OID balance is $ 6,188 , leaving a net balance of $ 23,128 . The Company has recorded $ 7,313 as interest expense for the year ended December 31, 2022 related to this OID. For the refinance terms in January of 2023 agreement, the Company funded amount by the third party was $ 98,500 , this amount is the purchase price less fees and is the net amount funded to the Company. This note will be paid back with 60 weekly installments of $ 2,133 , for a total amount of $ 128,000 to be paid back. This note contains Original Issue Discount (OID) of $ 29,500 at issuance. As of December 31, 2024, the Company paid this in full and owes $ 0 on this note payable and the OID balance.
NOTE 9 - CONVERTIBLE NOTES PAYABLE
On December 4, 2019, the Company entered into a convertible promissory note in the amount of $ 189,000 , with an interest rate of 8 % per annum and a maturity date of December 4, 2020 . The note carries a prepayment feature or is convertible 180 days from the date of the note, at a fixed price of $0.005 or if publicly traded at the rate of the lessor of $0.05 or the lowest of 65% of the lowest closing bid price for 3 trading days previous to the conversion or based on any subsequent financings with better terms to other investors. This note included an original discount fee of $ 9,000 . At December 31, 2023 and 2022, balance on this debt discount was $ 0 , respectively. The Company also issued 500,000 commitment shares valued at $ 25,000 on December 11, 2019 and recorded to debt discount. The Company amortized $ 1,712 for the year ended December 31, 2019, and $ 23,288 and $ 0 for the years ended December 31, 2020 and 2021 respectively. On January 23, 2024, the Company modified this note, along with several other Hillyer notes and advances, including accrued interest, to a new note maturing on December 31, 2024 .
On January 17, 2020, the Company issued a convertible promissory note to The Hillyer Group Inc. in the amount of $ 157,500 with an interest rate of 8 % per annum and a maturity date of January 17, 2021 . The note carries a prepayment feature or is convertible 180 days from the date of the note, at a fixed price of $0.50 or if publicly traded at the rate of the lessor of $0.50 or the lowest of 65% of the lowest closing bid price for 3 trading days previous to the conversion or based on any subsequent financings with better terms to other investors. On January 17, 2019 the Company issued 40,000 shares of common stock in consideration for the execution of this note. These shares are restricted and subject to SEC Rule 144. These shares were valued at $ 20,000 included an original discount fee of $ 7,500 , which was recorded to debt discount. On January 23, 2024, the Company modified this note, along with several other Hillyer notes and advances, including accrued interest, to a new note maturing on December 31, 2024.
On July 21, 2021, the Company issued a convertible promissory note to Hillyer Group LLC. in the amount of $ 26,250 with an interest rate of 8 % per annum and a maturity date of July 21, 2022 . The note carries a prepayment feature or is convertible 180 days from the date of the note, at a fixed price of $0.50 or if publicly traded at the rate of the lessor of $5.00 or the lowest of 65% of the lowest closing bid price for 3 trading days previous to the conversion or based on any subsequent financings with better terms to other investors. On July 21, the Company agreed to issue 6,000 shares of common stock in consideration for the execution of this note, which were subsequently issued on October 1, 2021. These shares are restricted and subject to SEC Rule 144. These shares were valued at $ 3,000 and recorded to debt discount. This note also included an original discount fee of $ 1,250 recorded to debt discount, the Company amortized $ 703 for the year ended December 31, 2022 leaving a balance of $ 0 . The Company recorded $ 0 and $ 0 as interest expense related to this OID for September 30, 2024 and December 31, 2023, respectively. On May 13, 2024, the debt holder exercised the convertible option on the note with an outstanding balance of $ 26,250 and accrued interest of $10,536 to 73,572 shares of common stock. The outstanding balance on the note was $0 as of December 31, 2024 as a result of the common stock conversion.
On September 16, 2021, the Company issued a convertible promissory note to Stout LLC. in the amount of $ 20,000 with an interest rate of 12 % per annum and a maturity date of September 16, 2022 . The note carries a prepayment feature or is convertible 180 days from the date of the note, at a fixed price of $0.50 per share of common stock or if publicly traded at the rate of the lessor of $0.50 or the lowest of 65% of the lowest closing bid price for 3 trading days previous to the conversion or based on any subsequent financings with better terms to other investors. The outstanding balance on the note was $ 20,000 as of December 31, 2024. This note is in default and is accruing interest at the default rate of 18 %.
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On March 1, 2023, the Company entered into a convertible promissory note in the amount of $ 10,000 with an interest rate of 8 % per annum and a maturity date of March 1, 2024 . The note carries a prepayment feature or is convertible 14 days from the date of the note, at a fixed price of $5.00 per share of common stock . The debt holder exercised the convertible option on the $ 10,000 note and converted the entire amount into 2,000 shares of the Company’s common stock. This conversion was carried out per the terms of the agreement, as such no gain or loss was recorded on the transaction The outstanding balance on the note was $ 0 as of December 31, 2024 as a result of the common stock conversion.
On May 3, 2023, the Company entered into a convertible promissory note in the amount of $ 25,000 with an interest rate of 10 % per annum and a maturity date of May 3, 2024 . The note carries a prepayment feature or is convertible 14 days from the date of the note, at a fixed price of $2.50 per share of common stock . The debt holder exercised the convertible option on the $ 25,000 note and converted the entire amount into 10,000 shares of the Company’s common stock. This conversion was carried out per the terms of the agreement, as such no gain or loss was recorded on the transaction. The outstanding balance on the note was $ 0 as of December 31, 2024 as a result of the common stock conversion.
On May 15, 2023, the Company entered into a convertible promissory note in the amount of $ 50,000 with an interest rate of 10 % per annum and a maturity date of May 15, 2024 . The note carries a prepayment feature or is convertible 14 days from the date of the note, at a fixed price of $02.50 per share of common stock . On May 13, 2024, the debt holder exercised the convertible option on the $ 50,000 note along with $ 5,000 in accrued interest and converted the entire amount into 22,000 shares of the Company’s common stock. This conversion was carried out per the terms of the agreement, as such no gain or loss was recorded on the transaction. The outstanding balance on the note was $ 0 as of December 31, 2024 as a result of the common stock conversion.
On May 16, 2023, the Company entered into a convertible promissory note in the amount of $ 50,000 with an interest rate of 10 % per annum and a maturity date of May 16, 2024 . The note carries a prepayment feature or is convertible 14 days from the date of the note, at a fixed price of $2.50 per share of common stock . On May 13, 2024, the debt holder exercised the convertible option on the $ 50,000 note along with $ 5,000 in accrued interest and converted the entire amount into 22,000 shares of the Company’s common stock. This conversion was carried out per the terms of the agreement, as such no gain or loss was recorded on the transaction. The outstanding balance on the note was $ 0 as of December 31, 2024 as a result of the common stock conversion.
On June 23, 2023, the Company entered into a convertible promissory note in the amount of $ 150,000 with an interest rate of 10 % per annum and a maturity date of June 23, 2024 . The note carries a prepayment feature or is convertible 14 days from the date of the note, at a fixed price of $2.50 per share of common stock . The outstanding balance on the note was $ 0 as of December 31, 2024 as a result of the common stock conversion.
On September 12, 2023, the Company entered into a convertible promissory note in the amount of $ 10,000 with an interest rate of 10 % per annum and a maturity date of September 11, 2024 . The note carried a prepayment feature or is convertible 14 days from the date of the note, at a fixed price of $2.50 per share of common stock . This note was converted to 4,000 shares on September 25, 2023. The outstanding balance on the note was $ 0 as of December 31, 2024.
On November 1, 2023, the Company entered into a convertible promissory note in the amount of $ 25,000 with an interest rate of 10 % per annum and a maturity date of January 2, 2024 . The note carries a prepayment feature or is convertible 14 days from the date of the note, at a fixed price of $2.50 per share of common stock . On January 23, 2024, the Company modified this note, along with several other Hillyer notes and advances, including accrued interest, to a new note maturing on December 31, 2024 .
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On January 4, 2024, the Company entered into a convertible promissory note in the amount of $ 10,000 with an interest rate of 10 % per annum and a maturity date of January 4, 2025 . The note carried a prepayment feature or is convertible 14 days from the date of the note, at a fixed price of $2.50 per share of common stock . This note was converted to 4,000 shares, as stated within the terms of the agreement. The outstanding balance on the note was $0 as of December 31, 2024.
On January 23, 2024, the Company modified and aggregated several Hillyer loans totaling $ 371,500 , advances totaling $ 205,000 and accrued interest totaling $ 218,216 for an aggregate balance of $ 794,716 and extended the maturity to December 31, 2024. The Company issued 5,000 incentive shares valued at a debt discount of $ 5,000 . The Company recognized $ 5,000 in amortization expense for the year months ended December 31, 2024.
On January 30, 2024, the Company entered into a convertible promissory note in the amount of $ 25,000 with an interest rate of 10 % per annum and a maturity date of January 30, 2025 . The note carried a prepayment feature or is convertible 14 days from the date of the note, at a fixed price of $2.50 per share of common stock . This note was converted to 10,000 shares, as stated within the terms of the agreement. The outstanding balance on the note was $0 as of December 31, 2024.
On February 28, 2024, the Company entered into a convertible promissory note in the amount of $ 50,000 with an interest rate of 12 % per annum and a maturity date of February 28, 2025 . The note carries a prepayment feature or is convertible 14 days from the date of the note, at a fixed price of $2.50 per share of common stock . On May 13, 2024, the debt holder exercised the convertible option on the $ 50,000 note and converted the entire amount into 20,000 shares of the Company’s common stock. This conversion was carried out per the terms of the agreement, as such no gain or loss was recorded on the transaction. The outstanding balance on the note was $ 0 as of December 31, 2024 as a result of the common stock conversion.
On March 12, 2024, the Company entered into a convertible promissory note in the amount of $ 10,000 with an interest rate of 12 % per annum and a maturity date of March 12, 2025 . The note carries a prepayment feature or is convertible 14 days from the date of the note, at a fixed price of $2.50 per share of common stock . On May 13, 2024, the debt holder exercised the convertible option on the $ 10,000 note and converted the entire amount into 4,000 shares of the Company’s common stock. This conversion was carried out per the terms of the agreement, as such no gain or loss was recorded on the transaction. The outstanding balance on the note was $ 0 as of December 31, 2024 as a result of the common stock conversion.
On March 15, 2024, the Company entered into a convertible promissory note in the amount of $ 10,000 with an interest rate of 12 % per annum and a maturity date of March 15, 2025 . The note carries a prepayment feature or is convertible 14 days from the date of the note, at a fixed price of $2.50 per share of common stock . On April 1, 2024, the debt holder exercised the convertible option on the $ 10,000 note and converted the entire amount into 4,000 shares of the Company’s common stock. This conversion was carried out per the terms of the agreement, as such no gain or loss was recorded on the transaction. The outstanding balance on the note was $ 0 as of December 31, 2024 as a result of the common stock conversion.
On April 5, 2024, the Company entered into a convertible promissory note in the amount of $ 100,000 with an interest rate of 12 % per annum and a maturity date of April 5, 2025 . The note carried a prepayment feature or is convertible 14 days from the date of the note, at a fixed price of $2.50 per share of common stock . This note was converted to 40,000 shares, as stated within the terms of the agreement. The outstanding balance on the note was $ 0 as of December 31, 2024.
On April 24, 2024, the Company entered into a convertible promissory note in the amount of $ 40,000 with an interest rate of 12 % per annum and a maturity date of April 24, 2025 . The note carried a prepayment feature or is convertible 14 days from the date of the note, at a fixed price of $2.50 per share of common stock . This note was converted to 16,000 shares, as stated within the terms of the agreement. The outstanding balance on the note was $ 0 as of December 31, 2024.
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On May 24, 2024, the Company entered into a convertible promissory note in the amount of $ 100,000 with an interest rate of 12 % per annum and a maturity date of May 24, 2025 . The note carried a prepayment feature or is convertible 14 days from the date of the note, at a fixed price of $2.50 per share of common stock . This note was converted to 40,000 shares, as stated within the terms of the agreement. The outstanding balance on the note was $ 0 as of December 31, 2024.
On June 19, 2024, the Company entered into a convertible promissory note in the amount of $ 10,000 with an interest rate of 12 % per annum and a maturity date of June 19, 2025 . The note carried a prepayment feature or is convertible 14 days from the date of the note, at a fixed price of $2.50 per share of common stock . This note was converted to 4,000 shares, as stated within the terms of the agreement. The outstanding balance on the note was $ 0 as of December 31, 2024.
On July 1, 2024, July 26, 2024 and October 18, 2024, the Company received $ 75,000 , $ 50,000 and $ 10,000 , respectively, related to a May 6, 2024 convertible promissory note with a third party. The note is for up to $ 160,000 with an interest rate of 12 % per annum and a maturity date of November 5, 2024 . The note shall be convertible into shares of common stock equal to 70% of the lowest closing price on the primary trading market on which the Company’s common stock is quoted for the last five (5) trading days immediately prior to but not including the conversion date, which is subject to a floor conversion price of $20.00 per share . The outstanding balance on the note is $ 135,000 as of December 31, 2024.
On August 21, 2024, the Company entered into a convertible promissory note in the amount of $ 100,000 with an interest rate of 12 % per annum and a maturity date of August 20, 2025 . The note carried a prepayment feature or is convertible 14 days from the date of the note, at a fixed price of $2.50 per share of common stock . This note was converted to 40,000 shares, as stated within the terms of the agreement. The outstanding balance on the note was $ 0 as of December 31, 2024.
Total interest expense including discount amortization on the above notes for December 31, 2024 and 2023 was $ 246,243 (including the finance lease interest on automobiles as referenced in Note 4) and $ 135,989 , respectively.
NOTE 10 - COMMITMENTS AND CONTINGENCIES
We are currently not involved in any litigation that we believe could have a material adverse effect on our financial condition or results of operations. There is no action, suit, proceeding, inquiry 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.
The Company discovered in September of 2021 that BYLT Basics, a party that it settled a previous trademark litigation case with, is in breach of its settlement agreement and sent a notice of breach to said party. The underlying matter is a trademark dispute for the mark B.Y.L.T. (Reg 6548069) of which the Company filed two oppositions of the party’s trademarks at the Trademark Trial and Appeal Board. BYLT Basics and the Company filed a claims against each other surrounding this mark and its use. Attorneys are in contact and discovery proceedings has already started to take place.
NOTE 11 - INVENTORY
As of December 31, 2024, the Company’s inventory was $ 0 , which consisted of $ 0 in raw material and $ 0 in finished goods.
As of December 31, 2023, the Company’s inventory was $ 30,802 , which consisted of $ 30,802 in raw material and $ 0 in finished goods.
NOTE 12 – OTHER INCOME
On January 10, 2022 (the “effective date”), the Company entered into a settlement agreement with a third party related to patent infringement. The term of this settlement agreement is from the effective date and terminates on December 31, 2024 (the “termination date”). The third party will pay a 7 % royalty fee to the Company on the sale of its products through the termination date. For the year ended December 31, 2024 and since the effective date of this agreement, the Company recorded $ 4,945 in other income related to the royalty fees. The Company also recorded a $ 6,000 gain on conversion of accounts payable to common stock.
NOTE 13 - SUBSEQUENT EVENTS
In accordance with ASC 855, the Company has analyzed its operations subsequent to December 31, 2024 through the date these consolidated financial statements were issued and has reported the following events:
In 2025, the Company issued 588,992 common shares. In addition, the Company issued $ 50,000 in various convertible notes.
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