Limitless X Holdings Inc.

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 Managements 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

RISKS RELATED TO OUR BUSINESS

Our future profitability is uncertain.

We have incurred losses in recent quarters. Because we operate in athe highly competitive innutritional supplement industry,  and are or expect to expand into film and television, regenerative skin care, 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 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 $10.04.2 million for the years ended December 31, 20234 and 2022, respectively, and we had an accumulated deficit of $12.938.8 million at December 31, 20234. 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 20234. 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 Companys 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. 

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, 20234, we incurred net losses of $16.13 million. We expect to continue to incur significant expenses and operating losses for the foreseeable future as we broaden our cu (i) expand our business into new areas, which includes film and television, regenerative skin-care, entertainment and fin-tech, and which may not come to fruition and prove successful (ii) broaden our customer base, (iii) develop our retail and wholesale distribution platforms, and we(iv) 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 ownlicensed or controllfrom Limitless Performance, Inc., an entity owned by our Chief Executive Officer and we may lose all of our business at any time.

All of the current brands and products th, including the NZT-48 products, that we sell and promote are ownlicensed or controllfrom Limitless Performance, Inc. (LPI), an entity owned by Jas Mathur, our Chief Executive Officer. If Mr. Mathur chooses, on behalf of his companies and/or brandsLPI, to terminate all of theour licensing agreements he has with us, we will effectively lose all of our current business. All of our We entered into the licensing agreements with oLPI for our current marketed brands were entered into in in 2021 and haveit has a five-year term with automatic renewal for five years, whereby the licensors are  is not able to terminate the agreement with us ebefore the end of a given term except for cause. However, all suchthe licensing agreements only grants us a non-exclusive license to manufacture, market, and distribute the brands products. Therefore, there is a possibility that the brands LPI could work with other companies to manufacture, market, and distribute theirits 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 , on behalf of LPI, 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 notIf be ablewe fail to successfully continue the business of Prime Time Live.

As a result of the LimitlessX Acquisition, we alsocost-effectively acquired the business of Prime Time Live, Inc. (PTL), a digital marketer and service provider in the event industry. A major part of new consumers or retain 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 PTLs platform, systems, and workflow with our brands existing marketing plans, our existing consumers, our nutritional supplements business, financial condition, results of operations, and prospects could uld be adversely affected.

If we fail to cost-effectively acquire new consumers or retain our existing consumers, our Our success in our nutritional supplements business could be adversely affected.

Our success dedepends 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 current nutritional supplement brand, build brand loyaltys, to develop new business divisions in television and film, regenerative skin-care, fintech, entertainment and real estate and generate interest in our current and new 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 current nutritional products across our variou(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 maywill be required to maintain or improve our brands market position or to introduce new products to the marketand 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, 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,  that 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 areis 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 e-commerce 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, e-commerce 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 cardholders 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 markecompanies operating com in the health and wellness space and other industries into which we intend to expaniesd such as film and entertainment, fintech, and oreal estate. Our operating results could suffer if we fail to compete effectively. The marketingse industry is ies are 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 andepartments and manufacturing organizationwings. 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 evolveevolving. In December 2024 and January 2025, we announced that we were entering into new industries, including television and film, entertainment, fintech, real estate and regenerative skin care. 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 inOur future financial performation displayed via our e-commerce webpages ance and our other websites.

We may be subjected ability to claims for defamation, negligence, copyright or trademark infringement, or based on other theoriommercialize our products and services relatingand 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-pcompete effectively will depend, in party websites, we could also be subjected, on our ability to claims based upon online content we do not control that is accessible from our e-commerce webpages.

The acmanage any future growth effectual or perceived failure by us orly.

If our vendors to comply with applicable privacy and data protecoperation laws, regulations, or industry standards could have an adverse effect on our business, financial conds expand as planned, we will need to manage addition,al results of operlations, and prospects.

We collect, store, share, use, retain, safeguard, transfer, analyzehips with various strategic partners, suppliers, and otherwise process, and our vendors process on o third parties. Our behalf, personal information, confidentifuture financial information and other inperformation necessary to providnce and deliver our products through our e-ability to 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 toialize our products and services and to compete effectively will depend, increase our compliance costs and exposure to li part, on our ability. There are numerous federal, state, local, and international laws, orders, codes, rules, regulations, and regulatory guidance regarding privacy, information security, and processing (collec to manage any future growth effectively, 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 (collecti. To that end, we must be able to manage our devely, Data Protection Obligations). Thereopment effore, the regulatory framework for privacy and data protts effection worldwide is,vely and is likely to remain, uncerthire, train and complex for the foreseeable future, and our actual or perceived failure to address or comply with applicable Data Protection Laws and Data Protection Obliga integrate additions could have an adverse effect on our business, financial condition, results of opeal management, administrations,ve and prospects. We also expect that there will continue to be new Data Protection Lawsales and Data Protection Obligations, and we cannot yet determine the impact such future Data Protmarketing personnel. Our projection Laws and Data Protection Obligations may have on our business. Anyed growth will place a 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 ostrain on our administrative, 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 beal, and financial resources. If we are unable to subject to the terms of our external and internal privacy and security policies, codes, representations, certifications, industry standards, publications, and frameworks (collectively, Privacy Policies)ccessfully manage our future growth, establish and contractual obligationsinue to third parties related to privacy, informupgrade our operation securityng and processing, includingfinancial 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 sucol systems, recruit and hire necessful in achieving compliance if our employees, partnary pers, or vendors do not comply with applicable Data Protonnel, or effection 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 practicvely manage unexpected expansion difficulties, our business, financial condition, and results of operations, and prospects c could be admaterially and adversely affected.

In the United States, oOur obligperations include rulng plan relies 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) ain large part upon our assumptions 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 informaanalyses. If these assumption of California residents to make new disclosuress or analyses prove to consumers about their data collbe incorrection, use and sharing pr, our actices, allows consumers to opt out of the sale of ual opersonal information with third parties, and prohibiating results covered businesses from discriminating against California residmay be materially differents (for example, charging more for services) from our 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 loecasted results.

Whether actual operating results and business of personal information. This private right of action is expected to increase the likelihood of, and risks associated with, data breach litigdevelopments will be consistent with our expectation. However, it remains unclear how various proviss and assumptions of the CCPA will be interpreted and enforced. Theas refore, the CCPA maylected 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, resultingoperating plan depends on a number of factors, many of which are outside our control, in further complexity. The law, among other things, gives California residents the ability to limit the use of their secluding, but not limited to:

Unsitive 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 enforcefavorable changes in any of the law. The effects of this legislation are far-reaching and may impact our business. Some observers have noted that the CCPA could mark thse or other factors, most of which are beginning of a treyond toward more stringent privacy legislation in the United States, which cour control, could increase our potentmaterial liabilitly and adversely affect our business, financial condition, results of operations, and prospects.

Other jurisdictions fin the United States have already passed or are ancial considering laws similar to the CCPA and CPRA, with potentially greater penalties and more rigorous compliance requirements relevant to dition.

Acts of war or terrorism may seriously harm our business. Many state legislatures have al

Acts of war, any outbready adopted legisk or escalation that regulates how businesses operate online, including measures relating to privacy, data security, data breaches, and the protection of sensitiveof hostilities between the United States and personal inany formation. For exampleeign power, on March 2, 2021, Virginia enacted the Virginia Consumer Data Protection Act (the CDPA), a comprehensive privacy statute that shares similarities withr acts of terrorism may cause disruption to the CCPA, CPRA, and legislation proposed in other states. TU.S. economy or 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 statlocal economies of the markets in which we operate, cause shortages have passed at least some form of data privacy legislation (for example, all 50 states have enacof materials, increase costs associated laws requiring disclosure of cerwith obtain personal data breaches).

At the federal level, the United States Congress is alsoing materials, affect job growth and 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 promulgumer confidence, or cause economic changes that we cannot anticipated under the authority, all of the FTC, which regulates unfair or deceptive acts could reduce demand for practices, including with respect to data privacy aour products and security. These state statutes,rvices and other similar state or federal laws, may require us to modify our data adversely impact our business, processing practices and policies and incur substantspects, liquidity, financial compliance-related costsndition, and expenses.

We rely on a varietyresults 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 consuoperations.

We could face liability for information displayed via our e-commers, and wece webpages and our vendors, arother websites.

We may be subjected to various current and future Data Protectclaims for defamation Laws and Data Protection Obligations that govern , negligence, copyright, or trademarketing and advertising practices. Govern infringemental authorities continue to evaluate the privacy implications inherent in the use of third-party cookies and other methods of online tracking , or based on other theories relating to the infor behavioral advertising and othermation we 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 useblish on our e-commerce webpages and on any of our websites. These types of data gathered with such tools. Additionallyclaims have been brought, some providers of consumer devitimes succes, 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, requirsfully, against similar companies in the past. We are currently involved in a lawsuit related to this issue additional consents, or limit the ability to track user activity,s noted Item 8. Financial Statements which could if widely adopted result in the use of third-party cookientains Companys and other methods of online tracking becoming significantly less effective. Laws and regulations regarding the use of these cookieudited financial statements for fiscal 2024 and 2023 Footnote 12 Commitments and other current online tracking andContingencies. In advertising practices or a loss in our ability to make effective use of services that employ such technologiesdition, based on links we provide to third-party websites, we could increase our costs of operations and limit our ability to acquire newalso be subjected to claims based upon online consumers on cost-effective terms, which, in turn, could have an adverse effect ontent we do not control that is accessible from our business, financial condition, results of operations, and prospecte-commerce webpages.

RISKS RELATING TO GOVERNMENT REGULATION AND POLICIES

Government regulation of the internet and e-commerce 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 e-commerce, 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, e-commerce, 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 possibpossible that general business regulations and laws, or those specifically governing the internet or e-commerce, 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.

(SeWe also Government Regulations for additional risks.)

Advertisingre subject to a inaccuracies or product mislabeling may have an adverse effect on our business by exposing us to number of other lawsuits, product recalls or and regulatory enforcement actions, increasing our operating costs and reducing demand for our produwhich could impact 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 FTCs 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)ur business.

We are subject to a broad range of federal, state, local, 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 regforeign laws and regulated definition of the term natural for useions 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 tended to protect 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 rendersand worker health and safety, natural resources, the statements false and deceptive. For example, some actions concerning natural claims have focused on the presence of genetically modifiedenvironment, and/or synthetic ingredients or components in products, including synthetic forms of otherwise natural ingredients.

(See Government Regul consumers. Our operations.)

Many of our products  are subject to regulatory enforcement.

State and local regulators also haveion the authority to prosecute false advertising cases, including relby the Occupating to environmentonal 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 ifSafety and Health Administration (OSHA), the basis for the claim is unfounded. Moreover, any regulatory or government enforcement actions may trigger class action lawsuits under state consumer protectFood and Drug Administration laws.

(FDAdverse publicity about these matters may discourage co), the Consumers from buying our pro 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  Safety Commission (CPSC), 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 United States Department of operations, and prospects.

False or misleading marketing claims concerning a products 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 regulatAgriculture (USDA), the Federal Trade Commission by the Occupational Safety and Health Administration (OSHA), the FDA, the CPSC, the USDA, the FTC (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 Ccurrent 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. Californias 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 e-commerce 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 e-commerce 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 e-commerce 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 e-commerce 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 manufacturers 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.

OWe, as well as our future financial performance andsuppliers, are subject to numerous federal, state and local laws and regulations and our compliance with these laws and regulations, as they currently exist or as modified in the future, may increase our costs, limit or eliminate our ability to commercialize oursell certain products, require recalls of certain products and services and to compete eff, raise regulatory enforcement risks not present in the past or otherwise adversely affect our business, results of operations and financial condition.

We are subjectively will depend, in part, on to various federal, state, and local laws, regulations and administrative practices that affect our ability tobusiness. Our suppliers and contract manage any future growth effectively.

If our operufacturers are also subject to such laws and regulations. The safety, formulation, manufacturing, processing, packaging, importation, labeling, promotion, advertising, and distribution of products we sell in our stores, including private label products, are subject to regulations expand as planned, we will need to manage addi by several federal agencies, including the FDA, the FTC, the USDA, the CPSC and the EPA, as well as by various state and local agencies.

Our sale of dietary supplements is subject to the FDAs comprehensive regulatory authority under the FDCA, as amended by the Dietary Supplement Health and Educational re Act (DSHEA). DSHEA greatly expanded the FDAs regulationships with various strategic partners,ory authority over dietary supplements and empowered the FDA to establish good manufacturing practice regulations governing key aspects of the production of dietary supplierements, and other third parties. Ourincluding quality control, packaging, and labeling. Under DSHEA, a person or firm that markets a dietary supplement with structure, future financial performance and our ability to commercialize ounction, general well-being or nutrient deficiency claims on the product labeling must notify FDA about the claim within thirty days after first marketing the dietary supplement with the claim and no dietary supplement may bear a statement that expressly or implicitly represents that such supplement will diagnose, cure, treat or products aevent a disease. If these laws and services and to compete efferegulations were violated by our management, suppliers, distributors or vendors, we could be subject to regulatory enforcement actively will deon, public warning letters, product recalls, fines, pendalties and sanctions, in part, on our ability to manage any future growth effecluding injunctions against the future shipment and sale of products, seizure and confiscation of products, prohibition on the operation of our stores, restitution and disgorgement of profits, operating restrictively. To that end, we must be able to manage our developons and even criminal prosecution in some circumstances. In addition, other public and private actors are increasingly targeting dietary supplement retailers and manufacturers with class action lawsuits for selling products that allegedly fail to adhere to the requirement efforts effectively and hire, train, ands of FDCA, DSHEA, and other federal and state statutes and requirements, including for failing to adhere to current GPMs, making false or misleading product statements, providing integrate additional managementaccurate ingredient identity and potency, and failing to control or disclose allergens, contaminants, residues and adulterants, administras well as for state common and statutory laws regarding deceptive and salestrade practices.

The storage, processing, and marketinguse of data, some of which contain personnel. Our al information, are subject to complex and evolving privacy and data projtected growth will place a significant strain on our administrative, operation laws and regulations that could adversely affect our business and financial condition.

Some data we store, process, and use, contains personal information, which subjects us to a variety of privacy, rights of publicity, data protection, content, protection of minors, and consumer protectional, a laws and regulations in the United States. These laws and financialregulations are constantly evolving, can be particularly resources. If we are unable to successfully manage trictive, and may impose significant fines or penalties. The application and interpretation of these laws and regulations are often uncertain and could result in investigations, claims, changes to our future growth, establishbusiness practices, and/or increased cost of operations, andy of which continue to upgrade ould have a material adverse effect on our oresults of operatingons and financial control systems, recruit and hire necessary dition.

A number of states have enacted laws or are considering the enactment of laws governing the protection of credit card or other personnel, or effectivenal information received from consumers. If we fail to comply with these laws, it could adversely manage unexpected expansion difaffect our business and financial performance.

We face significant risks relating to cybersecurity threats.

We face significultieant risks related to cybersecurity threats, our finwhich could adversely affect our business, financial condition, and results of operations could be materially. Cybersecurity incidents, including but not limited to unauthorized access, data breaches, and adversely affected.

Ouother malicious activities, could result in the loss or theft of sensitive information, disruption of our operating plan relies in large part upon our assumptions and analyses. Ions, and damage to our reputation. While we have implemented measures to protect our information systems, there can be no assurance that these measures will effectively prevent all cybersecurity incidents.

Government regulation of these assumptions or analyses pro internet and ecommerce is evolving and unfavorable changes or failure by us to comply with these regulations could have to be incorrect, our actual operatingan adverse effect on our business, financial condition, results of operations, and prospects.

We are subject to general business results may be materigulations and laws as well as regulations and laws specifically different from our forecastedgoverning the internet and ecommerce, including consumer protection regulations that results.

Whegulate retailers and govern ther actual opera promotion and sale of merchandise. Existing resultand future regulations and business developments will be consistent with our explaws 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 protectationion, electronic contracts and ascommunications, consumpter protections as reflected in our opera, sales practices, subscription programs, and internet neutrality. It is not clear how existing plan depends on a numblaws governing issues such as property ownership, sales and other taxes and consumer of factors, manprivacy apply to the Internet as the vast majority of which athese laws were outside our control, including, but not limitadopted prior to the advent of the Internet and do not contemplate or address the unique issues raised to:

Uby the infavoraternet or ecommerce. It is possible changes inthat general business regulations any ofd laws, or these or oose specifically governing ther factors internet or ecommerce, most of which are beyonday be interpreted and applied in a manner that is inconsistent from one jurisdiction to another and may conflict with other rules or our controlpractices. We cannot be sure that our practices have complied, could materimply, or will comply fully with ally such laws and adversely affect our business,regulations. Any failure, or perceived failure, by us to comply with any of these laws or regulations could results of oper in damage to our reputations, and financial condition.

Acts of war loss in business, and proceedings or actions against us by governmental entities, customers, suppliers or terrorism maothers. Any seriously harmuch proceeding or action could hurt our business.

Acts reputation, force us to spend significant amounts in defense of war, anythese proceedings, distract outbr management, increak or escalation se our costs of doing business, decrease the use of hostilitieour website and mobile applications between ty customers and suppliers, and may result in the United Statimposition of monetary liabilities and any foreign power, burdensome injunctions that could, for acts of terrorismexample, require changes to our business practices. We may cause disruption toalso be contractually liable to indemnify and hold harmless third parties from the U.S. economy costs or consequences of noncompliance with any such laws or the local economies ofregulations. As a result, adverse developments with respect to the markets in which we ose laws and regulations could have an adverse effect on our business, financial condition, results of operate, cause shions, and prospects.

Cortages of materiaporate Headquarters

Our executive offices are located in Beverly Hills, increase costs associated with obtainiCalifornia. We do not own any real property, but lease an office space consisting materials, affect job growthof approximately 1,900 square feet for all of our corporate and consumer confidence, or cause esubsidiary locations. We believe that substantially all of our property and equipment is in good conomic changes thatdition, subject to normal we cannotar and tear, anticipate, all of which could reduce demand for our products and services and adversely impactd that our facilities have sufficient capacity to meet the current needs of our business.

Legal Proceedings

From time to time, the Company may become involved in legal proceedings arising in the ordinary course of our business, prospects, liquiditythe resolution of which we do not anticipate would have, individually or in the aggregate, a material adverse effect on our business, financial condition, andor 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 Stock have a number of votes equal to 60% super majority vot of all of the issued and outstanding rights over ourshares of common stock of the Company. At this time, all shares of the Class A Preferred Convertible Stock are issued to our CEO, Jaspreet Mathur, our Chief Executive Officer and majority shareholder. 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 Ccommon Sstock, 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 78.92% 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 transactions. These insiders also have the ability to delay or perhaps even to 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 persons 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 Securities Act m of 1933, as amended (the Securities 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 Securities 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 attorneys 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 persons 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 A significant number of additional shares of our common stock may be issued under the terms of existing securities, which issuances would substantially dilute existing stockholders and may depress the market price of our common stock.

As of April 1, 2025, we have 14,205,965 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 are unahave an aggregate of 33,129,601 shares of our common stock that are issuable to impleme 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.

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:

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 managements 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 customers 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 customers 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 purchasers 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 originalconvertible 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 upoeferred B shares in the effectiveness of registration of such notes on a registration statement filed with the SECamount of $1,742,953. Upon conversion of the notes and the potential issuance of 49,065,120preferred B shares ofto 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 -GovernanceGovernance.

Provisions in our Charter and under Delaware law could make an acquisition of Limitless X more difficult, which acquisition may be beneficial to stockholders.

Provisions in our Charter and Amended and Restated Bylaws (Bylaws), as well as provisions of the General Corporation Law of the State of Delaware (the DGCL), which may discourage, delay or prevent a merger with, acquisition of or other change in control of Limitless X, even if such a change in control would be beneficial to our stockholders, include the following:

Additionally, Section 203 of the DGCL prohibits a person who owns in excess of 15% of our outstanding voting stock from merging or combining with us for a period of three years after the date of the transaction in which the person acquired in excess of 15% of our outstanding voting stock, unless the merger or combination is approved in a prescribed manner. We have not opted out of the restriction under Section 203, as permitted under the DGCL.