Filing Analysis
Limitless X Holdings Inc. entered into a $212,000 promissory note with its CEO/Chairman and issued 70,000 shares to him as consideration. The filing also details the resignation of the President and the appointment of a new director alongside significant equity-based compensation for a consultant.
🚩 Red Flags
- Related-party transaction: CEO/Chairman is the lender in a promissory note.
- Potential dilution: Multiple issuances of restricted stock to insiders and consultants (CEO, New Director, Consultant).
- Liquidity pressure: Note maturity tied to a specific date or a $1M funding event.
- Management turnover: Resignation of the President.
📋 Key Facts
- CEO Jaspreet Mathur entered into a $212,000 promissory note (principal + interest) on Dec 27, 2024.
- The note maturity is set for June 27, 2025, or upon the company securing at least $1 million in an offering.
- CEO to receive 70,000 shares of common stock as consideration for the note.
- President Kenneth Haller resigned effective Dec 30, 2024; no disagreements reported.
- Arthur Sarkissian elected to the Board effective Jan 1, 2025; will receive 100,000 restricted shares.
- Consultant Kourous Ghasaban entered into a $1M equity-based compensation agreement over 3 years; first issuance of 208,334 shares approved Dec 31, 2024.
Limitless X Holdings Inc. filed an 8-K to disclose a shareholder letter titled 'Limitless Horizons: A Vision for Growth, Innovation, and Shareholder Value at Limitless X Holdings Inc.' dated December 19, 2024.
📋 Key Facts
- The company released a strategic vision letter to shareholders on December 19, 2024.
- The filing is categorized under Item 8.01 (Other Events).
- The shareholder letter is attached as Exhibit 99.1.
Limitless X Holdings Inc. entered into a promissory note with its CEO, Chairman, and a >10% shareholder, Jaspreet Mathur, for $145,000 plus interest. The agreement includes the issuance of 50,000 shares of common stock to the Holder as consideration.
🚩 Red Flags
- Related-party transaction: The loan is with the CEO, Chairman, and a major shareholder (Jaspreet Mathur).
- Potential dilution: Issuance of 50,000 shares to an insider as consideration for debt.
- Liquidity pressure: Maturity triggered by a $1 million funding event or a specific date, creating immediate repayment obligations upon successful capital raise.
📋 Key Facts
- Effective date: December 10, 2024.
- Principal amount: $145,000.00; Total Full Balance (including interest): $153,700.00.
- Interest rate: 12% fixed.
- Maturity Date: June 10, 2025 (Note: Filing text says 2024, but context implies 2025) or upon securing $1 million in funding, whichever comes first.
- Consideration for note: Issuance of 50,000 shares of common stock to the Holder within two business days.
- Default terms include a 3% monthly default interest rate and responsibility for collection costs/attorney fees.
Limitless X Holdings Inc. has amended its Certificate of Designation for Class B Convertible Preferred Stock to adjust the conversion rate following a prior reverse stock split. The conversion ratio was adjusted from 1:2 to 1:0.067 to maintain economic parity.
🚩 Red Flags
- Adjustment relates to a prior reverse stock split, which is often associated with micro-cap companies struggling to maintain minimum exchange listing requirements.
📋 Key Facts
- Effective Date of amendment: September 20, 2024.
- Amends Section 5(a) of the Certificate of Designation of Class B Convertible Preferred Stock.
- The conversion rate was adjusted from 1 share of Class B Stock for every 2 shares of Common Stock to 1 share of Class B Stock for every 0.067 shares of Common Stock.
- The adjustment is intended to account for the reverse stock split effectuated in December 2022.
Limitless X Holdings Inc. entered into settlement agreements with its CEO, President, VP of Legal Affairs, and a former Operations Manager to resolve disputes regarding allegedly unpaid compensation. The company issued a total of 3,202,464 shares of common stock as settlement payments to these individuals.
🚩 Red Flags
- Related-party transactions: Significant issuance of equity directly to top executives (CEO and President).
- Legal/Employment disputes: Settlement specifically addresses claims for 'unpaid compensation' from the company's own leadership.
- Potential dilution: Issuance of over 3.2 million shares to settle internal labor disputes rather than for operational growth.
📋 Key Facts
- Effective date of settlement: September 10, 2024.
- Total shares issued via settlement: 3,202,464 shares.
- Settlement breakdown: Jaspreet Mathur (CEO) received 1,552,442 shares; Kenneth Haller (President) received 932,171 shares; Rob D. Cucher (VP Legal) received 658,476 shares; Karmandeep Munder (former Ops Manager) received 59,375 shares.
- The settlement addresses disputes or claims arising out of compensation allegedly owed and unpaid to the employees.
- All issued shares are subject to a one-year lock-up period starting September 10, 2024.
Limitless X Holdings Inc. announced the immediate resignation of director Dov Konetz on July 18, 2024. The company explicitly stated that the resignation was not due to any disagreement regarding operations, policies, or practices.
📋 Key Facts
- Dov Konetz resigned from the Board of Directors effective July 18, 2024.
- The resignation is categorized under Item 5.02(b) - Resignation of Director.
- The filing states there was no disagreement with the Company regarding operations, policies, or practices.
Limitless X Holdings Inc. has dismissed its independent auditor, BF Borgers CPA PC, and appointed M&K CPAS, PLLC as its replacement. Notably, the outgoing auditor was recently subject to an SEC Cease-and-Desist Order on May 3, 2024.
🚩 Red Flags
- Auditor change involving a firm (BF Borgers) that was recently sanctioned by the SEC (Order issued May 3, 2024).
- The dismissal of an auditor due to regulatory sanctions against that firm is a significant red flag for micro-cap companies.
- Potential risk of restatements or internal control issues if the previous auditor's work was impacted by their SEC disciplinary action.
📋 Key Facts
- Effective date of auditor change: May 9, 2024.
- Dismissed Auditor: BF Borgers CPA PC.
- New Auditor: M&K CPAS, PLLC.
- The Company stated there were no disagreements with the previous auditor regarding accounting principles or auditing scope.
- BF Borgers is currently not permitted to appear or practice before the SEC due to an SEC Order dated May 3, 2024.