10-Q: Limitless X Holdings Q1 2026 Financial Results

Limitless X Holdings reports a net loss of $28.9 million for Q1 2026, driven primarily by a $27.8 million loss on the conversion of Preferred C to Preferred D stock.

Summary

• Net revenue for the three months ended March 31, 2026, was $77,570, a significant decrease from $251,936 in the same period of 2025.
• The company reported a net loss of $28.9 million for Q1 2026, compared to a net loss of $34.6 million in Q1 2025.
• A major component of the Q1 2026 loss was a $27.8 million non-cash loss resulting from the conversion of Preferred C stock to Preferred D stock.
• Operating expenses decreased to $1.2 million from $4.4 million in the prior year period, largely due to reduced salaries and compensation.
• The company ended the quarter with $183,844 in cash, up from $7,169 at the end of 2025.

Sentiment

Score: 2

Explanation: StockSavvy.ai views this as highly negative due to the massive net loss, going concern warning, material weakness in internal controls, and ongoing legal judgments.

Positives

• Operating expenses were reduced by approximately $3.1 million compared to the same quarter in 2025.
• Cash position improved to $183,844 as of March 31, 2026, compared to $7,169 at year-end 2025.
• The company successfully acquired the remaining 80% interest in its entertainment and film subsidiaries, consolidating its business structure.

Negatives

• Net revenue declined by approximately 69% year-over-year to $77,570.
• The company recorded a massive $27.8 million loss on the conversion of preferred stock.
• Accumulated deficit reached $113.8 million as of March 31, 2026.
• The company continues to operate with a going concern warning due to substantial doubt about its ability to continue operations without additional capital.

Risks

• Substantial doubt regarding the company's ability to continue as a going concern.
• Significant reliance on a single supplier for 99% of inventory purchases.
• Ongoing legal proceedings, including a putative class action regarding marketing practices and various debt-related judgments.
• Material weakness in internal controls over financial reporting due to insufficient accounting personnel and lack of segregation of duties.
• High dependence on related-party financing and potential dilution from convertible debt instruments.

Future Outlook

The company intends to integrate the DING technology platform to enhance data-driven meal planning and commerce enablement, while continuing to focus on direct-to-consumer product sales and the opening of the Manny Pacquiao Impact Performance Training Center.

Management Comments

• Management believes the integrated approach of combining consumer products, content, and technology may support customer acquisition efficiency and revenue diversification.
• Management acknowledges the need to raise additional capital to fund future operations and address the going concern status.

Industry Context

StockSavvy.ai notes that the company operates in the highly competitive direct-to-consumer health and wellness space, where customer acquisition costs are volatile and regulatory scrutiny regarding marketing claims is increasing.

Comparison to Industry Standards

• The company's reliance on related-party financing and frequent debt-to-equity conversions is atypical for established public companies and suggests significant liquidity constraints.
• The high level of legal activity and material weaknesses in internal controls are significant departures from standard corporate governance benchmarks for publicly traded entities.

Corporate Governance

Legal Proceedings

• Putative class action in Oregon regarding NZT-48 marketing practices.
• Judgment in favor of Agile Lending LLC for $168,021.
• Default judgment in favor of Beverly Wilshire Investment Company LLC for $49,969.
• Ongoing settlement discussions for unpaid legal fees with Stubbs Alderton LLP.

Related Party Transactions

• Issuance of promissory notes to CEO Jaspreet Mathur.
• Acquisition of remaining 80% interest in subsidiaries from EM1 Capital, LLC, an entity controlled by the CEO.
• Exchange of Preferred C shares for Preferred D shares with affiliates controlled by the CEO.

Stakeholder Impact

• Shareholders face significant dilution risk from convertible debt and preferred stock conversions.
• Creditors are involved in multiple legal actions to recover unpaid debts.
• Employees and consultants have been compensated via stock issuances, impacting equity structure.

Next Steps

• Opening of the Manny Pacquiao Impact Performance Training Center in June 2026.
• Continued efforts to raise additional capital to support operations.
• Ongoing legal defense in various pending litigation matters.

Key Dates

Recommendation

The combination of a going concern warning, massive net losses, material weaknesses in internal controls, and significant legal liabilities makes this a high-risk investment that is likely to face continued downward pressure.

Keywords

Limitless X Holdings, LIMX, Direct-to-consumer, Dietary supplements, Convertible preferred stock, Going concern, Related party transactions