BYLT.Elite Performance Holding CORP

10-Q: Elite Performance Holding Corp. Reports Dismal Q2 2024 Results Amidst Going Concern Doubts

Sentiment:

Quarterly Report

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Elite Performance Holding Corp. reports a significant drop in revenue and a net loss for Q2 2024, raising concerns about its ability to continue as a going concern.

Capital raiseThe company's ability to continue as a going concern is dependent on raising additional capital and implementing its business plan.Management plans to raise new debt or equity to set up and market its line of sports drinks.
Worse than expectedThe company's revenue decreased significantly.The company experienced a gross loss compared to a gross profit in the same period last year.The company's auditor has expressed substantial doubt about its ability to continue as a going concern.

Summary

  • Elite Performance Holding Corp. (EPH) reported its financial results for the second quarter of 2024.
  • The company's revenue decreased significantly to $611, compared to $16,800 in the same period last year.
  • The gross profit turned into a loss of $(4,949) compared to a profit of $1,849 last year.
  • The net loss was $(235,012) compared to $(373,101) in Q2 2023.
  • For the six months ended June 30, 2024, revenue was $681 compared to $26,708 in the prior year.
  • The net loss for the six months was $(731,631) compared to $(737,060) in the first half of 2023.
  • The company's auditor has expressed substantial doubt about its ability to continue as a going concern due to an accumulated deficit of ($9,525,790) as of June 30, 2024.
  • Management plans to raise new debt or equity to market its sports drinks to alleviate these concerns.
  • As of August 14, 2024, there were 108,991,270 shares of the company's common stock outstanding.

Sentiment

Score: 2

Explanation: The document presents a negative outlook due to significant revenue decline, gross loss, accumulated deficit, and doubts about the company's ability to continue as a going concern. While there are some positive aspects, such as decreased losses and expenses, the overall financial health and future prospects appear weak.

Positives

  • The net loss decreased to $(235,012) for Q2 2024, compared to $(373,101) for Q2 2023.
  • Advertising expenses decreased by $12,090 for the three months ended June 30, 2024.
  • Legal and accounting expenses decreased by $22,834 for the three months ended June 30, 2024.
  • General and administrative expenses decreased by $23,304 for the six months ended June 30, 2024.

Negatives

  • Revenue for Q2 2024 plummeted to $611 from $16,800 in Q2 2023.
  • The company experienced a gross loss of $(4,949) in Q2 2024, compared to a gross profit of $1,849 in Q2 2023.
  • The company's auditor has expressed substantial doubt about its ability to continue as a going concern due to an accumulated deficit of ($9,525,790) as of June 30, 2024.
  • The company had a working capital deficit of $2,965,833 as of June 30, 2024.
  • Interest expenses increased by $19,003 for the six months ended June 30, 2024.

Risks

  • The company's ability to continue as a going concern is dependent on raising additional capital and implementing its business plan.
  • The company has a limited operating history, making it difficult to evaluate its business and future prospects.
  • The COVID-19 pandemic may have a material adverse impact on the company's financial position, operations, and cash flows.
  • The company faces competition within its chosen industry, including competition from much larger competitors.
  • The company's future operations are contingent upon increasing revenues and raising capital for ongoing operations and the anticipated expansion of its product lines.
  • The company identified a material weakness related to the lack of a sufficient complement of competent finance personnel to appropriately account for, review and disclose the completeness and accuracy of transactions.

Future Outlook

The company's future operations are contingent upon increasing revenues and raising capital for ongoing operations and the anticipated expansion of its product lines. Management plans to raise new debt or equity to set up and market its line of sports drinks.

Management Comments

  • Management believes that the consolidated financial statements in this Quarterly Report on Form 10-Q fairly present, in all material respects, our financial condition as of the Evaluation Date, and results of our operations and cash flows for the Evaluation Date, in conformity with GAAP.

Industry Context

The company is positioning its BYLT beverage to capitalize on the growing sports drink and nutrition/performance drink industries, which are projected to reach $15 billion by 2027. The company aims to differentiate itself by offering a comprehensive product that combines hydration, endurance, mental focus, fat oxidation, and muscle recovery.

Comparison to Industry Standards

  • The document does not provide enough information to make a detailed comparison to industry standards.
  • Without specific data on competitors' revenue growth, profitability, and key performance indicators, it is difficult to assess how Elite Performance Holding Corp.'s results compare to industry benchmarks.
  • A more comprehensive analysis would require comparing the company's financial metrics to those of similar-sized companies in the sports beverage and nutrition industry, such as BodyArmor, Gatorade, or smaller emerging brands.

Legal Proceedings

  • The company is involved in a trademark dispute with BYLT Basics, LLC, and has filed a countersuit for trademark infringement and breach of settlement agreement.

Related Party Transactions

  • The company had $3,000 in consulting expense to I Know a Dude, Inc. owned by Laya Clark.
  • The company had $22 for un-reimbursed business expenses to Joey Firestone.
  • On April 26, 2024, the Company converted the $4,500 balance to 18,000 shares of common stock to The Mosely Group.

Stakeholder Impact

  • Shareholders face significant risk due to the company's financial instability and going concern doubts.
  • Employees may be affected by potential cost-cutting measures or business restructuring.
  • Customers may experience disruptions in product availability or service quality.
  • Suppliers and creditors face increased risk of non-payment or delayed payments.

Next Steps

  • The company plans to raise new debt or equity to set up and market its line of sports drinks.
  • The company will continue to implement its business plan to increase revenues.
  • The company will address the material weakness in its internal control over financial reporting.

Key Dates

DateDescription
January 30, 2018Elite Performance Holding Corporation (EPH) was formed.
February 2, 2018Elite Performance Holding Corp. acquired Elite Beverage International through a 1:2 common share exchange.
August 1, 2020Elite Beverage International Corp. entered into an Exclusivity Agreement with Bruce Kneller for exclusive rights on SmartCarb technology.
September 2, 2021Forgiveness in the amount of $105,867 was given on PPP loan.
September 29, 2021Elite Beverage International Corp. entered into an Agreement with Bruce Kneller for the transfer and assignment of the SmartCarb technology.
February 9, 2022The SBA has paid off the balance of the PPP loan with the lender.
May 6, 2022The Company entered into a lease agreement with its CEO, Joey Firestone, for three cargo vans.
March 1, 2023The Company entered into a convertible promissory note in the amount of $10,000.
March 3, 2023Jon McKenzie transferred his ownership of 5,000,000 Series A Preferred shares with super voting rights to Chairman and CEO Joey Firestone.
May 3, 2023The Company entered into a convertible promissory note in the amount of $25,000.
May 15, 2023The Company entered into a convertible promissory note in the amount of $50,000.
May 16, 2023The Company entered into a convertible promissory note in the amount of $50,000.
June 23, 2023The Company entered into a convertible promissory note in the amount of $150,000.
September 12, 2023The Company entered into a convertible promissory note in the amount of $10,000.
November 1, 2023The Company entered into a convertible promissory note in the amount of $25,000.
January 4, 2024The Company entered into a convertible promissory note in the amount of $10,000.
January 23, 2024The Company modified and aggregated several Hillyer loans totaling $371,500, advances totaling $205,000 and accrued interest totaling $218,216 for an aggregate balance of $794,716 and extended the maturity to December 31, 2024.
January 30, 2024The Company entered into a convertible promissory note in the amount of $25,000.
February 28, 2024The Company entered into a convertible promissory note in the amount of $50,000.
March 1, 2024Jon Mckenzie retired fifteen million shares of common stock back to the company at no fee and Joey Firestone retired ten million shares of common stock back to the Company at no fee.
March 12, 2024The Company entered into a convertible promissory note in the amount of $10,000.
March 15, 2024The Company entered into a convertible promissory note in the amount of $10,000.
March 18, 2024The Company issued Greentree Financial, Inc.400,000 five year warrants exercisable at $2.00 valued at $38,811 for consulting services and High Creek Ventures, Inc 400,000 five year warrants exercisable at $2.00 valued at $39,297 for consulting services.
April 5, 2024The Company entered into a convertible promissory note in the amount of $100,000.
April 24, 2024The Company entered into a convertible promissory note in the amount of $40,000.
April 26, 2024The Company issued 18,000 shares in the amount of $1,800 valued at $0.10 per share to a related party in relation to an accounts payable balance totaling $4,500.
May 6, 2024The Company issued Greentree Financial 160,000 five year warrants exercisable at $2.00 valued at $19,855 for services.
May 13, 2024The debt holder exercised the convertible option on the $26,250 note with an outstanding balance of $26,250 and accrued interest of $10,536 to 735,720 shares of common stock.
May 24, 2024The Company entered into a convertible promissory note in the amount of $100,000.
June 19, 2024The Company entered into a convertible promissory note in the amount of $10,000.
June 30, 2024End of the reporting period for the 10-Q filing.
August 14, 2024Date of the 10-Q filing, with 108,991,270 shares of common stock outstanding.

Keywords

financial results, going concern, convertible notes, revenue, net loss, Elite Performance Holding Corp, BYLT, sports beverage, financial statements

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