10-Q: Elite Performance Reports Q3 2025: Zero Revenue, Mounting Debt
Sentiment:
Quarterly Report
Elite Performance Holding Corp. reported a net loss of $949,111 for the nine months ended September 30, 2025, with no revenue, and faces substantial doubt about its ability to continue as a going concern.
Capital raiseManagement is actively trying to raise new debt or equity to fund operations and market its sports drink line.The company's ability to continue as a going concern is dependent on its ability to raise additional capital.Historically, the company has been funded by related parties through capital investment and borrowing of funds.Proceeds from notes payable for the nine months ended September 30, 2025, were $371,000, indicating ongoing reliance on debt financing.Numerous convertible promissory notes were issued or amended in 2025, totaling significant amounts, which can be converted into common stock, potentially diluting existing shareholders.
Worse than expectedThe company reported $0 revenue for the three and nine months ended September 30, 2025, a significant decline from $681 in revenue in the prior nine-month period.Total liabilities increased substantially, driven by a rise in convertible notes payable, indicating increased financial strain.The accumulated deficit continued to grow, and the company maintains a large working capital deficit, highlighting ongoing financial instability.The auditor has expressed substantial doubt about the company's ability to continue as a going concern.
Summary
- Net loss for the nine months ended September 30, 2025, was $949,111, an improvement from $1,089,953 in the prior year.
- No revenue was generated for the three and nine months ended September 30, 2025, compared to $681 in revenue for the nine months ended September 30, 2024.
- Total liabilities increased to $3,271,955 as of September 30, 2025, from $2,874,583 at December 31, 2024.
- Convertible notes payable, net, significantly increased to $1,621,692 from $1,272,216 over the same period.
- The company has an accumulated deficit of $12,132,885 and a working capital deficit of $3,101,914 as of September 30, 2025.
- A one-for-ten reverse stock split was effected on March 17, 2025.
- The company settled a litigation in August 2025, receiving $50,000, which was recorded as other income.
- Management acknowledges deficiencies in disclosure controls and procedures due to a lack of personnel and outside directors.
Sentiment
Score: 2
Explanation: The company faces severe financial distress with no revenue, increasing liabilities, and a significant accumulated deficit, leading to a going concern warning. While net losses and cash used in operations improved, this was partly due to a one-time litigation settlement and reduced non-cash consulting expenses from the prior year, rather than operational success. The reliance on convertible debt and the need for further capital raises highlight extreme financial vulnerability.
Positives
- Net loss decreased by $140,842 for the nine months ended September 30, 2025, compared to the same period in 2024.
- Net loss decreased by $53,203 for the three months ended September 30, 2025, compared to the same period in 2024.
- Cash used in operating activities decreased to $363,763 for the nine months ended September 30, 2025, from $586,973 in the prior year.
- The company settled a previous litigation in August 2025, receiving $50,000, contributing to a significant increase in other income.
- A new U.S. Provisional Patent Application (No. 63/831,615) was filed on June 27, 2025, for a dual-phase SmartCarb system to improve BYLT Drinks and further protect intellectual property.
- The refinance agreement from January 2023 for $98,500 was paid in full as of September 30, 2025.
Negatives
- The company reported $0 revenue for the three and nine months ended September 30, 2025, indicating a complete halt in product sales.
- Total liabilities increased by $397,372 to $3,271,955 as of September 30, 2025, from $2,874,583 at December 31, 2024.
- Convertible notes payable, net, increased by $349,476 to $1,621,692 as of September 30, 2025, from $1,272,216 at December 31, 2024.
- The accumulated deficit grew to $12,132,885 as of September 30, 2025, from $11,183,774 at December 31, 2024.
- The company has a significant working capital deficit of $3,101,914 as of September 30, 2025.
- Cash at the end of the period was $0, indicating severe liquidity issues.
- Interest expense increased by $44,408 for the nine months ended September 30, 2025, due to additional outstanding notes.
- One convertible promissory note to Stout LLC is in default and accruing interest at an 18% default rate.
- The company purchased property and equipment for $2,573, which used cash from investing activities, despite having no cash on hand.
Risks
- Substantial doubt about the company's ability to continue as a going concern due to significant accumulated losses and negative working capital.
- Dependence on raising new debt or equity financing to fund ongoing operations and marketing efforts for its sports drink line.
- Uncertainty regarding the successful development and implementation of a concept that produces positive cash flows from operations.
- Risk of ceasing business if unable to raise required capital or secure necessary financing.
- Operations have been and continue to be affected by the COVID-19 pandemic, potentially leading to material adverse impacts on financial position, operations, and cash flows.
- Limited operating history makes it difficult for investors to evaluate the business and future prospects.
- Exposure to economic conditions generally and in the industries in which the company participates.
- Competition within the chosen industry, including from much larger competitors.
- Risks related to technological advances and failure to successfully develop business relationships.
- Deficiencies in disclosure controls and procedures due to a lack of personnel and outside directors.
Future Outlook
Management plans to raise new debt or equity to set up and market its line of sports drinks. The company's future operations are contingent upon increasing revenues and securing additional capital for ongoing operations and anticipated product line expansion. There is no assurance that the company will achieve its business plans or secure necessary financing.
Management Comments
- "The Company is currently trying to raise new debt or equity to set up and market its line of sports drinks."
- "If the Company is not successful in the development and implementation of a concept which produces positive cash flows from operations, the Company may be forced to continue to raise additional equity or debt financing to fund its ongoing obligations or risk ceasing doing business."
- "There can be no assurance that the Company will be able to achieve its business plans, raise any more required capital or secure the financing necessary to achieve its current operating plan."
- "The Company anticipates that with further resources, the Company will expand both management and the board of directors with additional officers and independent directors in order to provide sufficient disclosure controls and procedures."
Industry Context
The company operates in the sports performance, weight loss, nutritional, functional beverage, and energy markets, which are experiencing healthy living trends and a growing demand for "better-for-you" products. The sports drink industry is a significant segment of the fortified/functional beverage market, projected to reach $15 billion by 2027. BYLT is positioned as a "first to market" functional sports beverage combining hydration, endurance, fat oxidation, and muscle recovery, aiming to bridge the gap between sugar-loaded sports drinks and dietary supplements. The company highlights high potential for customer loyalty in this industry for brands that deliver on functional and health benefits.
Comparison to Industry Standards
- The company claims BYLT is "first to market" and has a "superior product offering" compared to other RTD beverages that combine its benefits.
- It states that athletes currently need to take 3-4 supplements to achieve optimal nutrients, which BYLT aims to consolidate without unhealthy additives.
- The sports drink market is expected to grow to $15 billion by 2027, and the nutrition and performance drink industry is also projected to reach $15 billion by 2027, suggesting a large addressable market for BYLT.
- The executive team, comprised of former Coca-Cola, PepsiCo, and Dr. Pepper executives with over 120 years of combined experience, brings significant industry expertise, which is a positive compared to typical startups.
Management Changes
| Role | Previous Person | New Person | Effective Date | Reason |
|---|---|---|---|---|
| Series A Preferred Shareholder | Jon McKenzie | Joey Firestone | 2023-03-03 | Transfer of ownership of 5,000,000 Series A Preferred shares with super voting rights. |
Corporate Governance
| Change Type | Description | Effective Date | Impact Assessment |
|---|---|---|---|
| Accounting Standard Adoption | Adopted ASU 2023-07, "Segment Reporting (Topic ASC 280) Improvements to Reportable Segment Disclosures," for the annual period ending December 31, 2024. | 2024-12-31 | Improves reportable segment disclosure requirements, primarily through enhanced disclosure about significant segment expenses. The CEO serves as the Chief Operating Decision Maker (CODM) and the company operates as a single reportable segment. |
| Internal Control Deficiencies | Management acknowledges deficiencies in disclosure controls and procedures due to a lack of personnel and outside directors. | Plans to expand management and the board of directors with additional officers and independent directors to provide sufficient disclosure controls and procedures. |
Legal Proceedings
- Settled a previous litigation in August 2025, resulting in a $50,000 payment to the company.
- Currently not involved in any litigation believed to have a material adverse effect on financial condition or results of operations.
Related Party Transactions
- Outstanding balance due to Laya Clark (Board Member) of $122,922 for consulting expense.
- Outstanding balance due to Joey Firestone (CEO) of $2,000 for un-reimbursed business expenses and $5,287 for consulting services as of September 30, 2025.
- Joey Firestone forgave $19,009 in salary, which was recorded as additional paid-in capital.
- Lease agreement with CEO Joey Firestone for three cargo vans for product delivery and distribution, with Mr. Firestone as the guarantor.
- Jon McKenzie transferred 5,000,000 Series A Preferred shares with super voting rights to CEO Joey Firestone on March 3, 2023.
Stakeholder Impact
- Shareholders face significant dilution risk from ongoing issuance of shares for debt conversion and consulting services, as well as the one-for-ten reverse stock split. The going concern warning indicates a high risk of capital loss.
- Creditors (Convertible Note Holders) face high risk due to the company's financial instability and accumulated deficit. One note is already in default. However, new notes are being issued, indicating some willingness to lend, likely with unfavorable terms for the company.
- Employees face uncertainty regarding job security given the company's financial struggles and dependence on future capital raises.
- Customers may experience potential disruption in product availability if the company cannot secure funding or achieve operational stability.
- Suppliers face increased risk of delayed payments or non-payment due to the company's negative working capital and reliance on financing.
Next Steps
- Raise new debt or equity to fund ongoing operations and marketing efforts for the BYLT sports drink line.
- Successfully develop and implement a concept that produces positive cash flows from operations.
- Expand management and the board of directors with additional officers and independent directors to address deficiencies in disclosure controls and procedures.
- Continue regional expansion for BYLT product launch.
- Pursue the U.S. Provisional Patent Application No. 63/831,615 for a dual-phase SmartCarb system.
Key Dates
| Date | Description |
|---|---|
| 2018-01-30 | Elite Performance Holding Corporation (EPH) formed (inception). |
| 2018-02-02 | Contribution and assignment agreement executed by Joseph Firestone and Jon McKenzie, assigning 10,000,000 shares of Elite Beverage International Corp. to Elite Performance Holding Corp., making it a wholly-owned subsidiary. |
| 2019-01-17 | Company issued 40,000 shares of common stock for the execution of a convertible promissory note to The Hillyer Group Inc. |
| 2019-12-04 | Company entered into a convertible promissory note for $189,000. |
| 2020-01-17 | Company issued a convertible promissory note to The Hillyer Group Inc. for $157,500. |
| 2020-04-30 | Elite Beverage International approved for a PPP loan of $201,352. |
| 2020-08-01 | Company entered into an Exclusivity Agreement with Bruce Kneller for exclusive rights on a patent-pending SmartCarb technology. |
| 2021-08-31 | US Patent No. 11,103,522 for SmartCarb technology issued. |
| 2021-09-02 | Forgiveness of $105,867 on the PPP loan was given. |
| 2021-09-16 | Company issued a convertible promissory note to Stout LLC for $20,000. |
| 2021-09-29 | Company entered into an Agreement with Bruce Kneller for the transfer and assignment of the SmartCarb technology. |
| 2021-10-01 | 40,000 shares valued at $20,000 issued for SmartCarb technology patent ownership. |
| 2022-02-09 | SBA paid off the balance of the PPP loan with the lender. |
| 2022-05-06 | Company entered into a lease agreement with CEO Joey Firestone for three cargo vans. |
| 2022-07-01 | Company entered into a receivables and sale note payable agreement with a third party for $50,460. |
| 2023-01-01 | Company entered into a refinance agreement with a third party for $98,500. |
| 2023-03-03 | Jon McKenzie transferred ownership of 5,000,000 Series A Preferred shares to Chairman and CEO Joey Firestone. |
| 2023-11-01 | Company entered into a convertible promissory note for $25,000. |
| 2024-01-23 | Company modified and aggregated several Hillyer loans and advances totaling $794,716, extending maturity to September 30, 2025. |
| 2024-03-18 | Company issued 80,000 five-year warrants exercisable at $20.00 for consulting services. |
| 2024-05-06 | Company entered into an agreement to borrow up to $160,000 (later amended to $200,000) and issued 16,000 five-year warrants for consulting services. |
| 2024-07-01 | Company received $75,000 related to the May 6, 2024 convertible promissory note. |
| 2024-07-26 | Company received $50,000 related to the May 6, 2024 convertible promissory note. |
| 2024-08-20 | Company issued 10,000 five-year warrants exercisable at $20.00 as part of a convertible note. |
| 2024-10-18 | Company received $10,000 related to the May 6, 2024 convertible promissory note. |
| 2025-01-06 | Company received $16,000 related to the May 6, 2024 convertible promissory note. |
| 2025-01-17 | May 6, 2024 note amended to fund up to $200,000 with 12% interest. |
| 2025-01-22 | Company received $20,000 related to the May 6, 2024 convertible promissory note. |
| 2025-02-27 | Company entered into a convertible promissory note for $5,000. |
| 2025-03-17 | Company effected a one-for-ten reverse stock split. |
| 2025-03-18 | Company entered into a convertible promissory note for $10,000. |
| 2025-03-21 | Company received $10,000 related to the May 6, 2024 convertible promissory note. |
| 2025-03-24 | Company entered into a convertible promissory note for $5,000. |
| 2025-03-27 | Company entered into two convertible promissory notes for $20,000 and $10,000 respectively. |
| 2025-03-28 | Company issued 10,000 and 5,000 five-year warrants exercisable at $2.00 as part of convertible notes. |
| 2025-05-20 | Company entered into a convertible promissory note for $100,000 and issued 50,000 five-year warrants exercisable at $2.00. |
| 2025-06-03 | Company entered into a convertible promissory note for $150,000. |
| 2025-06-11 | Company entered into a convertible promissory note for $25,000. |
| 2025-06-27 | Company filed U.S. Provisional Patent Application No. 63/831,615 for a dual-phase SmartCarb system. |
| 2025-08-01 | Company settled a previous litigation, receiving $50,000. |
| 2025-09-30 | End of the quarterly reporting period. |
| 2025-11-14 | Date of filing and certification of the 10-Q report; 12,429,646 common shares outstanding. |
Recommendation
strong sellThe company has reported zero revenue for the current period, indicating a complete lack of operational sales. It carries a substantial accumulated deficit of over $12 million and a significant working capital deficit, leading to an explicit "going concern" warning from its auditor. While net losses decreased, this was not driven by core business performance but rather by a one-time litigation settlement and a reduction in non-cash consulting expenses from prior year share issuances. The company is heavily reliant on issuing convertible debt, which poses a significant dilution risk to existing shareholders and indicates a desperate need for capital. With no clear path to profitability and severe liquidity issues, the investment risk is exceptionally high.
Keywords
Nutritional supplements, Sports performance, Functional beverage, BYLT, SmartCarb technology, SEC filing, 10-Q, Going concern, Convertible debt, Startup, Beverage industry, Intellectual property
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