10-Q: Elite Performance Reports Zero Revenue, Deepening Losses
Sentiment:
Quarterly Report
Elite Performance Holding Corp. reported no revenue for the quarter ended June 30, 2025, alongside a widening net loss and significant going concern doubts.
Capital raiseThe company explicitly states it is trying to raise new debt or equity to set up and market its sports drinks.Proceeds from notes payable amounted to $371,000 for the six months ended June 30, 2025.500,000 shares were issued for the conversion of accounts payable, valued at $500,000.68,992 shares were issued for the conversion of a convertible note payable.30,000 shares were issued for consulting services, valued at $30,000.65,000 five-year warrants were issued as part of convertible notes during the six months ended June 30, 2025.Convertible notes payable increased by over $323,000 from December 31, 2024, to June 30, 2025, indicating ongoing reliance on debt financing.
Worse than expectedThe company reported zero revenue for the quarter and six months ended June 30, 2025, a significant deterioration from the prior year periods.Net loss for the three months ended June 30, 2025, worsened compared to the prior year, indicating increasing operational losses.The working capital deficit deepened, and total current liabilities increased substantially, reflecting a deteriorating financial position and increased reliance on debt.
Summary
- Elite Performance Holding Corp. (EPH) reported zero revenue for both the three and six months ended June 30, 2025, a significant decline from $611 and $681 respectively in the prior year periods.
- The company's net loss for the three months ended June 30, 2025, increased to $362,445 from $235,012 in the same period of 2024.
- For the six months ended June 30, 2025, the net loss was $643,992, an improvement from $731,631 in the prior year period, primarily due to a decrease in consulting expenses.
- EPH's accumulated deficit grew to $11,827,766 as of June 30, 2025, from $11,183,774 at December 31, 2024.
- The company's working capital deficit worsened to $3,252,820 as of June 30, 2025, compared to $2,704,665 at December 31, 2024.
- Total current liabilities increased to $3,280,828 as of June 30, 2025, from $2,718,734 at December 31, 2024, driven by increases in accounts payable and convertible notes payable.
- Convertible notes payable, net, increased to $1,595,516 as of June 30, 2025, from $1,272,216 at December 31, 2024, with accrued interest on these notes totaling $394,839.
- Cash at the end of the period was $12,953, up from $0 at the beginning of the period, primarily from financing activities.
- The company issued 500,000 shares for the conversion of accounts payable and 68,992 shares for the conversion of convertible notes during the six months ended June 30, 2025.
- A one-for-ten reverse stock split was effected on March 17, 2025.
Sentiment
Score: 2
Explanation: The company reported zero revenue, increased net losses on a quarterly basis, and a worsening working capital deficit. The explicit 'going concern' warning from both management and auditors, coupled with significant increases in liabilities and reliance on new debt/equity, indicates severe financial distress and high operational risk, despite strategic plans and patent filings.
Positives
- Filed a new U.S. Provisional Patent Application (No. 63/831,615) on June 27, 2025, for a dual-phase SmartCarb system to improve the BYLT drink formula and protect intellectual property.
- Retained key executives with over 120 years of combined experience from major beverage companies (Coca-Cola, PepsiCo, Dr. Pepper) for nationwide sales and distribution.
- Net loss for the six months ended June 30, 2025, decreased by $87,639 compared to the same period in 2024, primarily due to lower consulting expenses.
- Cash used in operating activities slightly decreased for the six months ended June 30, 2025, to $341,383 from $349,731 in the prior year period.
- Cash balance increased to $12,953 as of June 30, 2025, from $0 at December 31, 2024.
Negatives
- Reported zero revenue for both the three and six months ended June 30, 2025, indicating a complete halt in product sales.
- Net loss for the three months ended June 30, 2025, increased by $127,433 compared to the same period in 2024.
- Accumulated deficit increased to $11,827,766, raising substantial doubt about the company's ability to continue as a going concern.
- Working capital deficit worsened to $3,252,820, indicating severe liquidity issues.
- Total current liabilities significantly increased to $3,280,828, primarily due to a rise in accounts payable and convertible notes.
- Interest expense increased by $21,871 for the three months and $40,756 for the six months ended June 30, 2025, due to additional notes outstanding.
- Deficiencies in disclosure controls and procedures were identified due to a lack of personnel and outside directors.
Risks
- Substantial doubt exists about the company's ability to continue as a going concern due to accumulated losses and negative working capital.
- The company's continuation is dependent on continued financial support from management, ability to generate profits, identify future investment opportunities, and obtain necessary debt or equity financing, with no assurance of success.
- Limited operating history makes it difficult to evaluate the business and future prospects.
- Operations may be materially adversely impacted by the ongoing effects of the COVID-19 pandemic, affecting customers, revenue, labor, supplies, and asset values.
- The company faces competition within its chosen industry, including from much larger competitors.
- Risks associated with technological advances and failure to successfully develop business relationships.
- Deficiencies in disclosure controls and procedures due to a lack of personnel and outside directors could lead to inaccurate financial reporting or non-compliance.
- Bylt Basics is in breach of a trademark settlement agreement, potentially leading to further legal disputes.
Future Outlook
The company plans to raise new debt or equity to fund operations and market its line of sports drinks, specifically the BYLT functional sports beverage. It intends to launch products through a series of regional expansions. Management acknowledges that the ability to continue as a going concern is dependent on successfully achieving these plans and eventually attaining profitable operations, with no assurance of success in raising required capital or securing 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 [we] 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. It positions its BYLT product as a 'first to market' ready-to-drink beverage combining hydration, endurance, mental focus, fat oxidation, and muscle recovery. The sports drink market is a highly lucrative segment of the fortified/functional beverage industry, expected to grow to a $15 billion market by 2027. The company aims to capitalize on healthy living trends and consumer demand for 'better-for-you' products, noting that 36% of U.S. individuals purchase a ready-to-drink sports drink 1-2 times a week, with 15% purchasing over 10 times a week, indicating high potential for customer loyalty.
Comparison to Industry Standards
- The company positions its BYLT product as 'first to market' and a 'superior product offering' within the functional sports beverage industry, aiming to bridge the gap between energy drinks, hydration beverages, and dietary supplements.
- While the filing highlights the overall market size for sports drinks ($15 billion by 2027) and nutrition/performance drinks ($9 billion, also projected to reach $15 billion by 2027), it does not provide specific comparable company financial metrics or performance benchmarks against direct competitors like Gatorade, Powerade, or emerging functional beverage brands.
- The company's current zero revenue and significant losses stand in stark contrast to the multi-billion dollar market it aims to penetrate, indicating it is far from achieving industry standard sales or profitability.
Management Changes
| Role | Previous Person | New Person | Effective Date | Reason |
|---|---|---|---|---|
| Chairman and CEO (Preferred Shareholder) | Jon McKenzie (partial ownership) | Joey Firestone (full ownership of 5,000,000 Series A Preferred shares) | 2023-03-03 | Transfer of ownership of super voting preferred shares. |
Corporate Governance
| Change Type | Description | Effective Date | Impact Assessment |
|---|---|---|---|
| Stock Split | Effected a one-for-ten reverse stock split. | 2025-03-17 | Reduced the number of outstanding common shares, potentially increasing per-share price but not changing overall market capitalization or underlying value. |
| Internal Controls | Identified deficiencies in disclosure controls and procedures due to lack of personnel and outside directors. | Raises concerns about the reliability of financial reporting and compliance; management plans to expand the board and management to address this. | |
| Segment Reporting Policy | Adopted ASU 2023-07 – Segment Reporting, which improves disclosure requirements for significant segment expenses. | 2024-12-31 | Enhances transparency regarding the company's single reportable segment, managed by the CEO as CODM. |
Legal Proceedings
- The company is not currently involved in any litigation believed to have a material adverse effect on its financial condition or results of operations.
- Bylt Basics, a party with whom the company settled a previous trademark litigation case, is in breach of its settlement agreement regarding the B.Y.L.T. trademark (Reg 6548069). A notice of breach has been sent.
Related Party Transactions
- Outstanding balance due to I Know a Dude, Inc. (owned by Laya Clark, a Board member) of $122,922 as of June 30, 2025, included in accounts payable related party.
- Outstanding balance due to Joey Firestone (CEO) of $4,622 for un-reimbursed business expenses as of June 30, 2025.
- Outstanding balance due to Joey Firestone of $194,321 for salary as of June 30, 2025, included in accounts payable related party.
- Lease agreement with CEO Joey Firestone for three cargo vans, with Mr. Firestone as guarantor, for delivery and distribution of products.
Stakeholder Impact
- Shareholders face significant risk of value erosion due to ongoing losses, negative working capital, and potential dilution from future capital raises and debt conversions.
- Creditors face increased risk due to the company's growing liabilities, accumulated deficit, and explicit 'going concern' warning, which indicates potential inability to meet obligations.
- Employees may face job insecurity given the company's financial distress and the stated need to raise capital to continue operations.
- Customers and suppliers may experience uncertainty regarding product availability and payment terms, respectively, if the company's financial situation does not improve.
Next Steps
- Raise new debt or equity financing to fund ongoing operations and market the sports drink line.
- 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 improve disclosure controls and procedures.
- Continue regional expansion rollout strategy for the BYLT product.
- Address the breach of trademark settlement agreement with Bylt Basics.
Key Dates
| Date | Description |
|---|---|
| 2018-01-30 | Elite Performance Holding Corporation (EPH) was formed. |
| 2018-02-02 | Contribution and assignment agreement executed by Joseph Firestone and Jon McKenzie, transferring Elite Beverage International Corp. shares to EPH, making it a wholly-owned subsidiary. |
| 2019-01-01 | Company adopted ASU 2016-02, Leases (Topic 842). |
| 2019-04-23 | S-1 registration statement became effective, through which the company raised $1,250,000. |
| 2019-12-04 | Company entered into a convertible promissory note in the amount of $189,000. |
| 2020-01-17 | Company issued a convertible promissory note to The Hillyer Group Inc. in the amount of $157,500. |
| 2020-04-30 | Elite Beverage International was approved for a loan for $201,352 through the Payment Protection Program (PPP). |
| 2020-08-01 | Company entered into an Exclusivity Agreement with Bruce Kneller for exclusive rights on a patent pending SmartCarb technology. |
| 2021-01-01 | Company renewed the employment agreement with Joey Firestone and entered into a royalty free trademark licensing agreement between Elite Beverage International Corp. and its subsidiary BYLT Performance LLC. |
| 2021-04-29 | Issued 500,000 shares for the trademark licensing agreement. |
| 2021-09-02 | Forgiveness in the amount of $105,867 was given on the PPP loan. |
| 2021-09-16 | Company issued a convertible promissory note to Stout LLC. in the amount of $20,000. |
| 2021-09-29 | Company entered into an Agreement with Bruce Kneller for the transfer and assignment of the SmartCarb technology (US Patent No. 11,103,522 issued August 31, 2021). |
| 2021-10-01 | Issued 40,000 shares valued at $20,000 for the SmartCarb technology. |
| 2022-02-09 | The SBA paid off the balance of the PPP loan with the lender. |
| 2022-05-06 | Company entered into a lease agreement with its CEO, Joey Firestone, for three cargo vans. |
| 2022-07-01 | Company entered into a receivables and sale note payable agreement with a third party. |
| 2023-01-01 | Company entered into a refinance agreement with a third party that held the original agreement on July of 2022. |
| 2023-03-03 | Jon McKenzie transferred his ownership of 5,000,000 Series A Preferred shares with super voting rights to Chairman and CEO Joey Firestone. |
| 2023-11-01 | Company entered into a convertible promissory note in the amount of $25,000. |
| 2024-01-23 | Company modified and aggregated several Hillyer loans and advances, including accrued interest, to a new note maturing on December 31, 2024 (later extended to June 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). Issued 16,000 five-year warrants exercisable at $20.00 for consulting services. |
| 2024-07-01 | Company received $75,000 related to a May 6, 2024 convertible promissory note. |
| 2024-07-26 | Company received $50,000 related to a 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 a May 6, 2024 convertible promissory note. |
| 2024-12-31 | Company adopted Accounting Standards Update 2023-07 – Segment Reporting. |
| 2025-01-06 | Company received $16,000 related to a May 6, 2024 convertible promissory note. |
| 2025-01-17 | The May 6, 2024 note was amended to fund up to $200,000. |
| 2025-01-22 | Company received $20,000 related to a May 6, 2024 convertible promissory note. |
| 2025-02-27 | Company entered into a convertible promissory note in the amount of $5,000. |
| 2025-03-17 | Company effected a one-for-ten reverse stock split. |
| 2025-03-18 | Company entered into a convertible promissory note in the amount of $10,000. |
| 2025-03-21 | Company received $10,000 related to a May 6, 2024 convertible promissory note. |
| 2025-03-24 | Company entered into a convertible promissory note in the amount of $5,000. |
| 2025-03-27 | Company entered into two convertible promissory notes in the amounts of $20,000 and $10,000. |
| 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 in the amount of $100,000 and issued 50,000 five-year warrants. |
| 2025-06-03 | Company entered into a convertible promissory note in the amount of $150,000. |
| 2025-06-11 | Company entered into a convertible promissory note in the amount of $25,000. |
| 2025-06-27 | Company filed U.S. Provisional Patent Application No. 63/831,615 for a dual phase SmartCarb system. |
| 2025-06-30 | End of the quarterly reporting period. |
| 2025-08-14 | Date of filing of the 10-Q report. |
Recommendation
strong sellThe company's financial position is extremely precarious, marked by zero revenue, substantial and increasing losses, a worsening working capital deficit, and a prominent 'going concern' warning from its auditors and management. While there are strategic plans and patent filings, the immediate financial performance indicates a severe lack of operational viability. The heavy reliance on dilutive financing and related party transactions, coupled with deficiencies in internal controls, presents an unacceptably high risk profile. Investors should exit positions to avoid further capital loss.
Keywords
Elite Performance Holding Corp, BYLT, sports beverage, nutritional products, functional beverage, SEC filing, 10-Q, financial results, going concern, patent, capital raise, liquidity, accumulated deficit
Disclaimer:The information provided here is for general informational purposes only and does not constitute financial advice, recommendation, or endorsement of any kind. It may contain errors or omissions. You should not rely on this information to make financial decisions. Always seek the advice of a qualified financial professional before making any investment or financial decisions. Use of this information is at your own risk.