UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

(Mark One)

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: ~~September~~March 3031, ~~2024~~2025

[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____________to _____________

Commission File No. 000-54693

LEATT CORPORATION
(Exact name of registrant as specified in its charter)

Nevada	20-2819367
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
(State or other jurisdiction of incorporationor organization)	(I.R.S. Employer Identification No.)

12 Kiepersol Drive, Atlas Gardens, Contermanskloof Road,
Durbanville, Western Cape, South Africa, 7441
(Address of principal executive offices)

+(27) 21-557-7257
(Registrant's telephone number, including area code)

__________________________________________________________________
(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes [X] No [_]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
Yes [X] No [_]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of "large accelerated filer", "accelerated filer", "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer [_] Accelerated filer [_] Non-accelerated filer [_] Smaller reporting company [X] Emerging growth company [X]

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial standards provided pursuant to Section 13(a) of the Exchange Act. [X]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [_] No [X]

The number of shares outstanding of each of the issuer's classes of common stock, as of ~~October 25~~May 9, ~~2024~~2025, is as follows:

Class of Securities	Shares Outstanding
Common Stock , $0.001 par value	6,215,440
Common Stock, $0.001 par value	6,217,550

LEATT CORPORATION

Quarterly Report on Form 10-~~QNine~~QThree Months Ended ~~September~~March 3031, ~~2024~~2025

TABLE OF CONTENTS

PART I	FINANCIAL INFORMATION	31
ITEM 1.	FINANCIAL STATEMENTS.	31
ITEM 2.	MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.	1314
ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.	2724
ITEM 4.	CONTROLS AND PROCEDURES.	2724
PART II	OTHER INFORMATION	2725
ITEM 1.	LEGAL PROCEEDINGS.	2725
ITEM 1A.	RISK FACTORS.	2725
ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.	2725
ITEM 3.	DEFAULTS UPON SENIOR SECURITIES.	2725
ITEM 4.	MINE SAFETY DISCLOSURES.	2825
ITEM 5.	OTHER INFORMATION.	2825
ITEM 6.	EXHIBITS.	2825

- i -

PART I

FINANCIAL INFORMATION

LEATT CORPORATION
CONSOLIDATED BALANCE SHEETS

ASSETS
		September 30, 2024			December 31, 2023
		Unaudited			Audited
Current Assets
Cash and cash equivalents	$	12,470,005		$	11,347,420
Accounts receivable, net		7,862,982			6,970,322
Inventory, net		15,772,146			20,391,873
Payments in advance		977,703			664,754
Deferred asset, net		-			9,601
Income tax refunds receivable		523,888			623,081
Prepaid expenses and other current assets		2,846,213			2,297,934
Total current assets		40,452,937			42,304,985
Property and equipment, net		4,055,879			4,026,821
Operating lease right-of-use assets, net		626,949			845,209
Accounts receivable, net		146,477			309,947
Deferred tax asset, net		84,200			84,200
Other Assets
Deposits		37,960			36,210
Total Assets	$	45,404,402		$	47,607,372
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable and accrued expenses	$	5,889,080		$	5,202,368
Notes payable, current		52,078			112,858
Operating lease liabilities, current		276,062			299,432
Short term loans, net of finance charges		5,795			1,135,761
Total current liabilities		6,223,015			6,750,419
Notes payable, net of current portion		7,147			30,652
Operating lease liabilities, net of current portion		350,887			545,777
Commitments and contingencies
Preferred stock, $.001 par value, 1,120,000 shares authorized, 120,000 shares issued and outstanding		3,000			3,000
Common stock, $.001 par value, 28,000,000 shares authorized, 6,215,440 and 6,215,440 shares issued and outstanding		130,553			130,553
Additional paid - in capital		10,749,136			10,745,384
Accumulated other comprehensive loss		(1,100,976	)		(1,398,258	)
Retained earnings		29,041,640			30,799,845
Total stockholders' equity		38,823,353			40,280,524
Total Liabilities and Stockholders' Equity	$	45,404,402		$	47,607,372

ASSETS

		March 31, 2025			December 31, 2024
		Unaudited			Audited
Current Assets
Cash and cash equivalents	$	12,699,342		$	12,368,100
Accounts receivable, net		6,380,596			6,409,610
Inventory, net		16,930,185			17,988,737
Payments in advance		1,092,572			870,920
Income tax receivable		117,311			526,498
Prepaid expenses and other current assets		2,995,831			3,003,173
Total current assets		40,215,837			41,167,038

Property and equipment, net		3,890,288			4,000,225
Operating lease right-of-use assets, net		524,202			552,970
Accounts receivable, net		-			56,391
Deferred tax asset, net		675,000			675,000

Other Assets
Deposits		38,173			37,322

Total Assets	$	45,343,500		$	46,488,946

LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities
Accounts payable and accrued expenses	$	4,783,388		$	6,906,939
Notes payable, current		17,523			28,722
Operating lease liabilities, current		295,655			251,946
Short term loan, net of finance charges		445,329			733,794
Total current liabilities		5,541,895			7,921,401

Notes payable, net of current portion		-			1,804
Operating lease liabilities, net of current portion		228,547			301,024
Total liabilities		5,770,442			8,224,229

Commitments and contingencies

Preferred stock, $.001 par value, 1,120,000 shares authorized, 120,000 shares issued and outstanding		3,000			3,000
Common stock, $.001 par value, 28,000,000 shares authorized, 6,217,550 and 6,217,550 shares issued and outstanding		130,555			130,555
Additional paid - in capital		11,109,153			10,988,316
Accumulated other comprehensive loss		(1,385,955	)		(1,452,335	)
Retained earnings		29,716,305			28,595,181
Total stockholders' equity		39,573,058			38,264,717

Total Liabilities and Stockholders' Equity	$	45,343,500		$	46,488,946

The accompanying notes are an integral part of these consolidated financial statements.

LEATT CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

Three Months Ended

~~Nine Months Ended~~

September 30

March 31

2024

2023

2024

2023

2025

2024

Unaudited

~~Unaudited~~

Revenues

1215,~~138~~367,~~123~~864

1210,~~008~~614,~~847~~470

~~32,831,288~~

~~37,438,414~~

Cost of Revenues

68,~~968~~646,~~051~~851

6,~~890~~606,~~845~~137

~~19,731,470~~

~~21,204,860~~

Gross Profit

56,~~170~~721,~~072~~013

54,~~118~~008,~~002~~333

~~13,099,818~~

~~16,233,554~~

Product Royalty Income

~~123~~85,~~706~~298

139,~~767~~303

~~255,789~~

~~25,151~~

Operating Expenses

Salaries and wages

1,~~676~~857,~~828~~380

1,~~267~~568,~~455~~271

~~4,853,471~~

~~3,737,382~~

Commissions and consulting expenses

~~138~~157,~~124~~722

~~168~~124,~~299~~216

~~427,941~~

~~375,548~~

Professional fees

~~108~~360,~~627~~051

~~156~~298,~~868~~971

~~528,215~~

~~605,896~~

Advertising and marketing

1892,~~304,215~~057

~~974~~892,~~488~~417

~~3,379,914~~

~~2,678,960~~

Office lease and expenses

~~141~~169,~~420~~176

~~145~~151,~~863~~554

~~456,164~~

~~457,675~~

Research and development costs

~~620~~664,~~019~~490

~~610~~555,~~589~~778

~~1,804,590~~

~~1,828,548~~

Bad debt expense (recovery)

(3063,~~788~~504

)

469,~~113~~964

~~(20,510~~

)

~~(135,108~~

)

General and administrative expenses

~~993~~1,~~031~~012,649

~~830~~942,~~145~~888

~~2,913,079~~

~~2,516,919~~

Depreciation

~~316~~327,~~404~~008

~~299~~294,~~554~~134

~~907,788~~

~~871,738~~

Total operating expenses

5,~~267~~377,~~880~~029

4,~~499~~838,~~374~~193

~~15,250,652~~

~~12,937,558~~

Income (Loss) from Operations

251,~~898~~429,282

~~620~~(790,~~395~~557

)

~~(1,895,045~~

)

~~3,321,147~~

Other Income (Expenses)

Interest and other expenses, net

105,430

(1,150

)

178,963

(38,948

)

Interest and other income (expenses), net

82,147

(24,483

)

Total other Income (expenses)

105,430

(1,150

)

178,963

(38,948

)

Total other income (expenses)

82,147

(24,483

)

Income (Loss) Before Income Taxes

~~131~~1,~~328~~511,429

~~619~~(815,~~245~~040

)

~~(1,716,082~~

)

~~3,282,199~~

Income Taxes

15390,~~491~~305

~~158~~1,~~771~~639

~~42,123~~

~~1,022,365~~

Net Income (Loss) Available to Common Shareholders

~~115~~1,~~837~~121,124

~~460~~(816,~~474~~679

)

~~(1,758,205~~

)

~~2,259,834~~

Net Income (Loss) per Common Share

Basic

0.0218

(0.0813

)

~~(0.28~~

)

~~0.38~~

Diluted

0.0217

(0.0713

)

~~(0.27~~

)

~~0.36~~

Weighted Average Number of Common Shares Outstanding

Basic

6,~~215~~217,~~440~~550

56,~~971~~215,~~340~~440

~~6,215,440~~

~~5,971,340~~

Diluted

6,~~485~~470,~~890~~546

6,~~270~~504,~~691~~189

~~6,485,890~~

~~6,270,691~~

Comprehensive Income (Loss)

Net Income (Loss)

~~115~~1,~~837~~121,124

~~460~~(816,~~474~~679

)

~~(1,758,205~~

)

~~2,259,834~~

Other comprehensive income (loss) , net of $0 deferred income taxes in 2024 and 2023

Other comprehensive income (loss), net of ($49,800) and ($49,800) deferred income taxes in 2025 and 2024

Foreign currency translation

~~274~~66,~~270~~380

(27137,~~708~~552

)

~~297,282~~

~~(464,777~~

)

Total Comprehensive Income (Loss)

~~390~~1,~~107~~187,504

~~432~~(954,~~766~~231

)

~~(1,460,923~~

)

~~1,795,057~~

The accompanying notes are an integral part of these consolidated financial statements.

LEATT CORPORATIONCONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' ~~EQUITYAS OF AND FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2024~~EQUITY

										Accumulated
										Other
	Preferred Stock A			Common Stock				Additional		Comprehensive			Retained
	Shares		Amount	Shares		Amount		Paid - In Capital		Loss			Earnings			Total
Balance, January 1, 2024	120,000	$	3,000	6,215,440	$	130,553	$	10,745,384	$	(1,398,258	)	$	30,799,845		$	40,280,524
Net loss	-		-	-		-		-		-			(1,758,205	)		(1,758,205	)
Restricted stock awards	-		-	-		-		3,752		-			-			3,752
Foreign currency translation adjustment	-		-	-		-		-		297,282			-			297,282
Balance, September 30, 2024	120,000	$	3,000	6,215,440	$	130,553	$	10,749,136	$	(1,100,976	)	$	29,041,640		$	38,823,353

AS OF AND FOR THE THREE MONTHS ENDED MARCH 31, 2025, AND FOR THE YEAR ENDED DECEMBER 31, 2024

										Accumulated
										Other
	Preferred Stock A			Common Stock				Additional		Comprehensive			Retained
	Shares		Amount	Shares		Amount		Paid - In Capital		Loss			Earnings			Total

Balance, January 1, 2024	120,000	$	3,000	6,215,440	$	130,553	$	10,745,384	$	(1,398,258	)	$	30,799,845		$	40,280,524

Restricted stock awards	-		-	2,110		2		242,932		-			-			242,934

Net loss	-		-	-		-		-		-			(2,204,664	)		(2,204,664	)

Foreign currency translation adjustment	-		-	-		-		-		(54,077	)		-			(54,077	)

Balance, January 1, 2025	120,000	$	3,000	6,217,550	$	130,555	$	10,988,316	$	(1,452,335	)	$	28,595,181		$	38,264,717

Net income	-		-	-		-		-		-			1,121,124			1,121,124

Restricted stock awards	-		-	-		-		120,837		-			-			120,837

Foreign currency translation adjustment	-		-	-		-		-		66,380			-			66,380

Balance, March 31, 2025	120,000	$	3,000	6,217,550	$	130,555	$	11,109,153	$	(1,385,955	)	$	29,716,305		$	39,573,058

The accompanying notes are an integral part of these consolidated financial statements.

LEATT CORPORATIONCONSOLIDATED STATEMENTS OF CASH FLOWSFOR THE ~~NINE~~THREE MONTHS ENDED ~~SEPTEMBER~~MARCH 3031, ~~2024~~2025 AND ~~2023~~2024

		2024			2023
		2025			2024
Cash flows from operating activities
Net income (loss)	$	(1,~~758~~121,~~205~~124	)	$	2(816,~~259,834~~679	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Adjustments to reconcile net income (loss) to net cash provided by
Depreciation		907,788			871,738
operating activities:
Stock-based compensation		3,752			-
Depreciation		327,008			294,134
Bad debts reserve		(31,247	)		(175,448	)
Stock-based compensation		120,837			3,752
Inventory reserve		128,096			299,942
Bad debts reserve		(63,504	)		10,032
Deferred asset allowance		(6,400	)		(75,971	)
Inventory reserve		46,291			(34,730	)
Gain on sale of property and equipment		-(14,985	)		~~(2,375~~-	)
(Increase) decrease in:
Accounts receivable		~~(861~~92,~~413~~226	)		2,~~342~~191,~~233~~962
Deferred asset		16,001			992,389
Inventory		1,012,261			3,357,216
Inventory		4,491,631			3,802,173
Payments in advance		(221,652	)		(335,758	)
Payments in advance		(312,949	)		413,276
Prepaid expenses and other current assets		7,342			60,944
Prepaid expenses and other current assets		(548,279	)		548,208
Income tax receivable		409,187			96,640
Income tax refunds receivable		99,193			(340,492	)
Long-term accounts receivable		56,391			80,473
Long-term accounts receivable		163,470			-
Deposits		(851	)		(1,074	)
Deposits		(1,750	)		792
Increase (decrease) in:
Accounts payable and accrued expenses		~~686~~(2,~~712~~123,551	)		(~~567~~2,~~611~~078,530	)
Income taxes payable		-			(3,382,700	)
Net cash provided by operating activities		768,124			2,828,382
Deferred compensation		-			(400,000	)
Net cash provided by operating activities		2,976,400			6,585,988
Cash flows from investing activities
Capital expenditures		(~~861~~195,~~567~~826	)		(149,~~412,558~~216	)
Proceeds from sale of property and equipment		-15,250			~~2,793~~-
Net cash used in investing activities		(~~861~~180,~~567~~576	)		(149,~~409,765~~216	)
Cash flows from financing activities
Repayment of notes payable to bank		(8413,~~285~~003	)		(7927,~~353~~797	)
Repayment of short-term loans, net		(1,129,966	)		(1,024,949	)
Repayment of short-term loan, net		(288,465	)		(467,964	)
Net cash used in financing activities		(1301,~~214,251~~468	)		(1495,~~104,302~~761	)
Effect of exchange rates on cash and cash equivalents		~~222~~45,~~003~~162			(~~391~~99,~~114~~183	)
Net increase in cash and cash equivalents		1331,~~122,585~~242			32,~~680~~184,~~807~~222
Cash and cash equivalents - beginning of period		1112,~~347~~368,~~420~~100			711,~~102~~347,~~945~~420
Cash and cash equivalents - end of period	$	12,~~470~~699,~~005~~342		$	1013,~~783~~531,~~752~~642
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for interest	$	6917,~~515~~170		$	5627,~~602~~573
Cash paid for income taxes	$	~~55,906~~-		$	43,~~529,602~~349
Other noncash investing and financing activities
Common stock issued for services	$	3120,~~752~~837		$	-3,752

The accompanying notes are an integral part of these consolidated financial statements.

LEATT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Note 1 - Basis of presentation

The consolidated balance sheet as of December 31, ~~2023~~2024, was audited and appears in the Form 10-K filed by the Company with the Securities and Exchange Commission on March 1328, ~~2024~~2025. The consolidated balance sheet as of ~~September~~March 3031, ~~2024~~2025 and the consolidated statements of operations and comprehensive income (loss) for the three ~~and nine~~ months ended ~~September~~March 3031, ~~2024~~2025 and ~~2023~~2024, changes in stockholders' equity as of for the ~~nine~~three months ended ~~September~~March 3031, 2025 and for the year ended December 31, 2024, cash flows for the ~~nine~~three months ended ~~September~~March 3031, ~~2024~~2025 and ~~2023~~2024, and the related information contained in these notes have been prepared by management without audit. In the opinion of management, all adjustments (which include only normal recurring items) necessary to present fairly the financial position, results of operations and cash flows in conformity with generally accepted accounting principles as of ~~September~~March 3031, ~~2024~~2025, and for all periods presented have been made. Interim operating results are not necessarily indicative of operating results for a full year. Certain information and note disclosures normally included in the Company's annual financial statements prepared in accordance with U.S. generally accepted accounting principles have been condensed or omitted. While management of the Company believes that the disclosures presented are adequate to make the information not misleading, it is suggested that these condensed consolidated financial statements be read in conjunction with the audited financial statements and notes thereto for the year ended December 31, ~~2023~~2024, as filed with the Securities and Exchange Commission in the Company's Form 10-K.

Note 2 - Inventory

Inventory is stated at the lower of cost or net realizable value. Cost is determined using the first-in first-out (FIFO) method. Inventory consists ~~primarily~~ of finished goods. Shipping and handling costs are included in the cost of inventory. In assessing the inventory value, the Company must make estimates and judgments regarding reserves required for product obsolescence, aging of inventory and other issues potentially affecting the saleable condition of products. In performing such evaluations, the Company utilizes historical experience as well as current market information. The reserve for obsolescence was $~~355~~580,~~624~~244 at ~~September~~March 3031, ~~2024~~2025 and $~~227~~533,~~528~~953 at December 31, ~~2023~~2024.

Note 3 - Operating Leases - Right-of-Use Assets and Lease Liability Obligations

The Company has ~~three~~two non-cancelable operating leases, for office and warehousing space, that expires in ~~February~~January ~~2025,~~2027 ~~February 2025~~ and ~~January~~February 2027, respectively. Rent expense for these operating leases is recognized over the term of the lease on a straight-line basis.

Below is a summary of the Company's Operating Right-of-Use Assets and Operating Lease liabilities as of ~~September~~March 3031, ~~2024~~2025 and December 31, ~~2023~~2024:

		2024		2023
		2025		2024
Assets
Operating lease ROU assets	$	~~626~~524,~~949~~202	$	~~845~~552,~~209~~970
Liabilities
Operating lease liabilities, current	$	~~276~~295,~~062~~655	$	~~299~~251,~~432~~946
Operating lease liabilities, net of current portion		~~350~~228,~~887~~547		~~545~~301,~~777~~024
Total operating lease liabilities	$	~~626~~524,~~949~~202	$	~~845~~552,~~209~~970

During the ~~nine~~three months ended ~~September~~March 3031, ~~2024~~2025 and ~~2023~~2024 the Company recognized $~~218~~71,~~802~~502 and $~~217~~72,~~942~~851, respectively, in operating lease expenses, which are included in office lease and expenses in the Company's consolidated statements of operations and comprehensive income (loss). Generally, the Company's lease agreements do not specify an implicit rate. Therefore, the Company estimates the incremental borrowing rate, which is defined as the interest rate the Company would pay to borrow on a collateralized basis, considering such factors as length of lease term and the risks of the economic environment in which the leased asset operates.

As of ~~September~~March 3031, ~~2024~~2025, and December 31, ~~2023~~2024 the following disclosures for the remaining lease terms and incremental borrowing rates were applicable:

Supplemental disclosure	March 31, 2025	December 31, 2024
Weighted average remaining lease term	1.76 years	2.05 years
Weighted average discount rate	3.78%	3.78%

Supplemental disclosure	September 30, 2024	December 31, 2023
Weighted average remaining lease term	2.21 years	3.55 years
Weighted average discount rate	3.78%	3.77%

Maturities of lease liabilities as of March 31, 2025 were as follows:

Maturities of lease liabilities as of September 30, 2024 were as follows:

Year ended December 31,		Amounts under Operating Leases
Remaining 2025		234,962
2026		322,563
2027		29,461
Total minimum lease payments	$	586,986
Less: amount representing interest	$	(62,784	)
Total operating lease liabilities	$	524,202

Year ended December 31,		Amounts under Operating Leases
Remaining 2024	$	80,543
2025		295,803
2026		298,791
2027		25,455
Total minimum lease payments	$	700,592
Less: amount representing interest	$	(73,643	)
Total operating lease liabilities	$	626,949

Supplemental cash flow information for the three months ended March 31, 2025 and 2024 are as follows:

Supplemental cash flow information for the nine months ended September 30, 2024 and 2023 are as follows:

		Three months ended March 31, 2025		Three months ended March 31, 2024
Cash paid for amounts included in the measurement of lease liabilities	$	78,207	$	77,282
Right-of-use assets obtained in exchange for lease obligations	$	43,547	$	-

		Nine months ended		Nine months ended
		September 30, 2024		September 30, 2023
Cash paid for amounts included in the measurement of lease liabilities	$	233,022	$	225,290
Right-of-use assets obtained in exchange for lease obligations	$	-	$	43,833

Note 4 - Revolving line of Credit facility

On November 19, 2018, the Company entered into a $1,000,000 revolving line of credit agreement with a bank. Advances under the line of credit bear interest at the LIBOR Daily Floating Rate plus 2.5 percentage points commencing January 1, 2019. The line of credit matured on November 19, 2020, at which time the unpaid principal, interest, or other charges outstanding under the agreement were due and payable. On November 5, 2020, the Company executed an amendment to the line of credit agreement to extend the credit facility through November 19, 2021. The amendment took retroactive effect to October 27, 2020 and introduced an index floor so that payments for any future advances will bear interest at the greater of the LIBOR Daily Floating Rate or an Index Floor of 1.25 percentage points plus 2.5 percentage points. Obligations under the line of credit are secured by equipment and fixtures in the United States of America, accounts receivable and inventory of Leatt Corporation and Two- Eleven Distribution, LLC. On March 1, 2021, the Company executed an amendment to the line of credit. The amendment took retroactive effect to February 17, 2021 and extended the line of credit facility through February 28, 2022 and increased the revolving line of credit to $1,500,000. Effective January 21, 2022, the Company executed an amendment agreement for the line of credit to extend the line of credit facility through February 28, 2023, and to replace interest determined by LIBOR Daily Floating Rate with the Bloomberg Short-Term Bank Yield Index rate. The Company and Two Eleven signed amended documents to secure the loan by equipment and fixtures, accounts receivable and inventory of Two Eleven. Effective January 20, 2023, the Company executed an amendment to the line of credit to extend the line of credit facility through February 29, 2024, ~~which~~to ~~has~~amend ~~subsequently~~Banking ~~been~~days and update Successor Rate. The bank had extended tothe line of credit until March 1, 2025. The Bank sent a letter dated October 4, 2024, which formally notified the Company that effective November 18, 2024, the interest rate transitioned from Bloomberg Short-Term Bank Yield Index rate to Secured Overnight Financing Rate Daily Floating rate plus spread adjustment. The Bank sent a letter dated January 24, 2025, notifying the Company that the bank has extended the line of credit until March 1, 2026. The Company and Two Eleven signed updated documents to secure the loan by equipment and fixtures, accounts receivable and inventory of Two -Eleven. As of ~~September~~March 3031, ~~2024,~~2025 and December 31, ~~2023~~2024, respectively there were no advances of the line of credit leaving $1,500,000 and $1,500,000 available for advances.

Note 5 - Short-term Loans

The Company carries product liability insurance policies with a U.S. and South African-based insurance carrier. The Company finances payment of both of its product liability insurance premiums over the period of coverage, which is generally twelve months. The U.S. short-term loan is payable in a cash down payment of $271,776 and in monthly installments of $~~132~~85,~~515~~555 over ~~eleven~~ten months including interest at 98.~~880~~976%. ~~The~~As ~~loan~~of ~~was~~March ~~paid~~31, in2025 ~~full~~and onDecember ~~August 30~~31, 2024, $407,663 and $733,794, was outstanding respectively. The South African short-term loan is payable in monthly installments of $65,~~041~~599 over a ten-month period at a flat interest rate of 4.2505%. As of March 31, 2025 and December 31, 2024, $37,666 and $0, was outstanding respectively.

Note 6 - Notes payable

Two Eleven entered into a Note Payable with a bank effective December 17, 2021 in the principal amount of $272,519, secured by equipment. The Note is payable in 36 consecutive monthly installments of $7,990, including interest at a fixed rate of 3.5370%, commencing February 5, 2022, and continuing to January 5, 2025. AsThe ofNote ~~September~~was ~~30,~~paid ~~2024~~in ~~and~~full ~~December~~on ~~31,~~January ~~2023~~6, ~~$31,724 and $101,755, was outstanding, respectively~~2025.

Two Eleven entered into a Note Payable with a bank effective December 1, 2022 in the principal amount of $58,075, secured by equipment. The Note is payable in 36 consecutive monthly installments of $1,816, including interest at a fixed rate of 7.8581%, commencing February 5, 2023, and continuing to January 5, 2026. As of March 31, 2025 and December 31, 2024, $17,523 and $22,561, was outstanding, respectively.

Two Eleven entered into a Note Payable with a bank effective December 1, 2022 in the principal amount of $58,075, secured by equipment. The Note is payable in 36 consecutive monthly installments of $1,816, including interest at a fixed rate of 7.8581%, commencing February 5, 2023, and continuing to January 5, 2026. As of September 30, 2024 and December 31, 2023, $27,501 and $41,755, was outstanding, respectively.

		March 31, 2025		December 31, 2024
Liabilities
Note payable, current	$	17,523	$	28,722
Note payable, net of current portion		-		1,804
	$	17,523	$	30,526

		September 30, 2024		December 31, 2023
Liabilities
Notes payable, current	$	52,078	$	112,858
Notes payable, net of current portion		7,147		30,652
	$	59,225	$	143,510

Principal maturities of notes payable as of March 31, 2025 were as follows:

Principal maturities of notes payable as of September 30, 2024 were as follows:

Year ended December 31,		Amounts under Notes Payable
2025		15,719
2026		1,804
	$	17,523

Year ended December 31,		Amounts under Notes Payable
Remaining 2024	$	28,698
2025		28,723
2026		1,804
	$	59,225

Note 7 - Revenue and Cost Recognition

The Company's products are sold worldwide to a global network of distributors and dealers, and directly to ~~consumers~~customers ~~when there are no dealers or distributors in their geographic area or~~ where consumers choose to purchase directly via the Company's e-commerce website (collectively the "customers").

Revenues from product sales are recognized when earned, net of applicable provisions for discounts, ~~and~~ returns, marketing incentives and allowances in the event of product defect where no exchange of product is possible. Revenues are recognized when performance obligations are satisfied as evidenced by transfer of control of promised goods to ~~the~~our ~~Company's~~ customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. Product royalty income, representing less than 1% of total revenues, is recorded as the underlying product sales occur, in accordance with the related licensing arrangements.

The Company's standard distributor payment terms range from pre-payment in full to 60 days after shipment and subsequent sales of product by distributors have no effect on the amount and timing of payments due to the Company, however, in limited instances qualified distributors and dealers may be granted extended payment terms during selected order periods. In performing such evaluations, the Company utilizes historical experience, sales performance, and credit risk ~~requirements~~assessments. Furthermore, products purchased by distributors may not be returned to the Company in the event that any such distributor relationship is terminated.

Since the Company (through its wholly-owned subsidiary) serves as the distributor of Leatt products in the United States, the Company records its revenue and related cost of revenue for its product sales in the United States upon shipment of the merchandise to the dealer or to the ~~ultimate~~ consumer ~~when~~where ~~there is no dealer in~~ the ~~geographic area or the~~ consumer chooses to purchase directly from the Company's e-commerce website and the sales order was received directly from, and paid by, the ultimate consumer. Since the Company (through its South African branch) serves as the distributor of Leatt products in South Africa, the Company records its revenue and related cost of revenue for its product sales in South Africa upon shipment of the merchandise from the branch to the dealer and upon shipment of products direct to end consumers which has been sold through digital channels. The Company's standard terms and conditions of sale for non-consumer direct or web-based sales do not allow for product returns other than under warranty.

AsInternational ofsales ~~September~~(other ~~30,~~than ~~2024~~in the United States and ~~December~~South ~~31,~~Africa) ~~2023~~are ~~sales~~generally ~~totalling~~drop-shipped $0directly from the Company's consolidation warehouse or the third-party manufacturer to the Company's international distributors. Revenue and ~~$31,671~~related ~~were~~cost ~~deferred,~~of ~~respectively~~revenue is recognized at the time of shipment from the manufacturer's port when the shipping terms are Free On Board ("FOB") shipping point, Cost and Freight ("CFR") or Cost and Insurance to named place ("CIP") as ~~all~~legal title and risk of loss to the ~~requirements~~product pass to ~~have~~the adistributor. ~~complete~~Sales ~~contract~~to ~~with~~all ~~certain~~ customers (distributors, dealers and consumers) are generally final; however, in ~~accordance~~limited ~~with~~instances, ~~ASC~~product ~~606~~may ~~had~~be ~~not~~returned ~~been~~and ~~met~~exchanged atdue ~~such~~to ~~respective~~product ~~date~~quality issues. Historically, ~~The~~returns ~~shipped~~due ~~goods~~to ~~associated~~product ~~with~~quality ~~these~~issues ~~deferred~~have ~~sales~~not ~~are~~been ~~included~~material inand ~~the~~there ~~caption~~have ~~deferred~~been ~~asset~~no indistributor ~~the~~terminations ~~balance~~that ~~sheet,~~resulted ~~net~~in product returns. Cost of anrevenues ~~allowance~~also ~~for~~includes ~~potential~~royalty ~~loss~~fees ~~amounting~~associated towith $0sales ~~and~~of ~~$6,400~~Leatt-Brace products. Product royalty income is recorded as ofthe ~~September~~underlying 30product sales occur, ~~2024~~in ~~and~~accordance ~~December~~with ~~31,~~the ~~2023~~related ~~respectively~~licensing arrangements.

International sales (other than in the United States and South Africa) are generally drop-shipped directly from the Company's consolidation warehouse or the third-party manufacturer to the international distributors. Revenue and related cost of revenue is recognized at the time of shipment from the manufacturer's port when the shipping terms are Free On Board ("FOB") shipping point, Cost and Freight ("CFR") or Cost and Insurance to named place ("CIP") as legal title and risk of loss to the product pass to the distributor. Sales to all customers (distributors, dealers and consumers) are generally final; however, in limited instances, product may be returned and exchanged due to product quality issues. Historically, returns due to product quality issues have not been material and there have been no distributor terminations that resulted in product returns. Cost of revenues also includes royalty fees associated with sales of Leatt-Brace products. Product royalty income is recorded as the underlying product sales occur, in accordance with the related licensing arrangements.

In the following table, revenue is disaggregated by the source of revenue:

		Nine months ended September 30,
			Three months ended March 31,
		2024		% of Revenues			2023		% of Revenues
			2025		% of Revenues			2024		% of Revenues
Consumer and athlete direct revenues	$	~~2,584,290~~$	861,186	8%	6%	$	~~2,235,122~~$	755,966	6%	7%
Dealer direct revenues		~~9,905,056~~	3,216,598	~~30%~~	21%		~~9,549,630~~	3,540,513	~~25%~~	33%
International distributor revenues		~~20,341,942~~	11,290,080	~~62%~~	73%		~~25,653,662~~	6,317,991	~~69%~~	60%
	$	~~32,831,288~~$	15,367,864	~~100%~~	100%	$	~~37,438,414~~$	10,614,470	~~100%~~	100%

The Company reviews the reserves for customer returns at each reporting period and adjusts them to reflect data available at that time. To estimate reserves for returns, the Company estimates the expected returns and claims based on historical rates as well as events and circumstances that indicate changes to historical rates of product returns and claims. Historically, returns due to product quality issues have not been material and there have been no distributor terminations that resulted in product returns. The provision for estimated returns at ~~September~~March 3031, ~~2024~~2025 and December 31, ~~2023~~2024 was $0, and $0, respectively.

Accounts receivable consist of amounts due to the Company from normal business activities. Credit is granted to ~~substantially all~~ distributors on an unsecured basis based on credit risk analysis assessments and procedures. The Company continuously monitors both credit reports and collections, communication and payments from customers and maintains an allowance for ~~doubtful~~credit ~~accounts~~losses ~~receivable~~ based upon the expected credit losses determined utilizing historical experience, the aging of funds outstanding and any specific customer collection issues that have been identified. In determining the amount of the allowance, the Company is required to make certain estimates and assumptions. Accounts receivable balances that are still outstanding after the Company has used reasonable collection efforts are written off as uncollectible. While such credit losses have historically been minimal, within the Company's expectations and the provisions established, macro-economic conditions and customer financial positions are fluid, and the Company cannot guarantee that itthe Company will continue to experience the same credit loss rates asthat it has in the past. A significant change in the liquidity or financial position of any of the Company's significant customers could have a material adverse effect on the collectability of the Company's accounts receivable and the future operating results. The allowance for short-term ~~doubtful~~credit ~~accounts~~losses at ~~September~~March 3031, ~~2024~~2025 was $~~645~~$440,~~618~~318 and at December 31, ~~2023~~2024 was $~~662~~500,~~612~~164. Additionally, an allowance for long-term ~~doubtful~~credit ~~accounts~~losses will be included for accounts receivables that are anticipated to be collected over a period that is greater than 12 months. The allowance for long-term ~~doubtful~~credit ~~accounts~~losses at ~~September~~March 3031, ~~2024~~2025 was $~~12,676~~0 and at December 31, ~~2023~~2024 was $263,~~929~~366.

Sales commissions are expensed when incurred, which is generally at the time of sale or cash received from customers, because the amortization period would have been one year or less. These costs are recorded in commissions and consulting expenses within operating expenses in the accompanying consolidated statements of operations and comprehensive income (loss).

Shipping and handling activities associated with outbound freight, after control over a product has transferred to a customer, are accounted for as a fulfilment cost and are included in revenues and cost of revenues in the accompanying consolidated statements of operations and comprehensive income (loss). Revenue recognized from contracts with customers is recorded net of sales taxes, value added taxes, or similar taxes that are collected on behalf of local taxing authorities.

Note 8 - Income Taxes

The Company uses the asset and liability approach to account for income taxes. Deferred tax assets and liabilities are determined based on the differences between the financial statement carrying amounts and the income tax basis of assets and liabilities. A valuation allowance is applied against any net deferred tax asset if, based on available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. The provision for income taxes included taxes currently payable, if any, plus the net change during the period in deferred tax assets and liabilities recorded by the Company.

The Company applies the provisions of FASB ASC Topic 740-10, Accounting for Uncertainty in Income Taxes ("Standard"), which provides that the tax effects from an uncertain tax position can be recognized in the consolidated financial statements only if the position is more likely than not of being sustained upon an examination by tax authorities. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. Additionally, the standard provides guidance on derecognition, classification, interest and penalties; accounting in interim periods, disclosure and transition, and any amounts when incurred would be recorded under these provisions.

The Company's practice is to recognize interest and/or penalties related to income tax matters in income tax expense. As of ~~September~~March 3031, ~~2024~~2025, the Company has no unrecognized tax benefits.

Note 9 - Net Income Per Share of Common Stock

Basic net income per common share is computed using the weighted-average number of common shares outstanding during the period. Diluted net income per share is computed using the weighted-average number of common stock shares and dilutive potential common shares outstanding during the period. For the ~~six~~three months ended ~~September~~March 3031, ~~2024~~2025, the Company had ~~341~~311,000 potential common shares, consisting of 120,000 preferred shares, and options to purchase ~~221~~191,000 shares, outstanding that were potentially dilutive, if exercised.

Note 10 - Common Stock

Stock-based compensation expense related to vested restricted stock awards during the ~~nine~~periods ~~months~~ ended ~~September~~March 3031, 2025 and 2024 was $120,837 and $3,752. respectively. As of ~~September~~March 3031, 2025 and December 31, 2024, there was $21,~~185~~840,~~775~~756 and $1,961,593 respectively of unrecognized compensation cost related to unvested restricted stock.

~~Note~~Restricted 11Stock -shall ~~Recent~~vest ~~Accounting~~and ~~Pronouncements~~become nonforfeitable in accordance with the vesting schedule contained in the Notice of Restricted Stock Grant, except that 100% of grantee's nonvested shares shall become fully vested upon a change of controls defined in the Notice of Restricted Stock Grant. If grantee's service with the Company ceases for any reason other than grantee's (a) death, (b) disability, (c) retirement, or (d) termination by the Company without cause, any nonvested shares shall be automatically forfeited to the Company.

~~Accounting~~Note ~~Pronouncements~~11 ~~Not Yet Adopted~~ - InPreferred December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The standard is intended to provide greater transparency in various income tax components that affect the rate reconciliation based on the applicable taxing jurisdictions, as well as the qualitative and quantitative aspects of those components. The ASU is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the impact of this accounting standard update on its consolidated financial statements and related disclosures.Stock

The Company's preferred stock, when issued, is generally convertible to common stock at or above the then current market price of the Company's common stock and therefore, contains no beneficial conversion feature. The Preferred Stock is convertible on a 1:1 ratio to common stock. Each holder of the Preferred Stock is not entitled to receive dividends and is entitled to 100 votes for each one share of Preferred Stock.

Note 12 - Recent Accounting Pronouncements

In December 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The standard is intended to provide greater transparency in various income tax components that affect the tax rate reconciliation based on the applicable taxing jurisdictions, as well as the qualitative and quantitative aspects of those components. This accounting standard update is effective for annual reporting periods beginning after December 15, 2024. The Company plans to adopt this accounting standard update in the fourth quarter of 2025 and is currently evaluating the impact on its consolidated financial statements and related disclosures.

In November 2024, the FASB issued ASU No. 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. This standard does not change the expense captions presented on the face of the income statement. Instead, it requires the disaggregation of certain expense captions into specified categories within the footnotes to the consolidated financial statements. This accounting standard update is effective for annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027. The Company is currently evaluating the impact of this accounting standard update on its consolidated financial statements and related disclosures.

Effective January 1, 2025, the Company adopted Accounting Standards Update No. 2023-07, "Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures" ("ASU 2023-07"), which is intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. The adoption of this guidance did not have a material effect on the Company's Consolidated Financial Statements.

The Company evaluated all ASU's issued by the FASB for consideration of their applicability. ASU's not included in the Company's disclosures were assessed and determined to be either not applicable or are not expected to have a material impact on the Company's consolidated financial statements.

Note 1213 - ~~Litigation~~Segment Information

InThe ~~the~~Company ~~ordinary~~manages ~~course~~its ofoperations ~~business,~~as ~~the~~a ~~Company~~single isoperating ~~involved~~segment infor ~~various~~the ~~legal~~purpose ~~proceedings~~of ~~involving~~assessing ~~product~~performance ~~liability~~ and ~~personal~~making ~~injury~~operating ~~and~~decisions, ~~intellectual~~resulting ~~property~~in ~~litigation.~~a ~~The~~single ~~Company~~reportable ~~is insured against loss for certain of these matters~~segment. The Company ~~will~~has ~~record~~determined ~~contingent~~that ~~liabilities~~its ~~resulting~~Chief ~~from~~Operating ~~asserted~~Decision ~~and~~Maker ~~unasserted~~("CODM") ~~claims against it when it~~ is ~~probable~~its ~~that~~Chief ~~the~~Executive ~~liability has been incurred and the amount of the loss is reasonably estimable~~Officer. The Company's ~~will~~CODM ~~disclose~~reviews ~~contingent~~the ~~liabilities~~Company's ~~when~~financial ~~there~~information ison a ~~reasonable~~consolidated ~~possibility~~basis ~~that~~for the ~~ultimate~~purpose ~~loss will exceed the recorded liability. While the outcome~~ of ~~currently~~making ~~pending~~key ~~litigation~~operating ~~is not yet determinable~~decisions, ~~the~~allocating ~~ultimate~~resources ~~exposure~~and ~~with~~assessing respect to these matters cannot be ascertained. However, based on the information currently available to the Company, the Company does not expect that any liabilities or costs that might be incurred to resolve these matters will have a material adverse effect on the financial ~~condition, results of operations, liquidity or cash flows of the Company~~performance.

~~Note~~The 13key measure of segment profit or loss that the CODM uses to allocate resources and assess performance is the Company's consolidated net income (loss), as reported on the consolidated statements of operations and comprehensive income (loss). In addition, the CODM is regularly provided the significant segment expense categories included in the table below, which are reviewed against budgeted expectations to assist in resource allocation decision-making. ~~Risks~~The CODM does not review assets in evaluating operating performance, and ~~Uncertainties~~therefore, such information is not presented.

The following table presents selected financial information with respect to the Company's single operating segment for the three months ended March 31, 2025 and March 31, 2024:

		2025			2024

Revenues	$	15,367,864		$	10,614,470
Cost of Revenues		8,646,851			6,606,137
Gross Profit		6,721,013			4,008,333

Product Royalty Income		85,298			39,303

Operating Expenses
Salaries and wages		1,857,380			1,568,271
Professional fees		360,051			298,971
Advertising and marketing		892,057			892,417
Research and development		664,490			555,778
General and administrative		1,012,649			942,888
Other operating expenses		590,402			579,868
Operating Expenses		5,377,029			4,838,193

Income (Loss) from Operations		1,429,282			(790,557	)

Other Income (Expense)		82,147			(24,483	)
Income Taxes		(390,305	)		(1,639	)

Net Income (Loss)	$	1,121,124		$	(816,679	)

Note 14 - Related Party Transactions

Royalty fees associated with sales of Leatt-Brace® products are paid to Holdings, a company owned by a director, and a related individual who is a shareholder. Royalties are based on 5% of the cash received from net sales of the neck braces worldwide and totalled $59,419 and $40,325 for the periods ended March 31, 2025 and 2024. The term of the royalty agreement is for the life of the intellectual property. As of March 31, 2025 and December 31, 2024, accrued royalties totalled $16,912 and $10,140.

On November 8, 2021, the Company entered into a consulting agreement with Innovation Services Limited, or Innovation, a Jersey limited company in which the Company's founder and chairman is an indirect beneficiary, pursuant to which Innovation served as the Company's exclusive research, development and marketing consultant. Monthly consulting fees amounting to $45,481 were payable effective January 1, 2024 until June 30, 2024, and increased to $47,072 effective July 1, 2024. During the periods ended March 31, 2025 and 2024, the Company recognized an aggregate of $141,217 and $136,442, respectively in consulting fees to Innovation.

Note 15 - Litigation

In the ordinary course of business, the Company is involved in various legal proceedings involving product liability and personal injury and intellectual property litigation. The Company is insured against loss for certain of these matters. The Company will record contingent liabilities resulting from asserted and unasserted claims against it when it is probable that a liability has been incurred and the amount of the loss is reasonably estimable. The Company will disclose contingent liabilities when there is a reasonable possibility that the ultimate loss will exceed the recorded liability. While the outcome of currently pending litigation is not yet determinable, the ultimate exposure with respect to these matters cannot be ascertained. However, based on the information currently available to the Company, the Company does not expect that any liabilities or costs that might be incurred to resolve these matters will have a material adverse effect on the financial condition, results of operations, liquidity or cash flow of the Company.

Note 16 - Risks and Uncertainties

The COVID-19 pandemic had an adverse impact on global shipping and supply chains which caused a disruption in our customers' ordering patterns and ultimately inflated certain industry wide stock levels. This was further compounded by the global economic slowdown experienced worldwide due to a high inflationary environment and geo-political instability. Although global conditions continue to improve, elevated industry wide inventory levels and adverse economic conditions compounded by resultant foreign exchange rate volatility may continue to impact levels of dealer and distributor ordering and ultimately consumer spending in the foreseeable future, which may affect the Company's profitability, and could have a negative impact on the Company's results of operations for the coming periods and beyond.

Note 14 - Subsequent Events

The Company has evaluated all subsequent events through the date the financial statements were released.

Note 17 - Subsequent Events

The Company has evaluated all subsequent events through the date the financial statements were released.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

Special Note Regarding Forward Looking Statements

This report contains forward-looking statements that are contained principally in the sections entitled "Our Business," "Risk Factors," and "Management's Discussion and Analysis of Financial Condition and Results of Operations." These statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. These risks and uncertainties include, but are not limited to, the factors described in the section captioned "Risk Factors" in ~~our~~this ~~latest annual~~ report ~~on Form 10-K filed with the SEC~~. In some cases, you can identify forward-looking statements by terms such as "anticipates," "believes," "could," "estimates," "expects," "intends," "may," "plans," "potential," "predicts," "projects," "should," "would" and similar expressions intended to identify forward-looking statements. Forward-looking statements reflect our current views with respect to future events and are based on assumptions and subject to risks and uncertainties. Given these uncertainties, you should not place undue reliance on these forward-looking statements. These forward-looking statements include, among other things, statements relating to:

• our expectations regarding growth in the motor sports and bicycle market;

• our expectation regarding increasing demand for protective equipment used in the motor sports and bicycle market;

• our belief that we will be able to effectively compete with our competitors and increase our market share;

• our expectations with respect to increased revenue growth and our ability to achieve profitability resulting from increases in our production volumes; and

• our future business development, results of operations and financial condition.

Also, forward-looking statements represent our estimates and assumptions only as of the date of this quarterly report. You should read this quarterly report and the documents that we reference and filed as exhibits to the quarterly report completely and with the understanding that our actual future results may be materially different from what we expect. Except as required by law, we assume no obligation to update any forward-looking statements publicly, or to update the reasons actual results could differ materially from those anticipated in any forward-looking statements, even if new information becomes available in the future.

Use of Certain Defined Terms

Except as otherwise indicated by the context, references in this annual report to:

• "Leatt," "we," "us," "our," the "Registrant" or the "Company" are to the combined business of Leatt Corporation, a Nevada corporation, its South African branch, Leatt SA, and its direct, wholly owned subsidiaries, Two Eleven and Leatt Prop;

• "Leatt Prop" refers to Leatt Prop (Pty) Ltd, a South African Company incorporated under the laws of South Africa with registration number: 2022/523867/07;

• "Leatt SA" are to the Company's branch office known as 'Leatt Corporation (Incorporated in the State of Nevada)' incorporated under the laws of South Africa with registration number: 2007/032780/10;

• "Leatt USA" are to Leatt USA, LLC, a Nevada Limited Liability Company;

• "PRC", and "China" are to the People's Republic of China;

• "Two Eleven" refers to Two- Eleven Distribution, ~~L.L.C.~~LLC, a Nevada Limited Liability Company;

• "Securities Act" are to the Securities Act of 1933, as amended, and to "Exchange Act" are to Securities Exchange Act of 1934, as amended;

• "South Africa" are to the Republic of South Africa;

• "U.S. dollar," "$" and "US$" are to the legal currency of the United States;

• "Xceed Holdings" refers to Xceed Holdings CC., a close corporation incorporated under the laws of South Africa, and wholly- owned by The Leatt Family Trust, of which Dr. Christopher J. Leatt, the Company's chairman, is a Trustee and Beneficiary; and

• "ZAR" refers to the South African Rand, the legal currency of South Africa. For all ZAR amounts reported, the dollar amount has been calculated on the basis that $1 = ~~ZAR17~~ZAR18.~~1039~~4199 for its ~~September~~March 3031, ~~2024~~2025 balance sheet.

Overview of Our Business

We were incorporated in the State of Nevada on March 11, 2005, under the name Treadzone, Inc. We were a shell company with little or no operations until March 1, 2006, when we acquired the exclusive global manufacturing, distribution, sale and use rights to the Leatt-Brace®, pursuant to a license agreement between the Company and Xceed Holdings, a company controlled by the Company's Chairman and founder, Dr. Christopher Leatt. On May 25, 2005, we changed our name to Leatt Corporation in connection with our anticipated acquisition of the Leatt-Brace® rights. Leatt designs, develops, markets and distributes personal protective equipment for participants in all forms of motor sports and leisure activities, including riders of motorcycles, bicycles, snowmobiles and ATVs. The Company sells its products to customers worldwide through a global network of distributors and retailers. Leatt also acts as the original equipment manufacturer for personal protective equipment sold by other international brands.

The Company's flagship products are based on the Leatt-Brace® system, a patented injection molded neck protection system owned by Xceed Holdings, designed to prevent potentially devastating injuries to the cervical spine and neck. The Company has the exclusive global manufacturing, distribution, sale and use rights to the Leatt-Brace®, pursuant to a license agreement between the Company and Xceed Holdings, a company owned and controlled by the Company's Chairman and founder, Dr. Christopher Leatt. The Company also has the right to use apparatus embodying, employing and containing the Leatt-Brace® technology and has designed, developed, marketed and distributed other personal protective equipment using this technology, as well as its own developed technology, including the Company's body protection products, and helmets which it markets under the Leatt® brand.

The Company's research and development efforts are conducted at its research facilities, located at its executive headquarters in Cape Town, South Africa. The Company employs 4 full-time employees who are dedicated exclusively to research, development, and testing. The Company also utilizes consultants, academic institutions and engineering companies as independent contractors or consultants, from time to time, to assist it with its research and development efforts. Leatt products have been tested and reviewed internally and by external bodies. All Leatt products are compliant with applicable European Union directives, or CE certified, where appropriate. Depending on the market we have other certifications outside of CE. Specifically, all our motorcycle helmets comply with Economic Commission for Europe (ECE) UN Regulation No. 22 r06, and our bicycle helmet complies with the European Committee for Standardization (CEN) EN-1078 standard. For the US market, our motorcycle helmets comply with the US Department of Transportation (DOT) FMVSS 218 helmet safety standard and our bicycle helmet complies with the US Consumer Product Safety Commission (CPSC) 1203 standard for helmet safety. Our downhill specific bicycle helmets also comply with the American Society for Testing and Materials (ASTM) F1952 standard for downhill racing safety. For the Australian market, our bicycle helmet complies with Australian/New Zealand Standard (AS/NZS) 2063, for the UK market, substantially all of our motorcycle helmets comply with the Auto Cycle Union (ACU) gold standard, for the Japanese market, our Moto 3.5 helmet with the Japanese Standard Association (JSA) JIS T 8133 standard for protective helmets, and for the Brazilian market our Moto 7.5, Moto 3.5, and Moto 2.5, ~~ADV 9.5 and ADV 8.5~~ helmets comply with The Brazilian Association of Technical Standards (ABNT) NBR 7471 safety standard. Moto 9.5, Moto 8.5, Moto 7.5, Moto 3.5 and Moto 2.5 have CCC approval for the market in China. Our Enduro 4.0 helmet and All-Mountain 4.0 helmet have acquired NTA8776 certification, a new e-bike helmet certification required in the Dutch Technical Agreement (NTA) 8776.

Our products are predominately manufactured in China in accordance with our manufacturing specifications, pursuant to outsourced manufacturing arrangements with third-party manufacturers located there, based on agreed terms. We continue to build manufacturing capacity outside China, namely, in Thailand and Bangladesh. The Company utilizes outside consultants and its own employees to ensure the quality of its products through regular on-site product inspections. Products sold to our international customers are usually shipped directly from our consolidation warehouse or manufacturers' warehouses to customers or their import agents.

Leatt earns revenues through the sale of its products through approximately 4961 distributors worldwide and 6 e-commerce partners, who in turn sell its products to retailers. Leatt distributors are required to follow certain standard business terms and guidelines for the sale and distribution of Leatt products. Two Eleven and Leatt SA directly distribute Leatt products to dealers and direct to end consumers through digital channels in the United States and South Africa, respectively.

Principal Factors Affecting Our Financial Performance

We believe that the following factors will continue to affect our financial performance:

• Global Economic Fragility - The ongoing turmoil in the global economy, especially in the U.S., Asia and Europe, may have an impact on our business and our financial condition if economic conditions do not improve. We sell our products through a global network of distributors and dealers who may have difficulty clearing elevated multi-brand stock, previously ordered in response to industry-wide supply chain challenges, which in turn could slow new orders and affect our financial performance. If our customers were to experience prolonged slow growth or recession as a result of these conditions or otherwise, we could see a drop-in demand for our products and potentially difficulty in collecting accounts receivables.

• Trade Restrictions - We engage in international manufacturing and sales which exposes us to trade restrictions and disruptions that could harm our business and competitive position. Most of our products are manufactured in China, and the U.S. administration has announced tariffs on certain products imported into the United States with China as the country of origin. While these tariffs have not had a significant impact on the shipment of our products to international markets as at September 30, 2024, we believe that the future imposition of, or significant increases in, the level of tariffs, custom duties, export quotas and other barriers and restrictions by the U.S. on China or other countries could disrupt our supply chain, increase the cost of our raw materials and therefore our pricing, and impose the burdens of compliance with foreign trade laws, any of which could potentially affect our bottom line and sales. While we are in continuous discussions with our manufacturers to ensure there are contingencies in place, we cannot assure you that we will not be adversely affected by changes in the trade laws of foreign jurisdictions where we sell and seek to sell our products.

• Fuel Prices - Significant fluctuations in fuel prices could have both a positive and negative effect on our business and operations. A significant portion of our revenue is derived from international sales and significant fluctuations in world fuel prices could significantly increase the price of shipping or transporting our products which we may not be able to pass on to our customers. On the other hand, fluctuations in fuel prices lead to higher commuter costs which may encourage the increased use of motorcycles and bicycles as alternative modes of transportation and lead to an increase in the market for our protection products.

• Product Liability Litigation - We face an inherent business risk of exposure to product liability claims arising from the claimed failure of our products to help prevent the types of personal injury or death against which they are designed to help protect. Therefore, we have acquired very costly product liability insurance worldwide. We have not experienced any material uninsured losses due to product liability claims, but it is possible that we could experience material losses in the future. After a two-week trial in the United States District Court for the Northern District of Ohio (Eastern) ending on April 17, 2014, a federal jury returned a defense verdict for the Company in the first Leatt-Brace® product liability lawsuit to be tried in the United States. The plaintiffs in that case had alleged that defective product design and failure to warn had caused a motocross rider to suffer multiple mid-thoracic spine fractures, causing immediate and permanent paraplegia, when he crashed at a relatively low speed on February 13, 2011. When the accident occurred, he was wearing a helmet and other safety gear from several different companies, including the Company's acclaimed Leatt-Brace®. The Company produced evidence at trial showing that his thoracic paraplegia was an unavoidable consequence of his fall, not the result of wearing a Leatt-Brace®, and that the neck brace likely saved his life (or saved him from quadriplegia) by preventing cervical spine injury. The Company had maintained from the onset that this and a small handful of other lawsuits are without merit and that it would vigorously defend itself in each case. In this case, the plaintiffs subsequently appealed the court's decision, and the parties reached an amicable settlement. Although we carry product liability insurance, a successful claim brought against us could significantly harm our business and financial condition and have an adverse impact on our ability to renew our product liability insurance or secure new coverage.

• Protection of Intellectual Property - We believe that the continued success of our business is dependent on our intellectual property portfolio consisting of globally registered trademarks, design patents and utility patents related to the Leatt-Brace®. We believe that a loss of these rights would harm or cause a material disruption to our business and, our corporate strategy is to aggressively take legal action against any violators of our intellectual property rights, regardless of where they may be. From time to time, we have had to enforce our intellectual property rights through litigation, and we may be required to do so in the future. Such litigation may result in substantial costs and could divert resources and management attention from the operations of our business.

• Fluctuations in Foreign Currencies - We are exposed to foreign exchange risk as our revenues and consolidated results of operations may be affected by fluctuations in foreign currency as we translate these currencies into U.S. dollars when we consolidate our financial results. While our reporting currency is the U.S. Dollar, a portion of our consolidated revenues are denominated in South African Rand, or ZAR, certain of our assets are denominated in ZAR, and our research and marketing operations in South Africa utilize South African labor sources. A decrease in the value of the U.S. dollar in relation to the ZAR could increase our cost of doing business in South Africa. If the ZAR depreciates against the U.S. Dollar, the value of our ZAR revenues, earnings and assets as expressed in our U.S. Dollar financial statements will decline. We have not entered into any hedging transactions in an effort to reduce our exposure to foreign exchange risk. Furthermore, since 66% of our sales are derived outside the U.S., where the U.S. dollar is not the primary currency, significant fluctuations in exchange rates such as the strengthening of the dollar versus our customers' local currency can adversely affect our ability to remain competitive in those areas.

• Natural or Man-made Catastrophic Events - We are exposed to natural or man-made catastrophic events that may disrupt our business and may reduce consumer demand for our products. A disruption or failure of our systems or operations in the event of a natural disaster, health pandemic, such as the outbreak and global spread of COVID-19 or the coronavirus, or a man-made catastrophic event could cause delays in completing sales, continuing production, or performing other critical functions of our business, particularly if a catastrophic event occurred at our primary manufacturing locations or our distributor locations worldwide. Any of these events could severely affect our ability to conduct normal business operations and, as a result, our operating results could be adversely affected. There may also be secondary impacts that are unforeseeable, such as impacts on our consumers and on consumer purchasing behavior, which could cause delays in new orders, delays in completing sales or even order cancellations. The continued mutation and spread of deadly viruses, economic headwinds caused by global quarantines, or the occurrence of any other catastrophic events, could have a negative impact on our sales revenue for the coming period and beyond.

~~• Impact of~~ Global ~~Conflict~~Economic Fragility - WeThe ~~are~~ongoing ~~exposed~~turmoil ~~to global conflict, such as the ones~~ in ~~Ukraine and~~ the ~~Middle East, that may disrupt our business and reduce consumer demand for our products. A disruption of~~ global ~~shipping routes~~economy, ~~the~~especially ~~imposition of government sanctions or other activities resulting from such conflicts could directly affect consumer demand for our products, cause delays~~ in ~~completing~~the ~~sales~~U.S., ~~shipping~~Asia ofand ~~our products~~Europe, ~~continuing~~may ~~production~~have oran ~~performing~~impact ~~other~~on ~~critical functions of~~ our business, ~~particularly~~and ~~if a conflict occurs at~~ our ~~primary~~financial ~~manufacturing~~condition ~~locations~~if oreconomic ~~our~~conditions ~~distributor~~do ~~locations~~not ~~worldwide~~improve. ~~Furthermore,~~We ~~prolonged~~sell ~~conflict~~our ~~may~~products ~~have~~through ~~unintended~~a global ~~consequences~~network ~~such~~of asdistributors ~~increased inflation, fuel~~ and ~~transportation~~dealers ~~costs.~~who ~~While~~may we have ~~conducted~~difficulty ~~due~~clearing ~~diligence~~elevated onmulti-brand ~~our~~stock, ~~customers~~previously ordered in ~~Russia~~response to ~~ensure~~industry ~~that~~wide ~~they~~supply dochain ~~not fall into any sanctioned categories~~challenges, wewhich ~~have~~in ~~seen~~turn acould ~~delay~~slow innew ~~the~~orders ~~receipt~~and ofaffect ~~receivables in~~ our ~~bank~~financial ~~account~~performance. ~~from~~If ~~the distributors of~~ our ~~products~~customers inwere ~~Russia~~to ~~caused~~experience byprolonged ~~enhanced~~slow ~~screening~~growth ~~of Russian funds in compliance with global sanctions against Russia for the war in Ukraine. The prolonging~~ or ~~expansion~~recession ofas ~~that~~a ~~conflict could have an adverse impact on our consumers and on consumer purchasing behavior, and~~ result ~~in delays~~ of ~~new~~these ~~orders~~conditions ~~and~~or ~~completing sales~~otherwise, ~~order~~we ~~cancellations,~~could orsee ~~payment~~a ~~and shipping delays. We will continue to monitor this fluid situation and any adverse impact that it may have on the global economy~~ drop-in ~~general~~demand ~~and~~for on our ~~business~~products ~~operations~~ and ~~especially~~potentially ~~that~~difficulty ofin ~~our~~collecting ~~customers,~~accounts ~~and we will develop contingencies as necessary to address any disruptions to our business operations as they arise~~receivables.
~~Results~~Trade Restrictions - We engage in international manufacturing and sales which exposes us to trade restrictions and disruptions that could harm our business and competitive position. Most of ~~Operations~~our products are manufactured in China, and the U.S. administration has announced tariffs on certain products imported into the United States with China as the country of origin. While these tariffs have not had a significant impact on the shipment of our products to international markets as at March 31, 2025, we believe that the future imposition of, or significant increases in, the level of tariffs, custom duties, export quotas and other barriers and restrictions by the U.S. on China or other countries could disrupt our supply chain, increase the cost of our raw materials and therefore our pricing, and impose the burdens of compliance with foreign trade laws, any of which could potentially affect our bottom line and sales. While we are in continuous discussions with our manufacturers to ensure there are contingencies in place, we cannot assure you that we will not be adversely affected by changes in the trade laws of foreign jurisdictions where we sell and seek to sell our products.
~~The~~Fuel ~~following~~Prices ~~summary~~- ofSignificant fluctuations in fuel prices could have both a positive and negative effect on our ~~results~~business ofand operations. ~~should~~A besignificant ~~read~~portion of our revenue is derived from international sales and significant fluctuations in ~~conjunction~~world ~~with~~fuel prices could significantly increase the price of shipping or transporting our ~~financial~~products ~~statements~~which ~~and~~we may not be able to pass on to our customers. On the ~~notes~~other ~~thereto~~hand, ~~for~~fluctuations in fuel prices lead to higher commuter costs which may encourage the ~~three~~increased use of motorcycles and ~~nine-month~~bicycles ~~periods~~as ~~ended~~alternative ~~September~~modes ~~30,~~of ~~2024~~transportation and ~~2023~~lead ~~included~~to ~~herein~~an increase in the market for our protection products.

~~Comparison~~Product Liability Litigation - We face an inherent business risk of ~~Three~~exposure ~~Months~~to ~~Ended~~product ~~September~~liability 30claims arising from the claimed failure of our products to help prevent the types of personal injury or death against which they are designed to help protect. Therefore, ~~2024~~we have acquired very costly product liability insurance worldwide. We have not experienced any material uninsured losses due to product liability claims, but it is possible that we could experience material losses in the future. After a two-week trial in the United States District Court for the Northern District of Ohio (Eastern) ending on April 17, 2014, a federal jury returned a defense verdict for the Company in the first Leatt-Brace® product liability lawsuit to be tried in the United States. The plaintiffs in that case had alleged that defective product design and ~~Three~~failure ~~Months~~to ~~Ended~~warn ~~September~~had 30caused a motocross rider to suffer multiple mid-thoracic spine fractures, ~~2023~~causing immediate and permanent paraplegia, when he crashed at a relatively low speed on February 13, 2011. When the accident occurred, he was wearing a helmet and other safety gear from several different companies, including the Company's acclaimed Leatt-Brace®. The Company produced evidence at trial showing that his thoracic paraplegia was an unavoidable consequence of his fall, not the result of wearing a Leatt-Brace®, and that the neck brace likely saved his life (or saved him from quadriplegia) by preventing cervical spine injury. The Company had maintained from the onset that this and a small handful of other lawsuits are without merit and that it would vigorously defend itself in each case. In this case, the plaintiffs subsequently appealed the court's decision, and the parties reached an amicable settlement. Although we carry product liability insurance, a successful claim brought against us could significantly harm our business and financial condition and have an adverse impact on our ability to renew our product liability insurance or secure new coverage.

~~The~~Protection ~~following~~of ~~table~~Intellectual ~~summarizes~~Property - We believe that the ~~results~~continued success of our ~~operations~~business ~~during~~is dependent on our intellectual property portfolio consisting of globally registered trademarks, design patents and utility patents related to the ~~three~~Leatt-~~month~~Brace®. ~~periods~~We ~~ended~~believe ~~September~~that ~~30,~~a ~~2024~~loss of these rights would harm or cause a material disruption to our business and, ~~2023~~our corporate strategy is to aggressively take legal action against any violators of our intellectual property rights, regardless of where they may be. From time to time, we have had to enforce our intellectual property rights through litigation, and ~~provides~~we ~~information~~may ~~regarding~~be required to do so in the ~~dollar~~future. Such litigation may result in substantial costs and ~~percentage~~could ~~increase~~divert orresources ~~(decrease)~~and inmanagement ~~such~~attention ~~periods:~~from the operations of our business.
Fluctuations in Foreign Currencies - We are exposed to foreign exchange risk as our revenues and consolidated results of operations may be affected by fluctuations in foreign currency as we translate these currencies into U.S. dollars when we consolidate our financial results. While our reporting currency is the U.S. Dollar, a portion of our consolidated revenues are denominated in South African Rand, or ZAR, certain of our assets are denominated in ZAR, and our research and marketing operations in South Africa utilize South African labor sources. A decrease in the value of the U.S. dollar in relation to the ZAR could increase our cost of doing business in South Africa. If the ZAR depreciates against the U.S. Dollar, the value of our ZAR revenues, earnings and assets as expressed in our U.S. Dollar financial statements will decline. We have not entered into any hedging transactions in an effort to reduce our exposure to foreign exchange risk. Furthermore, since 77% of our sales are derived outside the U.S., where the U.S. dollar is not the primary currency, significant fluctuations in exchange rates such as the strengthening of the dollar versus our customers' local currency can adversely affect our ability to remain competitive in those areas.

		Three Months Ended September 30,								Percentage
					2023			Increase		Increase
Item								(Decrease)		(Decrease)
REVENUES	$	12,138,123		$	12,008,847		$	129,276		1%
COST OF REVENUES		6,968,051			6,890,845		$	77,206		1%
GROSS PROFIT		5,170,072			5,118,002		$	52,070		1%
PRODUCT ROYALTY INCOME		123,706			1,767		$	121,939		6901%
OPERATING EXPENSES
Salaries and Wages		1,676,828			1,267,455		$	409,373		32%
Commissions and Consulting		138,124			168,299		$	(30,175	)	-18%
Professional Fees		108,627			156,868		$	(48,241	)	-31%
Advertising and Marketing		1,304,215			974,488		$	329,727		34%
Office Lease and Expenses		141,420			145,863		$	(4,443	)	-3%
Research and Development Costs		620,019			610,589		$	9,430		2%
Bad Debt Expense (Recovery)		(30,788	)		46,113		$	(76,901	)	-167%
General and Administrative		993,031			830,145		$	162,886		20%
Depreciation		316,404			299,554		$	16,850		6%
Total Operating Expenses		5,267,880			4,499,374		$	768,506		17%
INCOME FROM OPERATIONS		25,898			620,395		$	(594,497	)	-96%
Other Income (Expenses)		105,430			(1,150	)	$	106,580		9268%
INCOME BEFORE INCOME TAXES		131,328			619,245		$	(487,917	)	-79%
Income Taxes		15,491			158,771		$	(143,280	)	-90%
NET INCOME	$	115,837		$	460,474		$	(344,637	)	-75%

Natural or Man-made Catastrophic Events - We are exposed to natural or man-made catastrophic events that may disrupt our business and may reduce consumer demand for our products. A disruption or failure of our systems or operations in the event of a natural disaster, health pandemic, such as the outbreak and global spread of COVID-19 or the coronavirus, or a man-made catastrophic event could cause delays in completing sales, continuing production, or performing other critical functions of our business, particularly if a catastrophic event occurred at our primary manufacturing locations or our distributor locations worldwide. Any of these events could severely affect our ability to conduct normal business operations and, as a result, our operating results could be adversely affected. There may also be secondary impacts that are unforeseeable, such as impacts on our consumers and on consumer purchasing behavior, which could cause delays in new orders, delays in completing sales or even order cancellations. The continued mutation and spread of deadly viruses, economic headwinds caused by global quarantines, or the occurrence of any other catastrophic events, could have a negative impact on our sales revenue for the coming periods and beyond.

~~Revenues~~Impact of Global Conflict - We ~~earn~~are ~~revenues~~exposed ~~from~~to ~~the~~global ~~sale~~conflict, ofsuch ~~our~~as ~~protective~~the ~~gear~~ones ~~comprising~~in ofUkraine ~~neck~~and ~~braces,~~the ~~body~~Middle ~~armor~~East, ~~helmets~~that ~~and~~may ~~other~~disrupt ~~products,~~our ~~parts~~business and ~~accessories~~reduce ~~both~~consumer indemand ~~the~~for ~~United~~our ~~States~~products. ~~and~~A ~~abroad.~~disruption ~~Revenues~~of ~~for~~global ~~the~~shipping ~~quarter~~routes, ~~ended~~the ~~September~~imposition ~~30,~~of ~~2024~~government ~~were~~sanctions ~~$12.14~~or ~~million,~~other aactivities 1%resulting ~~increase,~~from ~~compared~~such toconflicts ~~$12.01~~could ~~million~~directly ~~for~~affect ~~the~~consumer ~~quarter~~demand ~~ended~~for ~~September~~our 30products, ~~2023.~~cause ~~This~~delays ~~increase~~ in ~~worldwide~~completing ~~revenues~~sales, isshipping ~~primarily~~of ~~attributable~~our toproducts, acontinuing ~~$0.27~~production ~~million~~or ~~increase~~performing inother ~~body~~critical ~~armor~~functions ~~sales~~of our business, aparticularly ~~$0.14~~if ~~million~~a ~~increase~~conflict inoccurs ~~helmet~~at ~~sales,~~our aprimary ~~$0.04~~manufacturing ~~million~~locations ~~increase~~or inour ~~neck~~distributor ~~brace~~locations ~~sales~~worldwide. Furthermore, ~~that~~prolonged ~~were~~conflict ~~partially~~may ~~offset~~have byunintended aglobal ~~$0.32~~consequences ~~million~~such ~~decrease~~as inincreased ~~other products~~inflation, ~~part~~fuel and ~~accessory~~transportation ~~sales~~costs. While ~~Revenues~~we ~~associated~~have ~~with~~conducted ~~international~~due diligence on our customers ~~were~~in ~~$8.58~~Russia ~~million~~to ~~and~~ensure ~~$8.16~~that ~~million,~~they ordo ~~71%~~not ~~and~~fall ~~68%~~into ofany ~~revenues~~sanctioned ~~for~~categories, ~~the~~we ~~three~~have ~~months~~seen ~~ended~~a ~~September~~delay ~~30,~~in ~~2024~~the ~~and~~receipt ~~2023,~~of ~~respectively. Revenues~~receivables ~~generated~~in our bank account from ~~sales~~the todistributors of our ~~customers~~products in ~~the~~Russia ~~United~~caused ~~States~~by ~~decreased~~enhanced ~~from~~screening ~~$3.85~~of ~~million,~~Russian tofunds ~~$3.55~~in ~~million,~~compliance with global sanctions against Russia for the ~~three~~war ~~months~~in ~~ended~~Ukraine. ~~September~~The ~~30,~~prolonging ~~2024~~or expansion of that conflict could have an adverse impact on our consumers and ~~2023,~~on ~~respectively.~~consumer ~~Although~~purchasing behavior, ~~consumer~~and ~~direct~~result ~~sales~~in ~~increased~~delays byof ~~12%~~new orders and completing sales, toorder ~~our~~cancellations, ~~global~~or ~~distributors~~payment ~~increased~~and byshipping ~~5%,~~delays. ~~when~~We ~~compared~~will continue to ~~the~~monitor ~~third~~this ~~quarter~~fluid ofsituation ~~2023,~~and ~~dealer~~any ~~direct~~adverse ~~sales~~impact ~~decreased~~that byit 9%may ~~for~~have on the ~~third~~global ~~quarter~~economy ofin ~~2024,~~general asand on our ~~MOTO~~business ~~dealers~~operations inand ~~the~~especially ~~United~~that ~~States~~of ~~continue~~our tocustomers, ~~conservatively~~and ~~manage~~we ~~specific~~will ~~category~~develop ~~ordering~~contingencies as ~~inventory~~necessary ~~continues~~to address any disruptions to ~~clear~~our business operations as they arise.

~~The~~Results ~~following~~of ~~table sets forth our revenues by product line for the quarter ended September 30, 2024 and 2023:~~Operations

The following summary of our results of operations should be read in conjunction with our financial statements and the notes thereto for the three-month periods ended March 31, 2025 and 2024 included herein.

Comparison of Three Months Ended March 31, 2025 and Three Months Ended March 31, 2024

The following table summarizes the results of our operations during the three-month periods ended March 31, 2025 and 2024 and provides information regarding the dollar and percentage increase or (decrease) in such periods:

		Three months ended September 30,
			Three Months Ended March 31,									Percentage
		2024			% ofRevenues			2023			% ofRevenues
			2025			2024			Increase			Increase
Neck braces	$	748,610			6%		$	709,144			6%
Item									(Decrease)			(Decrease)
Body armor		5,732,347			47%			5,462,972			45%
REVENUES		$	15,367,864		$	10,614,470		$	4,753,394			45%
Helmets		3,010,612			25%			2,869,396			24%
COST OF REVENUES			8,646,851			6,606,137		$	2,040,714			31%
Other products, parts and accessories		2,646,554			22%			2,967,335			25%
GROSS PROFIT			6,721,013			4,008,333		$	2,712,680			68%
	$	12,138,123			100%		$	12,008,847			100%
PRODUCT ROYALTY INCOME			85,298			39,303		$	45,995			117%
OPERATING EXPENSES
Salaries and Wages			1,857,380			1,568,271		$	289,109			18%
Commissions and Consulting			157,722			124,216		$	33,506			27%
Professional Fees			360,051			298,971		$	61,080			20%
Advertising and Marketing			892,057			892,417		$	(360	)		0%
Office Lease and Expenses			169,176			151,554		$	17,622			12%
Research and Development Costs			664,490			555,778		$	108,712			20%
Bad Debt Expense (Recovery)			(63,504	)		9,964		$	(73,468	)		-737%
General and Administrative			1,012,649			942,888		$	69,761			7%
Depreciation			327,008			294,134		$	32,874			11%
Total Operating Expenses			5,377,029			4,838,193		$	538,836			11%
INCOME (LOSS) FROM OPERATIONS			1,429,282			(790,557	)	$	2,219,839			281%
Other Income (Expenses)			82,147			(24,483	)	$	106,630			436%
INCOME (LOSS) BEOFRE INCOME TAXES			1,511,429			(815,040	)	$	2,326,469			285%
Income Taxes			390,305			1,639		$	388,666			23714%
NET INCOME (LOSS)		$	1,121,124		$	(816,679	)	$	1,937,803			237%

~~Sales~~Revenues - We earn revenues from the sale of our ~~flagship~~protective gear comprising of neck ~~brace~~braces, ~~accounted~~body ~~for~~armor, ~~$0.75~~helmets ~~million~~and other products, parts and accessories both in the United States and abroad. Revenues for the three months ended March 31, 2025 were $015.7137 million, ora 645% ~~and~~increase, 6%compared to revenues of ~~our~~$10.61 ~~revenues~~million for the ~~quarters~~quarter ended ~~September~~March 3031, 2024 ~~and 2023, respectively~~. This ~~The 6%~~ increase in ~~neck~~worldwide ~~brace~~ revenues is primarily attributable to a ~~109%~~$1.84 million increase in ~~the~~body ~~volume~~armor sales, a $1.71 million increase in helmet sales, a $1.09 million increase in sales of ~~our~~other ~~premium~~products, 6parts and accessories and a $0.512 million increase in neck brace sales. Revenues generated from sales to our customers in the United States were $3.60 million and $3.87 million, ~~that~~for ~~was~~the ~~partially~~three ~~offset~~months byended aMarch 3731, 2025 and 2024, respectively. Revenues associated with international customers were $11.77 million and $6.74 million, or 77% ~~decrease~~and in64% of revenues, for the ~~volume~~three ofmonths 3ended March 31, 2025 and 2024, respectively.5 ~~neck~~Sales ~~braces~~to ~~sold~~our ~~during~~global distributors increased by 79% and consumer direct sales increased by 14% for the ~~third~~first quarter of ~~2024~~2025, partially offset by a 9% decrease in dealer direct sales when compared to the ~~prior~~first ~~year~~quarter ~~three~~of ~~month~~2024 ~~period~~as our dealers, particularly in the United States continue to manage industry wide stocking dynamics.

~~Our~~The ~~body~~following ~~armor~~table ~~products~~sets ~~are~~forth comprised of chest protectors, full upper body protectors, upper body protection vests, back protectors, knee braces, knee and elbow guards, off-road motorcycle boots and mountain biking shoes. Body armor sales accounted for $5.73 million and $5.46 million, or 47% and 45% of our revenues ~~for~~by ~~the~~product ~~quarters~~line ~~ended~~for ~~September 30, 2024 and 2023, respectively. The 5% increase in body armor revenues was primarily~~ the ~~result~~three ofmonths aended ~~25%~~March ~~increase in revenues generated on the sale of upper body and limb protection during the third quarter of 2024~~31, ~~that~~2025 ~~was partially offset by a 55% decrease in the volume of footwear, comprising of motorcycle boots~~ and ~~mountain biking shoes, sold during the~~ 2024 ~~period, as our distribution partners continued to digest inventory.~~:

Our helmet sales accounted for $3.01 million or 25% of our revenues for the quarter ended September 30, 2024, as compared to $2.87 million or 24% of our revenues for the three months ended September 30, 2023. The 5% increase in helmet sales is primarily due to a 98% increase in revenues generated on the sale of MOTO helmets during the third quarter of 2024 that was partially offset by a 23% decrease in the volume of MTB helmets sold during the same period.

			Three months ended March 31,
		2025	% of Revenues		2024	% of Revenues
Neck braces	$	678,295	4%	$	561,182	5%
Body armor		6,870,476	45%		5,027,926	47%
Helmets		3,400,533	22%		1,694,815	16%
Other products, parts and accessories		4,418,560	29%		3,330,547	32%
	$	15,367,864	100%	$	10,614,470	100%

Our other products, parts and accessories are comprised of goggles, hydration bags and apparel items including jerseys, pants, shorts and jackets as well as aftermarket support items required primarily to replace worn or damaged parts through our global distribution network. Other products, parts and accessories sales accounted for $2.65 million and $2.97 million, or 22% and 25% of our revenues for the quarters ended September 30, 2024 and 2023, respectively. The 11% decrease in revenues from the sale of other products, parts and accessories during the 2024 third quarter is primarily due to a 37% decrease in the volume of MTB apparel sold during the third quarter of 2024, as our MTB distribution partners continue to manage ordering as a result of stocking dynamics.

Cost of Revenues and Gross Profit - Cost of revenues for the quarters ended September 30, 2024 and 2023 were $6.97 million and $6.89 million, respectively. Gross Profit for the quarters ended September 30, 2024 and 2023 were $5.17 million and $5.12 million, respectively, or 43% and 43% of revenues, respectively. Ourneck braceproducts continue to generate a higher gross profit margin than our other product categories. Neck brace revenues were 6% and 6% of our revenues for the period ended September 30, 2024 and 2023, respectively.

Product Royalty Income - Product royalty income is earned on sales to distributors that have royalty agreements in place, as well as on sales of licensed products by third parties that have licensing agreements in place. Product royalty income for the quarters ended September 30, 2024 and 2023 were $123,706 and $1,767, respectively. The 6901% increase in product royalty income is due to an increase in the sale of licensed products to licensees during the 2024 period.

Salaries and Wages - Salaries and wages for the quarters ended September 30, 2024 and 2023 were $1,676,828 and $1,267,455, respectively. The 32% increase in salaries and wages during the 2024 period was primarily due to to the employment of professional sales, marketing and brand management personnel in the United States and abroad, as the Company continues to build and invest in global multi-channel distribution.

~~Commissions~~Sales ~~and~~of ~~Consulting~~our ~~Expense~~flagship -neck ~~During~~brace ~~the~~accounted ~~quarters~~for ~~ended~~$0.68 ~~September~~million 30and $0.56 million, ~~2024~~or 4% and ~~2023,~~5% ~~commissions~~of ~~and~~our ~~consulting~~revenues ~~expenses~~for ~~were~~the ~~$138~~quarters ended March 31,~~124~~ 2025 and ~~$168~~2024,~~299,~~ respectively. The 1821% ~~decrease~~increase in ~~commissions~~neck ~~and~~brace ~~consulting~~revenues ~~expenses~~ is primarily ~~the~~attributable ~~result~~to of a ~~decrease~~21% inincrease ~~commissions paid~~ in the ~~United~~volume ~~States in line with the Company's employment~~ of ~~in-house~~neck ~~sales~~braces ~~representatives~~sold ~~that~~when ~~are~~compared ~~focused~~to ~~on selling~~ the ~~Company's~~first ~~growing~~quarter ~~range~~ of ~~product categories~~2024.

~~Professional~~Our ~~Fees~~body -armor ~~Professional~~products ~~fees~~are ~~consist~~comprised of ~~costs~~chest ~~incurred~~protectors, ~~for~~full ~~audit~~upper body protectors, ~~tax~~upper ~~and~~body ~~regulatory~~protection ~~filings~~vests, asback ~~well~~protectors, asknee ~~patent~~braces, ~~protection~~knee and ~~product~~elbow ~~liability~~guards, ~~litigation~~off-road ~~expenses~~motorcycle ~~incurred~~boots asand ~~the~~mountain ~~Company~~biking ~~continues~~shoes. toBody ~~expand.~~armor ~~Professional~~sales ~~fees~~accounted for ~~the~~$6.87 ~~quarters~~million ~~ended~~and ~~September~~$5.03 30million, ~~2024~~or 45% and ~~2023~~47% ~~were~~of ~~$108~~our revenues for the quarters ended March 31,~~627~~ 2025 and ~~$156~~2024,~~868,~~ respectively. The 3137% ~~decrease~~increase in ~~professional~~body ~~fees~~armor isrevenues was primarily ~~due~~the toresult of a ~~decrease~~48% increase in ~~expenditure~~revenues onfrom ~~patent~~the ~~litigation~~sale of upper body and ~~maintenance~~limb ~~expenditure~~protection, ~~during~~when compared to the 2024 period.

~~Advertising~~Our ~~and~~helmets ~~Marketing~~accounted -for ~~The~~$3.40 ~~Company~~million ~~places~~or ~~paid~~22% ~~advertising~~of inour ~~various~~revenues ~~motorsport~~for ~~and~~the ~~bicycle~~three ~~magazines~~months ~~and~~ended ~~online~~March ~~media~~31, ~~and sponsors a number of events~~2025, ~~professional~~as ~~teams~~compared ~~and individuals~~ to ~~increase~~$1.69 ~~product~~million ~~and~~or ~~brand~~16% ~~visibility~~of ~~globally.~~our ~~Advertising~~revenues ~~and marketing expenses~~ for the ~~quarters~~same ~~ended September 30,~~ 2024 ~~and 2023 were $1,304,215 and $974,488, respectively~~period. The 34101% increase in ~~advertising~~helmet ~~and~~sales ~~marketing expenditure during the 2024 period~~ is primarily ~~due~~attributable to ~~continued~~a ~~strong~~51% ~~investment~~increase in the ~~production~~sales ~~and~~volume ~~implementation~~ of ~~marketing~~helmets ~~campaigns that included athlete and event sponsorships, and activations~~ designed tofor ~~promote~~mountain ~~the Company's expanding product categories to a wider rider audience~~biking, ~~that~~offroad ~~now~~motorcycle ~~includes~~and adventure ~~riders,~~motorcycle ~~globally. Additionally~~riding, ~~the~~when ~~Company~~compared ~~invested~~to inthe ~~high~~first ~~level~~quarter ~~strategic~~of ~~creative direction and brand building activities~~2024.

~~Office~~Our ~~Lease~~other products, parts and ~~Expenses~~accessories -are ~~Office~~comprised ~~lease~~of goggles, hydrations bags and ~~expenses~~apparel ~~for~~items ~~the~~including ~~quarters~~jerseys, ~~ended~~pants, ~~September~~shorts 30and jackets, ~~2024~~sunglasses, bicycle components, as well as aftermarket support items required primarily to replace worn or damaged parts through our global distribution network. Other products, parts and ~~2023~~accessory ~~were~~sales accounted for $~~141,420~~4.42 million and $~~145~~3.33 million,~~863~~ or 29% and 32% of our revenues for the quarters ended March 31, 2025 and 2024, respectively. ~~The~~Although 3%sales ~~decrease~~of inour ~~office~~MOTO ~~lease~~apparel ~~and~~line ~~expenses~~decreased during the ~~2024~~first ~~period~~quarter, isthe ~~primarily~~33% ~~attributable~~increase toin arevenues ~~decrease~~from inthe ~~office~~sale ~~lease~~of ~~rental~~other ~~expenditures~~products, parts and accessories is primarily due to ~~the~~strong ~~purchase~~shipments of ~~the~~our ~~Company's~~ADV ~~head~~and ~~office~~MTB ~~facility~~apparel inlines, ~~Cape~~designed ~~Town~~for mountain biking and adventure motorcycle riding respectively, ~~South~~during ~~Africa~~the first quarter of 2025.

~~Research~~Cost of Revenues and ~~Development~~Gross ~~Costs~~Profit - ~~These~~Cost ~~costs~~of ~~consist~~revenues offor the ~~salaries~~quarters ofended ~~personnel~~March ~~who~~31, ~~are~~2025 ~~directly~~and ~~involved~~2024 inwere ~~the~~$8.65 ~~research~~million and ~~development~~$6.61 ~~of innovative products~~million, asrespectively. ~~well~~Gross asProfit for the ~~direct~~quarters ~~costs~~ended ~~associated~~March ~~with~~31, ~~developing~~2025 ~~these~~and ~~products~~2024 were $6.72 ~~Research~~million and ~~development~~$4.01 ~~costs~~million, respectively, or 44% and 38% of revenues, respectively. The 6% increase in gross profit as a percentage of revenues for the ~~quarter~~three months ended ~~September~~March 3031, ~~2024~~2025, ~~increased~~was primarily due to ~~$620,019,~~dealer ~~from~~direct ~~$610,589~~promotional selling activity during the ~~same~~first ~~2023~~ quarter. ~~The~~of 2%2024 ~~increase~~designed into ~~research~~turn ~~and~~slower ~~development~~moving ~~costs~~inventory. ~~during~~As ~~the~~industry ~~2024~~wide ~~third~~inventory ~~quarter~~levels iscontinue ~~primarily~~to ~~due~~stabilize, anmargins ~~increase~~earned inon ~~certification~~dealer ~~costs~~direct ~~incurred~~sales continued to improve. Additionally, shipping costs as ~~the~~a ~~Company~~percentage of international distributor revenue improved as management continues to ~~develop~~improve shipping and ~~refine~~logistics ~~its product categories~~efficiencies.

~~Bad~~Product ~~Debt~~Royalty ~~Expense~~Income ~~(Recovery)~~ - ~~Bad~~Product ~~debt~~royalty ~~expense~~income ~~(recovery)~~is earned on sales to distributors that have royalty agreements in place, as well as on sales of licensed products by third parties that have licensing agreements in place. Product royalty income for the quarters ended ~~September~~March 3031, ~~2024~~2025 and ~~2023~~2024 were $~~(30~~85,~~788)~~298 and $4639,~~113~~303, respectively. The ~~167~~117% ~~decrease~~increase in ~~bad~~product ~~debt~~royalty ~~expense~~income ~~(recovery)~~ is ~~primarily~~due ~~the~~to ~~result~~an ofincrease ~~a decrease~~ in ~~accounts~~the ~~receivable~~sale ~~balances~~of ~~that~~licensed ~~were~~products ~~considered~~by tolicensees ~~be unrecoverable~~ during the ~~2024~~2025 period ~~when compared to the quarter ended September 30, 2023~~.

~~General~~Salaries and ~~Administrative~~Wages ~~Expenses~~ - ~~General~~Salaries and ~~administrative~~wages ~~expenses consist of insurance, travel, merchant fees, telephone, office and computer supplies. General and administrative expenses~~ for the quarters ended ~~September~~March 3031, ~~2024~~2025 and ~~2023~~2024 were $~~993~~1,~~031~~857,380 and $~~830~~1,~~145~~568,271, respectively. The 2018% increase in ~~general~~salaries and ~~administrative~~wages ~~expenses~~during isthe 2025 period was primarily due to anthe ~~increase~~employment inof ~~travel~~sales, ~~expenditure~~marketing ~~relating~~and todigital ~~product~~professionals ~~development~~globally ~~and~~as ~~domestic~~we continue to build a multi-channel selling ~~activities~~organization. ~~and~~Additionally, anshare ~~increase~~compensation incosts ~~merchant~~relating ~~fees~~to ~~associated~~the ~~with~~recognition anof ~~increase~~share ingrants ~~consumer~~that ~~direct~~were ~~sales,~~issued asduring the ~~Company~~fourth ~~continues~~quarter toof ~~intensify~~2023 ~~its~~were ~~online~~recognized ~~presence~~on a straight-line basis during the first quarter of 2025.

~~Depreciation~~Commissions and Consulting Expense - ~~Depreciation~~During ~~expense for~~ the quarters ended ~~September~~March 3031, 2025 and 2024, commissions and ~~2023~~consulting expenses were $~~316~~157,~~404~~722 and $~~299~~124,~~554~~216, respectively. The 627% increase in ~~depreciation~~commissions ~~during~~and ~~the~~consulting ~~2024~~expenses ~~third quarter~~ is primarily ~~due~~the toresult ~~software~~of ~~enhancements~~an ~~utilized~~increase in commissions paid to ~~improve~~sales ~~consumer~~professionals ~~engagement~~in ~~and~~the ~~buying~~United ~~activity~~States ~~across~~as the Company's ~~web-based~~continues to optimize its selling ~~platforms~~abilities and add sales professionals in key areas.

~~Total~~Professional ~~Operating~~Fees ~~Expenses~~ - ~~Total~~Professional ~~operating~~fees ~~expenses~~consist ~~increased~~of bycosts ~~$768~~incurred for audit,~~506,~~ totax ~~$5.27~~and ~~million~~regulatory filings, inas ~~the~~well ~~quarter~~as ~~ended~~patent ~~September~~protection ~~30,~~and ~~2024,~~product orliability ~~17%,~~litigation ~~compared~~expenses incurred as the Company continues to $4expand.50 ~~million~~Professional infees for the ~~2023~~quarters ~~period.~~ended ~~This~~March ~~increase~~31, in2025 ~~total~~and ~~operating~~2024 ~~expenses~~were ~~during~~$360,051 ~~the~~and ~~2024~~$298,971, ~~period~~respectively. The 20% increase in professional fees is primarily due to ~~increases~~an increase in ~~salaries,~~audit ~~general~~ and ~~administrative,~~corporate ~~and~~legal ~~advertising~~fees ~~and~~incurred ~~marketing~~during ~~costs~~the ~~that~~2025 ~~were~~period. ~~partially~~Additionally, ~~offset~~fees byassociated ~~decreases~~with inmaintaining ~~bad~~and ~~debts~~growing ~~and~~the ~~professional~~Company's ~~fees~~patent portfolio increased during the ~~2024~~2025 period.

~~Net~~Advertising ~~Income~~and Marketing - The ~~net~~Company ~~income~~places ~~after~~paid ~~income~~advertising ~~taxes~~in various motorsport and bicycle magazines and online media and sponsors a number of events, professional teams and individuals to increase product and brand visibility globally. Advertising and marketing expenses for the ~~quarter~~quarters ended ~~September~~March 3031, 2025 and 2024 ~~was~~were $~~115~~892,~~837~~057 and $892,417, asrespectively. ~~opposed~~Although the Company continues to aproduce ~~net~~and ~~income~~implement ofcoordinated ~~$460,474~~global marketing campaigns that are designed to increase consumer demand for the ~~quarter~~Companies ~~ended~~growing ~~September~~product 30categories and brand, ~~2023. This~~advertising ~~75%~~and ~~decrease~~marketing incosts ~~net~~decreased ~~income~~marginally isduring ~~primarily~~the ~~due~~2025 toperiod ~~the~~as ~~increase~~decreased inexpenditure ~~total~~on ~~operating~~athlete ~~expenses~~sponsorships ~~discussed~~and ~~above~~point of sale merchandising costs were partially offset by increased expenditure on trade show, race and event attendance.

~~Comparison~~Office ofLease ~~Nine~~and ~~Months~~Expenses ~~Ended~~- ~~September~~Office 30lease and expenses for the quarters ended March 31, 2025 and 2024 were $169,176 and ~~Nine~~$151,554, ~~Months~~respectively. ~~Ended~~Although, ~~September~~lease 30expenses relating to our offices and warehouses in the United States and South Africa decreased when compared to the 2024 period, ~~2023~~the 12%, increase in office lease and expenses is primarily due to the inclusion of consolidation warehousing costs incurred to facilitate consolidated global shipping during the 2025 period.

The following table summarizes the results of our operations during the nine-month periods ended September 30, 2024 and 2023 and provides information regarding the dollar and percentage increase or (decrease) in such periods:

		Nine Months Ended September 30,								Percentage
		2024			2023			Increase		Increase
Item								(Decrease)		(Decrease)
REVENUES	$	32,831,288		$	37,438,414		$	(4,607,126	)	-12%
COST OF REVENUES		19,731,470			21,204,860		$	(1,473,390	)	-7%
GROSS PROFIT		13,099,818			16,233,554		$	(3,133,736	)	-19%
PRODUCT ROYALTY INCOME		255,789			25,151		$	230,638		917%
OPERATING EXPENSES
Salaries and Wages		4,853,471			3,737,382		$	1,116,089		30%
Commissions and Consulting		427,941			375,548		$	52,393		14%
Professional Fees		528,215			605,896		$	(77,681	)	-13%
Advertising and Marketing		3,379,914			2,678,960		$	700,954		26%
Office Lease and Expenses		456,164			457,675		$	(1,511	)	0%
Research and Development Costs		1,804,590			1,828,548		$	(23,958	)	-1%
Bad Debt Recovery		(20,510	)		(135,108	)	$	114,598		85%
General and Administrative		2,913,079			2,516,919		$	396,160		16%
Depreciation		907,788			871,738		$	36,050		4%
Total Operating Expenses		15,250,652			12,937,558		$	2,313,094		18%
INCOME (LOSS) FROM OPERATIONS		(1,895,045	)		3,321,147		$	(5,216,192	)	-157%
Other Income (Expenses)		178,963			(38,948	)	$	217,911		559%
INCOME (LOSS) BEFORE INCOME TAXES		(1,716,082	)		3,282,199		$	(4,998,281	)	-152%
Income Taxes		42,123			1,022,365		$	(980,242	)	-96%
NET INCOME (LOSS)	$	(1,758,205	)	$	2,259,834		$	(4,018,039	)	-178%

Research and Development Costs - These costs consist of the salaries of personnel who are directly involved in the research and development of innovative products, as well as the direct costs associated with developing these products. Research and development costs for the quarter ended March 31, 2025, increased to $664,490 from $555,778, during the same 2024 quarter. The 20% increase in research and development cost is primarily due to an increase in expenditures on product certification, homologation and product development activities, as the Company continues to refine and build a pipeline of exceptional products.

~~Revenues~~Bad -Debt WeExpense earn revenues from the sale of our protective gear comprising of neck braces, body armor, helmets and other products, parts and accessories both in the United States and internationally. Revenues for the nine(Recovery)-~~month~~ ~~period~~Bad ~~ended~~debt ~~September~~expense ~~30,~~(recovery) ~~2024 were $32.83 million, a 12% decrease, compared to revenues of $37.44 million~~ for the ~~period~~quarters ended ~~September~~March 3031, ~~2023. This~~2025 ~~decrease in worldwide revenue is primarily attributable to a $3.38 million decrease in helmet sales, a $0.86 million decrease in body armor sales, a $0.24 million decrease in other products, part~~ and accessory sales and a $0.13 million decrease in neck brace sales. Revenues generated from sales to our customers in the United States remained consistent at $11.17 million and $11.17 million for the nine months ended September 30, 2024 ~~and 2023, respectively. Revenues associated with international customers~~ were ($~~21.65~~63,504) ~~million~~ and $~~26.27 million~~9, ~~or 66% and 70% of revenues~~964, respectively~~, for the nine months ended September 30, 2024 and 2023~~. ~~Although,~~The ~~consumer direct sales increased by 16~~737% ~~and~~decrease ~~dealer~~in ~~direct~~bad ~~sales~~debt ~~increased~~expense byis ~~4% for~~ the ~~first~~result ~~nine months~~ of ~~2024,~~a ~~sales~~decrease toin ~~our~~provisions ~~global~~made ~~distributors~~for ~~decreased~~unrecoverable bydebts ~~21%~~relating ~~when compared~~ to the ~~first~~Company's ~~nine~~international ~~months~~customers ofduring ~~2023 as our distributors continued to order conservatively in~~ the ~~context~~2025 ~~of industry-wide inventory dynamics~~period.

~~The~~General ~~following~~and ~~table~~Administrative ~~sets~~Expenses ~~forth~~- ~~our~~General ~~revenues~~and byadministrative ~~product~~expenses ~~line~~consist of insurance, travel, merchant fees, telephone, office and computer supplies. General and administrative expenses for the ~~nine~~quarters ~~months~~ ended ~~September~~March 3031, 2025 and 2024 were $1,012,649 and ~~2023:~~$942,888, respectively. The 7% increase in general and administrative expenses is primarily due to an increase in domestic travel costs incurred during the 2025 period as the Company continues to intensify sales outreach and activation activities.

20Depreciation Expense - Depreciation expense for the quarters ended March 31, 2025 and 2024 were $327,008 and $294,134, respectively. The 11% increase in depreciation is primarily due to online software enhancements utilized to improve engagement and buying activity across the Company's web-based selling platforms.

		Nine months ended September 30,
		2024	% ofRevenues		2023	% ofRevenues
Neck braces	$	1,898,629	6%	$	2,030,515	5%
Body armor		16,343,151	50%		17,201,324	46%
Helmets		6,139,687	19%		9,518,457	26%
Other products, parts and accessories		8,449,821	26%		8,688,118	23%
	$	32,831,288	100%	$	$37,438,414	100%

Total Operating Expenses - Total operating expenses increased by $538,836, to $5.38 million in the three months ended March 31, 2025, or 11%, compared to $4.84 million in the 2024 period. This increase is primarily due to the increase in salaries, general and administrative and research and development costs discussed above.

~~Sales~~Other ofIncome ~~our~~(Expenses) ~~flagship~~- ~~neck~~Other ~~brace~~income ~~accounted~~(expenses) for ~~$1.90~~the ~~million~~quarters ~~and~~ended ~~$2.03~~March ~~million~~31, or2025 6% and 5%2024 ofwere ~~our revenues for the nine-month periods ended September 30~~$82,147 ~~2024~~ and ~~2023~~($24,483), respectively. The 6436% ~~decrease~~increase in ~~neck~~other ~~brace~~income ~~revenues~~ is primarily ~~attributable~~due to ainterest 2%earned ~~decrease~~during in the ~~volume~~first quarter of ~~neck~~2025 ~~braces~~in ~~sold~~line ~~during~~with ~~the~~an ~~first~~increase ~~nine~~in ~~months~~cash ofheld ~~2024~~in an interest-bearing account when compared to the ~~prior~~2024 ~~year~~first ~~period~~quarter.

~~Our~~Income ~~body~~taxes ~~armor~~- ~~products~~Income ~~are~~taxes ~~comprised~~for ofthe ~~chest~~quarters ~~protectors,~~ended ~~full~~March ~~upper body protectors~~31, ~~upper~~2025 ~~body protection vests, back protectors, knee braces, knee~~ and ~~elbow~~2024 ~~guards,~~were ~~off-road motorcycle boots and mountain biking shoes. Body armor sales accounted for~~ $~~16.34~~390,305 ~~million~~ and $~~17.20 million~~1, ~~or 50% and 46% of our revenues for the nine-month periods ended September 30~~639, ~~2024 and 2023,~~ respectively. ~~Although~~The ~~revenues~~increase ~~generated on the sale of upper body and limb protection increased by 19% during the first nine months of 2024, the 5% decrease~~ in ~~body~~income ~~armor~~taxes ~~revenues~~is ~~was~~ primarily ~~the~~due ~~result~~to ofan aincrease ~~63% decrease~~ in ~~revenues generated from~~ the ~~sale~~provision offor ~~footwear,~~income ~~comprising~~taxes ofin ~~motorcycle~~line ~~boots~~with ~~and mountain biking shoes, sold during~~ the ~~2024~~increase ~~period.~~in ~~Footwear~~net ~~has~~income ~~been~~when acompared ~~particularly constrained category due~~ to ~~post-Covid~~the ~~stocking~~prior ~~dynamics~~year ~~on an industry-wide basis~~period.

~~Our~~Net ~~Helmets~~Income ~~accounted~~(Loss) ~~for~~- ~~$6.14~~The ~~million~~net ~~and~~income ~~$9.52~~(loss) ~~million,~~after orincome ~~19%~~taxes ~~and 26% of our revenues~~ for the ~~nine-month~~quarter ~~periods~~ ended ~~September~~March 3031, ~~2024~~2025 ~~and~~was ~~2023, respectively~~$1. ~~The~~12 ~~35%~~million, ~~decrease~~as inopposed ~~helmet sales during the 2024 period is primarily attributable~~ to a ~~45%~~net ~~decrease~~loss ~~in the volume~~ of ~~MOTO~~($0.82) ~~and~~million ~~MTB~~for ~~helmets~~the ~~sold~~quarter toended ~~our~~March ~~international~~31, ~~customers during the~~ 2024. This ~~period,~~237% ~~when~~increase ~~compared~~in tonet ~~the~~income ~~nine~~is ~~month~~primarily ~~period~~due ~~ended September 30, 2023, as our distributors continue~~ to ~~manage~~the ~~elevated~~increase ~~inventory levels~~ in ~~the~~revenues ~~context~~and ofgross ~~post-Covid~~profit ~~stocking~~discussed ~~dynamics~~above.

Our other products, parts and accessories are comprised of goggles, hydrations bags and apparel items including jerseys, pants, shorts and jackets as well as aftermarket support items required primarily to replace worn or damaged parts through our global distribution network. Other products, parts and accessories sales accounted for $8.45 million and $8.69 million, or 26% and 23% of our revenues for the nine-month periods ended September 30, 2024 and 2023, respectively. The 3% decrease in revenues from the sale of other products, parts and accessories is primarily due to a 29% decrease in the sales volume of our MOTO and MTB technical apparel lines, designed for motorcycle and mountain biking use that was partially offset by strong shipments of ADV technical apparel, designed for adventure motorcycle riding during the first nine months of 2024.

Cost of Revenues and Gross Profit - Cost of revenues for the nine-month periods ended September 30, 2024 and 2023 were $19.73 million and $21.20 million, respectively. Gross Profit for the nine-month periods ended September 30, 2024 and 2023 were $13.10 million and $16.23 million, respectively, or 40% and 43% of revenues respectively. The 3% decrease in gross profit as a percentage of revenues for the nine months ended September 30, 2024, was primarily due to specific dealer and consumer direct promotional selling opportunities that were pursued on particularly affected product categories in the United States and South Africa as the Company continues to manage industry-wide stocking and promotional dynamics at the dealer and distributor level. Although demand for our products and participation remains strong, the Company continues to seek opportunities to turn over less current, slower moving inventory categories at pricing levels that are market-related as we move closer to sustainable inventory levels.

Product Royalty Income - Product royalty income is earned on sales to distributors that have royalty agreements in place, as well as on sales of licensed products by third parties that have licensing agreements in place. Product royalty income for the nine-month periods ended September 30, 2024 and 2023 were $255,789 and $25,151, respectively. The 917% increase in product royalty income is due to an increase in the sale of licensed products to licensees during the 2024 period.

Salaries and Wages - Salaries and wages for the nine-month periods ended September 30, 2024 and 2023 were $4,853,471 and $3,737,382, respectively. The 30% increase in salaries and wages during the 2024 period was primarily due to the employment of professional sales, marketing, brand and account management professionals in the United States and abroad as the Company continues to invest strongly in building and expanding a diversified and focused multi-channel selling operation globally.

Commissions and Consulting Expense - During the nine-month periods ended September 30, 2024 and 2023, commissions and consulting expenses were $427,941 and $375,548, respectively. This 14% increase in commissions and consulting expenses during the 2024 period is primarily due to an increase in consulting expenditure incurred as the Company continues to streamline domestic and international sales taxation and operating processes.

Professional Fees - Professional fees consist of costs incurred for audit, tax and regulatory filings, as well as patent protection and product liability litigation expenses incurred as the Company continues to expand. Professional fees for the nine-month periods ended September 30, 2024 and 2023 were $528,215 and $605,896, respectively. This 13% decrease in professional fees is primarily due to a decrease in expenditure on patent litigation and maintenance expenditure during the 2024 period.

Advertising and Marketing - The Company places paid advertising in various motorsport magazines and online media, and sponsors a number of events, teams and individuals to increase product and brand visibility. Advertising and marketing expenses for the nine-month periods ended September 30, 2024 and 2023 were $3,379,914 and $2,678,960, respectively. The 26% increase in advertising and marketing expenditure during the 2024 period is primarily due to continued strong investment in the production and implementation of marketing campaigns designed to promote brand recognition and the Company's expanding product categories to a wider rider audience, that now includes adventure riders, globally. Additionally, strategic branding activities and direct expenditures on incentives designed to increase customer sales increased, when compared to the prior year period.

Office Lease and Expenses - Office lease and expenses for the nine-month periods ended September 30, 2024 and 2023 were $456,164 and $457,675, respectively. The decrease in office lease and expenses during the 2024 period is primarily attributable to a decrease in office lease rental expenditures due to the purchase of the Company's head office facility in Cape Town, South Africa.

Research and Development Costs - These costs consist of the salaries of personnel who are directly involved in the research and development of innovative products, as well as the direct costs associated with developing these products. Research and development costs for the nine-month periods ended September 30, 2024 and 2023, decreased to $1,804,590, from $1,828,548, during the same 2023 period. The 1% decrease in research and development costs during the 2024 period is primarily due to a decrease in external product development and certification costs incurred, that were partially offset by an increase in staff costs relating to the employment of design and development staff during the 2024 period, as the Company continues to invest in building a strong pipeline of innovative products.

Bad Debt Recovery - Bad debt recovery for the nine-month periods ended September 30, 2024 and 2023 were ($20,510) and ($135,108), respectively. This 85% decrease in bad debt recovery during the 2024 period is primarily the result of a decrease in bad debts that were recovered during the 2024 period, when compared to the prior year comparative period.

General and Administrative Expenses - General and administrative expenses consist of insurance, travel, merchant fees, telephone, office and computer supplies. General and administrative expenses for the nine-month periods ended September 30, 2024 and 2023 were $2,913,079 and $2,516,919, respectively. The 16% increase in general and administrative expenses during the 2024 period is primarily due to an increase in domestic property insurance and merchant fees associated with an increase in consumer direct sales, as the Company continues to intensify its online selling activities. Additionally, travel costs increased as the Company intensified its global product development travel, and selling activities in the United States.

Depreciation Expense - Depreciation Expense for the nine-month periods ended September 30, 2024 and 2023 were $907,788 and $871,738, respectively. This 4% increase in depreciation during the 2024 period is primarily due to software enhancements utilized to improve consumer engagement and buying activity across the Company's web-based selling platforms.

Total Operating Expenses - Total operating expenses increased by $2.31 million to $15.25 million, in the nine-month period ended September 30, 2024, compared to $12.94 million in the nine-month period ended September 30, 2023. This increase in total operating expenses during the 2024 period is primarily due to increases in salaries, general and administrative and advertising and marketing costs that were partially offset by a decrease in professional fees during the 2024 period.

Net Income (Loss) - Net loss after income taxes for the nine-month period ended September 30, 2024 was $1.76 million, as opposed to net income after income taxes of $2.26 million for the nine-month period ended September 30, 2023. This decrease in net income during the 2024 period is primarily due to the decrease in revenues and gross profit and the increase in total operating expenditures discussed above.

Liquidity and Capital Resources

At ~~September~~March 3031, ~~2024~~2025, we had cash and cash equivalents of $12.4770 million. The following table sets forth a summary of our cash flows for the periods indicated:

		September 30
		March 31,
		2024			2023
		2025			2024
Net cash provided by operating activities	$	2768,~~976,400~~124		$	62,~~585~~828,~~988~~382
Net cash used in investing activities	$	(~~861~~180,~~567~~576	)	$	(149,~~409,765~~216	)
Net cash used in financing activities	$	(1301,~~214,251~~468	)	$	(1495,~~104,302~~761	)
Effect of exchange rate changes on cash and cash equivalents	$	~~222~~45,~~003~~162		$	(~~391~~99,~~114~~183	)
Net increase in cash and cash equivalents	$	1331,~~122,585~~242		$	32,~~680~~184,~~807~~222
Cash and cash equivalents at the beginning of period	$	1112,~~347~~368,~~420~~100		$	711,~~102~~347,~~945~~420
Cash and cash equivalents at the end of period	$	12,~~470~~699,~~005~~342		$	1013,~~783~~531,~~752~~642

Cash increased by $1.12 million or 10%, for the nine months ended September 30, 2024, when compared to cash on hand at December 31, 2023. The primary sources of cash for the nine months ended September 30, 2024 were decreased inventory of $4,491,631, increased accounts payable and accrued expenses of $686,712 and increased long term accounts receivable of $163,470. The primary uses of cash for the nine months ended September 30, 2024 were a net loss of $1,758,205, the repayment of a short term loan amounting to $1,129,966, increased accounts receivable of $861,413, increased prepaid expenses of $548,279, increased payments in advance of $312,249 and capital expenditures of $861,567.20

The Company is currently meeting its working capital needs through cash on hand, a revolving line of credit with a bank, as well as internally generated cash from operations. Management believes that its current cash and cash equivalent balances, along with the net cash generated by operations are sufficient to meet its anticipated operating cash requirements for at least the next twelve months. There are currently no plans for any major capital ~~expenditures~~expenditure in the next twelve months. Our long-term financing requirements depend on our growth strategy, which relates primarily to our desire to increase revenue both in the U.S. and abroad.

Obligations under Material Contracts

Pursuant to our Licensing Agreement with Xceed Holdings, a company controlled by Dr. Christopher Leatt, our founder, chairman and head of research and development, we pay Xceed Holdings 4% of all neck brace sales revenue billed and received by the Company on a quarterly basis based on sales of the previous quarter. During the ~~quarters~~three months ended ~~September~~March 3031, ~~2024~~2025 and ~~2023~~2024, the Company paid an aggregate of $2047,~~301~~535 and $2032,~~816~~260, in licensing fees to Xceed Holdings. In addition, pursuant to a separate license agreement between the Company and Mr. J. P. De Villiers, our former director, the Company is obligated to pay a royalty fee of 1% of all our billed and received neck brace sales revenue, in quarterly installments, based on sales of the previous quarter, to a trust that is beneficially owned and controlled by Mr. De Villiers. During the quarters ended ~~September~~March 3031, ~~2024~~2025 and ~~2023~~2024, the Company paid an aggregate of $511,~~092~~ 884 and $58,~~204~~065, in licensing fees to Mr. De Villiers.

Dr. Christopher Leatt is compensated in his capacity as our Research and Development consultant, pursuant to our Consulting Agreement, dated November 8, 2021, with Innovation Services Limited, or Innovation, a Jersey limited company in which, Dr. Leatt is an indirect beneficiary. Pursuant to the terms of the agreement, Innovation has agreed to serve as the Company's exclusive research, development and marketing consultant, in exchange for a monthly fee; provided, however, that Dr. Leatt must remain an Innovation director and beneficiary of a majority of its ownership interests during the term of the agreement, and Dr. Leatt must remain the Company's primary point of contact responsible for the oversight, review and delivery of the services to be performed by Innovation under the agreement. From ~~July~~January 1, ~~2023~~2024, through June 30, 2024, the monthly fee payable by the Company to Innovation was $45,~~463~~481, and commencing July 1, 2024, ~~the~~this monthly fee ~~payable by the Company~~ increased to $47,072. Innovation may increase its monthly fees, on an annual basis on written notice to the Company, by no greater than the lesser of: (a) five percent (5%) of the prior year's annualized fee; or (b) a percentage equal to then-applicable annual percentage increase in the Consumer Price Index (CPI) published by the United States Department of Labor's bureau of labor statistics, plus one-half percent (0.5%). The parties further agreed that all intellectual property generated in connection with the services provided under the consulting agreement will be the sole property of the Company. The term of the Consulting Agreement will continue unless terminated by either party in accordance with its terms. Either party may terminate the Consulting Agreement upon 6 months' prior written notice, except that the Company may immediately terminate it without notice if the services to be performed by Innovation cease to be performed by Dr. Leatt, if beneficial ownership in Innovation by Dr. Leatt's and his immediate family members decreases, or for any other material breach of the agreement. The parties have agreed to settle any dispute under the Consulting Agreement by submission to JAMS for final and binding arbitration pursuant to its Comprehensive Arbitration Rules and Procedures and in accordance with the Expedited Procedures in those Rules. The Company also simultaneously entered into a side letter agreement, dated November 8, 2021, with Dr. Leatt, pursuant to which Dr. Leatt agreed, among other things: (1) not to perform services similar to the services provided under the agreement for any current or future, direct or indirect competitor of the Company or any similar company; (2) not to solicit any current or future employees of the Company for employment with Innovation or any other entity with which he may become affiliated, or to contact or solicit any current or future stockholder or investor of the Company in connection with any matter that is not directly related to the ongoing or future business operations of the Company; and (3) that he will apprise the Company of any business opportunity that he becomes aware of that could benefit the Company so that the Company, can in its sole discretion, make a determination regarding whether to pursue such opportunity in the best interest of the Company and its stockholders. Dr. Leatt further agreed to continue dedicating a majority of his time on matters related to performance of his duties as a director of the Company and to the fulfillment of his obligations to the Company's research and development efforts under the consulting agreement, and the Company will have the right to adjust the amount of the fees payable under the consulting agreement to the extent of any substantial diminution in his fulfillment of such duties and obligations. The foregoing agreements replaced prior agreements in force from June 2018 to November 2021, among the Company, Dr. Leatt and Innovate Services Limited, a Seychelles company, beneficially owned by Dr. Leatt, that wound up operations. The foregoing description of the Consulting Agreement and Side Letter Agreement is qualified in its entirety by reference to the Consulting Agreement and the Side Letter Agreement, copies of which are filed as Exhibits 10.1 and 10.2, respectively, tohereto ~~the Form 10-K for the year ended December 31, 2023,~~ and are incorporated by reference in this report. During the ~~quarters~~three-month periods ended ~~September~~March 3031, ~~2024~~2025 and ~~2023~~2024, the Company recognized an aggregate of $141,217 and $~~135~~136,~~332~~442, respectively, in consulting fees to Innovation.

23On November 19, 2018, the Company entered into a $1,000,000 revolving line of credit agreement with a bank. Advances under the line of credit bear interest at the LIBOR Daily Floating Rate plus 2.5 percentage points commencing January 1, 2019. The line of credit matured on November 19, 2020, at which time the unpaid principal, interest, or other charges outstanding under the agreement were due and payable. On November 5, 2020, the Company executed an amendment to the line of credit agreement to extend the credit facility through November 19, 2021. The amendment took retroactive effect to October 27, 2020 and introduced an index floor so that payments for any future advances will bear interest at the greater of the LIBOR Daily Floating Rate or an Index Floor of 1.25 percentage points plus 2.5 percentage points. Obligations under the line of credit are secured by equipment and fixtures in the United States of America, accounts receivable and inventory of Leatt Corporation and Two Eleven Distribution, LLC. On March 1, 2021, the Company executed an amendment to the line of credit. The amendment took retroactive effect to February 17, 2021 and extended the line of credit facility through February 28, 2022 and increased the revolving line of credit to $1,500,000. Effective January 21, 2022, the Company executed an amendment agreement for the line of credit to extend the line of credit facility through February 28, 2023, and to replace interest determined by LIBOR Daily Floating Rate with the Bloomberg Short-Term Bank Yield Index rate. The Company and Two Eleven signed amended documents to secure the loan by equipment and fixtures, accounts receivable and inventory of Two Eleven. Effective January 20, 2023, the Company executed an amendment to the line of credit to extend the line of credit facility through February 29, 2024, to amend Banking days and update Successor Rate. The bank had extended the line of credit until March 1, 2025. The Bank sent a letter dated October 4, 2024, which formally notified the Company that effective November 18, 2024, the interest rate transitioned from Bloomberg Short-Term Bank Yield Index rate to Secured Overnight Financing Rate Daily Floating rate plus spread adjustment. The Bank sent a letter dated January 24, 2025, notifying the Company that the bank has extended the line of credit until March 1, 2026. The Company and Two Eleven signed updated documents to secure the loan by equipment and fixtures, accounts receivable and inventory of Two-Eleven. As of March 31, 2025 and December 31, 2024, respectively there were no advances of the line of credit leaving $1,500,000 and $1,500,000 available for advances.

Pursuant to a Premium Finance Agreement, dated October 26, 2023, between the Company and Aon Premium Finance, the Company is obligated to pay APF an aggregate sum of $1,520,667 in eleven payments of $132,515 at a 9.880% annual interest rate, commencing on November 1, 2023, and ending on September 1, 2024. Any late payment during the term of the agreement will be assessed a late penalty of 5% on the payment amount due, and in the event of default APF has the right to accelerate the payment due under the agreement. This loan was paid in full on August 30, 2024.21

OnPursuant ~~November~~to ~~19,~~a ~~2018,~~Premium ~~the~~Finance ~~Company~~Agreement, ~~entered~~dated ~~into~~November a7, $12024,~~000,000~~ ~~revolving~~between ~~line of credit agreement with a bank. Obligations under~~ the ~~line~~Company ~~of credit are secured by equipment~~ and ~~fixtures~~Aon inPremium ~~the~~Finance ~~United States of America~~("APF"), ~~accounts~~the ~~receivable~~Company ~~and~~is ~~inventory~~obligated ofto ~~Leatt~~pay ~~Corporation~~APF ~~and~~an ~~Two-Eleven~~aggregate ~~Distribution,~~sum ~~LLC.~~of ~~On March~~ $1, ~~2021~~087,103, weconsisting ~~executed~~of a ~~second~~cash ~~amendment~~down topayment ~~the line~~ of ~~credit.~~$271,776 ~~The~~followed ~~amendment~~by ~~took~~ten ~~retroactive~~payments ~~effect~~of ~~to February 17~~$85,555 ~~2021,~~at ~~extended~~an ~~the~~8.976% ~~line~~annual ofinterest ~~credit~~rate, ~~facility~~commencing ~~through~~on ~~February~~December 281, ~~2022~~2024, and ~~increased~~ending ~~the~~on ~~revolving~~September ~~line of credit to $~~1,~~500,000~~ 2025. Any ~~Effective~~late ~~January~~payment ~~21,~~during ~~2022,~~ the ~~Company~~term ~~executed~~of ~~an amendment to~~ the ~~line~~agreement ofwill ~~credit~~be toassessed ~~extend~~a ~~the~~late ~~line~~penalty of ~~credit~~5% ~~facility~~on ~~through~~the ~~February~~payment ~~29,~~amount ~~2023~~due, and toin ~~replace interest determined by LIBOR Daily Floating Rate with~~ the ~~Bloomberg~~event ~~Short-Term~~of ~~Bank Yield Index rate. Effective January 20~~default, ~~2023,~~APF ~~the~~has ~~Company executed an amendment to~~ the ~~line~~right ~~of credit~~ to ~~extend~~accelerate the ~~line~~payment ofdue ~~credit~~under ~~facility~~the ~~through February 29, 2024, which has subsequently been extended to March 1, 2025~~agreement. As of ~~September~~March 3031, ~~2024~~2025, ~~there were no advances of~~ the ~~line~~Company ofhas ~~credit~~not ~~leaving~~defaulted ~~$1,500,000~~on ofits ~~the~~payment ~~line~~obligations ofunder ~~credit~~this ~~available for advance~~agreement.

On December 2920, ~~2021~~2022, Two Eleven entered into a Loan and Security ~~agreement~~Agreement with a bank, effective December 171, ~~2021~~2022, to finance certain equipment owned by Two Eleven. The ~~Equipment~~note ~~Note~~issued ~~financed~~ under the ~~Loan~~agreement, ~~and~~the ~~Security~~Equipment ~~Agreement~~Note, has a total value of $~~272~~58,~~519~~075, payable by Two Eleven in 36 consecutive monthly installments, commencing on February 5, ~~2022~~2023, and continuing through to January 5, ~~2025~~2026. Interest ~~shall~~will accrue on the entire principal amount of ~~this~~the Equipment Note outstanding from time to time, at a fixed rate of 37.~~5370~~8581% per annum~~. The~~, and the principal and interest amount of each installment payment ~~shall~~will be $71,~~990~~816. As of ~~September~~March 3031, ~~2024~~2025 and December 31, ~~2023~~2024, ~~respectively,~~ $3117,~~724~~523 and $~~101~~22,~~755~~561, ofor ~~the~~this Equipment Note was outstanding, respectively.

On December 20, 2022, Two Eleven entered into a Loan and Security Agreement with a bank, effective December 1, 2022, to finance certain equipment owned by Two Eleven. The note issued under the agreement, the Equipment Note, has a total value of $58,075, payable by Two Eleven in 36 consecutive monthly installments, commencing on February 5, 2023, and continuing through to January 5, 2026. Interest will accrue on the entire principal amount of the Equipment Note outstanding from time to time at a fixed rate of 7.8581% per annum, and the principal and interest amount of each installment payment will be $1,816. As of September 30, 2024 and December 31, 2023, respectively, $27,501 and $41,755 of the Equipment Note was outstanding.

Critical Accounting Policies

Our discussion and analysis of financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported revenues and expenses during the reporting period. We have identified the following as the items that require the most significant judgment and often involve complex estimation: revenue recognition, estimating allowances for doubtful accounts receivable, inventory valuation, impairment of long-lived assets, leases and accounting for income taxes.

Revenue and Cost Recognition - The Company recognizes revenue in accordance with ASC 606 "Revenues from Contracts with Customers". As such the Company has and will continue to review its performance obligations in terms of material customer contractual arrangements in order to verify that revenue is recognized when performance obligations are satisfied on a periodic basis.

All manufacturing of Leatt products is performed by third party subcontractors that are predominately based in China.

The Company's products are sold worldwide to a global network of distributors and dealers, and directly to consumers when there are no dealers or distributors in their geographic area or where consumers choose to purchase directly via the Company's e-commerce website (collectively the "customers").

Revenues from product sales are recognized when earned, net of applicable provisions for discounts and returns and allowances in the event of product defect where no exchange of product is possible. Revenues are recognized when our performance obligations are satisfied as evidenced by transfer of control of promised goods to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services. Product royalty income, representing less than 1% of total revenues, is recorded as the underlying product sales occur, in accordance with the related licensing arrangements.

Our standard distributor payment terms range from pre-payment in full to sixty (60) days after shipment and subsequent sales of our products by distributors have no effect on the amount and timing of payments due to us, however, in limited instances, qualified distributors and dealers may be granted extended payment terms during selected order periods. In performing such evaluations, the Company utilizes historical experience, sales performance, and credit risk requirements. Furthermore, products purchased by distributors may not be returned to the Company in the event that any such distributor relationship is terminated.

Since the Company (through its wholly-owned subsidiary) serves as the distributor of Leatt products in the United States, the Company records its revenue and related cost of revenue for its product sales in the United States upon shipment of the merchandise to the dealer or to the ultimate consumer when there is no dealer in the geographic area or the consumer chooses to purchase directly from the Company's e-commerce website and the sales order was received directly from, and paid by, the ultimate consumer. Since the Company (through its South African branch) serves as the distributor of Leatt products in South Africa, the Company records its revenue and related cost of revenue for its product sales in South Africa upon shipment of the merchandise from the branch to the dealer. The Company's standard terms and conditions of sale for non-consumer direct or web-based sales do not allow for product returns other than under warranty.22

~~Sales~~Since ~~totaling~~the $0Company ~~and~~(through ~~$31,671~~its ~~were~~wholly-owned ~~deferred~~subsidiary) serves as ~~all~~the distributor of Leatt products in the ~~requirements~~United States, the Company records its revenue and related cost of revenue for its product sales in the United States upon shipment of the merchandise to ~~have~~the adealer ~~contract~~or ~~with~~to the ~~customer~~ultimate consumer when there is no dealer in ~~accordance~~the ~~with~~geographic ~~ASC~~area ~~606~~or ~~had~~the ~~not~~consumer ~~been~~chooses ~~met~~to aspurchase ofdirectly ~~September~~from ~~30,~~the ~~2024~~Company's e-commerce website and ~~December~~the 31sales order was received directly from, ~~2023~~and paid by, ~~respectively~~the ultimate consumer. ~~The~~Since ~~shipped~~the ~~goods~~Company ~~associated~~(through ~~with~~its ~~these~~South ~~deferred~~African ~~sales~~branch) ~~are~~serves ~~included~~as the distributor of Leatt products in South Africa, the ~~caption~~Company ~~deferred~~records ~~asset,~~its ~~net~~revenue ofand anrelated ~~allowance~~cost of revenue for ~~potential~~its ~~loss~~product sales in South Africa upon shipment of $0the merchandise from the branch to the dealer and ~~$6,400~~upon ~~for~~shipment ~~September~~of ~~30,~~products ~~2024~~direct to end consumers which has been sold through digital channels. The Company's standard terms and ~~December~~conditions ~~31,~~of ~~2023,~~sale ~~respectively~~for non-consumer direct or web-based sales do not allow for product returns other than under warranty.

International sales (other than in the United States and South Africa) are generally drop-shipped directly from our consolidation warehouse or third-party manufacturer to the international distributors. Revenue and related cost of revenue is recognized at the time of shipment from the manufacturer's port when the shipping terms are Free On Board ("FOB") shipping point, Cost and Freight ("CFR") or Cost and Insurance to named place ("CIP") as legal title and risk of loss to the product pass to the distributor. Sales to all customers (distributors, dealers and consumers) are generally final; however, in limited instances, product may be returned and exchanged due to product quality issues. Historically, returns due to product quality issues have not been material and there have been no distributor terminations that resulted in product returns. Cost of revenues also includes royalty fees associated with sales of Leatt-Brace products. Product royalty income is recorded as the underlying product sales occur, in accordance with the related licensing arrangements.

25Sales commissions are expensed when incurred, which is generally at the time of sale or cash received from customers, because the amortization period would have been one year or less. These costs are recorded in commissions and consulting expenses within operating expenses in the accompanying consolidated statements of operations and comprehensive income (loss).

~~Sales~~Shipping ~~commissions~~and ~~are~~handling ~~expensed~~activities ~~when~~associated ~~incurred,~~with ~~which~~outbound isfreight, ~~generally~~after atcontrol ~~the~~over ~~time~~a ofproduct ~~sale~~has ortransferred ~~cash~~to ~~received~~a ~~from customers~~customer, ~~because~~are ~~the~~accounted ~~amortization~~for ~~period~~as ~~would~~a ~~have~~fulfilment ~~been~~cost ~~one~~and ~~year or less. These costs~~ are ~~recorded~~included in ~~commissions~~revenues and ~~consulting~~cost ~~expenses~~of ~~within~~revenues ~~operating expenses~~ in the accompanying consolidated statements of operations and comprehensive income (loss).

Revenue recognized from contracts with customers is recorded net of sales taxes, value added taxes, or similar taxes that are collected on behalf of local taxing authorities.

Allowance for ~~Doubtful~~Credit ~~Accounts~~Losses ~~Receivable~~ - Accounts receivable consist of amounts due to the Company from normal business activities. Credit is granted to ~~substantially all~~ distributors on an unsecured basis based on credit risk analysis procedures. We continuously monitor both credit reports and collections, communication and payments from customers and ~~maintain~~maintains an allowance for ~~doubtful~~credit ~~accounts~~losses ~~receivable~~ based upon the expected credit losses determined utilizing historical experience, the aging of funds outstanding, and any specific customer collection issues that have been identified. In determining the amount of the allowance, we are required to make certain estimates and assumptions. Accounts receivable balances that are still outstanding after we have used reasonable collection efforts are written off as uncollectible. While such credit losses have historically been minimal, within our expectations and the provisions established, macro-economic conditions and customer financial positions are fluid, and we cannot guarantee that we will continue to experience the same credit loss rates that we have in the past. A significant change in the liquidity or financial position of any of our significant customers could have a material adverse effect on the collectability of our accounts receivable and our future operating results. The allowance for short-term ~~doubtful~~credit ~~accounts~~losses ~~was $645,618~~ at ~~September~~March 3031, ~~2024~~2025 ~~and~~was $~~662~~440,~~612~~318 and at December 31, ~~2023,~~2024 ~~respectively~~was $500,164. Additionally, an allowance for long-term ~~doubtful~~credit ~~accounts~~losses will be included ~~for~~in accounts ~~receivables~~receivable that are anticipated to be collected over a period that is greater than 12 months. The allowance for long-term ~~doubtful~~credit ~~accounts~~losses at ~~September~~March 3031, ~~2024~~2025 was $0, and at December 31, ~~2023~~2024 was $123,~~676 and $26,929, respectively~~366.

Inventory Valuation - Inventory is stated at the lower of cost or ~~market~~net realizable value. Cost is determined using the first-in first-out (FIFO) method. Inventory consists primarily of finished goods. Shipping and handling costs are included in the cost of inventory. In assessing the inventory value, we make estimates and judgments regarding reserves required for product obsolescence, aging of inventory and other issues potentially affecting the saleable condition of products. In performing such evaluations, we utilize historical experience as well as current market information. The reserve for obsolescence at ~~September~~March 3031, ~~2024~~ 2025 was $580,244, and at December 31, ~~2023~~2024 was $~~355~~533,~~624 and $227,528, respectively~~953.

Impairment of Long-Lived Assets - Our long-lived assets include property and equipment. We evaluate our long-lived assets for recoverability whenever events or changes in circumstances indicate that an asset may be impaired. In evaluating an asset for recoverability, we estimate the future cash flow expected to result from the use of the asset and eventual disposition. If the expected future undiscounted cash flow is less than the carrying amount of the asset, an impairment loss, equal to the excess of the carrying amount over the fair value of the asset, is recognized. We have determined there were no impairment charges during the quarters ended September 30, 2024 and 2023.23

Impairment of Long-Lived Assets - Our long-lived assets include property and equipment. We evaluate our long-lived assets for recoverability whenever events or changes in circumstances indicate that an asset may be impaired. In evaluating an asset for recoverability, we estimate the future cash flow expected to result from the use of the asset and eventual disposition. If the expected future undiscounted cash flow is less than the carrying amount of the asset, an impairment loss, equal to the excess of the carrying amount over the fair value of the asset, is recognized. We have determined there were no impairment charges during the periods ended March 31, 2025 and 2024.

Operating Leases - The Company determines if an arrangement is a lease at contract inception. Operating leases are included in the right-of-use assets ("ROU''), and lease liability obligations are included in the Company's consolidated balance sheets. ROU assets represent the Company's right to use an underlying asset of the lease term and lease liability obligations represent its obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at the commencement date, based on the present value of lease payments over the lease term. As the Company's leases typically do not provide an implicit rate, the Company estimates its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The Company uses the implicit rate when readily determinable. The ROU asset also includes any lease payments made and excludes lease incentives and lease direct costs. The Company's lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense is recognized on a straight-line basis over the lease term.

Income Taxes - As part of the process of preparing our consolidated financial statements, we are required to estimate our income tax provision (benefit) in each of the jurisdictions in which we operate. This process involves estimating our current income tax provision (benefit) together with assessing temporary differences resulting from differing treatment of items for tax and accounting purposes These differences result in deferred tax assets and liabilities, which are included within our consolidated balance sheets. We regularly evaluate our ability to recover the reported amount of our deferred income taxes considering several factors, including our estimate of the likelihood of the Company generating sufficient taxable income in future years during the period over which the temporary differences reverse.

Recent Accounting Pronouncements

See Note 2, "Summary of Significant Accounting Policies" in the Notes to the Consolidated Financial Statements for a full description of recent accounting pronouncements, including the respective dates of adoption, or expected adoption and effects on our consolidated financial position, results of operations and cash flows.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on its financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to its stockholders.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Not Applicable.

ITEM 4. CONTROLS AND PROCEDURES.

Disclosure Controls and Procedures

As of ~~September~~March 3031, ~~2024~~2025, the Company's management, under the direction of its Chief Executive Officer and the Chief Financial Officer, Mr. Sean Macdonald, carried out an evaluation of the effectiveness of the design and operation of the disclosure controls and procedures pursuant to Exchange Act Rule 13a-15. Our disclosure controls and procedures are designed to provide reasonable assurance that the information required to be disclosed in our SEC reports is recorded, processed, summarized and reported within the time periods specified by the SEC's rules and forms, and is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. Based upon that evaluation, the Company's Chief Executive Officer and Chief Financial Officer determined that the Company's disclosure controls and procedures were deemed to be effective.

Our disclosure controls and procedures are designed to provide reasonable assurance that the information required to be disclosed in our SEC reports is recorded, processed, summarized and reported within the time periods specified by the SEC's rules and forms, and is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. Based upon that evaluation, the Company's Chief Executive Officer and Chief Financial Officer determined that the Company's disclosure controls and procedures were deemed to be effective.

Changes in Internal Controls Over Financial Reporting

There were no changes in our internal controls over financial reporting during the period ended ~~September~~March 3031, ~~2024~~2025, that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II

OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

From time to time, we may become involved in various lawsuits and legal proceedings in the ordinary course of our business. We are currently not aware of any legal proceedings the ultimate outcome of which, in our judgment based on information currently available, would have a material adverse effect on our business, financial condition or operating results.

On February 26, 2025, a lawsuit was filed against the Company and other defendant in the Supreme Court of the State of New York, County of Queens, for alleged violation of the American Disabilities Act of 1990, in connection with the accessibility of the Company's website to visually impaired and/or legally blind individuals who may wish to purchase products thereon. The litigation is at an early stage and the Company is in the process of investigating the claim.

ITEM 1A. RISK FACTORS.

There are no material changes from the risk factors previously disclosed in Item 1A "Risk Factors" of our annual report on Form 10-K for the period ended December 31, ~~2023~~2024.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

None.

ITEM 4. MINE SAFETY DISCLOSURES.

None.

ITEM 5. OTHER INFORMATION.

We have no information to disclose that was required to be in a report on Form 8-K during the period covered by this report, but was not reported. There have been no material changes to the procedures by which security holders may recommend nominees to our board of directors.

ITEM 6. EXHIBITS.

The following exhibits are filed as part of this report or incorporated by reference:

Exhibit No.	Description
31.1	Certifications of Principal Executive Officer filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.1*	Certifications of Principal Executive Officer filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certifications of Principal Financial Officer filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*	Certifications of Principal Financial Officer filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certifications of Principal Executive Officer furnished pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.1*	Certifications of Principal Executive Officer furnished pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certifications of Principal Financial Officer furnished pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2*	Certifications of Principal Financial Officer furnished pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101*	Interactive data files pursuant to Rule 405 of Regulation S-T
101.SCH	Inline XBRL Taxonomy Extension Schema Document
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

101*	Interactive data files pursuant to Rule 405 of Regulation S-T

101.INS	Inline XBRL Instance Document-the instance document does not appear in the Interactive Data File as its XBRL tags are embedded within the Inline XBRL document

101.SCH	Inline XBRL Taxonomy Extension Schema Document

101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document

104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

* Filed with this Form 10-Q for Leatt Corporation. Pursuant to Rule 406T of Regulation S-T, the interactive data files on Exhibit 101 hereto are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, or for purposes of Section 18 of the Securities Act of 1934, as amended, and otherwise are not subject to liability under those sections.

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SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: October 29, 2024	LEATT CORPORATION
Date: May 14, 2025	LEATT CORPORATION
	By: /s/ Sean Macdonald
	Sean Macdonald
	Chief Executive Officer and Chief Financial Officer
	(Principal Executive, Financial and Accounting Officer)

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EXHIBIT INDEX

Exhibit No.	Description
31.1	Certifications of Principal Executive Officer filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.1*	Certifications of Principal Executive Officer filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certifications of Principal Financial Officer filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*	Certifications of Principal Financial Officer filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certifications of Principal Executive Officer furnished pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.1*	Certifications of Principal Executive Officer furnished pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certifications of Principal Financial Officer furnished pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2*	Certifications of Principal Financial Officer furnished pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101*	Interactive data files pursuant to Rule 405 of Regulation S-T
101.INS	Inline XBRL Instance Document-the instance document does not appear in the Interactive Data File as its XBRL tags are embedded within the Inline XBRL document
101.SCH	Inline XBRL Taxonomy Extension Schema Document
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

3028

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