Form 8-K - Current report

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

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): October 29, 2024

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

Nevada	000-54693	20-2819367
(State or other jurisdiction	(Commission	(IRS Employer
of incorporation)	File Number)	Identification No.)

12 Kiepersol Drive, Atlas Gardens, Contermanskloof Road
Durbanville, Western Cape, South Africa 7550
(Address of principal executive offices) (ZIP Code)

Registrant’s telephone number, including area code: +27-21-557-7257

Not Applicable
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbols		Name of each exchange on which registered
—		—		—

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b -2 of this chapter).

Emerging growth company ☑

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 accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☑

ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION

On October 29, 2024, the Company issued a press release announcing its financial results for the quarter ended September 30, 2024. A copy of the press release, which the Company is furnishing to the Securities and Exchange Commission (the "Commission") is attached as Exhibit 99.1 and incorporated by reference herein.

In accordance with General Instruction B.2 of Current Report on Form 8-K, the information contained in this Report and the exhibit attached hereto shall not be deemed to be "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities of that section, nor shall such information or such exhibits be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

ITEM 7.01 REGULATION FD DISCLOSURE.

The information set forth in Item 2.02 above is incorporated by reference herein.

ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.

(d) Exhibits.

Exhibit No.	Description
99.1	Press Release, dated October 29, 2024
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	LEATT CORPORATION

Dated: October 29, 2024	By:	/s/ Sean Macdonald
		Sean Macdonald
		Chief Executive Officer and Chief Financial Officer

EXHIBIT INDEX

Exhibit No.	Description
99.1	Press Release, dated October 29, 2024
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

Leatt Corp Announces Results for the Third Quarter 2024

CAPE TOWN, South Africa, (October 29, 2024) - Leatt Corporation (OTCQB: LEAT), a leading developer and marketer of head-to-toe protective equipment for Moto, MTB, ADV and a wide range of extreme and high-velocity sports, today announced financial results for the third quarter ending September 30, 2024. All financial numbers are in U.S. dollars.

Third Quarter and First Nine Months 2024 Snapshot

• Global revenues returned to growth as revenues for the third quarter of 2024 were $12.14 million, up 1%, compared to the third quarter of 2023.

• Gross profit margins increased 4% sequentially, compared to the second quarter of 2024.

• Cash flow generated from operations for the first nine months of 2024 was $2.98 million.

• Net Income was $115,837, down 75%, compared to the third quarter of 2023.

• Direct-to-consumer sales increased 12% for the third quarter of 2024.

• Cash and cash equivalents at September 30, 2024 was $12.47 million, up 10%, compared to cash on hand at December 31, 2023.

Chief Executive Officer Sean Macdonald commented, "We are all very encouraged by the results of the third quarter of 2024, which we see as a pivotal quarter as global revenues returned to growth, albeit still marginal at this stage. Total global revenues for the quarter were $12.14 million, a 1% increase year-over-year. Body armor sales were up $0.27 million, helmet sales were up $0.14 million and neck brace sales were up $0.04 million. International sales were $8.58 million, up 5% as inventory continues to be digested and an uptick in ordering begins to filter through to our revenues. Gross profit for the third quarter was $5.17 million.

"Our margins also continued to improve on a quarterly basis, increasing by 4% sequentially over the second quarter of 2024, as we manage clearing older inventory and selling newer stock at higher margins. Our inventory levels continue to stabilize, decreasing by $4.62 million, or 23%, over the last nine months, as we continue to seek opportunities to turn over slower-moving inventory and replenish stock levels in preparation for stronger ordering.

"During the quarter we continued to ship orders for our new ADV (Adventure) apparel product line, designed for motorcycle enthusiasts seeking comfort and safety while riding in all weather conditions and terrains. We remain confident that we have the initial distribution, track record, core competencies and talent to deliver a pipeline of other innovative ADV product categories to reach this substantial segment.

"Footwear, comprising MTB shoe and MOTO boot revenues, contracted on a global basis during the quarter. Footwear has been particularly constrained in the current environment with aggressive competitive pricing and high inventory levels causing very cautious buying at the dealer level. We do expect this area to improve as inventory is digested, and ordering continues to pick up.

"We continue to see very encouraging trends at the direct-to-consumer level as consumer direct sales increased by 12%. Our consumer direct platform in South Africa continued to display strong sales, exceeding our expectations.

"Despite current industry-wide conditions, re-investments in working capital and our push to invest in long-term growth, cash increased by $1.12 million to $12.47 million, with cash flows provided by operations of $2.98 million for the nine months ended September 30, 2024. Our liquidity continues to improve as our team continues to manage working capital efficiently.

"Overall, despite some constrained brick-and-mortar MOTO dealer sales in the US, our team remains enthusiastic about the pivotal moment in our recovery that is currently in play. We strongly believe that our strategy of investing in talent, innovative product development and the brand, and our distribution capabilities will fuel growth moving forward."

Financial Summary

Total revenues for the third quarter of 2024 were $12.14 million, up 1%, compared to $12.01 million for the third quarter of 2023.

This increase in worldwide revenues is primarily attributable to a $0.27 million increase in body armor sales, a $0.14 million increase in helmet sales, and a $0.04 million increase in neck brace sales, that were partially offset by a $0.32 million decrease in other products, part and accessory sales.

Income from operations for the third quarter of 2024 was $25,898, down 96%, compared to $620,395 for the third quarter of 2023.

Net income for the third quarter of 2024 was $115,837 or $0.02 per basic and $0.02 per diluted share, down 75%, as compared to net income of $460,474, or $0.08 per basic and 0.07 per diluted share, for the third quarter of 2023.

Leatt continued to meet its working capital needs from cash on hand and internally generated cash flow from operations. At September 30, 2024, the Company had cash and cash equivalents of $12.47 million and a current ratio of 6.5:1.

Founder and Research and Development Lead, Dr. Christopher Leatt remarked: "As evidenced by our new ADV apparel line, and our new range of bicycle components, which will commence initial shipment in the coming months, our pipeline of innovative head-to-toe products continues to be very strong."

Business Outlook

Mr. Macdonald added, "Although there are still some challenging economic headwinds globally that may impact demand to some extent, inventory continues to be digested, participation remains strong and ordering patterns continue to improve and have started to filter through to our international distribution revenues and ultimately our revenue position. This is a trend that we expect to continue over the next few periods and beyond.

"We will continue to optimize our selling capabilities by building a team of sales and marketing professionals around the world as industry-wide turbulence presents an opportunity to continue growing the Leatt family by adding talent.

"We are all enthusiastic about the future at Leatt with our strong portfolio of innovative products in the market and in the pipeline, a multi-channel sales organization that is growing and developing, and a robust balance sheet to fuel brand and revenue growth. We remain confident that we are well positioned for future growth and shareholder value."

Conference Call

The Company will host a conference call at 10:00 am ET on Tuesday, October 29, 2024 to discuss the third quarter 2024 results.

Participants should dial in to the call ten minutes before the scheduled time, using the following numbers: 1-877-407-9716 (U.S.A) or +1-201-493-6779 (international) to access the call.

Audio Webcast

There will also be a simultaneous live webcast through the Company's website, www.leatt-corp.com. Participants should register on the website approximately ten minutes prior to the start of the webcast.

Replay

An audio replay of the conference call will be available for seven days and can be accessed by dialing 1-844-512-2921 (U.S.A) or +1-412-317-6671 (international) and using passcode 13749831.

For those unable to attend the call, a recording of the live webcast will be archived shortly following the event for 30 days on the Company's website.

About Leatt Corp

Driven by the science of thrill, Leatt Corporation develops head-to-toe personal protective gear for various sports, with a focus on mountain biking and extreme motorsports. This includes the award-winning Leatt-Brace®, a neck brace system considered the gold standard for neck protection when worn in conjunction with a helmet. Leatt products are designed for participants in extreme sports that use motorcycles, bicycles, mountain bikes, all-terrain vehicles, snowmobiles, and other open-air vehicles. For more information, visit www.leatt.com.

Follow Leatt® on Facebook, Twitter, and Instagram.

Forward-looking Statements

This press release may contain forward-looking statements regarding Leatt Corporation (the "Company") within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical fact included herein are "forward-looking statements" including statements regarding the continued impact of the ADV range of products and direct-to-consumer sales on the Company's results of operations; the Company's ability to continue developing a pipeline of innovative products and attracting global industry talent to fuel future growth; the ability of the Company to ship and successfully gain market acceptance of its new bicycle components category; the general ability of the Company to achieve its commercial objectives, including development and growth of a multi-channel sales organization; the business strategy, plans and objectives of the Company; and any other statements of non-historical information. These forward-looking statements are often identified by the use of forward-looking terminology such as "believes," "expects," "anticipates," "seeks," "should," "could," "intends," or "projects" or similar expressions, and involve known and unknown risks and uncertainties. These statements are based upon the Company's current expectations and speak only as of the date hereof. Any indication of the merits of a claim does not necessarily mean the claim will prevail at trial or otherwise. Financial performance in one period does not necessarily mean continued or better performance in the future. The Company's actual results in any endeavor may differ materially and adversely from those expressed in any forward-looking statements as a result of various factors and uncertainties, which factors or uncertainties may be beyond our ability to foresee or control. Other risk factors include the status of the Company's common stock as a "penny stock" and those listed in other reports posted on The OTC Markets Group, Inc.

Contact:

Michael Mason

Investor Relations

Investor-info@leatt.com

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

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						September 30
		2024			2023			2024			2023
		Unaudited			Unaudited			Unaudited			Unaudited

Revenues	$	12,138,123		$	12,008,847		$	32,831,288		$	37,438,414

Cost of Revenues		6,968,051			6,890,845			19,731,470			21,204,860

Gross Profit		5,170,072			5,118,002			13,099,818			16,233,554

Product Royalty Income		123,706			1,767			255,789			25,151

Operating Expenses
Salaries and wages		1,676,828			1,267,455			4,853,471			3,737,382
Commissions and consulting expenses		138,124			168,299			427,941			375,548
Professional fees		108,627			156,868			528,215			605,896
Advertising and marketing		1,304,215			974,488			3,379,914			2,678,960
Office lease and expenses		141,420			145,863			456,164			457,675
Research and development costs		620,019			610,589			1,804,590			1,828,548
Bad debt expense (recovery)		(30,788	)		46,113			(20,510	)		(135,108	)
General and administrative expenses		993,031			830,145			2,913,079			2,516,919
Depreciation		316,404			299,554			907,788			871,738
Total operating expenses		5,267,880			4,499,374			15,250,652			12,937,558

Income (Loss) from Operations		25,898			620,395			(1,895,045	)		3,321,147

Other Income (Expenses)
Interest and other expenses, net		105,430			(1,150	)		178,963			(38,948	)
Total other Income (expenses)		105,430			(1,150	)		178,963			(38,948	)

Income (Loss) Before Income Taxes		131,328			619,245			(1,716,082	)		3,282,199

Income Taxes		15,491			158,771			42,123			1,022,365

Net Income (Loss) Available to Common Shareholders	$	115,837		$	460,474		$	(1,758,205	)	$	2,259,834

Net Income (Loss) per Common Share
Basic	$	0.02		$	0.08		$	(0.28	)	$	0.38
Diluted	$	0.02		$	0.07		$	(0.27	)	$	0.36

Weighted Average Number of Common Shares Outstanding
Basic		6,215,440			5,971,340			6,215,440			5,971,340
Diluted		6,485,890			6,270,691			6,485,890			6,270,691

Comprehensive Income (Loss)
Net Income (Loss)	$	115,837		$	460,474		$	(1,758,205	)	$	2,259,834
Other comprehensive income (loss) , net of $0 deferred income taxes in 2024 and 2023
Foreign currency translation		274,270			(27,708	)		297,282			(464,777	)

Total Comprehensive Income (Loss)	$	390,107		$	432,766		$	(1,460,923	)	$	1,795,057

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

LEATT CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2024 AND 2023

		2024			2023

Cash flows from operating activities
Net income (loss)	$	(1,758,205	)	$	2,259,834
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation		907,788			871,738
Stock-based compensation		3,752			-
Bad debts reserve		(31,247	)		(175,448	)
Inventory reserve		128,096			299,942
Deferred asset allowance		(6,400	)		(75,971	)
Gain on sale of property and equipment		-			(2,375	)
(Increase) decrease in:
Accounts receivable		(861,413	)		2,342,233
Deferred asset		16,001			992,389
Inventory		4,491,631			3,802,173
Payments in advance		(312,949	)		413,276
Prepaid expenses and other current assets		(548,279	)		548,208
Income tax refunds receivable		99,193			(340,492	)
Long-term accounts receivable		163,470			-
Deposits		(1,750	)		792
Increase (decrease) in:
Accounts payable and accrued expenses		686,712			(567,611	)
Income taxes payable		-			(3,382,700	)
Deferred compensation		-			(400,000	)
Net cash provided by operating activities		2,976,400			6,585,988

Cash flows from investing activities
Capital expenditures		(861,567	)		(1,412,558	)
Proceeds from sale of property and equipment		-			2,793
Net cash used in investing activities		(861,567	)		(1,409,765	)

Cash flows from financing activities
Repayment of notes payable to bank		(84,285	)		(79,353	)
Repayment of short-term loans, net		(1,129,966	)		(1,024,949	)
Net cash used in financing activities		(1,214,251	)		(1,104,302	)

Effect of exchange rates on cash and cash equivalents		222,003			(391,114	)

Net increase in cash and cash equivalents		1,122,585			3,680,807

Cash and cash equivalents - beginning of period		11,347,420			7,102,945

Cash and cash equivalents - end of period	$	12,470,005		$	10,783,752

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for interest	$	69,515		$	56,602
Cash paid for income taxes	$	55,906		$	4,529,602

Other noncash investing and financing activities
Common stock issued for services	$	3,752		$	-

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

Document and Entity Information Document	Oct. 29, 2024
Document Information [Line Items]
Document Type	8-K
Document Creation Date	Oct. 29, 2024
Document Period End Date	Oct. 29, 2024
Amendment Flag	false
Entity Registrant Name	Leatt Corp.
Entity Address, Address Line One	12 Kiepersol Drive, Atlas Gardens, Contermanskloof Road
Entity Address, City or Town	Durbanville
Entity Address, Country	ZA
Entity Address, Postal Zip Code	7550
Entity Incorporation, State Country Name	NV
City Area Code	21
Region code of country	+27
Local Phone Number	557-7257
Entity File Number	000-54693
Entity Central Index Key	0001456189
Entity Emerging Growth Company	true
Entity Tax Identification Number	20-2819367
Entity Ex Transition Period	true
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false