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: ~~March~~ June 3130, 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 incorporationor organization)	(I.R.S. Employer Identification No.)
(State or other jurisdiction of incorporation or 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 ~~May~~August 96, 2025, is as follows:

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

1Quarterly Report on Form 10-QSix Months Ended June 30, 2025

LEATT CORPORATION

Quarterly Report on Form 10-QThree Months Ended March 31, 2025

TABLE OF CONTENTS

PART I	FINANCIAL INFORMATION	1
ITEM 1.	FINANCIAL STATEMENTS.	1
ITEM 2.	MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.	1413
ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.	2426
ITEM 4.	CONTROLS AND PROCEDURES.	2426
PART II	OTHER INFORMATION	2528
ITEM 1.	LEGAL PROCEEDINGS.	2528
ITEM 1A.	RISK FACTORS.	2528
ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.	2528
ITEM 3.	DEFAULTS UPON SENIOR SECURITIES.	2528
ITEM 4.	MINE SAFETY DISCLOSURES.	2528
ITEM 5.	OTHER INFORMATION.	2528
ITEM 6.	EXHIBITS.	2528

-PART iIFINANCIAL -INFORMATION

PART I

FINANCIAL INFORMATION

LEATT CORPORATION
CONSOLIDATED BALANCE SHEETS

ASSETS

		March 31, 2025			December 31, 2024
		June 30, 2025			December 31, 2024
		Unaudited			Audited
Current Assets
Cash and cash equivalents	$	1215,~~699~~726,~~342~~188		$	12,368,100
Accounts receivable, net		68,~~380~~263,~~596~~662			6,409,610
Inventory, net		1612,~~930~~896,~~185~~024			17,988,737
Payments in advance		1,~~092~~077,~~572~~477			870,920
Income tax receivable		~~117~~495,~~311~~168			526,498
Prepaid expenses and other current assets		23,~~995~~419,~~831~~859			3,003,173
Total current assets		4041,~~215~~878,~~837~~378			41,167,038
Property and equipment, net		3,~~890~~751,~~288~~778			4,000,225
Operating lease right-of-use assets, net		~~524~~454,~~202~~217			552,970
Accounts receivable, net		-			56,391
Deferred tax asset, net		675,000			675,000
Other Assets
Deposits		3844,~~173~~226			37,322
Total Assets	$	4546,~~343~~803,~~500~~599		$	46,488,946
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable and accrued expenses	$	4,~~783~~408,~~388~~857		$	6,906,939
Notes payable, current		1712,~~523~~386			28,722
Operating lease liabilities, current		~~295~~300,~~655~~309			251,946
Short term loan, net of finance charges		445,329			733,794
Income tax payable		772,741			-
Total current liabilities		5,541,895			7,921,401
Short term loan, net of finance charges		185,330			733,794
Total current liabilities		5,679,623			7,921,401
Notes payable, net of current portion		-			1,804
Operating lease liabilities, net of current portion		~~228~~153,~~547~~908			301,024
Total liabilities		5,~~770~~833,~~442~~531			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~~231,~~153~~333			10,988,316
Accumulated other comprehensive loss		(1,~~385~~249,~~955~~859	)		(1,452,335	)
Retained earnings		2930,~~716~~855,~~305~~039			28,595,181
Total stockholders' equity		3940,~~573~~970,~~058~~068			38,264,717
Total Liabilities and Stockholders' Equity	$	4546,~~343~~803,~~500~~599		$	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						Six Months Ended
		March 31
		June 30						June 30
		2025			2024			2025			2024
		Unaudited			Unaudited			Unaudited			Unaudited
Revenues	$	1516,~~367~~176,~~864~~339		$	10,~~614~~078,~~470~~695		$	31,544,203		$	20,693,165
Cost of Revenues		89,~~646~~287,~~851~~146			6,~~606~~157,~~137~~282			17,933,997			12,763,419
Gross Profit		6,~~721~~889,~~013~~193			43,~~008~~921,~~333~~413			13,610,206			7,929,746
Product Royalty Income		8548,~~298~~306			3992,~~303~~780			133,604			132,083
Operating Expenses
Salaries and wages		1,~~857~~846,~~380~~237			1,~~568~~608,~~271~~372			3,703,617			3,176,643
Commissions and consulting expenses		~~157~~187,~~722~~434			~~124~~165,~~216~~601			345,156			289,817
Professional fees		~~360~~155,~~051~~345			~~298~~120,~~971~~617			515,396			419,588
Advertising and marketing		~~892~~1,~~057~~152,207			~~892~~1,~~417~~183,282			2,044,264			2,075,699
Office lease and expenses		~~169,~~176,120			~~151~~163,~~554~~190			345,296			314,744
Research and development costs		~~664~~616,~~490~~795			~~555~~628,~~778~~793			1,281,285			1,184,571
Bad debt expense (recovery)		(6331,~~504~~155	)		~~9,964~~314			(94,659	)		10,278
General and administrative expenses		1,~~012~~101,~~649~~992			~~942~~977,~~888~~160			2,114,641			1,920,048
Depreciation		~~327~~332,~~008~~606			~~294~~297,~~134~~250			659,614			591,384
Total operating expenses		5,~~377~~537,~~029~~581			45,~~838~~144,~~193~~579			10,914,610			9,982,772
Income (Loss) from Operations		1,~~429~~399,~~282~~918			(~~790~~1,~~557~~130,386	)		2,829,200			(1,920,943	)
Other Income (Expenses)
Other Income
Interest and other income (expenses), net		82,147			(24,483	)
Interest and other income, net		117,737			98,016			199,884			73,533
Total other income (expenses)		82,147			(24,483	)
Total other Income		117,737			98,016			199,884			73,533
Income (Loss) Before Income Taxes		1,~~511~~517,~~429~~655			(~~815~~1,~~040~~032,370	)		3,029,084			(1,847,410	)
Income Taxes		~~390~~378,~~305~~921			124,~~639~~993			769,226			26,632
Net Income (Loss) Available to Common Shareholders	$	1,~~121~~138,~~124~~734		$	(~~816~~1,~~679~~057,363	)	$	2,259,858		$	(1,874,042	)
Net Income (Loss) per Common Share
Basic	$	0.18		$	(0.1317	)	$	0.36		$	(0.30	)
Diluted	$	0.1718		$	(0.1316	)	$	0.35		$	(0.29	)
Weighted Average Number of Common Shares Outstanding
Basic		6,217,550			6,215,440			6,217,550			6,215,440
Diluted		6,~~470~~475,~~546~~942			6,~~504~~490,~~189~~828			6,475,942			6,490,828
Comprehensive Income (Loss)
Net Income (Loss)	$	1,~~121~~138,~~124~~734		$	(~~816~~1,~~679~~057,363	)	$	2,259,858		$	(1,874,042	)
Other comprehensive income (loss), net of ($49,800) and ($49,800) deferred income taxes in 2025 and 2024
Other comprehensive income (loss) , net of $0 deferred income taxes in 2025 and 2024
Foreign currency translation		66136,~~380~~096			~~(137~~160,~~552~~564	)		202,476			23,012
Total Comprehensive Income (Loss)	$	1,~~187~~274,~~504~~830		$	(~~954~~896,~~231~~799	)	$	2,462,334		$	(1,851,030	)

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

LEATT CORPORATION
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

ASFor OFthe ~~AND~~Three ~~FOR~~and ~~THE~~Six ~~THREE~~Months ~~MONTHS~~Ended ~~ENDED~~June ~~MARCH 31~~30, 2025~~, AND FOR THE YEAR ENDED DECEMBER 31, 2024~~

										Accumulated
										Other
	Preferred Stock A			Common Stock						Other
	Preferred Stock A			Common Stock				Additional		Comprehensive			Retained
	Number of			Number of				Additional		Comprehensive			Retained			Total
	Shares		Amount	Shares		Amount		Paid - In Capital		Loss			Earnings			~~Total~~Equity
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
Net income	-		-	-		-		-		-			1,121,124			1,121,124
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
Restricted stock awards	-		-	-		-		122,180		-			-			122,180
Net income	-		-	-		-		-		-			1,138,734			1,138,734
Foreign currency translation adjustment	-		-	-		-		-		136,096			-			136,096
Balance, June 30, 2025	120,000	$	3,000	6,217,550	$	130,555	$	11,231,333	$	(1,249,859	)	$	30,855,039		$	40,970,068

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

LEATT CORPORATIONCONSOLIDATED STATEMENTS OF ~~CASH~~CHANGES ~~FLOWSFOR~~IN ~~THE~~STOCKHOLDERS' ~~THREE MONTHS ENDED MARCH 31, 2025 AND 2024~~EQUITY

		2025			2024
Cash flows from operating activities
Net income (loss)	$	1,121,124		$	(816,679	)
Adjustments to reconcile net income (loss) to net cash provided by
operating activities:
Depreciation		327,008			294,134
Stock-based compensation		120,837			3,752
Bad debts reserve		(63,504	)		10,032
Inventory reserve		46,291			(34,730	)
Gain on sale of property and equipment		(14,985	)		-
(Increase) decrease in:
Accounts receivable		92,226			2,191,962
Inventory		1,012,261			3,357,216
Payments in advance		(221,652	)		(335,758	)
Prepaid expenses and other current assets		7,342			60,944
Income tax receivable		409,187			96,640
Long-term accounts receivable		56,391			80,473
Deposits		(851	)		(1,074	)
Increase (decrease) in:
Accounts payable and accrued expenses		(2,123,551	)		(2,078,530	)
Net cash provided by operating activities		768,124			2,828,382
Cash flows from investing activities
Capital expenditures		(195,826	)		(49,216	)
Proceeds from sale of property and equipment		15,250			-
Net cash used in investing activities		(180,576	)		(49,216	)
Cash flows from financing activities
Repayment of notes payable to bank		(13,003	)		(27,797	)
Repayment of short-term loan, net		(288,465	)		(467,964	)
Net cash used in financing activities		(301,468	)		(495,761	)
Effect of exchange rates on cash and cash equivalents		45,162			(99,183	)
Net increase in cash and cash equivalents		331,242			2,184,222
Cash and cash equivalents - beginning of period		12,368,100			11,347,420
Cash and cash equivalents - end of period	$	12,699,342		$	13,531,642
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for interest	$	17,170		$	27,573
Cash paid for income taxes	$	-		$	3,349
Other noncash investing and financing activities
Common stock issued for services	$	120,837		$	3,752

For the Three and Six Months Ended June 30, 2024

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

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	-		-	-		-		3,752		-			-			3,752

Net loss	-		-	-		-		-		-			(816,679	)		(816,679	)

Foreign currency translation adjustment	-		-	-		-		-		(137,552	)		-			(137,552	)

Balance, March 31, 2024	120,000	$	3,000	6,215,440	$	130,553	$	10,749,136	$	(1,535,810	)	$	29,983,166		$	39,330,045

Net loss	-		-	-		-		-		-			(1,057,363	)		(1,057,363	)

Foreign currency translation adjustment	-		-	-		-		-		160,564			-			160,564

Balance, June 30, 2024	120,000	$	3,000	6,215,440	$	130,553	$	10,749,136	$	(1,375,246	)	$	28,925,803		$	38,433,246

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

LEATT CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2025 AND 2024

		2025			2024

Cash flows from operating activities
Net income (loss)	$	2,259,858		$	(1,874,042	)
Adjustments to reconcile net income (loss) to net cash provided by
operating activities:
Depreciation		659,614			591,384
Stock-based compensation		243,017			3,752
Bad debts reserve		(100,091	)		1,559
Inventory reserve		40,203			(28,390	)
Gain on sale of property and equipment		(18,943	)		-
(Increase) decrease in:
Accounts receivable		(1,753,961	)		1,235,162
Inventory		5,052,510			5,681,721
Payments in advance		(206,557	)		(503,679	)
Prepaid expenses and other current assets		(416,686	)		(294,959	)
Income tax receivable		31,330			101,993
Long-term accounts receivable		56,391			65,564
Deposits		(6,904	)		(1,317	)
Increase (decrease) in:
Accounts payable and accrued expenses		(2,498,082	)		(1,984,795	)
Income tax payable		772,741			-
Net cash provided by operating activities		4,114,440			2,993,953

Cash flows from investing activities
Capital expenditures		(349,011	)		(239,094	)
Proceeds from sale of property and equipment		19,250			-
Net cash used in investing activities		(329,761	)		(239,094	)

Cash flows from financing activities
Repayment of notes payable to bank		(18,140	)		(55,890	)
Repayment of short-term loan, net		(548,464	)		(735,363	)
Net cash used in financing activities		(566,604	)		(791,253	)

Effect of exchange rates on cash and cash equivalents		140,013			18,922

Net increase in cash and cash equivalents		3,358,088			1,982,528

Cash and cash equivalents - beginning of period		12,368,100			11,347,420

Cash and cash equivalents - end of period	$	15,726,188		$	13,329,948

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for interest	$	30,206		$	42,210
Cash paid or income taxes	$	-		$	26,633

Other noncash investing and financing activities
Common stock issued for services	$	243,017		$	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, 2024, was audited and appears in the Form 10-K filed by the Company with the Securities and Exchange Commission on March 28, 2025. The consolidated balance sheet as of ~~March~~June 3130, 2025 and the consolidated statements of operations and comprehensive income (loss) for the three and six months ended ~~March~~June 3130, 2025 and 2024, changes in stockholders' equity as of for the ~~three~~six months ended ~~March~~June 3130, 2025 and for the year ended December 31, 2024, cash flows for the ~~three~~six months ended ~~March~~June 3130, 2025 and 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 ~~March~~June 3130, 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, 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 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 $~~580~~574,~~244~~156 at ~~March~~June 3130, 2025 and $533,953 at December 31, 2024.

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

The Company has two non-cancelable operating leases, for office and warehousing space, that expires in January 2027 and 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~~Liabilities as of ~~March~~June 3130, 2025 and December 31,2024:

		2025		2024
Assets
Operating lease ROU assets	$	~~524~~454,~~202~~217	$	552,970
Liabilities
Operating lease liabilities, current	$	~~295~~300,~~655~~309	$	251,946
Operating lease liabilities, net of current portion		~~228~~153,~~547~~908		301,024
Total operating lease liabilities	$	~~524~~454,~~202~~217	$	552,970

During the ~~three~~six months ended ~~March~~June 3130, 2025 and 2024 the Company recognized operating lease expenses amounting to $71142,~~502~~771 and $72142,~~851~~689, 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 ~~March~~June 3130, 2025, and December 31, 2024 the following disclosures for the remaining lease terms and incremental borrowing rates were applicable:

Supplemental disclosure	June 30, 2025	~~March~~December 31, ~~2025~~2024	~~December 31, 2024~~
Weighted average remaining lease term	1.52 years	12.7605 years	~~2.05 years~~
Weighted average discount rate	3.78%	3.78%	~~3.78%~~

Maturities of lease liabilities as of ~~March~~June 3130, 2025 were as follows:

Year ended December 31,		Amounts under Operating Leases
Year ending December 31,		Amounts under Operating Leases
Remaining 2025	$	~~234~~157,~~962~~745
2026		~~322~~323,~~563~~381
2027		29,~~461~~599
Total minimum lease payments	$	~~586~~510,~~986~~725
Less: amount representing interest	$	(6256,~~784~~508	)
Total operating lease liabilities	$	~~524~~454,~~202~~217

Supplemental cash flow information for the ~~three~~six months ended ~~March~~June 3130, 2025 and 2024 are as follows:

		Three months endedMarch 31, 2025		Three months endedMarch 31, 2024
		Six months ended June 30, 2025		Six months ended June 30, 2024
Cash paid for amounts included in the measurement of lease liabilities	$	78155,~~207~~851	$	77154,~~282~~768
Right-of-use assets obtained in exchange for lease obligations	$	43,547	$	-

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~~amended 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~~June 3130, 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.

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 inthrough a cash down payment of $271,776 and in monthly installments of $85,555 over ten months including interest at 8.976%. As of ~~March~~June 3130, 2025 and December 31, 2024, $~~407~~163,~~663~~065 and $733,794, was outstanding respectively. The South African short-term loan is payable in monthly installments of $5,~~599~~792 over a ten-month period at a flat interest rate of 4.05%. As of ~~March~~June 3130, 2025 and December 31, 2024, $3722,~~666~~265 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. The Note was paid in full on January 6, 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~~June 3130, 2025 and December 31, 2024, $1712,~~523~~386 and $22,561, was outstanding, respectively.

		June 30, 2025		December 31, 2024
Liabilities
Note payable, current	$	12,386	$	28,722
Note payable, net of current portion		-		1,804
	$	12,386	$	30,526

		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

Principal maturities of notes payable as of June 30, 2025 were as follows:

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

Year ending December 31,		Amounts under Notes Payable
Remaining 2025	$	10,582
2026		1,804
	$	12,386

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

Note 7 - Revenue and Cost Recognition

The Company's products are sold worldwide to a global network of distributors and dealers, and directly to ~~customers~~consumers 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, 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 our 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 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 consumer where 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. Web-based direct sales permits products to be returned or exchanged within 30 days of purchase date.

International sales (other than in the United States and South Africa) are generally drop-shipped directly from the Company's consolidation warehouse or ~~the~~our third-party ~~manufacturer~~manufacturing partners to the Company's 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:

			Three months ended March 31,
		Six months ended June 2025
		2025	~~2025~~	% of Revenues	~~% of Revenues~~		2024	~~2024~~	% of Revenues	~~% of Revenues~~
Consumer and athlete direct revenues	$	$2,267,128	~~861,186~~	7%	6%	$	$1,797,123	~~755,966~~	9%	7%
Dealer direct revenues		7,850,564	~~3,216,598~~	25%	~~21%~~		6,740,842	~~3,540,513~~	32%	~~33%~~
International distributor revenues		21,426,511	~~11,290,080~~	68%	~~73%~~		12,155,200	~~6,317,991~~	59%	~~60%~~
	$	$31,544,203	~~15,367,864~~	100%	~~100%~~	$	$20,693,165	~~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 ~~March~~June 3130, 2025 and December 31, 2024 was $0, and $0, respectively.

Accounts receivable consist of amounts due to the Company from normal business activities. Credit is granted to 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 credit losses 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 the Company will continue to experience the same credit loss rates that 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 credit losses at ~~March~~June 3130, 2025 ~~was $$440,318~~ and at December 31, 2024 ~~was~~were $403,439 and $500,164, respectively. Additionally, an allowance for long-term credit 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 credit losses at ~~March~~June 3130, 2025 was $0 and at December 31, 2024 was $3,366.

Sales commissions are expensed when incurred, which is generally at the time of sale or cash received from customers, ~~because~~due ~~the~~to a maximum amortization period ~~would~~of ~~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 be 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 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.9

The Company's practice is to recognize interest and/or penalties related to income tax matters in income tax expense. As of ~~March~~June 3130, 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 ~~three~~six months ended ~~March~~June 3130, 2025, the Company had 311,000 potential common shares, consisting of 120,000 preferred shares, and options to purchase 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 periods ended ~~March~~June 3130, 2025 and 2024 was $~~120~~243,~~837~~017 and $3,752 respectively. As of ~~March~~June 3130, 2025 and December 31, 2024, there was $1,~~840~~718,~~756~~576 and $1,961,593 respectively of unrecognized compensation cost related to unvested restricted stock.

Restricted Stock shall vest and 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.

Note 11 - Preferred 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 13 - Segment Information

The Company manages its operations as a single operating segment for the purpose of assessing performance and making operating decisions, resulting in a single reportable segment. The Company has determined that its Chief Operating Decision Maker ("CODM") is its Chief Executive Officer. The Company's CODM reviews the Company's financial information on a consolidated basis for the purpose of making key operating decisions, allocating resources and assessing financial performance.

The key 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. The CODM does not review assets in evaluating operating performance, and therefore, such information is not presented.

1110

The following table presents selected financial information with respect to the Company's single operating segment for the ~~three~~six months ended ~~March~~June 3130, 2025 and ~~March 31,~~ 2024:

		2025			2024
Revenues	$	1531,~~367~~544,~~864~~203		$	1020,~~614~~693,~~470~~165
Cost of Revenues		817,~~646~~933,~~851~~997			612,~~606~~763,~~137~~419
Gross Profit		613,~~721~~610,~~013~~206			47,~~008~~929,~~333~~746
Product Royalty Income		85133,~~298~~604			39132,~~303~~083
Operating Expenses
Salaries and wages		13,~~857~~703,~~380~~617			13,~~568~~176,~~271~~643
Professional fees		~~360~~515,~~051~~396			~~298~~419,~~971~~588
Advertising and marketing		~~892~~2,~~057~~044,264			~~892~~2,~~417~~075,699
Research and development		~~664~~1,~~490~~281,285			~~555~~1,~~778~~184,571
General and administrative		12,~~012~~114,~~649~~641			~~942~~1,~~888~~920,048
Other operating expenses		~~590~~1,~~402~~255,407			~~579~~1,~~868~~206,223
Operating Expenses		510,~~377~~914,~~029~~610			49,~~838~~982,~~193~~772
Income (Loss) from Operations		12,~~429~~829,~~282~~200			(~~790~~1,~~557~~920,943	)
Other Income (Expense)		82,147			(24,483	)
Other Income		199,884			73,533
Income Taxes		(~~390~~769,~~305~~226	)		(126,~~639~~632	)
Net Income (Loss)	$	12,~~121~~259,~~124~~858		$	(~~816~~1,~~679~~874,042	)

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 preferred shareholder. Royalties are based on 5% of the cash received from net sales of the neck braces worldwide and totalled $5968,~~419~~599 and $4071,~~325~~198 for the periods ended ~~March~~June 3130, 2025 and 2024. The term of the royalty agreement is for the life of the intellectual property. As of ~~March~~June 3130, 2025 and December 31, 2024, accrued royalties totalled $169,~~912~~933 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 through June 30, 2025. During the six month periods ended ~~March~~June 3130, 2025 and 2024, the Company recognized an aggregate of $~~141~~282,~~217~~434 and $~~136~~272,~~442~~883, 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~~Although ~~was further compounded by the~~ global ~~economic~~shipping ~~slowdown experienced worldwide due to a high inflationary environment~~ and ~~geo-political~~supply ~~instability.~~chain ~~Although global~~ conditions ~~continue~~have ~~to improve~~improved, elevated industry wide inventory levels and adverse economic conditions compounded by resultant foreign exchange rate volatility and tariff uncertainty 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.

12Changes in U.S. and international trade policies, including the imposition of tariffs and retaliatory measures, have created significant uncertainty in global markets. Our business is exposed to risks associated with these evolving policies, which may materially affect our operations, supply chain, and financial performance. Our products are manufactured in China which may be subject to increased tariffs. These tariffs may raise our costs and reduce profit margins if we are unable to pass them on to customers. Tariff changes may lead to delays, shortages, or the need to identify alternative suppliers, which could impact production timelines and product availability. Foreign governments may impose retaliatory tariffs or restrictions, further complicating our international operations and market access. The duration and scope of current and future tariffs remain unpredictable. Legal challenges, Congressional action, or executive orders may alter the landscape abruptly. Uncertainty surrounding trade policy may also delay capital investments, hinder long-term planning, and affect our ability to enter new markets or expand existing ones. If these risks materialize, they could adversely affect our financial condition, results of operations, and stock price.

Note 17 - Subsequent Events

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

1312

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 ~~this~~our 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., 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;

• "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;13

• "~~Leatt~~South ~~Prop~~Africa" ~~refers~~are to ~~Leatt~~the ~~Prop~~Republic ~~(Pty)~~of ~~Ltd~~South Africa; "U.S. dollar," a"$" ~~South~~and ~~African~~"US$" ~~Company~~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, ~~with~~and ~~registration~~wholly- ~~number:~~owned ~~2022/523867/07~~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 = ZAR 17.8069 for its June 30, 2025 balance sheet.

• "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, 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 = ZAR18.4199 for its March 31, 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 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 61 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:

15
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 ~~March~~June 3130, 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.
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 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.

1615

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.
Impact of Global Conflict - We are exposed 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, the imposition of government sanctions or other activities resulting from such conflicts could directly affect consumer demand for our products, cause delays in completing sales, shipping of our products, continuing production or performing other critical functions of our business, particularly if a conflict occurs at our primary manufacturing locations or our distributor locations worldwide. Furthermore, prolonged conflict may have unintended global consequences such as increased inflation, fuel and transportation costs. While we have conducted due diligence on our customers in Russia to ensure that they do not fall into any sanctioned categories, we have seen a delay in the receipt of receivables in our bank account from the distributors of our products in Russia caused by enhanced screening of Russian funds in compliance with global sanctions against Russia for the war in Ukraine. The prolonging or expansion of that conflict could have an adverse impact on our consumers and on consumer purchasing behavior, and result in delays of new orders and completing sales, order cancellations, or payment and shipping delays. We will continue to monitor this fluid situation and any adverse impact that it may have on the global economy in general and on our business operations and especially that of our customers, and we will develop contingencies as necessary to address any disruptions to our business operations as they arise.

Results of 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 and six-month periods ended ~~March~~June 3130, 2025 and 2024 included herein.

Comparison of Three-Month ~~Months~~Periods Ended ~~March~~June 3130, 2025 and ~~Three Months Ended March 31,~~ 2024

The following table summarizes the results of our operations during the three-month periods ended ~~March~~June 3130, 2025 and 2024 and provides information regarding the dollar and percentage increase or (decrease) in such periods:

		Three Months Ended June 30,								Percentage
		2025			2024			Increase		Increase
Item								(Decrease)		(Decrease)

REVENUES	$	16,176,339		$	10,078,695		$	6,097,644		61%
COST OF REVENUES		9,287,146			6,157,282		$	3,129,864		51%
GROSS PROFIT		6,889,193			3,921,413		$	2,967,780		76%
PRODUCT ROYALTY INCOME		48,306			92,780		$	(44,474	)	-48%
OPERATING EXPENSES
Salaries and Wages		1,846,237			1,608,372		$	237,865		15%
Commissions and Consulting		187,434			165,601		$	21,833		13%
Professional Fees		155,345			120,617		$	34,728		29%
Advertising and Marketing		1,152,207			1,183,282		$	(31,075	)	-3%
Office Lease and Expenses		176,120			163,190		$	12,930		8%
Research and Development Costs		616,795			628,793		$	(11,998	)	-2%
Bad Debt Expense (Recovery)		(31,155	)		314		$	(31,469	)	-10022%
General and Administrative		1,101,992			977,160		$	124,832		13%
Depreciation		332,606			297,250		$	35,356		12%
Total Operating Expenses		5,537,581			5,144,579		$	393,002		8%
INCOME (LOSS) FROM OPERATIONS		1,399,918			(1,130,386	)	$	2,530,304		224%
Other Income		117,737			98,016		$	19,721		20%
INCOME (LOSS) BEOFRE INCOME TAXES		1,517,655			(1,032,370	)	$	2,550,025		247%
Income Taxes		378,921			24,993		$	353,928		1416%
NET INCOME (LOSS)	$	1,138,734		$	(1,057,363	)	$	2,196,097		208%

Revenues - We 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 abroad. Revenues for the quarter ended June 30, 2025 were $16.18 million, a 61% increase, compared to $10.08 million for the quarter ended June 30, 2024. This increase in worldwide revenues is attributable to a $2.70 million increase in body armor sales, a $1.68 million increase in helmet sales, a $1.60 million increase in other products, part and accessory sales and a $0.11 million increase in neck brace sales. Revenues generated from sales to our customers in the United States increased from $3.73 million to $5.56 million, for the three months ended June 30, 2025 and 2024, respectively. Revenues associated with international customers were $10.62 million and $6.34 million, or 66% and 63% of revenues for the quarters ended June 30, 2025 and 2024, respectively. Consumer direct sales and sales to our global distributors continued to increase strongly - increasing by 35% and 74%, respectively, during the second quarter of 2025, as consumer demand and stocking dynamics continued to improve. Dealer direct sales increased by 45% as our sales teams and dealer outreach programs gain momentum fueled by continued investment in our selling capabilities and brand.

The following table sets forth our revenues by product line for the quarter ended June 30, 2025 and 2024:

		Three months ended June 30,
		2025	% of Revenues		2024	% of Revenues
Neck braces	$	703,301	5%	$	588,837	6%
Body armor		8,286,870	51%		5,582,878	55%
Helmets		3,113,783	19%		1,434,260	14%
Other products, parts and accessories		4,072,385	25%		2,472,720	25%
	$	16,176,339	100%	$	10,078,695	100%

		Three Months Ended March 31,								Percentage
		2025			2024			Increase		Increase
Item								(Decrease)		(Decrease)
REVENUES	$	15,367,864		$	10,614,470		$	4,753,394		45%
COST OF REVENUES		8,646,851			6,606,137		$	2,040,714		31%
GROSS PROFIT		6,721,013			4,008,333		$	2,712,680		68%
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 of our flagship neck brace accounted for $0.70 million and $0.59 million, or 5% and 6% of our revenues for the quarters ended June 30, 2025 and 2024, respectively. The 19% increase in neck brace revenues is primarily attributable to a 35% increase in the volume of neck braces sold when compared to the second quarter of 2024.

~~Revenues~~Our -body Wearmor ~~earn~~products ~~revenues~~are ~~from~~comprised ~~the sale~~ of ~~our~~chest ~~protective~~protectors, ~~gear~~full ~~comprising~~upper ofbody ~~neck braces~~protectors, upper body ~~armor~~protection vests, ~~helmets~~back ~~and~~protectors, ~~other~~knee ~~products~~braces, ~~parts~~knee and ~~accessories~~elbow ~~both~~guards, inoff-road ~~the~~motorcycle ~~United~~boots ~~States~~ and ~~abroad.~~mountain ~~Revenues~~biking ~~for~~shoes. ~~the~~Body ~~three~~armor ~~months~~sales ~~ended~~accounted ~~March~~for ~~31,~~$8.29 ~~2025~~million ~~were~~and $155.3758 million, aor 4551% ~~increase,~~and ~~compared~~55% ~~to revenues~~ of ~~$10.61~~our ~~million~~revenues for the ~~quarter~~quarters ended ~~March~~June 3130, ~~2024. This~~2025 ~~increase~~and in2024, ~~worldwide revenues is primarily attributable to a $1~~respectively.84 The ~~million~~48% increase in body armor ~~sales,~~revenues awas ~~$1.71~~primarily ~~million~~the ~~increase~~result ~~in helmet sales, a $1.09 million increase in sales~~ of ~~other products, parts and accessories and~~ a ~~$0.12~~35% ~~million~~ increase in ~~neck~~revenues ~~brace sales. Revenues~~ generated ~~from~~on ~~sales to our customers in~~ the ~~United~~sale ~~States~~of ~~were~~upper ~~$3.60~~body ~~million~~ and ~~$3.87~~limb ~~million,~~protection ~~for~~during the ~~three~~second ~~months~~quarter ~~ended~~of ~~March 31,~~ 2025 and ~~2024,~~a ~~respectively.~~108% ~~Revenues~~increase ~~associated~~in ~~with~~the ~~international~~volume ~~customers~~of ~~were~~footwear, ~~$11.77~~comprising ~~million~~of ~~and~~motorcycle ~~$6.74~~boots ~~million, or 77%~~ and ~~64%~~mountain ofbiking ~~revenues~~shoes, ~~for~~sold during the ~~three~~2025 ~~months ended March 31~~period, ~~2025~~as ~~and~~stocking ~~2024,~~dynamics ~~respectively.~~continue ~~Sales~~ to ~~our~~stabilize ~~global distributors increased by 79%~~ and consumer ~~direct~~demand ~~sales increased by 14%~~ for ~~the first quarter of 2025, partially offset by a 9% decrease in dealer direct sales when compared to the first quarter of 2024 as~~ our ~~dealers,~~exceptional ~~particularly~~protective ingear ~~the~~products ~~United~~continues ~~States continue~~ to ~~manage industry wide stocking dynamics~~strengthen.

~~The~~Our ~~following~~helmet ~~table~~sales ~~sets~~accounted ~~forth~~for ~~our~~$3.11 ~~revenues~~million byand ~~product~~$1.43 ~~line~~million or 19% and 14% of our revenues for the ~~three~~quarters ~~months~~ ended ~~March~~June 3130, 2025 and 2024:, respectively. The 117% increase in helmet sales during the 2025 second quarter is primarily attributable to a 51% increase in revenue generated on the sale of MOTO helmets, when compared to the second quarter of 2024, and a 275% increase in the volume of MTB helmets sold during the period. Our dealers and distributors continue to adjust ordering patterns as inventory levels stabilize and participation remains strong.

			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, jackets, bicycle components and aftermarket support items required primarily to replace worn or damaged parts through our global distribution network. Other products, parts and accessories sales accounted for $4.07 million and $2.47 million, or 25% and 25% of our revenues for the quarters ended June 30, 2025 and 2024, respectively. The 65% increase in revenues from the sale of other products, parts and accessories during the 2025 second quarter was primarily due to a 101% increase in revenues generated on the sale of MTB, ADV and MOTO apparel, when compared to the second quarter of 2024.

Cost of Revenues and Gross Profit - Cost of revenues for the quarters ended June 30, 2025 and 2024 were $9.29 million and $6.16 million, respectively. Gross Profit for the quarters ended June 30, 2025 and 2024 were $6.89 million and $3.92 million, respectively, or 43% and 39% of revenues, respectively. Our neck brace products continue to generate a higher gross profit margin than our other product categories. Although neck brace revenues accounted for 5% and 6% of our revenues for the quarters ended June 30, 2025 and 2024, respectively, the 4% increase in gross profit as a percentage of revenues for the three months ended June 30, 2025, was primarily due to dealer direct promotional selling activity during the second quarter of 2024 designed to turn slower moving inventory. As industry wide inventory levels continue to stabilize and our domestic sales team and dealer outreach programs gain momentum, margins earned on dealer direct sales continued to improve. Additionally, shipping costs as a percentage of domestic and international distributor revenues improved as management continues to develop shipping and logistics efficiencies.

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 June 30, 2025 and 2024 were $48,306 and $92,780, respectively. The 48% decrease in product royalty income is due to a decrease in the sale of licensed products by licensees during the 2025 period.

Salaries and Wages - Salaries and wages for the quarters ended June 30, 2025 and 2024 were $1,846,237 and $1,608,372, respectively. The 15% increase in salaries and wages was primarily due to the employment of sales and marketing professionals globally as we continue to build a multi-channel selling organization. Additionally, share compensation costs relating to the recognition of share grants that were issued during the fourth quarter of 2023 were recognized on a straight-line basis during the second quarter of 2025.

Commissions and Consulting Expense - During the quarters ended June 30, 2025 and 2024, commissions and consulting expenses were $187,434 and $165,601, respectively. The 13% increase in commissions and consulting expenses is primarily the result of an increase in commissions paid to employees and external sales representatives in the United States in line with the increase in domestic sales when compared to the second quarter of 2024.

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 quarters ended June 30, 2025 and 2024 were $155,345 and $120,617, respectively. The 29% increase in professional fees is primarily due to an increase in audit and corporate legal fees incurred during the 2025 period.

~~Sales~~Advertising ofand ~~our~~Marketing ~~flagship~~- ~~neck~~The ~~brace~~Company ~~accounted~~places ~~for~~paid ~~$0.68~~advertising ~~million~~in various motorsport and ~~$0.56~~bicycle ~~million,~~magazines orand 4%online media and 5%sponsors a number of ~~our~~events, ~~revenues~~professional teams and individuals to increase product and brand visibility globally. Advertising and marketing expenses for the quarters ended ~~March~~June 3130, 2025 and 2024 were $1,152,207 and $1,183,282, respectively. ~~The~~Although ~~21%~~the ~~increase~~Company incontinues ~~neck~~to ~~brace~~produce ~~revenues~~and isimplement ~~primarily~~coordinated ~~attributable~~global tomarketing acampaigns ~~21%~~that are designed to increase inconsumer demand for the ~~volume~~Company's ofgrowing ~~neck~~product ~~braces~~categories ~~sold~~and ~~when~~brand, ~~compared~~advertising toand marketing costs decreased marginally by 3% during the ~~first~~2025 ~~quarter~~period as decreased expenditures on video asset production and point of ~~2024~~sale merchandising costs were partially offset by increased expenditures on trade show attendance.

~~Our~~Office ~~body~~Lease ~~armor~~and ~~products~~Expenses ~~are~~- ~~comprised~~Office oflease ~~chest~~and ~~protectors,~~expenses ~~full~~for ~~upper~~the ~~body~~quarters ~~protectors,~~ended ~~upper~~June ~~body protection vests~~30, ~~back~~2025 ~~protectors,~~and ~~knee~~2024 ~~braces~~were $176,120 ~~knee~~ and ~~elbow guards~~$163,190, ~~off-road motorcycle boots and mountain biking shoes~~respectively. ~~Body~~The ~~armor~~8% ~~sales~~increase ~~accounted~~in ~~for~~office ~~$6.87~~lease ~~million~~ and ~~$5.03~~expenses ~~million,~~during orthe ~~45%~~2025 ~~and~~period ~~47%~~is ofprimarily ~~our~~due ~~revenues~~to ~~for~~ the ~~quarters~~inclusion ~~ended~~of ~~March~~consolidation ~~31,~~warehousing ~~2025~~costs ~~and~~incurred ~~2024,~~to ~~respectively.~~facilitate ~~The~~consolidated ~~37%~~global ~~increase~~shipping inthat ~~body~~were ~~armor~~partially ~~revenues~~offset ~~was~~by ~~primarily~~a ~~the~~decrease ~~result~~in ofadditional awarehouse ~~48%~~storage ~~increase~~rented in ~~revenues from~~ the ~~sale~~United ofStates ~~upper~~during ~~body and limb protection, when compared to~~ the ~~2024~~2025 period.

~~Our~~Research ~~helmets~~and ~~accounted~~Development ~~for~~Costs ~~$3.40~~- ~~million~~These orcosts ~~22%~~consist of ~~our~~the ~~revenues~~salaries ~~for~~of personnel who are directly involved in the ~~three~~research ~~months~~and ~~ended~~development ~~March~~of ~~31,~~innovative ~~2025~~products, as ~~compared~~well toas ~~$1.69~~the ~~million~~direct orcosts ~~16%~~associated ofwith ~~our~~developing ~~revenues~~these products. Research and development costs for the quarter ended June 30, 2025, decreased to $616,795, from $628,793, during the same 2024 ~~period~~quarter. The ~~101~~2% ~~increase~~decrease in ~~helmet~~research ~~sales~~and development costs during the 2025 second quarter is primarily ~~attributable~~as to a ~~51%~~result ~~increase~~of a decrease in ~~the~~expenditures ~~sales~~on ~~volume~~product ofcertification ~~helmets~~and ~~designed~~homologation ~~for~~costs ~~mountain~~that ~~biking,~~were ~~offroad~~partially ~~motorcycle~~offset ~~and~~by ~~adventure~~an ~~motorcycle~~increase ~~riding,~~in ~~when~~salaries ~~compared~~related to the ~~first~~employment ~~quarter~~of research and development staff as the Company continues to refine and build a pipeline of ~~2024~~exceptional products.

~~Our~~Bad ~~other~~Debt ~~products,~~Expense ~~parts~~(Recovery) ~~and~~- ~~accessories~~Bad ~~are~~debt ~~comprised~~expense of(recovery) goggles, hydrations bags and apparel items including jerseys, pants, shorts and jackets, 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 accessory sales accounted for ~~$4.42 million and $3.33 million, or 29% and 32% of our revenues for~~ the quarters ended ~~March~~June 3130, 2025 were $(31,155) and ~~2024~~$314, respectively. ~~Although~~The ~~sales~~decrease ofin ~~our~~bad ~~MOTO~~debt ~~apparel~~expense ~~line~~(recovery) ~~decreased~~is ~~during~~ the ~~first~~result ~~quarter,~~of ~~the~~a ~~33%~~decrease ~~increase~~ in ~~revenues~~amounts ~~from~~owing ~~the~~that ~~sale~~were ofconsidered ~~other products, parts and accessories is primarily due~~ to ~~strong~~be ~~shipments~~irrecoverable ofduring ~~our~~the ~~ADV~~quarter ~~and~~ended ~~MTB~~June ~~apparel~~30, ~~lines~~2025, ~~designed~~when ~~for~~compared ~~mountain~~to ~~biking and adventure motorcycle riding respectively, during~~ the ~~first~~comparative ~~quarter~~2024 ~~of 2025~~period.

~~Cost~~General ~~of Revenues~~ and ~~Gross~~Administrative ~~Profit~~ Expenses - ~~Cost~~General ofand ~~revenues~~administrative ~~for~~expenses ~~the~~consist ~~quarters~~of ~~ended~~insurance, ~~March~~travel, 31merchant fees, ~~2025~~telephone, office and ~~2024~~computer ~~were $8~~supplies.65 ~~million~~General and ~~$6.61~~administrative ~~million,~~expenses ~~respectively. Gross Profit~~ for the quarters ended ~~March~~June 3130, 2025 ~~and 2024~~ were $~~6.72~~1,101,992 ~~million~~ and $~~4.01 million~~977, ~~respectively~~160, ~~or 44% and 38% of revenues,~~ respectively. The 613% increase in ~~gross~~general ~~profit~~and asadministrative aexpenses ~~percentage~~is ~~of revenues for the three months ended March 31, 2025, was~~ primarily due to ~~dealer~~an ~~direct~~increase ~~promotional~~in ~~selling~~global ~~activity~~travel ~~during~~expenditures ~~the~~incurred ~~first~~and ~~quarter~~merchant offees ~~2024~~associated ~~designed~~with toan ~~turn~~increase ~~slower~~in ~~moving~~consumer ~~inventory. As industry wide inventory levels continue to stabilize, margins earned on dealer~~ direct sales ~~continued to improve. Additionally, shipping costs~~ as athe ~~percentage~~Company ~~of international distributor revenue improved as management~~ continues to ~~improve~~develop ~~shipping~~its ~~and~~online ~~logistics~~selling ~~efficiencies~~activities.

~~Product~~Depreciation ~~Royalty Income~~ Expense - Depreciation ~~Product~~expense 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 ~~March~~June 3130, 2025 ~~and 2024~~ were $85332,~~298~~606 and $39297,~~303~~250, respectively. The ~~117~~12% increase in ~~product~~depreciation ~~royalty~~during ~~income~~the 2025 second quarter is primarily due to anthe ~~increase~~development inof ~~the~~software ~~sale~~enhancements ofutilized ~~licensed~~to ~~products~~improve byconsumer ~~licensees~~engagement ~~during~~and buying activity across the ~~2025~~Company's ~~period~~web-based selling platforms.

~~Salaries~~Total ~~and~~Operating ~~Wages~~ Expenses - ~~Salaries~~Total ~~and~~operating ~~wages~~expenses ~~for~~increased ~~the~~by ~~quarters~~$0.39 ~~ended~~million, ~~March~~to 31$5.54 million, ~~2025~~for ~~and~~the ~~2024~~quarter ~~were~~ended $1June 30,~~857,380~~ ~~and $1~~2025,~~568,271,~~ ~~respectively.~~or ~~The~~8 18%, ~~increase~~compared into ~~salaries~~$5.14 ~~and~~million ~~wages~~in ~~during~~ the ~~2025~~2024 period. ~~was~~This increase is primarily due to ~~the~~increases ~~employment~~in ~~of sales~~salaries, ~~marketing~~general and ~~digital~~administration ~~professionals~~costs ~~globally~~that aswere wepartially ~~continue~~offset tobe ~~build~~ a ~~multi-channel~~decrease ~~selling~~in ~~organization.~~advertising ~~Additionally,~~and ~~share~~marketing ~~compensation~~ costs ~~relating~~and tobad ~~the~~debt ~~recognition~~expense ~~of share grants that were issued~~ during the ~~fourth quarter of 2023 were recognized on a straight-line basis during the first quarter of~~ 2025 period.

~~Commissions~~Other ~~and~~Income ~~Consulting~~- ~~Expense~~Other -income ~~During~~for the quarters ended ~~March~~June 3130, 2025 and 2024, ~~commissions and consulting expenses~~ were $~~157~~117,~~722~~737 and $~~124~~98,~~216~~016, respectively. The 2720% increase in ~~commissions~~other ~~and~~income ~~consulting expenses~~ is primarily ~~the~~due ~~result~~to ofinterest anearned ~~increase~~during inthe ~~commissions~~second ~~paid~~quarter toof ~~sales~~2025, ~~professionals~~ in ~~the~~line ~~United~~with ~~States~~an asincrease ~~the~~in ~~Company~~cash ~~continues~~held toin ~~optimize~~an ~~its~~interest-bearing ~~selling~~account ~~abilities~~when ~~and~~compared ~~add~~to ~~sales~~the ~~professionals~~2024 insecond ~~key areas~~quarter.

~~Professional~~Income ~~Fees~~taxes - ~~Professional~~Income ~~fees~~taxes ~~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~~ quarters ended ~~March~~June 3130, 2025 and 2024 were $~~360~~378,~~051~~921 and $~~298~~24,~~971~~993, respectively. The ~~20%~~ increase in ~~professional~~income ~~fees~~taxes is primarily due to an increase in ~~audit and corporate legal fees incurred during~~ the ~~2025~~provision ~~period.~~for ~~Additionally,~~income ~~fees~~taxes ~~associated~~in line with ~~maintaining~~the ~~and~~increase ~~growing~~in ~~the~~net ~~Company's~~income ~~patent~~when ~~portfolio~~compared ~~increased~~to ~~during~~ the ~~2025~~prior year period.

~~Advertising~~Net ~~and~~Income ~~Marketing~~ (Loss) - The ~~Company~~net ~~places~~income ~~paid~~after ~~advertising~~income intaxes 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 ~~quarters~~quarter ended ~~March~~June 3130, 2025 ~~and~~was ~~2024 were~~ $~~892,057~~1.14 ~~and $892~~million,~~417,~~ ~~respectively.~~as ~~Although~~opposed ~~the Company continues~~ to ~~produce~~a ~~and~~net ~~implement~~loss ~~coordinated~~after ~~global~~income ~~marketing~~taxes ~~campaigns~~of ~~that~~$1.06 ~~are~~million ~~designed to increase consumer demand~~ for the ~~Companies~~quarter ~~growing~~ended ~~product~~June ~~categories and brand~~30, ~~advertising~~2024. ~~and~~This ~~marketing~~208% ~~costs~~increase ~~decreased~~in ~~marginally~~net ~~during~~income ~~the~~is ~~2025~~primarily ~~period~~due asto ~~decreased~~the ~~expenditure~~increase onin ~~athlete~~revenues ~~sponsorships~~ and ~~point~~margins ofdiscussed ~~sale merchandising costs were partially offset by increased expenditure on trade show, race and event attendance~~above.

~~Office~~Comparison ~~Lease~~of ~~and Expenses~~ Six-Month ~~Office~~Periods ~~lease~~Ended ~~and~~June ~~expenses for the quarters ended March 31~~30, 2025 and 2024 were $169,176 and $151,554, respectively. Although, lease expenses relating to our offices and warehouses in the United States and South Africa decreased when compared to the 2024 period, 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 six-month periods ended June 30, 2025 and 2024, and provides information regarding the dollar and percentage increase or (decrease) in such periods:

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.

		Six Months Ended June 30,								Percentage
		2025			2024			Increase		Increase
Item								(Decrease)		(Decrease)

REVENUES	$	31,544,203		$	20,693,165		$	10,851,038		52%
COST OF REVENUES		17,933,997			12,763,419		$	5,170,578		41%
GROSS PROFIT		13,610,206			7,929,746		$	5,680,460		72%
PRODUCT ROYALTY INCOME		133,604			132,083		$	1,521		1%
OPERATING EXPENSES
Salaries and Wages		3,703,617			3,176,643		$	526,974		17%
Commissions and Consulting		345,156			289,817		$	55,339		19%
Professional Fees		515,396			419,588		$	95,808		23%
Advertising and Marketing		2,044,264			2,075,699		$	(31,435	)	-2%
Office Lease and Expenses		345,296			314,744		$	30,552		10%
Research and Development Costs		1,281,285			1,184,571		$	96,714		8%
Bad Debt Expense (Recovery)		(94,659	)		10,278		$	(104,937	)	-1021%
General and Administrative		2,114,641			1,920,048		$	194,593		10%
Depreciation		659,614			591,384		$	68,230		12%
Total Operating Expenses		10,914,610			9,982,772		$	931,838		9%
INCOME (LOSS) FROM OPERATIONS		2,829,200			(1,920,943	)	$	4,750,143		247%
Other Income		199,884			73,533		$	126,351		172%
INCOME (LOSS) BEOFRE INCOME TAXES		3,029,084			(1,847,410	)	$	4,876,494		264%
Income Taxes		769,226			26,632		$	742,594		2788%
NET INCOME (LOSS)	$	2,259,858		$	(1,874,042	)	$	4,133,900		221%

~~Bad~~Revenues ~~Debt~~- ~~Expense~~We ~~(Recovery)-~~earn ~~Bad~~revenues ~~debt~~from ~~expense~~the ~~(recovery)~~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 ~~quarters~~six months ended ~~March~~June 30, 2025 were $31.54 million, a 52% increase, compared to $20.69 million for the six months ended June 30, 2024. This increase in worldwide revenue is attributable to a $4.55 million increase in body armor sales, a $3.39 million increase in helmet sales, a $2.69 million increase in other products, parts an accessories sales and a $0.31 increase in neck brace sales. Revenues generated from sales to our customers in the United States increased from $7.61 million to $9.15 million, for the six months ended June 30, 2025 and 2024, respectively. Revenues associated with international customers were ($~~63,504)~~22.39 million and $913.09 million,~~964~~ or 71% and 63% of revenues, respectively, for the six months ended June 30, 2025 and 2024. ~~The~~Consumer ~~737~~direct sales increased by 26% ~~decrease~~and indealer ~~bad~~direct ~~debt~~sales ~~expense~~increased isby 16% for the ~~result~~first six months of a2025 ~~decrease~~with insales ~~provisions~~to ~~made~~our ~~for~~global ~~unrecoverable~~distributors ~~debts~~increasing ~~relating~~by 76%, when compared to the ~~Company's~~first ~~international~~six ~~customers~~months ~~during~~of 2024, as consumer demand for our products continued to build, sales momentum at the ~~2025~~dealer ~~period~~level improved and our distributors continued to invest in our growing product categories.

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 quarters ended March 31, 2025 and 2024 were $1,012,649 and $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.

Depreciation 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.

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.

Other Income (Expenses) - Other income (expenses) for the quarters ended March 31, 2025 and 2024 were $82,147 and ($24,483), respectively. The 436% increase in other income is primarily due to interest earned during the first quarter of 2025 in line with an increase in cash held in an interest-bearing account when compared to the 2024 first quarter.

Income taxes - Income taxes for the quarters ended March 31, 2025 and 2024 were $390,305 and $1,639, respectively. The increase in income taxes is primarily due to an increase in the provision for income taxes in line with the increase in net income when compared to the prior year period.

Net Income (Loss) - The net income (loss) after income taxes for the quarter ended March 31, 2025 was $1.12 million, as opposed to a net loss of ($0.82) million for the quarter ended March 31, 2024. This 237% increase in net income is primarily due to the increase in revenues and gross profit discussed above.

Liquidity and Capital Resources

At March 31, 2025, we had cash and cash equivalents of $12.70 million. The following table sets forth a summary of our cash flows for the periods indicated:

		March 31,
		2025			2024
Net cash provided by operating activities	$	768,124		$	2,828,382
Net cash used in investing activities	$	(180,576	)	$	(49,216	)
Net cash used in financing activities	$	(301,468	)	$	(495,761	)
Effect of exchange rate changes on cash and cash equivalents	$	45,162		$	(99,183	)
Net increase in cash and cash equivalents	$	331,242		$	2,184,222
Cash and cash equivalents at the beginning of period	$	12,368,100		$	11,347,420
Cash and cash equivalents at the end of period	$	12,699,342		$	13,531,642

The ~~Company~~following istable ~~currently~~sets ~~meeting~~forth ~~its~~our ~~working~~revenues ~~capital~~by ~~needs~~product ~~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~~six ~~twelve~~ months. ~~There~~ended ~~are~~June ~~currently no plans for any major capital expenditure in the next twelve months. Our long-term financing requirements depend on our growth strategy~~30, ~~which~~2025 ~~relates primarily to our desire to increase revenue both in the U.S.~~ and ~~abroad.~~2024:

Obligations under Material Contracts

		Six months ended June 30,
		2025	% of Revenues		2024	% of Revenues
Neck braces	$	1,381,596	4%	$	1,150,019	6%
Body armor		15,157,346	48%		10,610,804	51%
Helmets		6,514,316	21%		3,129,075	15%
Other products, parts and accessories		8,490,945	27%		5,803,267	28%
	$	31,544,203	100%	$	20,693,165	100%

~~Pursuant~~Sales toof our ~~Licensing~~flagship ~~Agreement~~neck ~~with~~brace ~~Xceed~~accounted ~~Holdings,~~for ~~a company controlled by Dr~~$1.38 ~~Christopher~~million ~~Leatt, our founder, chairman~~ and ~~head~~$1.15 ~~of research and development~~million, weor ~~pay Xceed Holdings~~ 4% ~~of all neck brace sales revenue billed~~ and ~~received~~6% ~~by the Company on a quarterly basis based on sales~~ of ~~the~~our ~~previous~~revenues ~~quarter.~~for ~~During~~ the ~~three~~six-month ~~months~~periods ended ~~March~~June 3130, 2025 and 2024, ~~the~~respectively. ~~Company~~The ~~paid~~20% anincrease ~~aggregate of $47,535 and $32,260,~~ in ~~licensing~~neck ~~fees~~brace torevenues ~~Xceed~~is ~~Holdings.~~primarily Inattributable ~~addition, pursuant~~ to a ~~separate~~30% ~~license~~increase ~~agreement~~in ~~between~~ the ~~Company~~volume ~~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~~braces ~~sales revenue~~sold, inwhen ~~quarterly~~compared ~~installments, based on sales of the previous quarter,~~ to ~~a trust that is beneficially owned and controlled by Mr. De Villiers. During~~ the ~~quarters~~six-month period ended ~~March~~June 3130, ~~2025 and~~ 2024~~, the Company paid an aggregate of $11,884 and $8,065, in licensing fees to Mr~~. ~~De Villiers.~~

~~Dr.~~Our ~~Christopher~~body ~~Leatt~~armor isproducts ~~compensated~~are incomprised ~~his~~of ~~capacity~~chest ~~as our Research and Development consultant~~protectors, ~~pursuant~~full toupper ~~our~~body ~~Consulting Agreement~~protectors, ~~dated~~upper ~~November~~body 8,protection ~~2021~~vests, ~~with~~back ~~Innovation Services Limited~~protectors, orknee ~~Innovation~~braces, aknee ~~Jersey~~and ~~limited~~elbow ~~company in which~~guards, ~~Dr.~~off-road ~~Leatt~~motorcycle isboots anand ~~indirect~~mountain ~~beneficiary~~biking shoes. ~~Pursuant~~Body toarmor ~~the~~sales ~~terms~~accounted ~~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~~$15.16 ~~Leatt~~million ~~must remain an Innovation director~~ and ~~beneficiary~~$10.61 ofmillion, aor ~~majority~~48% ~~of its ownership interests during the term of the agreement,~~ and ~~Dr.~~51% ~~Leatt must remain the Company's primary point~~ of ~~contact~~our ~~responsible~~revenues for the ~~oversight,~~six-month ~~review~~periods ~~and~~ended ~~delivery of the services to be performed by Innovation under the agreement. From January 1, 2024, through~~ June 30, ~~2024,~~2025 ~~the monthly fee payable by the Company to Innovation was $45,481,~~ and ~~commencing July 1,~~ 2024, ~~this monthly fee increased to $47,072~~respectively. ~~Innovation~~The ~~may~~43% increase ~~its~~in ~~monthly~~body ~~fees,~~armor onrevenues anwas ~~annual~~primarily ~~basis on written notice to~~ the ~~Company,~~result ~~by no greater than the lesser~~ of: (a) ~~five percent (5~~34%) ~~of the prior year's annualized fee; or (b) a percentage equal to then-applicable annual percentage~~ increase in the ~~Consumer~~volume ~~Price Index (CPI) published by the United States Department~~ of ~~Labor's~~upper ~~bureau~~body 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 and ~~his~~limb ~~immediate~~protection ~~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~~44% ~~letter~~increase 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~~volume ~~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~~footwear, ~~can~~comprising ~~in its sole discretion, make a determination regarding whether to pursue such opportunity in the best interest~~ of ~~the~~motorcycle ~~Company~~boots and ~~its~~mountain ~~stockholders.~~biking 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 agreementshoes, ~~and~~sold ~~the~~during ~~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, hereto and are incorporated by reference in this report. During the three-month periods ended March 31, 2025 ~~and 2024, the Company recognized an aggregate of $141,217 and $136,442, respectively, in consulting fees to Innovation~~period.

OnOur ~~November~~Helmets ~~19,~~accounted ~~2018,~~for ~~the Company entered into a~~ $~~1,000,000 revolving line of credit agreement with a bank~~6.51 ~~Advances~~million 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~~$3.13 ~~On November 5~~million, 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 an21% ~~Index Floor of 1.25 percentage points plus 2.5 percentage points. Obligations under the line of credit are secured by equipment~~ and ~~fixtures~~15% ~~in the United States~~ of ~~America,~~our ~~accounts~~revenues 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~~six-~~Term~~month ~~Bank~~periods ~~Yield~~ended ~~Index~~June ~~rate. The Company and Two Eleven signed amended documents to secure the loan by equipment and fixtures~~30, ~~accounts~~2025 ~~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~~respectively. The ~~bank~~108% ~~had~~increase ~~extended~~in ~~the~~helmet ~~line~~sales ofduring ~~credit~~the ~~until March 1,~~ 2025. ~~The~~period ~~Bank~~is ~~sent~~primarily aattributable ~~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~~72% ~~dated~~increase ~~January~~in ~~24, 2025, notifying~~ the ~~Company~~sales ~~that~~volume ~~the bank has extended the line~~ of ~~credit~~helmets ~~until~~designed ~~March~~for 1mountain biking, ~~2026.~~offroad ~~The~~motorcycle ~~Company~~ and ~~Two~~adventure ~~Eleven~~motorcycle ~~signed~~riding, ~~updated~~when ~~documents~~compared to ~~secure~~ the ~~loan~~first bysix ~~equipment~~months ~~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~~.

Our other products, parts and accessories are comprised of goggles, hydration bags and apparel items including jerseys, pants, shorts, jackets, bicycle components and aftermarket support items required primarily to replace worn or damaged parts through our global distribution network. Other products, parts and accessories sales accounted for $8.49 million and $5.80 million, or 27% and 28% of our revenues for the six-month periods ended June 30, 2025 and 2024, respectively. The 46% increase in revenues from the sale of other products, parts and accessories is primarily due to strong shipments of our ADV and MTB apparel lines, designed for adventure motorcycle riding and mountain biking respectively. Apparel sales increased by 57% during the first six months of 2025.

Cost of Revenues and Gross Profit - Cost of revenues for the six-month periods ended June 30, 2025 were $17.93 and $12.76 million, respectively. Gross Profit for the six-month periods ended June 30, 2025 were $13.61 and $7.93 million, respectively, or 43% and 38% of revenues respectively. Our neck brace products continue to generate a higher gross margin than our other product categories. Although neck brace revenues accounted for 4% and 6% of our revenues for the six-month periods ended June 30, 2025 and 2024, respectively, the 5% increase in gross profit as a percentage of revenues for the six months ended June 30, 2025, was primarily due to dealer direct promotional selling activity during the first six months of 2025 designed to turn slower moving inventory. As industry wide inventory levels stabilize and our dealer direct sales momentum continues, margins earned on dealer direct sales continued to improve. Additionally, shipping costs as a percentage of domestic and international distributor revenues improved as management continues to improve shipping and logistics efficiencies.

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 six-month periods ended June 30, 2025 were $133,604 and $132,083, respectively. The 1% increase in product royalty income is due to an increase in the sale of licensed products by licensees during the 2025 period.

Salaries and Wages - Salaries and wages for the six-month periods ended June 30, 2025 were $3,703,617 and $3,176,643, respectively. The 17% increase in salaries and wages during the 2025 period was primarily due to the employment of sales, marketing and digital professionals globally as we continue to build a diversified multi-channel selling organization. Additionally, share compensation costs relating to the recognition of share grants that were issued during the fourth quarter of 2023 were recognized on a straight-line basis during the first six months of 2025.

~~Pursuant~~Commissions toand aConsulting ~~Premium~~Expense ~~Finance~~- ~~Agreement,~~During ~~dated November 7, 2024, between~~ the ~~Company~~six-month ~~and~~periods ~~Aon~~ended ~~Premium~~June ~~Finance ("APF")~~30, ~~the~~six ~~Company~~months isended ~~obligated~~June to30, ~~pay APF an aggregate sum of $1~~2025,~~087,103,~~ ~~consisting~~commissions ofand aconsulting ~~cash~~expenses ~~down~~were ~~payment of~~ $~~271~~345,~~776~~156 ~~followed~~and ~~by ten payments of~~ $85289,~~555~~817. atThis ~~an 8.976~~19% ~~annual~~increase ~~interest~~in ~~rate,~~commissions ~~commencing on December 1, 2024,~~ and ~~ending~~consulting onexpenses ~~September~~during 1,the 2025~~. Any~~ ~~late~~period ~~payment~~is ~~during~~primarily ~~the~~due ~~term~~to ofan ~~the~~increase ~~agreement~~in ~~will~~commissions bepaid ~~assessed~~to asales ~~late~~professionals ~~penalty~~in ~~of 5% on~~ the ~~payment~~United ~~amount~~States ~~due,~~in ~~and~~line inwith the ~~event~~increase ofin ~~default,~~domestic ~~APF~~sales ~~has~~when ~~the~~compared ~~right~~ to ~~accelerate~~ the ~~payment~~first ~~due~~six ~~under~~months ~~the agreement. As~~ of ~~March 31, 2025, the Company has not defaulted on its payment obligations under this agreement~~2024.

OnProfessional ~~December~~Fees ~~20,~~- ~~2022,~~Professional ~~Two~~fees ~~Eleven~~consist ~~entered~~of ~~into~~costs aincurred ~~Loan~~for ~~and Security Agreement with a bank~~audit, ~~effective~~tax ~~December~~and 1,regulatory ~~2022~~filings, toas ~~finance~~well ~~certain~~as ~~equipment~~patent ~~owned~~protection byand ~~Two~~product ~~Eleven.~~liability ~~The~~litigation ~~note~~expenses ~~issued~~incurred ~~under~~as the ~~agreement,~~Company ~~the~~continues ~~Equipment~~to ~~Note,~~expand. ~~has~~Professional afees ~~total~~for ~~value~~the ofsix-month ~~$58,075,~~periods ~~payable~~ended byJune ~~Two Eleven in 36 consecutive monthly installments~~30, ~~commencing~~2025 onwere ~~February 5~~$515,396 ~~2023,~~ and ~~continuing through to January 5~~$419,588, ~~2026~~respectively. This ~~Interest~~23% ~~will~~increase ~~accrue~~in onprofessional ~~the~~fees ~~entire~~is ~~principal~~primarily ~~amount~~due ~~of the Equipment Note outstanding from time~~ to ~~time,~~an atincrease ain ~~fixed~~audit ~~rate~~and ofcorporate ~~7.8581%~~legal ~~per~~fees ~~annum,~~incurred ~~and~~during the ~~principal~~2025 ~~and~~period. ~~interest amount of each installment payment will be $1~~Additionally,~~816.~~ Asfees ofassociated ~~March~~with ~~31,~~maintaining ~~2025~~ and ~~December~~growing ~~31,~~the ~~2024,~~Company's ~~$17,523~~patent ~~and~~portfolio ~~$22,561,~~increased orduring ~~this~~the ~~Equipment~~2025 ~~Note was outstanding, respectively~~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 six-month periods ended June 30, 2025 were $2,044,264 and $2,075,699, respectively. Although the Company continues to invest 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, the 2% decrease in advertising and marketing expenditures during the 2025 period is primarily due to a decrease in video production and point of sale merchandising costs that were partially offset by increased expenditures on trade show attendance.

Office Lease and Expenses - Office lease and expenses for the six-month periods ended June 30, 2025 were $345,296 and $314,744, respectively. The 10% increase in office lease and expenses during the 2025 period was primarily due to the inclusion of consolidation warehousing costs incurred to facilitate consolidated global shipping that were partially offset by a decrease in additional warehouse storage rented in the United States during the 2025 period.

Research and Development Costs - These costs for the six-month periods ended June 30, 2025, decreased to $1,281,285, from $1,184,571, during the same 2024 period. The 8% increase in research and development costs during the 2025 period is primarily due to increased product certification costs and an increase in salaries related to the employment of research and development staff as the Company continues to refine and build a pipeline of exceptional products.

Bad Debt Expense (Recovery) - Bad debt expense (recovery) for the six-month periods ended June 30, 2025 were $(94,659) and $10,278, respectively. This decrease in bad debt expense (recovery) during the 2025 period is primarily the result of a decrease in amounts owing that were considered to be irrecoverable during the six-month period ended June 30, 2025, when compared to the comparative 2024 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 six-month periods ended June 30, 2025 were $2,114,641 and $1,920,048, respectively. The 10% increase in general and administrative expenses during the 2025 period is primarily due to an increase in merchant fees associated with an increase in consumer direct sales as the Company continues to intensify its online presence and selling activities.

Depreciation Expense - Depreciation Expense for the six-month periods ended June 30, 2025 and 2024 were $659,614 and $591,384, respectively. This 12% increase in depreciation during the 2025 period is primarily due to software enhancements utilized to improve buying activity across the Company's web-based platforms and molds and tooling employed as the Company continues to build its widening product portfolio.

Total Operating Expenses - Total operating expenses increased by $0.93 million to $10.91 million for the six-month period ended June 30, 2025, or 9%, compared to $9.98 million for the six-month period ended June 30, 2024. This increase in total operating expenses is primarily due to increases in salaries, general and administrative costs that were partially offset by decreases in advertising and marketing costs and a decrease in bad debt expense during the 2025 period.

Other Income - Other income for the six-month periods ended June 30, 2025 and 2024 were $199,844 and $73,533, respectively. The 172% increase in other income is primarily due to interest earned during 2025 period in line with an increase in cash held in an interest-bearing account when compared to the period ended 30 June, 2024.

Income taxes - Income taxes for the six-month periods ended June 30, 2025 and 2024 were $769,226 and $26,632, respectively. The increase in income taxes is primarily due to an increase in the provision for income taxes in line with the increase in net income when compared to the prior year period.

Net Income (Loss) - Net income after taxes for the six-month period ended June 30, 2025 was $2.26 million, compared to net loss after taxes of $1.87 million for the six-month period ended June 30, 2024. This increase in net income during the 2025 period is primarily due to the increase in revenues and margins discussed above.

Liquidity and Capital Resources

At June 30, 2025, we had cash and cash equivalents of $15.73 million. The following table sets forth a summary of our cash flows for the periods indicated:

		June 30,
		2025			2024
Net cash provided by operating activities	$	4,114,440		$	2,993,953
Net cash used in investing activities	$	(329,761	)	$	(239,094	)
Net cash used in financing activities	$	(566,604	)	$	(791,253	)
Effect of exchange rate changes on cash and cash equivalents	$	140,013		$	18,922
Net increase in cash and cash equivalents	$	3,358,088		$	1,982,528
Cash and cash equivalents at the beginning of period	$	12,368,100		$	11,347,420
Cash and cash equivalents at the end of period	$	15,726,188		$	13,329,948

Cash increased by $3.36 million, or 27%, for the six months ended June 30, 2025, when compared to cash on hand at December 31, 2024. The primary sources of cash for the six months ended June 30, 2025 were net income of $2,259,858, a decrease in inventory of $5,052,510 and an increase in income tax payable of $772,741. The primary uses of cash for the six-months ended June 30, 2025 were a decrease in accounts payable of $2,498,082, an increase in accounts receivable of $1,753,961, the repayment of a short term loan amounting to $548,464 and an increase in prepaid expenses and other current assets of $416,686.

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 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 six months ended June 30, 2025 and 2024, the Company paid an aggregate of $54,879 and $56,958, 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 six months ended June 30, 2025 and 2024, the Company paid an aggregate of $13,720 and $14,240, 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 January 1, 2024, through June 30, 2024, the monthly fee payable by the Company to Innovation was $45,481, from July 1, 2024, through June 30, 2025, the monthly fee payable by the Company to Innovation was $47,072, and commencing July 1, 2025, this monthly fee increased to $48,437. 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 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, hereto and are incorporated by reference in this report. During the six-month periods ended June 30, 2025 and 2024, the Company recognized an aggregate of $282,434 and $272,883, respectively, in consulting fees to Innovation.

The Company is the holder of a $1,500,000 revolving line of credit through March 1, 2026, pursuant to a line of credit agreement with a U.S. bank, dated November 19, 2018, as amended through January 24, 2025. Advances under the line of credit bear interest at the greater of the Secured Overnight Financing Rate Daily Floating rate plus spread adjustment or an Index Floor of 1.25 percentage points, plus 2.5 percentage points. Obligations under the line of credit are secured by the accounts receivable, inventory, and equipment and fixtures in the United States of the Company and its subsidiary, Two Eleven Distribution, LLC. As of June 30, 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 November 7, 2024, between the Company and Aon Premium Finance ("APF"), the Company is obligated to pay APF an aggregate sum of $1,087,103, consisting of a cash down payment of $271,776 followed by ten payments of $85,555 at an 8.976% annual interest rate, commencing on December 1, 2024, and ending on September 1, 2025. 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. As of June 30, 2025, the Company has not defaulted on its payment obligations under this agreement.

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 June 30, 2025 and December 31, 2024, $12,386 and $22,561, or this Equipment Note was outstanding, respectively.

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~~credit ~~accounts receivable~~losses, 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.

22Since 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 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 sales do not allow for product returns other than under warranty. Web-based direct sales permits products to be returned or exchanged within 30 days of purchase date.

~~Since~~International sales (other than in the ~~Company~~United ~~(through~~States ~~its~~and ~~wholly-owned~~South ~~subsidiary~~Africa) ~~serves~~are asgenerally ~~the~~drop-shipped ~~distributor~~directly offrom ~~Leatt~~our ~~products~~consolidation inwarehouse ~~the~~or ~~United~~our ~~States,~~third-party ~~the~~manufacturing partner to Company's ~~records~~international ~~its~~distributors. ~~revenue~~Revenue and related cost of revenue ~~for~~is ~~its~~recognized ~~product~~at ~~sales in~~ the ~~United~~time ~~States~~of ~~upon~~ shipment offrom the ~~merchandise~~manufacturer's toport when the ~~dealer~~shipping orterms toare ~~the~~Free ~~ultimate~~On ~~consumer~~Board ~~when~~("FOB") ~~there~~shipping ispoint, noCost ~~dealer~~and inFreight ~~the~~("CFR") ~~geographic area~~ or ~~the~~Cost ~~consumer~~and ~~chooses~~Insurance to ~~purchase~~named ~~directly~~place ~~from~~("CIP") ~~the~~as ~~Company's~~legal ~~e-commerce~~title ~~website~~ and ~~the~~risk ~~sales~~of ~~order~~loss ~~was~~to ~~received~~the ~~directly~~product ~~from,~~pass ~~and~~to ~~paid by,~~ the ~~ultimate consumer~~distributor. ~~Since~~Sales ~~the~~to ~~Company~~all customers (~~through~~distributors, ~~its~~dealers ~~South~~and ~~African branch~~consumers) ~~serves~~are asgenerally ~~the~~final; ~~distributor~~however, ~~of Leatt products~~ in ~~South~~limited ~~Africa~~instances, ~~the~~product ~~Company~~may ~~records~~be ~~its~~returned ~~revenue~~ and ~~related~~exchanged ~~cost~~due ofto ~~revenue~~product ~~for~~quality ~~its~~issues. ~~product~~Historically, ~~sales~~returns indue ~~South~~to ~~Africa~~product ~~upon~~quality ~~shipment~~issues ofhave ~~the~~not ~~merchandise~~been ~~from~~material ~~the~~and ~~branch~~there tohave ~~the~~been ~~dealer~~no ~~and~~distributor ~~upon~~terminations ~~shipment~~that ofresulted ~~products~~in ~~direct~~product toreturns. ~~end~~Cost ~~consumers~~of ~~which~~revenues ~~has~~also ~~been~~includes ~~sold~~royalty ~~through~~fees ~~digital~~associated ~~channels.~~with ~~The~~sales ~~Company's~~of ~~standard~~Leatt-Brace ~~terms~~products. ~~and~~Product ~~conditions~~royalty ofincome ~~sale~~is ~~for~~recorded ~~non-consumer~~as ~~direct~~the orunderlying ~~web-based~~product sales dooccur, ~~not~~in ~~allow~~accordance ~~for~~with ~~product~~the ~~returns~~related ~~other~~licensing ~~than under warranty~~arrangements.

~~International~~The ~~sales~~Company ~~(other~~reviews ~~than in~~ the ~~United~~reserves ~~States~~for ~~and~~customer ~~South~~returns ~~Africa)~~at ~~are~~each ~~generally~~reporting ~~drop-shipped~~period ~~directly~~and ~~from~~adjusts ~~our~~them ~~consolidation warehouse or third-party manufacturer~~ to ~~the~~reflect ~~international~~data ~~distributors.~~available ~~Revenue and related cost of revenue is recognized~~ at ~~the~~that time. ofTo ~~shipment~~estimate ~~from~~reserves ~~the~~for ~~manufacturer's~~returns, ~~port when~~ the ~~shipping~~Company ~~terms~~estimates ~~are~~the ~~Free~~expected Onreturns ~~Board ("FOB") shipping point, Cost~~ and ~~Freight~~claims ~~("CFR")~~based oron ~~Cost~~historical ~~and~~rates ~~Insurance~~as towell ~~named place ("CIP")~~ as ~~legal~~events ~~title~~ and ~~risk~~circumstances ofthat ~~loss~~indicate tochanges ~~the product pass~~ to ~~the~~historical ~~distributor.~~rates ~~Sales~~of ~~to all customers (distributors, dealers and consumers) are generally final; however, in limited instances,~~ product ~~may~~returns ~~be returned~~ and ~~exchanged due to product quality issues~~claims. Historically, returns due to product quality issues have not been material and there have been no distributor terminations that resulted in product returns. ~~Cost~~The ofprovision ~~revenues~~for ~~also~~estimated ~~includes~~returns ~~royalty~~at ~~fees~~June ~~associated~~30, ~~with~~2025 ~~sales~~and of2024 ~~Leatt-Brace~~were ~~products.~~$0 ~~Product~~and ~~royalty income is recorded as the underlying product sales occur~~$0, ~~in accordance with the related licensing arrangements~~respectively.

~~The~~Sales ~~Company~~commissions ~~reviews~~are ~~the~~expensed ~~reserves~~when ~~for~~incurred, ~~customer~~which ~~returns~~is atgenerally ~~each reporting period and adjusts them to reflect data available~~ at ~~that~~the time. Toof ~~estimate~~sale ~~reserves~~or ~~for~~cash ~~returns,~~received ~~the~~from ~~Company~~customers, ~~estimates~~due ~~the~~to ~~expected~~a ~~returns~~maximum ~~and~~amortization ~~claims~~period ~~based on historical rates as well as events and circumstances that indicate changes to historical rates~~ of ~~product~~one ~~returns and claims~~year. ~~Historically,~~These ~~returns~~costs ~~due~~are torecorded ~~product~~in ~~quality~~commissions ~~issues have not been material~~ and ~~there~~consulting ~~have~~expenses ~~been~~within nooperating ~~distributor~~expenses ~~terminations that resulted~~ in ~~product~~the ~~returns.~~accompanying ~~The~~consolidated ~~provision~~statements ~~for~~of ~~estimated~~operations ~~returns at March 31, 2025~~ and ~~December~~comprehensive ~~31,~~income ~~2024 were $0, and $0, respectively~~(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~~cost ~~and~~of ~~consulting~~revenues ~~expenses within 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.

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 Credit Losses - Accounts receivable consist of amounts due to the Company from normal business activities. Credit is granted to 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 maintains an allowance for credit losses 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 had 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 credit losses at ~~March~~June 3130, 2025 ~~was $440,318~~ and at December 31, 2024, was $403,439 and $500,164, respectively. Additionally, an allowance for long-term credit losses will be included infor accounts ~~receivable~~receivables that are anticipated to be collected over a period that is greater than 12 months. The allowance for long-term credit losses at ~~March~~June 3130, 2025 ~~was $0,~~ and at December 31, 2024 was $0 and $3,366, respectively.

Inventory Valuation - 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, 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 March 31, 2025 was $580,244, and at December 31, 2024 was $533,953.25

23Inventory Valuation - 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, 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 June 30, 2025 and December 31, 2024 was $574,156 and $533,953, respectively.

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~~six ~~ended~~months ~~March~~e 31nded June 30, 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 ~~March~~June 3130, 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.

Changes in Internal Controls Over Financial Reporting

There were no changes in our internal controls over financial reporting during the period ended ~~March~~June 3130, 2025, that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

2427

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, 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.

31.2*	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.

32.2*	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)

*	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.

Exhibit No.	Description
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.
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.

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.

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: May 14, 2025	LEATT CORPORATION
Date: August 7, 2025	LEATT CORPORATION
	By: /s/ Sean Macdonald
	Sean Macdonald
	Chief Executive Officer and Chief Financial Officer
	(Principal Executive, Financial and Accounting Officer)

2729

EXHIBIT INDEX

Exhibit No.	Description
31.1*	Certifications of Principal Executive Officer filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*	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.
32.2*	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)
*	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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