Company: LIFD
Filing Date: 2025-05-15
Form Type: 10-Q
Source: 0001096906-25-000819
Chunk: 58

Company: LFTD PARTNERS INC.
Filing Date: 2025-05-15
Form: 10-Q
Item: Part I, Item 8
Chunk 58
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 goods that would no longer be sold or that are slow moving; 4)Identifying finished goods that are expired; and 5)Valuing and expensing raw and finished goods that would no longer be sold. Monthly overhead costs such as payments for rent, utilities, insurance, and indirect labor are allocated to finished goods based on the estimated percentage cost toward the finished goods. Depreciation expense related to certain machinery and equipment is also allocated to finished goods. At March 31, 2025, $388,633 of overhead costs incurred during the first quarter of 2025 were allocated to finished goods. In comparison, at December 31, 2024, $383,646 of overhead costs incurred during the fourth quarter of 2024 were allocated to finished goods.  During the quarters ended March 31, 2025, and 2024, $464,521 and $398,815 of obsolete and spoiled inventory was written off, respectively. On December 30, 2022, Lifted was able to reach an agreement for the forgiveness of $630,000 of payables owed to its third-party disposable vape device manufacturer. The agreement also includes credits to Lifted against future purchases from the device manufacturer totaling $370,047. The credit is to be provided by the manufacturer at the rate of $46,255.87 per quarter beginning with the first quarter of 2023 and continuing for the next six consecutive quarters, with a final quarterly credit of $46,255.91 for the fourth quarter of 2024. The agreement is a result of the vape manufacturer agreeing to share a portion of the Company’s prior $2,313,902 write-off of certain 2 mL disposable vapes that were written off due to clogging issues. The payable forgiveness resulted in a net $485,496 improvement to the cost of goods sold and accrued liabilities sections of the Company’s consolidated statements of operations as of December 30, 2022. The $370,047 in credits had been booked as an asset as of December 30, 2022 and recognized as other income amortized quarterly at the rate of $46,256 per quarter beginning with the first quarter of 2023 and continuing for the next six consecutive quarters, with a final quarterly credit of $46,255 for the fourth quarter of 2024.  However, based on an analysis of credits applied to the vape device manufacturer bills in 2023, Lifted received $33,427 more