Company: LIFD
Filing Date: 2025-03-31
Form Type: 10-K
Source: 0001096906-25-000346
Chunk: 244

Company: LFTD PARTNERS INC.
Filing Date: 2025-03-31
Form: 10-K
Item: Item 1
Chunk 244
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 may materially adversely affect our Company. The foregoing risks may have a material adverse effect on our Company and the trading price of our common stock. 

Under US GAAP, we will not be able to consolidate our financial statements with the financial statements of companies in which we own minority equity ownership interests

US GAAP does not permit the consolidation of our financial statements with the financial statements of companies in which we own minority equity ownership interests and have no substantial influence over the management of the businesses. US GAAP also requires us to record these types of investments at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. As such, we will not be allowed to consolidate into our financial statements any portion of the revenues, earnings or assets of companies in which we own minority equity ownership interests such as Ablis, Bendistillery and Bend Spirits.  

Also, under US GAAP, we used the equity method of accounting to account for our 50% membership interest in SmplyLifted prior to the Lifted’s sale of that interest in February 2022. Under the equity method of accounting, we recorded our initial investment in SmplyLifted, which was $200,000, as an asset at historical cost. We then recorded our share (50%) of SmplyLifted’s losses as losses on the Consolidated Statements of Operations. In addition, under the equity method of accounting, the investment’s value was adjusted on a quarterly basis to reflect the changes in value due to Lifted’s share in SmplyLifted’s losses.

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As a result of these effects of US GAAP, potential buyers or sellers of our stock may be confused because they may not be able to immediately understand the financial results and the values of the minority ownership interests that we have in certain businesses such as Ablis, Bendistillery and Bend Spirits, or future businesses. The foregoing risks may have a material adverse effect on our Company and the trading price of our common stock. 

We may not be able to exit from minority equity ownership interests

We may not be able to exit from minority equity ownership interests in companies such as Ablis, Bendistillery and Bend Spirits on acceptable terms, if at all. Because our equity ownership interests in these companies will not allow us to clearly control the management, operations, and direction of the businesses, a potential sale or other exit from