Company: LIFD
Filing Date: 2025-03-31
Form Type: 10-K
Source: 0001096906-25-000346
Chunk: 149

Company: LFTD PARTNERS INC.
Filing Date: 2025-03-31
Form: 10-K
Item: Item 1
Chunk 149
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 on any of its obligations under this Agreement and such default is not cured within thirty (30) days after receipt of written notice specifying the default.

Accounting for the Agreement

Regarding the accounting for the Agreement: the Company has evaluated the principal versus agent considerations in ASC 606, Revenue from Contracts with Customers. Management has considered the following facts to assess Lifted’s position relative to the other party under the Agreement:

An entity is a principal and therefore records revenue on a gross basis if it controls a promised good or service before transferring that good or service to the customer.  

An entity is an agent and records as revenue the net amount it retains for its agency services if its role is to arrange for another entity to provide the goods or services.   

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Management has considered the following facts to assess whether Lifted has control of the Products that are manufactured and distributed pursuant to the Agreement: 

 ·Lifted is the exclusive nationwide manufacturer and distributor of the Products. To fulfill its obligations pursuant to the Agreement, Lifted sources raw goods, labor, and other resources to manufacture the Products at Lifted’s facilities and holds the Products in its facilities until the Products are sold and shipped to customers.    ·Customers’ orders of Products are received through Lifted’s website www.urb.shop. Lifted processes these orders, prepares the Products for shipment from Lifted’s warehouse, and ships the Products directly to the customers. Lifted is responsible for the collection of payments from customers, and is responsible for paying the other party 10% of any accounts receivable that are past due by more than 90 days.

Lifted does not include in its inventory the value of the Products, because the other party pays for 100% of the costs of the Products.  

The Company concludes that Lifted is the principal relative to the other party in the Agreement.  

Sales of Products are recognized and reported by the Company on a gross basis on the Consolidated Statements of Operations, and until such time that the other party has received, in each instance with respect to an applicable Purchase Order, one-hundred percent (100%) of the Purchase Order Amount from Lifted, Lifted will report all of the money received from the other party as a current liability on the Company’s Consolidated Balance Sheets. This current liability account will become smaller as Lifted remits payments to the other party. 

After the other party has received 100% of the Purchase Order Amount from Lifted, any Adjust