Company: LIFD
Filing Date: 2025-05-15
Form Type: 10-Q
Source: 0001096906-25-000819
Chunk: 261

Company: LFTD PARTNERS INC.
Filing Date: 2025-05-15
Form: 10-Q
Item: Part I, Item 2
Chunk 261
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 expense reported during the quarter ended March 31, 2024.

As described in the Accounts Receivable section under NOTE 2 – BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES, bad debt expense stems from the change in the Company’s allowance for doubtful accounts, which stems from the Company’s CECL Model analysis. Although in the three months ended March 31, 2025 the Company reported a benefit from bad debt expense of $(403,869), the delay in Lifted’s receipt of payments from certain customers—primarily distributors—have increasingly become an issue for Lifted. Certain customers have become slower to pay Lifted for purchased product (“Slow Paying Customers”), and the Slow Paying Customers disregard payment terms. Management speculates that some Slow Paying Customers may be slow-paying Lifted because of their own sales collection issues, which may in part be caused by the regulatory uncertainty over our industry. The Company has an accounting protocol which effectively causes the Company to recognize an allowance for doubtful accounts for all invoices older than 90 days. Consequently, the delay in Lifted’s receipt of payments from certain customers has a direct impact on the Company’s net receivables, net income, and earnings per share.

Collaboration Commission and Royalty Expense

For the quarter ended March 31, 2025, the Company reported collaboration commission and royalty expense of $67,098. In comparison, for the quarter ended March 31, 2024, the Company reported collaboration commission and royalty expense of $170,915.  

Other Operating Expenses

Other Operating Expenses decreased to $651,331 during the quarter ended March 31, 2025, from $684,169 during the quarter ended March 31, 2024. Other operating expenses include, for example, insurance expense, rent expense, repairs and maintenance, state license and filing fees, excise and sales tax expense, health and dental expenses, warehouse and lab expenses below the Company’s capitalization threshold, and other expenses. The premiums of certain insurance policies that the Company has had in place have typically been based on the Company’s revenue; as such, these policies are costly for the Company. 

Other Income or Expenses

Net Other Expenses decreased to $54,364 during the quarter ended March 31, 2025, from $1,416,622 during the quarter ended March 31, 2024. The decrease in Other Expenses was primarily driven by the $1,349,467 loss related to the