Company: LIFD
Filing Date: 2025-05-15
Form Type: 10-Q
Source: 0001096906-25-000819
Chunk: 242

Company: LFTD PARTNERS INC.
Filing Date: 2025-05-15
Form: 10-Q
Item: Part I, Item 1
Chunk 242
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 price point; and other competing brands paying distributors and wholesalers more than what Lifted is willing to pay (if anything), for valuable shelf space.

During the quarter ended March 31, 2025, Lifted has launched several initiatives in order to attempt to increase net sales and decrease operating expenses, including: laying off certain employees and independent contractors in Kenosha and Durango; restructuring its sales team; consolidating operations; emphasizing sales of hemp-free brands including Rebel Energy Gummy, Mielos, and other products; increasing spending on SEO; and online advertising and marketing. 

Write-offs of Inventory

Lifted's industry, and customer preferences, are constantly and quickly evolving. Consequently, Lifted finds it extremely difficult to predict future sales of its products and to anticipate raw goods needs for future production. This exposes Lifted to the risk that it will need to write off obsolete raw goods and slow-moving finished goods, causing an increase in cost of goods sold. During the quarters ended March 31, 2025 and 2024, $464,521 and $398,815, respectively, of obsolete and spoiled inventory was written off. 

Payroll Expenses

During the quarters ended March 31, 2025 and 2024, the Company reported $1,299,570 and $1,602,078 of payroll expenses. In March 2025, an Employee Retention Tax Credit (“ERC”) of $22,357 related to the second quarter of 2020 was recovered. The $22,357 ERC is accounted for as a reduction in payroll expenses in the first quarter of 2025. 

Payroll expenses include sales commissions paid to independent contractors. Lifted’s former Chief Strategy Officer (the “CSO”), who worked for Lifted from July 1, 2021 through April 30, 2024, had been hired to develop and implement certain important strategies to assist Lifted’s efforts to increase its production, fulfillment and sales capabilities. The CSO’s two-year agreement with Lifted entitled the CSO to be paid an annual salary of $180,000 plus a bonus equal to 5% of total net sales for Lifted in excess of $6,000,000 per quarter. The CSO’s final bonus, for April 2024, was $27,941, and was paid in May 2024. During the quarter ended March 31, 2024, the bonus earned by the CSO was $163,333. 

Company-Wide