Company: LIFD
Filing Date: 2025-03-31
Form Type: 10-K
Source: 0001096906-25-000346
Chunk: 1962

Company: LFTD PARTNERS INC.
Filing Date: 2025-03-31
Form: 10-K
Item: Item 7
Chunk 1962
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 hired Zuanic & Associates to initiate coverage of the Company’s common stock; however, any opinions, estimates, valuation projections or forecasts regarding the Company’s performance made by analysts, including Zuanic & Associates, are theirs alone and do not represent opinions, forecasts or predictions of the Company or its management. The Company does not by its reference or distribution imply its endorsement of or concurrence with analyst information, conclusions or recommendations.

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 year ended December 31, 2024, $1,550,599 of obsolete and spoiled inventory was written off. During the fourth quarter of 2024, $170,618 of obsolete and spoiled inventory was written off, consisting of $61,532 of finished goods, and $109,085 worth of raw goods. The most significant write offs during the year ended December 31, 2024 occurred during the second quarter of 2024. During the second quarter of 2024, $651,190 of inventory, primarily comprised of packaging that cost $434,402, was written off.

During the year ended December 31, 2023, $2,056,603 of obsolete and spoiled inventory was written off, primarily driven by the write-offs in the third and fourth quarters of 2023. Descriptions of the third and fourth quarter write-offs are included below: 

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During the quarter ended December 31, 2023, $1,285,248 of obsolete and spoiled inventory, which related primarily to $570,778 worth of raw goods packaging and vapes, and $497,811 of finished goods, such as amanita mushroom gummies, and slow-moving hemp-infused gummies manufactured by third-party suppliers prior to the commencement of Lifted’s in-house gummy manufacturing operations in Kenosha, Wisconsin.

During the quarter ended September 30, 2023, $597,098 of obsolete and spoiled inventory, which related primarily to $489,022 of expired HHC-infused gummies, was written off. Nearly all of these expired gummies were manufactured by third-party suppliers prior to the commencement of Lifted