Company: LIFD
Filing Date: 2025-03-31
Form Type: 10-K
Source: 0001096906-25-000346
Chunk: 2956

Company: LFTD PARTNERS INC.
Filing Date: 2025-03-31
Form: 10-K
Item: Item 1A
Chunk 2956
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 provision to cannabis operations, prohibiting them from deducting certain expenses associated with cannabis businesses. Section 280E may have a lesser impact on cannabis cultivation and manufacturing operations. Accordingly, Section 280E has a significant impact on the operations and financial results of cannabis companies and an otherwise profitable business may operate at a loss, after taking into account its U.S. income tax expenses. The foregoing risk may have a material adverse effect on our Company and the trading price of our common stock.

We may be at a higher risk of IRS audit

We believe there is a greater likelihood that the IRS will audit the tax returns of cannabis-related businesses. Any such audit of our tax returns could result in us being required to pay additional tax, interest and penalties, as well as incremental accounting and legal expenses, which could be material. Moreover, an audit will divert our management’s attention and resources away from our business. The foregoing risk may have a material adverse effect on our Company and the trading price of our common stock.

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As a cannabis businesses, we may be subject to civil asset forfeiture

Any property owned by participants in the cannabis industry used in the course of conducting such business, or that is the proceeds of such business, could be subject to seizure by law enforcement and subsequent civil asset forfeiture because of the illegality of the cannabis industry under federal law. Even if the owner of the property is never charged with a crime, the property in question could still be seized and subject to an administrative proceeding by which, with minimal due process, it could be subject to forfeiture. The foregoing risk may have a material adverse effect on our Company and the trading price of our common stock.

We are subject to proceeds of crime statutes

We are subject to a variety of laws that concern money laundering, financial recordkeeping and proceeds of crime. These include: the Bank Secrecy Act, as amended by Title III of the USA Patriot Act, the Proceeds of Crime (Money Laundering), and regulations or guidelines, issued, administered or enforced by governmental authorities in the United States.

In the event that any of our business agreements, or any proceeds thereof, in the United States were found to be in violation of money laundering legislation or otherwise, such transactions may be viewed as proceeds of crime under one or more of the statutes noted above, or any other applicable legislation. This could have a material adverse effect on us, among other things, and could restrict or otherwise jeopardize our ability to declare or pay dividends, or effect other distributions. The foregoing risk