Company: LIFD
Filing Date: 2025-03-31
Form Type: 10-K
Source: 0001096906-25-000346
Chunk: 1120

Company: LFTD PARTNERS INC.
Filing Date: 2025-03-31
Form: 10-K
Item: Item 1B
Chunk 1120
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, 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’s in-house gummy manufacturing operations in Kenosha, Wisconsin. Management believes that these expired gummies were manufactured pursuant to formulations and manufacturing protocols that were of lower quality than Lifted’s in-house gummy products, and sold more slowly due to the relative lack of consumer excitement for HHC-infused gummies. 

In comparison, during the year ended December 31, 2022, $4,418,922 of obsolete and spoiled inventory was written off. 

Of the $4,418,922 of obsolete and spoiled inventory that was written off during the year ended December 31, 2022, $2,313,902 of it related to certain 2 mL disposable vapes written off during the third quarter of 2022 due to clogging issues (the “Clogged Vapes”). Management believes that the clogging was