Company: LIFD
Filing Date: 2025-03-31
Form Type: 10-K
Source: 0001096906-25-000346
Chunk: 2385

Company: LFTD PARTNERS INC.
Filing Date: 2025-03-31
Form: 10-K
Item: Item 9
Chunk 2385
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 cash flow predictability. Management assesses the impact of delayed customer payments on overall liquidity and considers credit risk and allowance for doubtful accounts, in an effort to provide some safeguard against potential cash flow disruptions. However, if economic conditions deteriorate or customer creditworthiness declines further, additional measures may be required to preserve liquidity and operational stability. Inventory – Inventory is valued at the lower of average cost or market value (net realizable value). Inventory consisted of the following at December 31, 2024 and December 31, 2023:    December 31, 2024  December 31, 2023 Raw Goods $5,867,526  $4,962,652 Finished Goods  3,448,765   5,212,015 Total Inventory $9,316,291  $10,174,667  The process of determining obsolete or spoiled inventory involves:   1)Identifying raw goods that would no longer be used in the manufacture of finished goods; 2)Identifying expired raw goods; 3)Identifying finished goods that would no longer be sold or that are slow moving; 4)Identifying finished goods that are expired; and 5)Valuing and expensing raw and finished goods that would no longer be sold. Monthly overhead costs such as payments for rent, utilities, insurance, and indirect labor are allocated to finished goods based on the estimated percentage cost toward the finished goods. Depreciation expense related to certain machinery and equipment is also allocated to finished goods.  As of December 31, 2024, $383,646 of overhead costs incurred during the fourth quarter of 2024 were allocated to finished goods. In comparison, as of December 31, 2023, $338,582 of overhead costs incurred during the fourth quarter were allocated to finished goods.  On December 30, 2022, Lifted was able to reach an agreement for the forgiveness of $630,000 of payables owed to its third-party disposable vape device manufacturer. The agreement also includes credits to Lifted against future purchases from the device manufacturer totaling $370,047. The credit is to be provided by the manufacturer at the rate of $46,255.87 per quarter beginning with the first quarter of 2023 and continuing for the next six consecutive quarters, with a final quarterly credit of $46,255.91 for the fourth quarter of 2024. The agreement