Company: LIFD
Filing Date: 2025-11-14
Form Type: 10-Q
Source: 0001096906-25-001862
Chunk: 147

Company: LFTD PARTNERS INC.
Filing Date: 2025-11-14
Form: 10-Q
Item: Item 2
Chunk 147
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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. For the three and nine months ended September 30, 2024, the bonus earned by the CSO was $0 and $191,273, respectively.

Advertising and Marketing Expenses

Advertising and marketing costs are expensed as incurred. During the three and nine months ended September 30, 2025, the Company incurred $426,573 and $1,374,018, respectively, in advertising and marketing expenses. Advertising and marketing expenses primarily relate to marketing campaigns, trade shows, digital marketing, and promotional products. Lifted has been engaging with third party specialists to increase its presence in the direct-to-consumer space.  In comparison, during the three and nine months ended September 30, 2024, the Company incurred $470,676 and $837,462, respectively, in advertising and marketing expenses.

Bad Debt Expense

Bad debt expense for the three and nine months ended September 30, 2025 totaled $418,918 and $664,686, respectively. In comparison, bad debt expense for the three and nine months ended September 30, 2024, totaled $864,345 and $2,304,898, respectively. 

Bad debt expense stems from the change in the Company’s allowance for doubtful accounts, which stems from the Company’s CECL Model analysis. The delay in Lifted’s receipt of payments from certain customers—primarily distributors—have increasingly become an issue for Lifted. Certain customers have become slower to pay Lifted for purchased product (“Slow Paying Customers”), and the Slow Paying Customers disregard payment terms. Management speculates that some Slow Paying Customers may be slow-paying Lifted because of their own sales collection issues, which may in part be caused by the regulatory uncertainty over our industry. The Company has an accounting protocol which effectively causes the Company to recognize an allowance for doubtful accounts for all invoices older than 90 days. Consequently, the delay in Lifted’s receipt of payments from certain customers has a direct impact on the Company’s net receivables, net income, and earnings per share.

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Collaboration Commission and Royalty Expense

During the three and nine months ended September 30, 2025, the Company reported collaboration commission and royalty expense of $33,899 and $