Company: LIFD
Filing Date: 2025-08-14
Form Type: 10-Q
Source: 0001096906-25-001332
Chunk: 44

Company: LFTD PARTNERS INC.
Filing Date: 2025-08-14
Form: 10-Q
Item: Part I, Item 8
Chunk 44
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 the three months ended June 30, 2025 and 2024, respectively, and $13,985,399 and $13,215,667 during the six months ended June 30, 2025 and 2024, respectively. 

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. 

 8Table of Contents

During the quarters ended June 30, 2025 and 2024, $316,408 and $651,190, respectively, of obsolete and spoiled inventory was written off. During the six months ended June 30, 2025, and 2024, $780,929 and $1,050,005 of obsolete and spoiled inventory was written off, respectively.

Operating Expenses

Operating expenses include accounts such as payroll expenses, professional fees, bank charges and merchant fees, advertising and marketing, bad debt expense, depreciation and amortization, collaboration commission and royalty expense, and other operating expenses.

Payroll Expenses

During the three and six months ended June 30, 2025, the Company reported $1,196,704 and $2,496,274 of payroll expenses, respectively. In March 2025, an Employee Retention Tax Credit (“ERC”) of $22,357 related to the second quarter of 2020 was recovered. The $22,357 ERC is accounted for as a reduction in payroll expenses in the first quarter of 2025. 

Payroll expenses include sales commissions paid to independent contractors. Lifted entered into an agreement with its Chief Strategy Officer (the “CSO”), effective as of April 1, 2025, pursuant to which, in addition to his base compensation of $10,000 every two weeks plus health insurance coverage, the CSO receives (1) a royalty on certain gummies manufactured by Lifted of between $0.005 and $0.01, and (2) certain quarterly and annual bonuses based upon Lifted’s quarterly and annual collected revenues on certain sales exceeding targets of $9,000,000 and $58,000,000, respectively.

Lifted’s former Chief Strategy Officer (the “CSO”), who worked for Lifted from July 1, 2021 through