Company: LIFD
Filing Date: 2025-08-14
Form Type: 10-Q
Source: 0001096906-25-001332
Chunk: 128

Company: LFTD PARTNERS INC.
Filing Date: 2025-08-14
Form: 10-Q
Item: Part I, Item 2
Chunk 128
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 has been adopted or proposed in many states that are significant markets for Lifted, such as in Florida, Texas, Illinois and California; greater competition in the marketplace for branded hemp-derived and psychoactive products that are similar to those that Lifted sells; more distributors creating their own brands and selling their own branded products at a lower price than Lifted’s products; increased competition for products containing more milligrams of cannabinoids or active ingredients per unit at a lower price point; and other competing brands paying distributors and wholesalers more than what Lifted is willing to pay (if anything), for valuable shelf space.

During the six months ended June 30, 2025, Lifted has launched several initiatives in order to attempt to increase net sales and decrease operating expenses, including: laying off certain employees and independent contractors in Kenosha and Durango; restructuring its sales team; consolidating operations; developing the marketing and distribution networks of hemp-free brands including Rebel Energy Gummy, Mielos, and other brands and products; and increasing spending on marketing and advertising, and digital marketing.

Cost of Goods Sold

Cost of goods sold amounted to $7,078,942 and $5,933,058 during 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,