Company: LIFD
Filing Date: 2025-03-31
Form Type: 10-K
Source: 0001096906-25-000346
Chunk: 1041

Company: LFTD PARTNERS INC.
Filing Date: 2025-03-31
Form: 10-K
Item: Item 16
Chunk 1041
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  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 is a result of the vape manufacturer agreeing to share a portion of the Company’s prior $2,313,902 write-off of certain 2 mL disposable vapes that were written off due to clogging issues. The payable forgiveness resulted in a net $485,496 improvement to the cost of goods sold and accrued liabilities sections of the Company’s consolidated statements of operations as of December 30, 2022. The $370,047 in credits had been booked as an asset as of December 30, 2022 and recognized as other income