Company: LIFD
Filing Date: 2025-11-14
Form Type: 10-Q
Source: 0001096906-25-001862
Chunk: 123

Company: LFTD PARTNERS INC.
Filing Date: 2025-11-14
Form: 10-Q
Item: Item 1
Chunk 123
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 $4,933,780 during the three months ended September 30, 2025 and 2024, respectively, and $18,884,646 and $18,149,447 during the nine months ended September 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 quarter ended September 30, 2025, the Company recognized a net benefit of $11,826 related to the write off of obsolete and spoiled inventory as a result of the reversal of a write off of $185,781 of certain packaging in the second quarter of 2025; the second quarter 2025 write off was reversed in the third quarter of 2025 because the packaging is expected to be used in production. During the nine months ended September 30, 2025, and 2024, $769,104 and $1,379,982 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 nine months ended September 30, 2025, the Company reported $1,169,117 and $3,665,391 of payroll expenses, respectively. In comparison, during the three and nine months ended September 30, 2024, the Company reported $1,360,035 and $4,432,534 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