LFTD Partners (LIFD) warns of going concern risk amid hemp and kratom crackdowns
LFTD Partners Inc. reported sharply weaker results for the six months ended June 30, 2026 and disclosed substantial doubt about its ability to continue as a going concern. Net sales were $17,863,400, down from $19,449,186 a year earlier, and cost of goods sold rose to $18,918,247, producing a gross loss of $1,054,847.
The company recorded a large $6,596,096 inventory reserve, including $5,007,427 against hemp-derived products and $1,434,458 against kratom-derived inventory, driving a six‑month net loss of $5,598,239 and reducing shareholders’ equity to $7,027,327. Cash was $1,504,297 and total assets fell to $12,026,907.
Management states that LFTD is completely dependent on subsidiary Lifted and that federal actions targeting intoxicating hemp-derived products (effective November 12, 2026) and 7‑OH kratom products could eliminate its two major lines of business. The company has laid off staff to about 77 people, agreed to sell its Kenosha facility for $1,500,000 to repay an $836,358 Surety Bank mortgage, impaired its Bendistillery investment to zero, and is pursuing diversification into hemp‑free gummies and potential acquisitions of multifamily properties and laundromats, while warning there is no assurance these initiatives will succeed.
Positive
- Planned debt reduction via asset sale – Lifted agreed on July 22, 2026 to sell its Kenosha property for $1,500,000, with plans to repay the $836,358 Surety Bank mortgage and use remaining proceeds for working capital, which would simplify the balance sheet and add liquidity.
- Operating cash flow near break-even – Despite a large net loss, net cash used in operating activities for the six months ended June 30, 2026 was only $96,085, indicating working capital actions and non‑cash charges absorbed much of the accounting loss.
Negative
- Substantial doubt about going concern – Management explicitly states that conditions, including dependence on Lifted and looming regulatory changes, "raise substantial doubt about the Company’s ability to continue as a going concern" for the 12 months following issuance.
- Large net loss and equity erosion – For the six months ended June 30, 2026, net loss was $5,598,239 versus $571,992 a year earlier, reducing shareholders’ equity from $12,632,260 at December 31, 2025 to $7,027,327.
- Heavy inventory write-downs tied to regulatory risk – The company booked a $6,596,096 inventory reserve, including $5,007,427 on hemp-derived and $1,434,458 on kratom-derived inventory, reflecting uncertainty around a national hemp ban and potential Schedule I controls on 7‑OH.
- Potential loss of core revenue streams – Management warns that federal law banning intoxicating hemp-derived products on November 12, 2026 and proposed DEA rules on 7‑OH could eliminate Lifted’s two major lines of business and approximately half or more of revenue.
- Asset impairments and investment losses – The company recorded $208,049 of impairments on hemp-specific fixed assets year‑to‑date and fully impaired its remaining $99,800 investment in Bendistillery, signaling diminished asset recoverability.
- Customer and credit risk pressures – Management highlights delayed collections, significant allowances for doubtful accounts (including an allowance of $1,207,367 on receivables) and states that wholesalers and distributors may fail to pay if regulatory changes damage their businesses.
Key Figures
Key Terms
going concern financial
inventory reserve financial
Schedule I regulatory
Allowance for Doubtful Accounts financial
Deferred Revenue financial
ASC 606 financial
FAQ
How did LFTD Partners (LIFD) perform financially for the six months ended June 30, 2026?
What going concern risks does LFTD Partners (LIFD) disclose?
How exposed is LFTD Partners (LIFD) to hemp and kratom regulatory changes?
What major write-downs did LFTD Partners (LIFD) record in this period?
What is the status of LFTD Partners’ (LIFD) balance sheet and liquidity?
How is LFTD Partners (LIFD) responding strategically to these risks?
AI-generated analysis. How Rhea-AI works. Not financial advice.
NOTE 6 – RESERVED
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from ________ to ________
Commission file number
(Exact name of registrant as specified in its charter) |
| ||
(State or other jurisdiction of incorporation or organization) |
| (I.R.S. Employer Identification Number) |
(Address of principal executive offices)
(
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12 of the Act:
Common Stock, $0.001 par value |
| LIFD |
| None |
Title of each class |
| Trading symbol(s) |
| Name of exchange on which registered |
Indicate by checkmark whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer | ☐ | Accelerated filer | ☐ |
☒ | Smaller reporting company | ||
|
| Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
APPLICABLE ONLY TO CORPORATE ISSUERS
As of August 14, 2026, there were
LFTD PARTNERS INC.
QUARTERLY REPORT ON FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2026
TABLE OF CONTENTS
PART I — FINANCIAL INFORMATION | ||||
| Use of Names |
| 3 |
|
| Currency |
| 3 |
|
| Cautionary Note Regarding Forward-Looking Statements |
| 3 |
|
ITEM 1. | FINANCIAL STATEMENTS |
| F-1 |
|
| CONSOLIDATED BALANCE SHEETS, JUNE 30, 2026 (UNAUDITED) AND DECEMBER 31, 2025 (AUDITED) |
| F-1 |
|
| CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2026 AND 2025 (UNAUDITED) |
| F-2 |
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| CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (DEFICIT) FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2026 AND 2025 (UNAUDITED) |
| F-3 |
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| CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE SIX MONTHS ENDED JUNE 30, 2026 AND 2025 (UNAUDITED) |
| F-4 |
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| NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) |
| F-5 |
|
ITEM 2. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
| 4 |
|
ITEM 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
| 12 |
|
ITEM 4. | CONTROLS AND PROCEDURES |
| 12 |
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PART II — OTHER INFORMATION | ||||
ITEM 1. | LEGAL PROCEEDINGS |
| 15 |
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ITEM 1A. | RISK FACTORS |
| 15 |
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ITEM 2. | UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS |
| 15 |
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ITEM 3. | DEFAULTS UNDER SENIOR SECURITIES |
| 15 |
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ITEM 4. | MINE SAFETY DISCLOSURES |
| 15 |
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ITEM 5. | OTHER INFORMATION |
| 15 |
|
ITEM 6. | EXHIBITS |
| 16 |
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| SIGNATURES |
| 17 |
|
| 2 |
| Table of Contents |
PART I — FINANCIAL INFORMATION
Use of Names
In this Quarterly Report on Form 10-Q, unless the context otherwise requires, the terms “we,” “us,” “our,” “Company,” “Corporation” or “LFTD Partners” refer to LFTD Partners Inc. together with its wholly owned subsidiary Lifted Liquids, Inc. d/b/a Lifted Made (“Lifted”), d/b/a Urb Finest Flowers (“Urb”), d/b/a Highlandia and d/b/a LM Nutra.
Currency
Unless otherwise indicated, all references to “$” in this document refer to United States dollars.
Cautionary Note Regarding Forward-Looking Statements
This Quarterly Report on Form 10-Q contains statements that are considered forward-looking statements. Forward-looking statements give the Company’s current expectations and forecasts of future events. All statements other than statements of current or historical fact contained in this Quarterly Report on Form 10-Q, including statements regarding the Company’s future financial position, planned acquisitions, prospects of our industries or our prospects, plans, performance, operations, business strategy, budgets, projected costs, capital spending, sources of liquidity and financing sources, and plans and objectives of management for future operations, are forward-looking statements. In addition, forward-looking statements generally can be identified by the use of forward-looking words such as “anticipate,” “foresee,” “project,” “forecast,” “could”, “believe,” “continue,” “estimate,” “expect,” “intend,” “may,” “plan,” or the negative of these terms or variations of them or similar terms or expressions of similar meaning, as they relate to the Company. Furthermore, forward-looking statements may be included in various filings that we make with the Securities and Exchange Commission (the “SEC”), and in press releases or oral statements made by or with the approval of one of our authorized executive officers. Although we believe that the expectations reflected in these forward-looking statements are reasonable, we cannot assure you that these expectations will prove to be correct. These forward-looking statements are based on the Company’s current plans, and the Company’s actual future activities and results of operations may be materially different from those set forth in the forward-looking statements.
These forward-looking statements are subject to certain known and unknown risks and uncertainties, as well as assumptions that could cause actual results to differ materially from those reflected in these forward-looking statements. These known and unknown risks and uncertainties include, without limitation, the risk factors described in sections “SUMMARY OF RISK FACTORS”, “ITEM 1A. RISK FACTORS”, and “ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS” and the consolidated financial statements and the related notes included elsewhere in our Annual Report on Form 10-K for the year ended December 31, 2025 (the “2025 Form 10-K”) filed with the SEC on April 1, 2026, and within this Quarterly Report on Form 10-Q sections “ITEM 1A. RISK FACTORS” and “ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS”, and the consolidated financial statements and the related notes included elsewhere, and in our other SEC public filings, which can be read at www.sec.gov. These matters cumulatively raise substantial doubt about the Company’s ability to continue as a going concern. Therefore, these forward-looking statements are not guarantees or promises of our future performance and involve risks, uncertainties, estimates and assumptions that are difficult to predict. As a result, our actual outcomes and results may differ materially from those expressed in these forward-looking statements. You should not place undue reliance on any of these forward-looking statements.
Any or all of the forward-looking statements in this Quarterly Report on Form 10-Q may turn out to be inaccurate. The Company has based these forward-looking statements largely on its current expectations and projections about future events and financial trends that it believes may affect its financial condition, results of operations, business strategy and financial needs. The forward-looking statements can be affected by inaccurate assumptions or by known or unknown risks, uncertainties and assumptions. The Company undertakes no obligation to publicly revise these forward-looking statements to reflect events occurring after the date hereof. All subsequent written and oral forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by the cautionary statements contained in this Quarterly Report on Form 10-Q.
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and related notes that appear in our 2025 Form 10-K. In addition to historical consolidated financial information, the following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. Certain information included herein contains statements that may be considered forward-looking statements, such as statements relating to our anticipated revenues and operating results, future performance and operations, plans for future expansion, capital spending, sources of liquidity and financing sources. Such forward-looking information involves important risks and uncertainties that could significantly affect anticipated results in the future, and accordingly, such results may differ from those expressed in any forward-looking statements made herein. Readers are cautioned not to place undue reliance on any forward-looking statements contained in this document, which reflect management’s opinions only as of the date hereof. Except as required by law, we undertake no obligation to revise or publicly release the results of any revision to any forward-looking statements. You are advised, however, to consult any additional disclosures we make in our reports to the SEC. We undertake no obligation to further update any such statement, or the risk factors described in sections “SUMMARY OF RISK FACTORS”, “ITEM 1A. RISK FACTORS”, and “ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS” and the consolidated financial statements and the related notes included elsewhere in our 2025 Form 10-K, and within this Quarterly Report on Form 10-Q sections “ITEM 1A. RISK FACTORS” and “ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS”, and the consolidated financial statements and the related notes included elsewhere, and in our other SEC public filings, which can be read at www.sec.gov, to reflect new information, the occurrence of future events or circumstances or otherwise. None of the statements contained herein have been approved by the Food and Drug Administration, and none of the products manufactured or sold by the Company are intended to diagnose, treat, cure or prevent any disease.
| 3 |
| Table of Contents |
ITEM 1. FINANCIAL STATEMENTS
LFTD PARTNERS INC.
CONSOLIDATED BALANCE SHEETS
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| June 30, 2026 (Unaudited) |
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| December 31, 2025 (Audited) |
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ASSETS |
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Current Assets |
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Cash and Cash Equivalents |
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Prepaid Expenses |
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Accounts Receivable, net of allowance of $ |
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Inventory, net of allowance of $ |
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Current Portion of Settlement Asset and Receivables |
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Assets Held for Sale |
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Other Current Assets |
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Total Current Assets |
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Investment in Bendistillery |
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Net Deferred Tax Asset |
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Fixed Assets, less accumulated depreciation of $ |
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Security and State Licensing Deposits and Bonds |
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Operating Lease Right-of-Use Asset, net of Right-of-Use Asset Amortization of $ |
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Total Assets |
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| $ |
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LIABILITIES AND SHAREHOLDERS' EQUITY |
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Current Liabilities |
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Operating Lease Liability |
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Deferred Revenue |
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Income Tax Payable |
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Accounts Payable and Accrued Expenses |
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Accounts Payable - Related Party |
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Note Payable - Related Party |
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Preferred Stock Dividends Payable |
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Notes Payable to Surety Bank |
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Interest Payable to Surety Bank |
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Total Current Liabilities |
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Non-Current Liabilities |
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Operating Lease Liability |
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Note Payable to Surety Bank |
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Total Non-Current Liabilities |
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Total Liabilities |
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Commitments and Contingencies |
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Shareholders' Equity |
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Preferred Stock, $ |
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Series A Convertible Preferred Stock: |
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Series B Convertible Preferred Stock: |
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Common Stock, $ |
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Additional Paid-in Capital |
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Accumulated Deficit |
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Total Shareholders' Equity |
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Total Liabilities and Shareholders' Equity |
| $ |
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| $ |
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The accompanying notes are an integral part of these unaudited interim consolidated financial statements.
| F-1 |
| Table of Contents |
LFTD PARTNERS INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
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| For the Three Months Ended |
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| For the Six Months Ended |
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| June 30, |
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| June 30, |
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| 2026 |
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| 2025 |
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| 2026 |
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| 2025 |
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Net Sales |
| $ |
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| $ |
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Cost of Goods Sold |
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Gross Profit |
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Operating Expenses |
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Payroll Expense |
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Professional Fees |
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Bank Charges and Merchant Fees |
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Advertising and Marketing |
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Bad Debt (Recovery)/Expense |
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Impairment of Hemp-Specific Fixed Assets |
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Depreciation and Amortization |
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Collab Commission and Royalty Expense |
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Other Operating Expenses |
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Total Operating Expenses |
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Loss From Operations |
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Other Income/(Expenses) |
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Impairment of Investment in Bendistillery |
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Interest Income |
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Interest Expense |
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Theft Expense |
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Settlement Income |
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Settlement Costs |
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Debt Financing Expenses |
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Penalties |
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Gain/(Loss) on Disposal of Fixed Assets |
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Loss on Deposits |
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Gain on Forgiveness of Debt |
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Total Other Income/(Expenses) |
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Loss Before Provision for Income Taxes |
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Benefit/(Provision) for Income Taxes |
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Net Loss |
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Less: Accrued Preferred Stock Dividends |
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Net Loss Attributable to Common Stockholders |
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Earnings/(Loss) Per Common Share Attributable to Common Stockholders |
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Basic |
| $ | ( | ) |
| $ | ( | ) |
| $ | ( | ) |
| $ | ( | ) |
Diluted |
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| $ | ( | ) |
| $ | ( | ) |
| $ | ( | ) |
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Weighted average number of common shares outstanding |
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Basic |
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Diluted |
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The accompanying notes are an integral part of these unaudited interim consolidated financial statements.
| F-2 |
| Table of Contents |
LFTD PARTNERS INC.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (DEFICIT)
(UNAUDITED)
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| Additional |
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| Deferred |
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| Total |
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| Preferred Stock |
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| Common Stock |
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| Contingent Stock |
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| Amount |
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| Amount |
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| Capital |
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| to be Issued |
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| Deficit |
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| Equity |
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| Balance, December 31, 2024 |
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| $ |
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| $ |
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| $ |
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| $ |
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| $ | ( | ) |
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| Series A Preferred Stock dividend payable |
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| Series B Preferred Stock dividend payable |
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| Net Loss |
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| Balance, March 31, 2025 |
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| $ |
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| $ |
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| $ |
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| $ |
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| $ | ( | ) |
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| Series A Preferred Stock dividend payable |
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| ( | ) |
|
| ( | ) |
| Series B Preferred Stock dividend payable |
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ( | ) |
|
| ( | ) |
| Net Loss |
|
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|
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|
|
|
|
|
|
|
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|
|
|
|
|
|
| ( | ) |
|
| ( | ) |
| Balance, June 30, 2025 |
|
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|
| $ |
|
|
|
|
| $ |
|
| $ |
|
| $ |
|
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| ( | ) |
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| |||||||
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| Balance, December 31, 2025 |
|
|
|
| $ |
|
|
|
|
| $ |
|
| $ |
|
| $ |
|
|
| ( | ) |
|
|
| |||||||
| Series A Preferred Stock dividend payable |
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ( | ) |
|
| ( | ) |
| Series B Preferred Stock dividend payable |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
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|
|
|
|
|
|
| ( | ) |
|
| ( | ) |
| Net Loss |
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|
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|
| ( | ) |
|
| ( | ) |
| Balance, March 31, 2026 |
|
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| $ |
|
|
|
|
| $ |
|
| $ |
|
| $ |
|
| $ | ( | ) |
|
|
| |||||||
| Series A Preferred Stock dividend payable |
|
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|
|
|
|
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|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ( | ) |
|
| ( | ) |
| Series B Preferred Stock dividend payable |
|
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|
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|
|
|
|
|
|
|
|
|
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|
|
|
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|
| ( | ) |
|
| ( | ) |
| Net Loss |
|
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|
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|
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| ( | ) |
|
| ( | ) |
| Balance, June 30, 2026 |
|
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| $ |
|
|
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|
| $ |
|
| $ |
|
| $ |
|
| $ | ( | ) |
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| |||||||
The accompanying notes are an integral part of these unaudited interim consolidated financial statements.
| F-3 |
| Table of Contents |
LFTD PARTNERS INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
|
| For the Six Months Ended |
| |||||
|
| June 30, |
| |||||
|
| 2026 |
|
| 2025 |
| ||
Cash Flows From Operating Activities |
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| ||
Net Loss |
| $ | ( | ) |
| $ | ( | ) |
Adjustments to Reconcile Net Income/(Loss) to Net Cash Provided by/(Used in) Operating Activities |
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Impairment of Investment in Bendistillery |
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Sales Allowance |
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Spoiled and Written Off Inventory |
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Inventory Reserve Expense (Allowance) |
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Bad Debt Expense |
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| ( | ) |
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| |
Impairment of Hemp-Specific Fixed Assets |
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Depreciation and Amortization |
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Settlement Income |
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| ( | ) | |
Debt Financing Expenses |
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Loss on Disposal of Fixed Assets |
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Loss on Deposits |
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Gain on Forgiveness of Debt |
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| ( | ) | |
Deferred Income Taxes |
|
| ( | ) |
|
| ( | ) |
Effect on Cash of Changes in Operating Assets and Liabilities |
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Prepaid Expenses |
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Accounts Receivable |
|
| ( | ) |
|
| ( | ) |
Inventory |
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| ( | ) | |
Change in Right Of Use Asset |
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Other Assets |
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| ( | ) | |
Income Tax Receivable and Payable, net |
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| ( | ) | |
Collab Commissions and Royalties Payable |
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| ( | ) | |
Deferred Revenue |
|
| ( | ) |
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| |
Accounts Payable and Accrued Expenses |
|
| ( | ) |
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| |
Accounts Payable and Interest Payable to Related Parties |
|
| ( | ) |
|
| ( | ) |
Change in Settlement Asset and Receivables |
|
| ( | ) |
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| |
Change in Operating Lease Liabilities |
|
| ( | ) |
|
| ( | ) |
Net Cash Provided By/(Used in) Operating Activities |
|
| ( | ) |
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| |
Cash Flows From Investing Activities |
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Purchases of Fixed Assets |
|
| ( | ) |
|
| ( | ) |
Net Cash Used in Investing Activities |
|
| ( | ) |
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| ( | ) |
Cash Flows From Financing Activities |
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Proceeds from Related Party Note |
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Payments on Related Party Note |
|
| ( | ) |
|
| ( | ) |
Payments on Surety Bank Loans |
|
| ( | ) |
|
| ( | ) |
Payments of Dividends to Preferred Stockholders |
|
| ( | ) |
|
| ( | ) |
Net Cash Used In Financing Activities |
|
| ( | ) |
|
| ( | ) |
Net Increase/(Decrease) in Cash |
|
| ( | ) |
|
| ( | ) |
Cash, Cash Equivalents and Restricted Cash at Beginning of Period |
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Cash, Cash Equivalents and Restricted Cash at End of Period |
| $ |
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| $ |
| ||
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| For the Six Months Ended |
| |||||
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| June 30, |
| |||||
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| 2026 |
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| 2025 |
| ||
Supplemental Cash Flow Information |
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Cash Paid For Interest |
| $ |
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| $ |
| ||
Cash Paid/(Received) For Income Taxes |
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| ( | ) | |
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Reconciliation of the Consolidated Statements of Cash Flows to the Consolidated Balance Sheets |
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Cash and Cash Equivalents |
| $ |
|
| $ |
| ||
Restricted Cash |
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| ||
Total Cash, Cash Equivalents and Restricted Cash at End of Period |
| $ |
|
| $ |
| ||
The accompanying notes are an integral part of these unaudited interim consolidated financial statements.
| F-4 |
| Table of Contents |
LFTD PARTNERS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1 – DESCRIPTION OF THE BUSINESS OF LFTD PARTNERS INC.
LFTD Partners Inc., Jacksonville, Florida, was organized under the laws of the State of Nevada on January 2, 1986. We were a former shell company, primarily engaged in identifying, structuring, and seeking to execute acquisitions of all or a portion of one or more operating businesses. Between 2011 and 2013, we acquired and operated several businesses linked to the defense industry. In 2018, we shifted focus to the cannabis industry where we have operated since. Shares of the Company’s common stock are listed for trading on the OTCQB Venture Market under the symbol “LIFD”.
LFTD Partners is the parent corporation of Lifted Liquids, Inc. d/b/a Lifted Made, d/b/a Urb Finest Flowers, d/b/a Highlandia and d/b/a LM Nutra, Kenosha, Wisconsin (“Lifted Made” or “Lifted”), which manufactures and sells hemp-derived and other psychoactive products under its award-winning Urb Finest Flowers (“Urb”) brand (www.urb.shop) and other brands, hemp-derived beverages under the Highlandia brand (www.Highlandia.com), and hemp-free health and wellness gummies under its Mielos brand (www.mielos.com). Lifted also has plans to manufacture and sell hemp-free gummies in multiple flavors under a new brand. Lifted also manufactures and sells hemp-derived and hemp-free products to private label clients, and licenses the Urb brand name to Extrax NM LLC in New Mexico for use on marijuana products. LFTD Partners also owns a
LFTD Partners is completely dependent upon revenue from Lifted to stay in business and to remain solvent. If Lifted’s revenue were to be seriously disrupted, LFTD Partners would face severe financial difficulties including a potential bankruptcy.
At this point in time, both of Lifted’s two major lines of business – intoxicating hemp-derived products and kratom-derived 7-OH and other products (collectively “7-OH”) – are at severe risk of serious disruption and potential elimination.
Pursuant to a federal law enacted in November 2025, intoxicating hemp-derived products are scheduled to become federally illegal as of November 12, 2026, unless that law is repealed, amended or delayed. And even if that federal law is repealed, amended or delayed, numerous states have enacted laws restricting or prohibiting sales of intoxicating hemp-derived products.
Pursuant to federal regulations that are in the process of being enacted by the U.S. Drug Enforcement Administration, products that include 7-OH above a defined threshold either will temporarily become federally illegal as a controlled substance or will be otherwise restricted.
These federal legislative and regulatory attacks on intoxicating hemp-derived products and 7-OH products threaten to eliminate Lifted’s two major lines of business during the second half of 2026. Lifted has already experienced slowing sales activity and slower collection of accounts receivable in response to regulatory uncertainty and changing market conditions and has taken steps to reduce its remaining inventory of certain affected products. If Lifted’s two major lines of business are eliminated, then Lifted’s operating results, liquidity, and cash flows would be materially adversely affected.
Under those circumstances, Lifted could experience significant liquidity constraints that could impair its ability to satisfy payroll, debt service, accounts payable, rent, insurance, taxes, professional fees, and other operating obligations as they become due. If the Company is unable to offset these revenue declines through cost reductions, asset sales, financing transactions, or diversification initiatives, management believes that the Company could become insolvent and may be required to seek protection under applicable bankruptcy laws.
| F-5 |
| Table of Contents |
The management and board of directors of Lifted and LFTD Partners are acutely aware of these very serious risks, and have responded in several ways:
These conditions raise substantial doubt about the Company’s ability to continue as a going concern for the twelve months following the issuance of these financial statements. Management has implemented, and continues to evaluate, several initiatives intended to preserve liquidity, reduce operating costs, monetize assets, and diversify the Company’s operations; however, there can be no assurance that these initiatives will be completed successfully or will be sufficient to alleviate the substantial doubt regarding the Company’s ability to continue as a going concern:
| (1) | During 2026, Lifted has streamlined its operations by laying off a large number of employees and independent contractors. Lifted’s total workforce, including both employees and independent contractors, at one time was close to 200 people, but has been streamlined via layoffs down to approximately 77 people. Significant additional layoffs are highly likely if either or both of Lifted’ two major lines of business are seriously disrupted or eliminated. Such layoffs are highly likely to include people with valuable skills, experience and relationships without which Lifted’s future operations and revenues would be materially adversely affected. |
|
|
|
| (2) | On July 22, 2026, Lifted entered into a binding agreement to sell its real property located at 5511 95th Avenue, Kenosha, Wisconsin for a purchase price of $ |
|
|
|
| (3) | Faced with these very serious risks to Lifted’s two major lines of business, LFTD Partners perceives an urgent need to diversify Lifted’s and LFTD Partners’ business away from intoxicating hemp-derived products and 7-OH products. |
| a. | In the case of Lifted, the management of Lifted plans to manufacture and sell hemp-free gummies in multiple flavors under a new brand, and is exploring the possibility of manufacturing and selling, or purchasing and re-selling, other hemp-free and kratom-free products that may appeal to consumers whose access to intoxicating hemp-derived products and to 7-OH products have been reduced or eliminated as described above. |
|
|
|
| b. | In the case of LFTD Partners, in June 2026, the Board of Directors of the Company voted unanimously to authorize the CEO of the Company to identify, negotiate and sign contracts to acquire multifamily housing properties and/or laundromats, and in that connection to hire investment bankers and raise capital to support those acquisitions. Pursuant to that resolution, the CEO of the Company, working in conjunction with our President and CFO, have been conducting due diligence investigations of many apartment buildings and laundromats, and have made written and oral offers pursuant to which newly formed subsidiaries of the Company would acquire multiple apartment buildings along the East Coast of Florida. To date, none of these offers have resulted in any legally binding agreements, but these efforts are continuing. No guarantee or assurance can be given that any apartment buildings or laundromats will be acquired by the Company, nor on any particular pricing, terms and conditions. |
|
|
|
|
| It is unclear at this point in time how much debt and/or equity can be dedicated or raised by the Company for acquisitions of apartment buildings or laundromats. The Company has engaged, and is continuing to engage, in discussions with certain banks, investment banks and other potential sources of capital for this purpose. No guarantee or assurance can be given that the Company’s capital raising efforts to purchase apartment buildings and/or laundromats will be successful. The Company’s challenges in raising capital relate to several factors, including: potential investors’ and lenders’ skepticism regarding the future of Lifted’s intoxicating hemp-derived and 7-OH products; the fact that the Company’s common stock is not currently traded on NASDAQ or on another national exchange; and the low trading volume of the Company’s stock on the OTCQB Venture Market. Also, the Company’s limited cash on hand and Lifted’s need to devote its limited cash on hand to its expansion opportunities in the hemp-derived THC beverages industry, the hemp-free gummies industry, and other new consumer products have made acquisitions of apartment buildings that require significant equity components of the purchase price difficult. Consequently, the Company is focusing a significant portion of its due diligence efforts on properties that include seller financing or assumable debt. |
| F-6 |
| Table of Contents |
If and when the Company is successful in acquiring one or more apartment buildings and/or laundromats, the CEO of the Company has been authorized by our Board of Directors to implement a change in the Company’s name and trading ticker symbol, in order to highlight the Company’s diversification away from intoxicating hemp-derived and 7-OH products. Again, no guarantee or assurance can be given that this diversification can or will be accomplished, nor on any particular timetable.
Our principal headquarters are located at 14155 Pine Island Drive, Jacksonville, Florida 32224. Our telephone number is (847) 915-2446. Our corporate website address is www.LFTDPartners.com.
NOTE 2 – BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES
Consolidated Financial Statements – The accompanying unaudited interim consolidated financial statements include the accounts of LFTD Partners and its wholly owned subsidiaries. The financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“US GAAP”) for interim financial information and in accordance with the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). Accordingly, they do not include all of the information and footnotes required by US GAAP for complete financial statements and, accordingly, certain information, footnotes and disclosures normally included in the annual financial statements, prepared in accordance with US GAAP, have been condensed or omitted in accordance with SEC rules and regulations. As part of the consolidation, all intercompany transactions have been eliminated. The financial data presented herein should be read in conjunction with the audited consolidated financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025 (the “2025 Form 10-K”). In the opinion of management, the financial data presented includes all adjustments necessary to present fairly the financial position, results of operations and cash flows for the interim periods presented. Certain previously reported amounts have been reclassified between line items to conform to the current period presentation. Results of interim periods should not be considered indicative of the results for the full year. These unaudited interim consolidated financial statements include estimates and assumptions of management that affect the amounts reported in the unaudited consolidated financial statements. Actual results could differ from these estimates.
Use of Estimates – The preparation of financial statements in conformity with US GAAP typically requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses. Actual results and outcomes may differ from management’s estimates and assumptions. Key estimates in these financial statements include, but are not limited to, the inventory reserve (allowance), allowance for doubtful accounts, sales allowance, estimated useful lives of fixed assets, impairment of fixed assets, impairment of investments, and valuation allowance on deferred income tax assets.
Cash and Cash Equivalents – Cash and cash equivalents as of the reported period ends include cash on-hand. The Company considers all highly liquid investments with an original maturity date within 90 days to be cash equivalents. Cash equivalents are carried at cost. The Company maintains its cash balance at a credit-worthy financial institution that is insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $
Fair Value of Financial Instruments – The historical carrying amount of the financial instruments, which principally include cash, trade receivables, historical accounts payable and accrued expenses, approximates fair value due to the relative short maturity of such instruments.
| F-7 |
| Table of Contents |
Accounting Standards Codification (“ASC”) 820 defines fair value, establishes a framework for measuring fair value under US GAAP and enhances disclosures about fair value measurements. Fair value is defined under ASC 820 as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value under ASC 820 must maximize the use of observable inputs and minimize the use of unobservable inputs. The standard describes a fair-value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value as follows:
Level 1 –Quoted prices in active markets for identical assets or liabilities.
Level 2 –Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
Level 3 –Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
Accounting for Investments
The Company’s Investment in Lifted
The financial statements of LFTD Partners are consolidated with Lifted’s, since Lifted is a wholly owned subsidiary of LFTD Partners.
The Act (defined below) necessitated the calculation and recording of an impairment charge on the Lifted Goodwill (defined below) and Oculus Goodwill (defined below). Reference is hereby made to the disclosures in the following section, which are hereby incorporated by reference thereto:
NOTE 4 – THE COMPANY’S INVESTMENTS
The Company’s Investment in Lifted
The Company’s Investments in Ablis and Bendistillery
The Company’s investments in Ablis and Bendistillery are recorded at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. The Company owns less than 20% of the equity ownership of each of these entities and has no substantial influence over the management of the businesses. In accordance with US GAAP, the Company does not consolidate its financial statements with those of Ablis and Bendistillery.
At each reporting period, the Company makes a qualitative assessment considering impairment indicators to evaluate whether its investments are impaired. Factors that the Company would consider indicators of impairment include: (1) a significant deterioration in the earnings performance, credit rating, asset quality, or business prospects of the investee, (2) a significant adverse change in the regulatory, economic, or technological environment of the investee, (3) a significant adverse change in the general market condition of either the geographical area or the industry in which the investee operates, (4) a bona fide offer to purchase, an offer by the investee to sell, or a completed auction process for the same or similar investment for an amount less than the carrying amount of that investment, and (5) factors that raise significant concerns about the investee’s ability to continue as a going concern, such as negative cash flows from operations, working capital deficiencies, or noncompliance with statutory capital requirements or debt covenants, if any.
The qualitative assessments at the end of first, second and third quarters are done via conference calls with the management teams of Ablis and Bendistillery. The qualitative assessment at the end of the fourth quarter relating to these entities also includes review of their respective financial statements that have been reviewed by a third-party accounting firm. At that time, the Company performs an annual impairment assessment. The reviewed financial statements of these companies are not audited, and the Company is not active in the management of these companies, and except for these companies’ quarterly meetings with the management of the Company, the Company’s assessment of these companies is inherently limited to infrequent and relatively brief conversations with officers of these companies and to reviews of those reviewed financial statements.
| F-8 |
| Table of Contents |
The Act (defined below) necessitated the calculation and recording of an impairment of LFTD Partners’ investment in Ablis, from $
NOTE 4 – THE COMPANY’S INVESTMENTS
The Company’s Investments in Ablis and Bendistillery
Regarding LFTD Partners investment in Bendistillery: for a number of reasons, as of December 31, 2025, LFTD Partners recorded an impairment charge on its investment in Bendistillery, reducing the carrying value of LFTD Partners’ investment in Bendistillery to $
NOTE 4 – THE COMPANY’S INVESTMENTS
The Company’s Investments in Ablis and Bendistillery
Prepaid Expenses – Prepaid expenses relate primarily to advance payments made for purchases of inventory; prepaid inventory is reclassified as inventory when the purchased items are received by the Company. Other expenses, such as prepaid commercial property insurance and prepaid health and dental insurance, among others, are also recognized as prepaid expenses when advance payments are made for services that will be performed in periods subsequent to the balance sheet date. Prepaids for these other expenses are recognized as expenses ratably over the applicable service period.
Accounts Receivable – The Company evaluates the collectability of its trade accounts receivable based on a number of factors. Management of the Company reviews and discusses all outstanding customer trade balances as of reporting period end. In circumstances where the Company becomes aware of a specific customer’s inability to meet its financial obligations to the Company, a specific reserve for bad debts is estimated and recorded (the “Allowance for Doubtful Accounts”), which reduces the recognized receivable to the estimated amount the Company believes will ultimately be collected. Management also considers industry-specific factors which may impact customers’ ability to meet their financial obligations to the Company.
In addition to specific customer identification of potential bad debts, management takes into consideration Accounting Standards Update (“ASU”) No. 2016-13, Financial Instruments – Credit Losses, which is codified as Accounting Standards Codification Topic 326, adds to US GAAP the current expected credit loss model (“CECL Model”), which is a measurement model based on expected losses rather than incurred losses. Under the CECL Model, an entity recognizes its estimate of expected losses as an allowance. The Company has considered the applicable guidance in ASU 2016-13. Key aspects of the CECL Model include the following:
1. | The CECL Model applies to financing receivables measured at amortized cost, which includes trade accounts receivable. | |
2. | An entity will recognize an allowance for credit losses that results in the financial statements reflecting the net amount expected to be collected from the financial asset. | |
3. | The allowance represents the portion of the amortized cost basis that an entity does not expect to collect due to credit over the asset’s contractual life, considering past events, current conditions and reasonable and supportable forecasts of future economic conditions. |
Accounting Standards Update 2025-05 (“Update”) to ASC Topic 326 is effective for periods beginning after December 15, 2025. The amendments in this Update provide a practical expedient under which an entity assumes that current conditions as of the balance sheet date do not change for the remaining life of the current trade receivables, thereby eliminating the requirement to identify, analyze, and document macroeconomic data as part of developing a reasonable and supportable forecast when estimating expected credit losses.
LFTD Partners elects the practical expedient, starting with its financial statements for the year ended December 31, 2025, to assume balance sheet date conditions do not change for the remaining life of current trade receivables.
| F-9 |
| Table of Contents |
In performing its CECL Model Analysis, management calculates the ratio of write offs to sales made to wholesalers and distributors for the trailing three-year period (the “Bad Debt Loss Rate”). The Bad Debt Loss Rate is then multiplied by sales made to wholesalers and distributors during the trailing twelve months (the “Bad Debt Calc”). The Bad Debt Calc is compared to the total accounts receivable that is older than 90 days as of reported period end; for conservatism, whichever is larger is considered the Allowance for Doubtful Accounts as of reported period end. The Company’s position is that the Company’s conservative approach toward the treatment of Allowance for Doubtful Accounts provides sufficient coverage in relation to potential credit losses from outstanding invoice write-offs. Accounts receivable of $
The Company records an allowance for sales for estimated future discounts and refunds related to products sold prior to the reporting period end that are expected to be credited or refunded to customers. The allowance represents management’s estimate of consideration to which the Company does not expect to be entitled and is recorded as a reduction of net sales. A sales allowance of $
Adjustments to the allowance for sales, whether increases or decreases, are recorded as adjustments to net sales in the Consolidated Statements of Operations, with a corresponding adjustment to the Return Liability within Accounts Payable and Accrued Expenses on the Consolidated Balance Sheets. In periods prior to December 31, 2025, the allowance was presented as a contra accounts receivable account; however, the Company has reclassified the balance to a Return Liability to more appropriately reflect the nature of the obligation under ASC 606.
A primary impetus for the need of a sales allowance is because the regulatory landscape at the municipal, state and federal levels in which Lifted operates is unstable and unpredictable. Reference is hereby made to the disclosures in the following section, which are hereby incorporated by reference thereto:
NOTE 3 - RISKS AND UNCERTAINTIES
Going Concern
Moreover, sometimes in the past, when employees of federal, state and local regulatory agencies and/or law enforcement have made statements and/or issue correspondence that claim or imply that certain products that Lifted sells are unsafe or illegal, or should be banned, these statements and correspondence, and industry publications and/or news media coverage of such statements and correspondence, have triggered confusion, uncertainty or alarm among the distributors, retailers and consumers who purchase our products, and consequently have resulted in returns of our products. On a case-by-case basis, the Company has credited or refunded the customer for returns. In many cases, the Company has been able to re-sell the returned products to other distributors, retailers and consumers. In anticipation of making discretionary concessions and issuing credits for certain returned products, management records a sales allowance.
Described below are some of the reasons why a customer may want to return an ordered item, and how the Company responds in each situation:
| 1) | The ordered item breaks, melts, or separates in transit to the customer. In this case, the Company will replace the broken, melted or separated item at no cost to the customer. |
| 2) | The Company shipped the wrong item to the customer. In this case, the Company will allow the customer to keep, at no cost to the customer, the item that was mistakenly shipped to the customer. The Company will also ship the correct product to the customer, at no cost to the customer. |
| 3) | The customer ordered the wrong product. In this case, the customer, at his/her own expense, must ship the mistakenly ordered product back to the Company, and the Company will ship the correct product to the customer. |
| 4) | The ordered item is recalled. In a situation where product is recalled, the Company will offer a replacement, credit, or refund. |
| F-10 |
| Table of Contents |
Impact of Delayed Customer Payments on Cash Flow – The Company’s ability to generate sufficient operating cash flow is directly affected by the timing and collectability of its accounts receivable. A significant portion of the Company’s revenue comes from wholesale and distributor sales, which often involve extended payment terms. As a result, delays in customer payments can have a material impact on cash flow, liquidity, and working capital availability. Fluctuations in cash collections can impact the Company’s ability to meet short-term obligations, fund inventory purchases, and invest in growth initiatives. Prolonged delays in accounts receivable collection could necessitate further adjustments to working capital management strategies, including modifications to vendor payment schedules, securing additional financing, or reevaluating sales terms to improve cash flow predictability. Management assesses the impact of delayed customer payments on overall liquidity and considers credit risk and allowance for doubtful accounts, in an effort to provide some safeguard against potential cash flow disruptions. However, if economic conditions deteriorate or customer creditworthiness declines further, additional measures may be required to preserve liquidity and operational stability.
Customer Concentration Risk – As of June 30, 2026 and 2025, one and two customers represented more than
Inventory – Inventory is valued at the lower of average cost or market value (net realizable value). The net realizable value of inventory represents the estimated selling price for inventory in the ordinary course of business, less all estimated costs of completion and costs necessary to make the sale. The determination of net realizable value requires significant judgment, including consideration of factors such as shrinkage, the aging of and future demand for inventory, and expected future selling price the Company expects to realize by selling the inventory. The estimates are judgmental in nature and are made at a point in time, using available information, expected business plans and expected market conditions. As a result, the actual amount received on sale could differ from the estimated value of inventory. Periodic reviews are performed on the inventory balance.
Inventory consisted of the following at June 30, 2026 and December 31, 2025:
|
| June 30, 2026 |
|
| December 31, 2025 |
| ||
Raw Goods |
| $ |
|
| $ |
| ||
Finished Goods |
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|
|
|
|
| ||
Inventory Reserve (Allowance) |
|
| ( | ) |
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|
| |
Total Inventory |
| $ |
|
| $ |
| ||
Overhead expenses related to leases, 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. At June 30, 2026, $
Inventory Reserve (Allowance)
Under US GAAP, an inventory reserve (allowance) is recorded to ensure inventory is not carried on the balance sheet at more than its recoverable value. Events that might trigger the need for an inventory reserve include, but are not limited to:
-Sustained decline in sales of particular products;
-Adverse regulatory developments with increased certainty;
-Significant increases in inventory aging or obsolescence; and
-Observable deterioration in customer demand.
A total inventory reserve of $
| F-11 |
| Table of Contents |
Regarding Lifted’s inventory reserve against its hemp-derived inventory: on November 12, 2025, President Trump signed into law H.R. 5371, the “Continuing Appropriations, Agriculture, Legislative Branch, Military Construction and Veterans Affairs, and Extensions Act, 2026” (the “Act”), which makes continuing appropriations and extensions for fiscal year 2026, and which also bans intoxicating hemp-derived products nationally on November 12, 2026. It is unknown to the Company whether or not the sections of the Act that impact the hemp industry will ultimately go into effect on November 12, 2026, or if those sections will be replaced, impacted or amended by subsequent acts of Congress. It is unknown to management what the demand for hemp products will be through November 12, 2026. An inventory reserve of $
Regarding Lifted’s inventory reserve against its kratom-derived inventory: Schedule I placement or other significant federal regulatory restrictions may occur, as the FDA and the DEA have expressed concerns regarding products containing 7-hydroxymitragynine (“7-OH”). In July 2026, the Department of Health and Human Services (“HHS”) initiated a Request for Information regarding proposed scheduling thresholds for 7-OH, and the DEA issued two notices of intent to issue temporary scheduling orders, which were published in the Federal Register. The first proposal would temporarily place 7-OH into Schedule I when present above specified concentration or dosage thresholds in botanical kratom and certain processed products. The second would place mitragynine pseudoindoxyl, MGM-15, and MGM-16 into Schedule I without concentration thresholds. If finalized, these proposals could materially restrict or prohibit the manufacture, distribution, and sale of certain kratom-derived products sold by the Company and materially reduce the Company’s revenue, potentially by approximately half or more. Based on these developments, the Company recorded an inventory reserve of $1,434,458 against its kratom-derived inventory as of June 30, 2026. The Company continues to monitor these regulatory developments and will evaluate their impact as the rulemaking process progresses.
Regarding Lifted’s inventory reserve of $
NOTE 3 - RISKS AND UNCERTAINTIES
Going Concern
Cost of Goods Sold – Cost of goods sold primarily consist of the costs of raw goods utilized in the manufacture of products, direct labor, co-packing fees, freight and shipping charges, and certain quality control costs, such as lab testing costs.
Spoiled and obsolete inventory that is written off is a component of cost of goods sold. During the quarters ended June 30, 2026 and 2025, $
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 and unusable raw goods; |
| 3) | Identifying finished goods that would no longer be sold or that are slow moving; |
| 4) | Identifying finished goods that are expired or that will expire within a month after reported period end; and |
| 5) | Valuing and expensing raw and finished goods that would no longer be sold. |
| F-12 |
| Table of Contents |
Inventory reserve (allowance) expense is also a component of cost of goods sold. $
NOTE 2 – BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES
Inventory
NOTE 3 - RISKS AND UNCERTAINTIES
Going Concern
Fixed Assets – Fixed assets are recorded and stated at cost. Fixed assets that cost less than $
Management regularly reviews property and equipment and other long-lived assets for possible impairment. This review occurs annually, or more frequently if events or changes in circumstances indicate the carrying amount of the asset may not be recoverable. If there is an indication of impairment, management prepares an estimate of future cash flows (undiscounted and without interest charges) expected to result from the use of the asset and its eventual disposition. If these cash flows are less than the carrying amount of the asset, an impairment loss is recognized to write down the asset to its estimated fair value. Fair value is determined using valuation techniques appropriate under the circumstances and consistent with ASC 820. Estimates of future cash flows and fair value involve significant management judgment and are based on information available at the time the estimates are made.
During the first quarter of 2026, management compared Lifted’s undiscounted cash flows through mid-November 2026 (November 12, 2026 is when the national hemp ban goes into effect under the Act), based on Lifted’s first quarter hemp-derived product sales; based on this analysis, the undiscounted cash flow for 2026 is less than the carrying value of the hemp-specific fixed assets as of March 31, 2026. It is unknown to the Company whether or not the sections of the Act that impact the hemp industry will ultimately go into effect on November 12, 2026, or if those sections will be replaced, impacted or amended by subsequent acts of Congress. It is also unknown what hemp sales will be closer to November 12, 2026. The hemp-specific fixed assets may be sold, but it is unknown for what price. Thus, as of March 31, 2026, management recorded an impairment charge of $
Similarly, during the second quarter of 2026, management updated its impairment analysis using current information available as of June 30, 2026, including revised estimates of the undiscounted future cash flows expected to be generated by the Company’s hemp-specific fixed assets through November 12, 2026. Based on this updated analysis and continued uncertainty regarding the future use and recoverability of these assets, management concluded that an additional impairment charge was warranted. Accordingly, the Company recognized an additional impairment charge of $
Reference is hereby made to the disclosures in the following section, which are hereby incorporated by reference thereto:
| F-13 |
| Table of Contents |
NOTE 3 - RISKS AND UNCERTAINTIES
Going Concern
Assets Held for Sale – The Company classifies a long-lived asset or disposal group as held for sale in the period in which all applicable criteria under ASC 360 are met. Assets classified as held for sale are presented separately from property and equipment and measured at the lower of their carrying amount or fair value less cost to sell. Depreciation ceases upon classification as held for sale. Reference is hereby made to the disclosures in the following section, which are hereby incorporated by reference thereto:
NOTE 6 - ASSETS HELD FOR SALE
Revenue – The Company recognizes revenue in accordance with ASC 606. The majority of the Company’s sales are of branded products to distributors, followed by the Company’s sales to wholesalers, and then the Company’s sales to end consumers. A minority of the Company’s sales are of raw goods to manufacturers, distributors and wholesalers. Distributors primarily sell Lifted’s products to vape and smoke shops, stores specializing in hemp-derived products, convenience stores, health food stores, and other outlets. Lifted extends terms selectively to certain distributors and wholesalers. End consumers do not have payment terms; end consumers pay at the time of purchase.
Typically, the Company’s revenue is recognized when it satisfies a single performance obligation by transferring control of its products to a customer. Control is generally transferred when the Company’s products are either shipped or delivered based on the terms contained within the underlying contracts or agreements. If the shipping terms on a sale are FOB destination, the revenue is deferred until the product reaches its destination.
The Company excludes from revenues all taxes assessed by a governmental authority that are imposed on the sale of its products and collected from customers. Discounts and rebates provided to customers are recorded as a reduction to gross sales. Reference is hereby made to the disclosures in the following section, which are hereby incorporated by reference thereto:
NOTE 3 - RISKS AND UNCERTAINTIES
Going Concern
License Fee – On June 1, 2023, Lifted and Extrax NM LLC (“ENM”) entered into an Agreement (the “ENM Agreement”). Pursuant to the ENM Agreement, (1) Lifted will sell certain devices/objects to ENM, and Lifted will loan certain amounts to ENM, and (2) ENM will manufacture and exclusively sell Urb-branded marijuana products to licensed marijuana dispensaries located in New Mexico. ENM shall pay over to Lifted one-half of the gross sales proceeds, excluding only governmentally-imposed taxes, received by ENM from product sales, which payments shall be allocated and applied as follows: firstly, to repay Lifted for its loans to ENM; secondly, to pay to Lifted mutually agreed upon amounts for said devices/objects sold by Lifted to ENM; and thirdly, to pay to Lifted a license fee (the “License Fee”). The License Fee shall be calculated as an amount equal to (a) one-half of the gross sales proceeds paid to Lifted, minus (b) the loan repayment(s) and the amounts paid for said devices/objects sold by Lifted to ENM. License Fee is included in Net Sales, if any.
The ENM Agreement is for an Initial Term of 60 months, provided that if the aggregate product sales during the Initial Term are $
Lifted and ENM each shall have the right to terminate the ENM Agreement in specified circumstances, including in the event that its CEO determines in good faith, and provides evidence to other party proving, that the business being conducted pursuant to the terms and conditions of the ENM Agreement is no longer profitable for such company.
In July 2025, the Parties agreed:
| a) | That Extrax would not remit 50% of its monthly gross revenue to Lifted, starting with April 2025; |
| b) | Lifted would not make any more loans to Extrax; and |
| c) | For any future purchase of inventory from Lifted, Extrax would pay Lifted in full upon receipt of an invoice from Lifted (“July Agreement”) |
Then, as of September 30, 2025, Lifted and ENM signed an Agreement pursuant to which ENM has acknowledged that it owes Lifted a total $
Because no restructuring of the deal occurred by December 31, 2025, and because the loans receivable from ENM are subject to allowance considerations under ASC 326, the Company determined that an allowance against the outstanding loans (“Provision for Credit Losses – Extrax NM Loans”) was necessary as of December 31, 2025. As such, as of December 31, 2025, the loans receivable from ENM (a non-current asset) total $
| F-14 |
| Table of Contents |
No License Fee was reported during the six months ended June 30, 2026 or 2025.
ENM also owed Lifted a total of $
Segment Disclosures
The financial statements of LFTD Partners are consolidated with Lifted’s, since Lifted is a wholly owned subsidiary of LFTD Partners. All of the Company’s sales are generated by the Company’s wholly owned subsidiary Lifted; LFTD Partners as an entity by itself generates no sales.
Pursuant to ASC 280-10-50-1: “an operating segment is a component of a public entity that has all of the following characteristics:
| a. | It engages in business activities from which it may recognize revenues and incur expenses (including revenues and expenses relating to transactions with other components of the same public entity). |
| b. | Its operating results are regularly reviewed by the public entity’s chief operating decision maker (“CODM”) to make decisions about resources to be allocated to the segment and assess its performance. |
| c. | Its discrete financial information is available.” |
Based on the similarities and shared resources of our production and related product portfolio, the Company views its operations and manages its business as one operating and one reporting segment. The Company’s CODM is NWarrender. Due to the rapidly evolving nature of the Company’s industry, NWarrender leads the Company’s efforts to launch new products to stay ahead of trends, find new sales channels, and modify sales strategies. Consumer demands, changes to regulations, proposed legislation, resource needs for Lifted’s various brands, new product and diversification opportunities are some of the factors that are considered by NWarrender when determining how to allocate the Company’s resources for operations and business development.
Shown below are tables showing the approximate disaggregation of historical revenue:
|
| For the Three Months Ended |
|
| For the Six Months Ended |
| ||||||||||||||||||||||||||
|
| June 30, |
|
| June 30, |
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Type of Sale |
| 2026 |
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| 2025 |
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| 2026 |
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| 2025 |
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Net sales of raw materials to customers |
| $ |
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| % |
| $ |
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| % |
| $ |
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| % |
| $ |
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Net sales of products to private label clients |
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| % |
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| % |
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| % |
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Net sales of products to wholesalers |
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| % |
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| % |
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| % |
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Net sales of products to distributors |
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| % |
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| % |
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| % |
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Net sales of products to end consumers |
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| % |
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| % |
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| % |
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Net Sales |
| $ |
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| % |
| $ |
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| % |
| $ |
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| % |
| $ |
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| % | ||||||||
| F-15 |
| Table of Contents |
|
| For the Three Months Ended |
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| For the Six Months Ended |
| ||||||||||||||||||||||||||
|
| June 30, |
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| June 30, |
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Product Type |
| 2026 |
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| 2025 |
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| 2026 |
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| 2025 |
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Beverage |
| $ |
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|
| % |
| $ |
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| % |
| $ |
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| % |
| $ |
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| % | ||||||||
Vapes |
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|
| % |
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|
| % |
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| % |
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| % | ||||||||
Edibles |
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| % |
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| % |
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| % |
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Flower |
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| % |
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Cartridges |
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| % |
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| % |
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| % |
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Apparel and Accessories |
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| % |
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| % |
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| % |
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Net Sales |
| $ |
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|
| % |
| $ |
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| % |
| $ |
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| % |
| $ |
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| % | ||||||||
|
| For the Three Months Ended |
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| For the Six Months Ended |
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| June 30, |
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| June 30, |
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Hemp vs Non-Hemp Product Sales |
| 2026 |
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| 2025 |
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| 2026 |
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| 2025 |
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Net sales of hemp products |
| $ |
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| % |
| $ |
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| % |
| $ |
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| % |
| $ |
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Net sales of non-hemp products |
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| % |
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| % |
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Net Sales |
| $ |
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| % |
| $ |
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| % |
| $ |
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| % |
| $ |
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| For the Three Months Ended |
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| For the Six Months Ended |
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| June 30, |
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| June 30, |
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Geographic Market |
| 2026 |
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| 2025 |
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| 2026 |
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| 2025 |
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United States |
| $ |
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| % |
| $ |
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| % |
| $ |
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International |
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| % |
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| % |
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Net Sales |
| $ |
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| % |
| $ |
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| % |
| $ |
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| % |
| $ |
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| % | ||||||||
Deferred Revenue – Amounts received from a customer before the purchased product is shipped to the customer are treated as deferred revenue. If cash is not received, an accounts receivable is recognized for the invoiced order, but revenue is not recognized until the order is fully shipped.
At June 30, 2026, total deferred revenue was $
Earnings/(Loss) Per Common Share Attributable to Common Stockholders – Basic earnings/(loss) per common share attributable to common stockholders is calculated by dividing net income/(loss), less accrued preferred stock dividends, by the weighted-average number of common shares outstanding during the period. Diluted earnings/(loss) per common share attributable to common stockholders is calculated by dividing net income/(loss), less accrued preferred stock dividends, by the weighted-average number of common shares and dilutive common share equivalents outstanding during the period. When dilutive, the incremental potential common shares issuable upon exercise of stock options and warrants, convertible preferred stock and any issuable Deferred Contingent Stock are determined by the treasury stock method. The following table summarizes the calculations of basic and diluted earnings/(loss) per common share for the three and six months ended June 30, 2026 and 2025:
|
| For the Three Months Ended |
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| For the Six Months Ended |
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| June 30, |
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| June 30, |
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| 2026 |
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| 2025 |
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| 2026 |
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| 2025 |
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Net Loss |
| $ | ( | ) |
| $ | ( | ) |
| Net Loss |
| $ | ( | ) |
| $ | ( | ) |
Less: Accrued Preferred Stock Dividends |
|
| ( | ) |
|
| ( | ) |
| Less: Accrued Preferred Stock Dividends |
|
| ( | ) |
|
| ( | ) |
Net Loss Attributable to Common Stockholders |
| $ | ( | ) |
| $ | ( | ) |
| Net Loss Attributable to Common Stockholders |
| $ | ( | ) |
| $ | ( | ) |
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| Weighted average number of common shares outstanding |
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| Weighted average number of common shares outstanding |
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Basic |
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| Basic |
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Diluted |
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| Diluted |
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Loss Per Common Share Attributable to Common Stockholders |
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| Loss Per Common Share Attributable to Common Stockholders |
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Basic |
| $ | ( | ) |
| $ | ( | ) |
| Basic |
| $ | ( | ) |
| $ | ( | ) |
Diluted |
| $ | ( | ) |
| $ | ( | ) |
| Diluted |
| $ | ( | ) |
| $ | ( | ) |
| F-16 |
| Table of Contents |
Recent Accounting Pronouncements – On December 14, 2023, the FASB issued a final standard on improvements to income tax disclosures, ASU 2023-09, Improvements to Income Tax Disclosures. The standard requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as information on income taxes paid. The standard is intended to benefit investors by providing more detailed income tax disclosures that would be useful in making capital allocation decisions. For public business entities, the new requirements became effective for annual periods beginning after December 15, 2024, and as such the guidance was adopted by the Company in its 2025 year-end financial statements.
In addition, in November 2024, the FASB issued ASU 2024-03 - Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40). ASU 2024-03 is effective for public business entities for annual periods beginning after December 15, 2026. The Company is currently evaluating the impact, if any, that the updated standard will have on the consolidated financial statements.
In July 2025, the FASB issued Accounting Standards Update 2025-05 to Financial Instruments – Credit Losses (Topic 326) (“Update”). The amendments in this Update provide a practical expedient under which an entity assumes that current conditions as of the balance sheet date do not change for the remaining life of the current trade receivables, thereby eliminating the requirement to identify, analyze, and document macroeconomic data as part of developing a reasonable and supportable forecast when estimating expected credit losses. LFTD Partners elected the practical expedient, starting with its financial statements for the year ended December 31, 2025, to assume balance sheet date conditions do not change for the remaining life of current trade receivables.
Off-Balance Sheet Arrangements – The Company has no off-balance sheet arrangements.
Reclassifications – Some items from the prior period have been reclassified within the financial statements to conform with the current presentation. These reclassifications had no effect on previously reported net income (loss), total assets, total liabilities, or stockholders’ equity.
Business Combinations – The Company accounts for its acquisitions under ASC Topic 805, Business Combinations and Reorganizations (“ASC Topic 805”). ASC Topic 805 provides guidance on how the acquirer recognizes and measures the consideration transferred, identifiable assets acquired, liabilities assumed, non-controlling interests, and goodwill acquired in a business combination. ASC Topic 805 also expands required disclosures surrounding the nature and financial effects of business combinations. Acquisition costs are expensed as incurred.
When the Company acquires a business, we allocate the purchase price to the assets acquired and liabilities assumed in the transaction at their respective estimated fair values. We record any premium over the fair value of net assets acquired as goodwill. The allocation of the purchase price involves judgments and estimates both in characterizing the assets and in determining their fair value. We use all available information to make these fair value determinations and engage independent valuation specialists to assist in the fair value determination of the acquired long-lived assets.
Accounting for Goodwill – Goodwill represents the future economic benefit arising from other assets acquired that could not be individually identified and separately recognized. The goodwill arising from the Company’s acquisitions is attributable to the value of the potential expanded market opportunity with new customers.
Goodwill is not amortized. Goodwill is tested at least annually for impairment at the report unit level. The Company performs an annual impairment assessment for goodwill during the fourth quarter of each year and more frequently whenever events or changes in circumstances indicate that the fair value of the asset may be less than the carrying amount.
Impairment of goodwill is the condition that exists when the carrying amount of a reporting unit that includes goodwill exceeds its fair value. A goodwill impairment loss is recognized for the amount that the carrying amount of a reporting unit, including goodwill, exceeds its fair value, limited to the total amount of goodwill allocated to that reporting unit. However, an entity shall consider the related income tax effect from any tax deductible goodwill, if applicable, when measuring the goodwill impairment loss.
| F-17 |
| Table of Contents |
An entity may first assess qualitative factors, to determine whether it is necessary to perform the quantitative goodwill impairment test. If determined to be necessary, the quantitative impairment test shall be used to identify goodwill impairment and measure the amount of a goodwill impairment loss to be recognized (if any).
An entity may assess qualitative factors to determine whether it is more likely than not (that is, a likelihood of more than 50 percent) that the fair value of a reporting unit is less than its carrying amount, including goodwill.
An entity has an unconditional option to bypass the qualitative assessment described in the preceding paragraph for any reporting unit in any period and proceed directly to performing the quantitative goodwill impairment test. An entity may resume performing the qualitative assessment in any subsequent period.
In evaluating whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount, an entity shall assess relevant events and circumstances. Examples of such events and circumstances include the following:
| a. | Macroeconomic conditions such as a deterioration in general economic conditions, limitations on accessing capital, fluctuations in foreign exchange rates, or other developments in equity and credit markets |
| b. | Industry and market considerations such as a deterioration in the environment in which an entity operates, an increased competitive environment, a decline in market-dependent multiples or metrics (considered in both absolute terms and relative to peers), a change in the market for an entity’s products or services, or a regulatory or political development |
| c. | Cost factors such as increases in raw materials, labor, or other costs that have a negative effect on earnings and cash flows |
| d. | Overall financial performance such as negative or declining cash flows or a decline in actual or planned revenue or earnings compared with actual and projected results of relevant prior periods |
| e. | Other relevant entity-specific events such as changes in management, key personnel, strategy, or customers; contemplation of bankruptcy; or litigation |
| f. | Events affecting a reporting unit such as a change in the composition or carrying amount of its net assets, a more-likely-than-not expectation of selling or disposing of all, or a portion, of a reporting unit, the testing for recoverability of a significant asset group within a reporting unit, or recognition of a goodwill impairment loss in the financial statements of a subsidiary that is a component of a reporting unit |
| g. | If applicable, a sustained decrease in share price (considered in both absolute terms and relative to peers). |
If, after assessing the totality of events or circumstances such as those described in the preceding paragraph, an entity determines that it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then the quantitative goodwill impairment test is unnecessary.
If, after assessing the totality of events or circumstances such as those described previously, an entity determines that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, then the entity shall perform the quantitative goodwill impairment test.
The examples included above are not all-inclusive, and an entity shall consider other relevant events and circumstances that affect the fair value or carrying amount of a reporting unit in determining whether to perform the quantitative goodwill impairment test. An entity shall consider the extent to which each of the adverse events and circumstances identified could affect the comparison of a reporting unit’s fair value with its carrying amount. An entity should place more weight on the events and circumstances that most affect a reporting unit’s fair value or the carrying amount of its net assets. An entity also should consider positive and mitigating events and circumstances that may affect its determination of whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If an entity has a recent fair value calculation for a reporting unit, it also should include as a factor in its consideration the difference between the fair value and the carrying amount in reaching its conclusion about whether to perform the quantitative goodwill impairment test.
| F-18 |
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An entity shall evaluate, on the basis of the weight of evidence, the significance of all identified events and circumstances in the context of determining whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. None of the individual examples of events and circumstances included above are intended to represent standalone events or circumstances that necessarily require an entity to perform the quantitative goodwill impairment test. Also, the existence of positive and mitigating events and circumstances is not intended to represent a rebuttable presumption that an entity should not perform the quantitative goodwill impairment test.
The quantitative goodwill impairment test, used to identify both the existence of impairment and the amount of impairment loss, compares the fair value of a reporting unit with its carrying amount, including goodwill. The fair value of a reporting unit refers to the price that would be received to sell the unit as a whole in an orderly transaction between market participants at the measurement date. In estimating the fair value of a reporting unit, a valuation technique based on multiples of earnings or revenue or a similar performance measure may be used if that technique is consistent with the objective of measuring fair value. Use of multiples of earnings or revenue in determining the fair value of a reporting unit may be appropriate, for example, when the fair value of an entity that has comparable operations and economic characteristics is observable and the relevant multiples of the comparable entity are known. Conversely, use of multiples would not be appropriate in situations in which the operations or activities of an entity for which the multiples are known are not of a comparable nature, scope, or size as the reporting unit for which fair value is being estimated.
If the fair value of a reporting unit exceeds its carrying amount, goodwill of the reporting unit is considered not impaired. If the carrying amount of a reporting unit exceeds its fair value, an impairment loss shall be recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit. Additionally, an entity shall consider the income tax effect from any tax deductible goodwill on the carrying amount of the reporting unit, if applicable, when measuring the goodwill impairment loss.
Determining the fair value of a reporting unit is judgmental in nature and requires the use of significant estimates and assumptions, including revenue growth rates, strategic plans, and future market conditions, among others. There can be no assurance that the Company’s estimates and assumptions made for purposes of the goodwill impairment testing will prove to be accurate predictions of the future.
Goodwill impairment charges on the Lifted Goodwill (defined below) and Oculus Goodwill (defined below) were recorded as of December 31, 2025; reference is hereby made to the disclosures in the following section, which are hereby incorporated by reference thereto:
NOTE 3 - RISKS AND UNCERTAINTIES
Going Concern
NOTE 3 - RISKS AND UNCERTAINTIES
Going Concern – The Company currently has one revenue-generating subsidiary, Lifted. Prior to the acquisition of Lifted on February 24, 2020, the Company had no sources of revenue, and the Company had a history of recurring losses, which has resulted in an accumulated deficit of $
| F-19 |
| Table of Contents |
The Company’s investments in Ablis and Bendistillery made the Company a minority owner of these companies. As a minority owner, the Company is not able to recognize any portion of Ablis’ or Bendistillery’s revenues or earnings in the Company’s financial statements. The Company monitors its investments in Ablis and Bendistillery and from time to time will evaluate whether there has been a potential impairment of value, which there was as of December 31, 2025 and as of June 30, 2026. Reference is made to the following section for more information about the impairment charges recorded against the Company’s investments in Ablis and Bendistillery as of December 31, 2025 and June 30, 2026:
NOTE 4 – THE COMPANY’S INVESTMENTS
The Company’s Investments in Ablis and Bendistillery
The Company currently is making payments of interest and principal on its loan from Surety Bank, and is accruing and paying dividends on outstanding Series A Preferred Stock and Series B Preferred Stock at the rate of 3% per year, among other ongoing financial obligations. As extensively discussed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025 (“2025 Form 10-K”), in this Quarterly Report on Form 10-Q, and in the Company’s other SEC filings, the Company is subject to a wide variety of Risk Factors including substantial legal and regulatory risks. Reference is hereby made to the disclosures in the following section, which are hereby incorporated by reference thereto:
PART I — FINANCIAL INFORMATION
Cautionary Note Regarding Forward-Looking Statements
The legal and regulatory risks facing the Company’s business are particularly acute at this point in time, in at least the following respects:
On November 12, 2025, President Trump signed into law H.R. 5371, the “Continuing Appropriations, Agriculture, Legislative Branch, Military Construction and Veterans Affairs, and Extensions Act, 2026” (the “Act”), which makes continuing appropriations and extensions for fiscal year 2026, and which also bans intoxicating hemp-derived consumable products nationally on November 12, 2026. It is unknown to the Company whether or not the sections of the Act that impact the hemp industry will ultimately go into effect on November 12, 2026, or if those sections will be replaced, impacted or amended by subsequent acts of Congress. However, the Act in all likelihood will have a devastating impact on the Company and the price of its common stock. The material adverse effects of the Act cannot be overstated; these material adverse effects include, but are not limited to, the following:
| 1) | The elimination of half or more of Lifted’s sales. Sales of hemp-derived products made up approximately 44% and 49% of Lifted’s sales during the three and six months ended June 30, 2026, respectively, and 52% of Lifted’s sales during the year ended December 31, 2025; thus, the Act could eliminate approximately half or more of the Company’s revenue; |
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| 2) | Goodwill impairment charges. As a result of LFTD Partners’ acquisition of Lifted, LFTD Partners recognized goodwill of $ |
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| 3) | An investment impairment charge. The Act necessitated the calculation and recording of an impairment of LFTD Partners’ investment in hemp-derived beverage and products maker Ablis. On April 30, 2019, LFTD Partners purchased |
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| 4) | Inventory reserve (allowance) against, or significant write offs of, inventory. The Act will most likely negatively impact the pricing of hemp-derived products, the availability and price of raw goods, and production forecasting and sales, which may lead to the recording of an inventory reserve (allowance) against, or write offs of, our hemp-derived inventory each quarter end leading up to November 12, 2026. Moreover, any hemp-derived products in inventory on November 12, 2026 will have to be written off. An allowance of $ |
| F-20 |
| Table of Contents |
| 5) | Significant write offs of accounts receivable. The Act will have a material adverse effect on the wholesalers and distributors that sell our products. In turn, these wholesalers and distributors may disregard their payment terms and not pay us for the product that they have purchased, causing us to have to correspondingly increase our allowance for doubtful accounts, and eventually write off the accounts receivable. |
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| 6) | Impairments of, or losses on the disposition of, hemp-related fixed assets. The Act is expected to materially reduce or eliminate the utility and marketability of fixed assets used primarily in the manufacture of hemp-derived products. As a result, we may be required to record impairment charges on these assets, and any efforts to sell such assets may result in significant losses due to limited demand or substantial price discounts. During the three and six months ended June 30, 2026, impairments of hemp-specific fixed assets of $ |
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| 7) | Sales of fixed or other assets to fund ongoing operations. If the Act materially reduces our revenue from hemp-derived products, our cash flow may be insufficient to support ongoing operating expenses. In that event, we may be required to sell fixed assets or other assets to generate liquidity, which could occur at unfavorable prices and materially adversely affect our financial condition. |
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| 8) | Workforce reductions and termination of contractor relationships. If the Act materially reduces demand for our hemp-derived products, we may be required to reduce our workforce and terminate relationships with independent contractors. Such actions could disrupt our operations, result in restructuring costs, and adversely affect our ability to operate or pursue future business opportunities. On June 30, 2026, Lifted announced a strategic restructuring to reduce its operating costs as part of its ongoing efforts to align its cost structure with the evolving regulatory environment affecting portions of the hemp-derived and kratom-derived products. As part of this initiative, between June 12-26, 2026, Lifted reduced its workforce from approximately 100 employees and independent contractors to 77. The restructuring is expected to reduce Lifted’s future operating expenses by approximately $ |
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| 9) | Reduced interest in our Company and in our common stock from investors, potential financing sources, and potential merger candidates. Just the passing of the Act has significantly reduced interest in our Company and in our common stock from investors, potential financing sources, and potential merger candidates, because the Act calls into question our Company’s short-term and long-term financial and operational viability, growth prospects, liquidity, and potential for listing on a national stock exchange; and if the Act is not replaced, impacted or amended by subsequent acts of Congress prior to November 12, 2026, then these negative impacts on our Company and our common stock are likely to even further intensify. |
Additional factors that could materially adversely affect the Company’s future operating results include, but are not limited to: other changes to federal laws and regulations; any new rule proposed by the federal Drug Enforcement Administration that might attempt to classify certain hemp-derived products as controlled substances; and any other federal or state laws and regulations prohibiting or restricting hemp-derived, kratom-derived, nicotine or other psychoactive products and/or vaping.
| F-21 |
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On July 29, 2025, during a joint press conference, the FDA announced that it had recommended to the DEA that 7-hydroxymitragynine (“7-OH”), a concentrated alkaloid derived from the kratom plant, be classified as a Schedule I controlled substance under the Controlled Substances Act (“CSA”). Since that time, the FDA and the DEA have continued to express concerns regarding products containing 7-OH. In July 2026, HHS initiated a Request for Information regarding proposed scheduling thresholds for 7-OH, and the DEA issued two notices of intent to issue temporary scheduling orders, which were published in the Federal Register. The first proposal would temporarily place 7-OH into Schedule I when present above specified concentration or dosage thresholds in botanical kratom and certain processed products. The second would place mitragynine pseudoindoxyl, MGM-15, and MGM-16 into Schedule I without concentration thresholds. Under the standard rulemaking process, the DEA generally would publish a proposed rule, provide an opportunity for public comment, and subsequently issue a final rule. Alternatively, the CSA authorizes the DEA to issue a temporary scheduling order if it determines that 7-OH presents an imminent hazard to public safety, which could become effective upon publication in the Federal Register and generally remain in effect for up to two years, subject to extension while permanent scheduling proceedings are pending. If either proposal is finalized, or if the DEA issues a temporary scheduling order, the manufacture, distribution, and sale of certain kratom-derived products sold by the Company could be materially restricted or prohibited, which could materially reduce the Company’s revenue, potentially by approximately half or more. Based on these developments, the Company recorded an inventory reserve of $
There can be no assurance that the regulatory positions of the FDA, HHS, or the DEA regarding 7-OH or related kratom-derived compounds will be resolved in a manner favorable to the Company. Any Schedule I placement or other significant federal restrictions applicable to products sold by the Company could materially and adversely affect the Company’s business, financial condition, results of operations, and cash flows.
There is also a risk that the Company potentially might be accused of selling products containing ingredients that might be considered an analog of a controlled substance. The Company is also subject to vendor concentration risk, customer concentration risk, customer credit risk, and counterparty risk. A limited number of customers have historically made up a significant portion of the Company’s sales. Also, historically, the Company has purchased raw goods and finished goods from a limited number of suppliers. The loss of Lifted’s relationships with these customers and vendors could have a material adverse effect on Lifted’s business.
The Company maintains levels of cash bank accounts that typically exceed federally insured limits. The Company has not experienced any losses in such accounts and it believes that it is not exposed to any significant credit risk on cash.
No assurance or guarantee whatsoever can be given that the net income of the Company’s wholly owned subsidiary Lifted will be sufficient to allow the Company to pay all of its operating expenses, its financial obligations under its loan agreements with Surety Bank, the dividends accruing and being paid on the Company’s preferred stock, future company-wide management bonus pool payments, and other obligations.
As a result of all of the foregoing described factors, there is substantial doubt that the Company will be able to continue as a going concern.
NOTE 4 – THE COMPANY’S INVESTMENTS
The Company’s Investment in Lifted
As a result of LFTD Partners’ acquisition of Lifted, LFTD Partners recognized goodwill of $
NOTE 3 - RISKS AND UNCERTAINTIES
Going Concern
The Act necessitated the calculation and recording of an impairment charge on the Lifted Goodwill and Oculus Goodwill. As of December 31, 2025, LFTD Partners recorded a goodwill impairment charge on the Lifted Goodwill and Oculus Goodwill, reducing the carrying value of both to $0. In its goodwill impairment analysis, the Company took both an income approach and market approach to determining the fair value of the reporting unit.
The Company’s Investments in Ablis and Bendistillery
On April 30, 2019, the Company purchased
| F-22 |
| Table of Contents |
The Act necessitated the calculation and recording of an impairment of LFTD Partners’ investment in Ablis. On April 30, 2019, LFTD Partners purchased
Regarding LFTD Partners investment in Bendistillery: distillers such as Bendistillery are navigating a tougher, more complex environment than they did even a few years ago. Liquor companies today are balancing category decline, stricter rules, and higher costs while trying to stay culturally relevant. Consequently, as of December 31, 2025, LFTD Partners recorded an impairment charge on its investment in Bendistillery, reducing the carrying value of LFTD Partners’ investment in Bendistillery to $
Reference is hereby made to the disclosures in the following section, which are hereby incorporated by reference thereto:
NOTE 3 - RISKS AND UNCERTAINTIES
Going Concern
NOTE 5 – PROPERTY AND EQUIPMENT, NET
Property and Equipment consist of the following:
| Asset Class |
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| Machinery & Equipment, net of accumulated impairment on hemp-specific fixed assets of $99,948 in 2026 and $0 in 2025 |
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| Computer Equipment |
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| Trade Show Booths, net of accumulated impairment on hemp-specific fixed assets of $108,101 in 2026 and $0 in 2025 |
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The useful lives of the Company’s property and equipment by asset class are as follows:
Asset Class | Estimated Useful Life | |
Building | ||
Land | ||
Machinery & Equipment | ||
Building Improvements | ||
Leasehold Improvements | ||
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Vehicles | ||
Computer Equipment | ||
Furniture & Fixtures | ||
| F-23 |
| Table of Contents |
The Company recognized an impairment charge of $
NOTE 2 – BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES
Fixed Assets
NOTE 3 – RISKS AND UNCERTAINTIES
Going Concern
In the Consolidated Statements of Operations, depreciation expense is consolidated with amortization expense. Depreciation expense related to machinery and equipment and depreciation expense related to Lifted’s main operations building located at 5511 95th Avenue, Kenosha, Wisconsin (“5511 Building”) totaling $
Comparatively, depreciation expense related to machinery and equipment and depreciation expense related to 5511 Building totaling $
NOTE 6 – ASSETS HELD FOR SALE
On June 16, 2026, the Board of Directors authorized management, as part of the Company’s downsizing and cash-conservation plan, to proceed with a plan to sell Lifted’s real property located at 5511 95th Avenue, Kenosha, Wisconsin. As of that date, the property was available for immediate sale in its present condition and was being actively marketed at a price management considered reasonable in relation to its fair value. Based on the Board’s authorization, the active marketing efforts, management’s intent to accept a reasonable offer, and the absence of any known circumstances indicating that a sale could not be completed within one year, management concluded that the sale was probable and that all criteria in ASC 360-10-45-9 were met on June 16, 2026. This conclusion was subsequently corroborated by the binding purchase agreement executed on July 22, 2026, for a sale price of $
Assets held for sale consisted of the following as of June 30, 2026:
Assets held for sale at June 30, 2026 |
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The property’s estimated fair value less cost to sell was approximately $
NOTE 7 – INTANGIBLE ASSETS, NET
Reference is hereby made to the disclosures in the following sections, which are hereby incorporated by reference thereto:
NOTE 2 – BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES
Business Combinations
Accounting for Goodwill
NOTE 4 – THE COMPANY’S INVESTMENTS
The Company’s Investment in Lifted
NOTE 8 – RELATED PARTY TRANSACTIONS
Ablis
During the three and six months ended June 30, 2026, Lifted sold $
Outside Director Fees
Each of the Company’s outside directors, including Mr. Vincent Mesolella, Dr. Joshua Bloom, Ms. Sharial Howard, Dr. James Jacobs, and Mr. Kevin Rocio, receive quarterly director fees of $
| F-24 |
| Table of Contents |
Lease and Purchase of 5511 95th Avenue, Kenosha, Wisconsin 53144
Toward the end of 2020, NWarrender, through his assigned entity 95th Holdings, LLC (“Holdings”), purchased the building located at 5511 95th Avenue, Kenosha, Wisconsin 53144 (“5511 Building”) that was immediately leased to us to conduct our expanded operations. The 5511 Building includes office, laboratory and warehouse space. As part of the lease agreement with Holdings, the parties agreed that Lifted would eventually purchase the 5511 Building. The purchase price for the 5511 Building was originally subject to variation based on a formula agreed upon by the parties. Pursuant to the Omnibus Agreement with NWarrender on December 30, 2021, Lifted was obligated to purchase the 5511 Building from Holdings on or before December 31, 2022 for a fixed purchase price of $
Pursuant to an Acceleration Agreement, the deadline to purchase the 5511 Building was extended by one year to December 31, 2023. In addition, the Acceleration Agreement contained a provision that if we raised $
On December 14, 2023, LFTD Partners and Lifted (together the “Borrower”), jointly borrowed a total of $
The Lender made two five-year loans to the Borrower, as joint borrowers: (1) a working capital loan of $
Then, on November 20, 2025, Borrower paid off the principal balance and accrued interest on the Working Capital Loan, which totaled $
Prior to the WCL Payoff, the Board of Directors of the Company had authorized management of the Company to explore a sale of the 5511 Building, and, if the 5511 Building is sold, to apply the net proceeds of such sale, firstly to the full repayment of the Business Loan, and secondly to the partial repayment of the Working Capital Loan. Simultaneously with such authorization, the Board of Directors of the Company had authorized management of the Company to apply certain tax refunds expected to be received by the Company, plus certain cash on hand held by the Company, to the partial or full repayment of the Working Capital Loan. Pursuant to this authorization, during the third quarter ended September 30, 2025, the Working Capital Loan was paid down $
Laurie Warrender
On December 30, 2024, Laurie Warrender, NWarrender’s mother, was hired as an employee of Lifted, as a consultant and advisor to NWarrender, with a salary of $
William Jacobs
At the closing of the acquisition of Lifted,
| F-25 |
| Table of Contents |
Related Party Note
On April 1, 2025, the Company converted $
Agreement to Sell Real Property
On July 22, 2026, Lifted entered into a binding agreement to sell its real property located at 5511 95th Avenue, Kenosha, Wisconsin for a purchase price of $
NOTE 9 – SHAREHOLDERS’ EQUITY AND STOCK BASED COMPENSATION
Issuance of Series A Convertible Preferred Stock
The Company has authorized
Issuance of Series B Convertible Preferred Stock
The Company has authorized
| F-26 |
| Table of Contents |
Share-Based Compensation
In connection with the acquisition of Lifted,
Options and Warrants
As of June 30, 2026 and December 31, 2025, the Company did not have any options or warrants outstanding.
Other Agreements
In connection with the Company’s acquisition of Lifted (the “Lifted Merger”), pursuant to the Lifted Merger Agreement, the Company entered into several material agreements with CEO Gerard M. Jacobs (“GJacobs”), COO Nicholas S. Warrender (“NWarrender”) and President and CFO William Jacobs (“WJacobs”).
Registration Rights Agreement
Pursuant to a Registration Rights Agreement, NWarrender was granted demand and piggyback registration rights with respect to the
Stockholders Agreement
At the closing of the Lifted Merger, NWarrender, GJacobs, and WJacobs entered into a Stockholders Agreement under which they agreed to vote all shares of Company common stock now or hereafter held by them in accordance with unanimous agreement among the three on certain corporate matters, including the election and removal of directors, amendments to charter documents, compensation decisions, acquisitions and divestitures, and capital raising activities.
Executive Employment Agreements
Concurrent with the Lifted Merger closing, the Company entered into five-year, automatically renewing Executive Employment Agreements with NWarrender (Vice Chairman, Chief Operating Officer of the Company, and Chief Executive Officer of Lifted), GJacobs (Chairman, Chief Executive Officer, and Secretary), and WJacobs (President, Chief Financial Officer, and Treasurer).
NOTE 10 – LEASES
In February 2016, the FASB issued ASU No. 2016-02, “Leases” (Topic 842) (“ASU 2016-02”). The amended guidance, which was effective for the Company on January 1, 2019, requires the recognition of lease assets and lease liabilities on the balance sheet for those leases with terms in excess of 12 months and currently classified as operating leases. Leases with an initial term of one year or less are not recorded on the balance sheet; lease expense for these types of leases are recognized on a straight-line basis over the lease term. Options to extend or terminate a lease are not included in the determination of the right-of-use asset or lease liability unless it is reasonably certain to be exercised. Operating lease right-of-use assets and operating lease liabilities are recognized based on the present value of future minimum lease payments over the lease term at commencement date. Lifted adopted ASU 2016-02 using the modified retrospective approach, electing the package of practical expedients.
| F-27 |
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The Company currently has operating leases for its leased facilities located at 8910 58th Place, Suites 100, 600 and 700, Kenosha, WI 53144 and 5732 95th Avenue, Suites 100-400, Kenosha, WI 53144. These facilities are used for manufacturing, packaging, storage and office space in Kenosha, Wisconsin. The Company has paid security deposits for these leases. From time to time, the Company maintains inventory at third party facilities around the USA.
The following table is the maturity analysis of the Company’s operating leases as of the reported period end:
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Weighted Average Discount Rate
In calculating the right-of-use assets and liabilities, the Company uses a discount rate based on a published range of conventional commercial mortgage interest rates corresponding to the life of each lease. The Company uses the higher end of the range due to the Company’s limited credit history and the riskiness of the industries in which the Company operates.
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Lease Costs
The table below summarizes the components of lease costs for the following periods:
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| F-28 |
| Table of Contents |
Balance Sheet Classification of Operating Lease Assets and Liabilities
| Asset |
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| June 30, 2026 |
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Operating Lease Right-of-Use Asset, net of Right-of-Use Asset Amortization of $591,243 |
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Allocation of a Portion of Lease Expense to Finished Goods
Reference is hereby made to the disclosures in the following section, which are hereby incorporated by reference thereto:
NOTE 2 – BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES
Inventory
Other Deposits and Bonds
The majority of the Company’s security deposit for the lease of 789 Tech Center Drive, Unit C, Durango, Colorado 81301 was returned to the Company in the second quarter of 2025 after the termination of the lease. The Company’s security deposit for its former sublease of the space located at 2701-09 West Fulton PH, Chicago, Illinois 60612 was written off in the second quarter of 2025. The Company is required to, and has, paid bonds and deposits to various state departments and vendors for licenses and utilities, respectively.
NOTE 11 - CONTINGENT CONTRACTUAL OBLIGATIONS AND COMMERCIAL COMMITMENTS
Potential Issuance of Warrants to Purchase Shares of Common Stock of the Company
The Compensation Committee of the Company’s Board of Directors may, from time to time, recommend that certain warrants to purchase shares of common stock of the Company should be issued to new or current members of the Company’s Board of Directors, to officers and employees of the Company and its subsidiaries, or to members of any advisory board or consultants to the Company.
Compensation of Lifted’s Chief Strategy Officer
Lifted entered into an agreement with its Chief Strategy Officer (the “CSO”),
| F-29 |
| Table of Contents |
Company-Wide Management Bonus Pool
Reference is hereby made to the disclosures in the following section, which are hereby incorporated by reference thereto:
NOTE 13 – COMPANY-WIDE MANAGEMENT BONUS POOL
Other Contingent Contractual Obligations and Commercial Commitments
Reference is hereby made to the disclosures in the following section, which are hereby incorporated by reference thereto:
NOTE 8 – RELATED PARTY TRANSACTIONS.
NOTE 12 – LEGAL PROCEEDINGS
The Company may be involved in certain legal proceedings that arise from time to time in the ordinary course of its business. Except for income tax contingencies, the Company records accruals for contingencies to the extent that management concludes that the occurrence is probable and that the related amounts of loss can be reasonably estimated. Legal expenses associated with the contingency are expensed as incurred.
Lifted currently is involved in one pending lawsuit, as the defendant:
| (1) | Jessie Hooks v. Lifted Made, URB Cannabis, Barry Hollingsworth, Gerard Jacobs, Nicholas Warrender, and Pharmlabs, LLC – Plaintiff had filed suit against the Company, three of its officers, and a testing company in the United States District Court for the Eastern District of Wisconsin alleging that Plaintiff bought 3-4 of the Company’s products, that some of the Company’s products exceeded legal limitations for hemp, and that all of the Defendants misrepresented the nature of the products. In his Amended Complaint, plaintiff asserted seven causes of action including civil RICO claims and alleged the existence of 1,000 “John Doe” defendants. The Company contended that this lawsuit was without merit and is vigorously defending the action. On February 6, 2025, the Court ordered that the RICO claims were dismissed with prejudice, and the other claims were also dismissed. The Court noted that the RICO claims were “borderline frivolous”. The Court further dismissed all claims against the individual defendants. On March 6, 2025, Plaintiff filed a second amended complaint alleging that the Company misrepresented various products. The Company filed a motion to dismiss the amended complaint. On February 23, 2026, the court orally announced that it was granting the motion to dismiss and dismissed the case with prejudice. On March 30, 2026, Plaintiff filed a notice of appeal and the briefing has been completed and the parties are waiting for oral argument. |
Lifted currently is involved in five pending lawsuits, as the plaintiff:
| (1) | Lifted Liquids, Inc. v RanCo, LLC |
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| On September 9, 2025, the Company had filed an action to recover approximately $ |
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|
| (2) | Lifted Liquids, Inc. v. Buckbee Seed Company LLC |
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|
|
| On May 29, 2026, Lifted Liquids, Inc. filed a complaint against Buckbee Seed Company LLC in the Circuit Court of the 17th Judicial Circuit, Winnebago County, Illinois, alleging breach of contract arising from Defendant’s failure to pay for products purchased from Lifted. The complaint seeks recovery of approximately $ |
| F-30 |
| Table of Contents |
| (3) | MoHemp Trade Association, Lifted Liquids, Inc. and MNG 2005, Inc. vs. Mike Kehoe, Catherine Hanaway and Sarah Wilson |
|
|
|
|
| On July 16, 2026, the Company, together with the MoHemp Trade Association and MNG 2005, Inc., filed a lawsuit in the United States District Court for the Western District of Missouri against Missouri Governor Mike Kehoe, Attorney General Catherine Hanaway, and Sarah Wilson, Director of the Missouri Department of Health and Senior Services, challenging the constitutionality and enforceability of Missouri House Bill 2641. The complaint alleges, among other things, that certain provisions of the statute are preempted by federal law, violate the Dormant Commerce Clause, and are unconstitutionally vague under the Due Process Clause. The plaintiffs seek declaratory and injunctive relief to prevent enforcement of the challenged provisions before they become effective. The litigation is in its preliminary stages, and the Company is unable to predict the ultimate outcome or reasonably estimate any potential loss or recovery associated with the matter. |
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| (4) | Delta Beverages, Inc., et al. v. Canepa, et al. |
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|
| As described in NOTE 16 – SUBSEQUENT EVENTS, on July 30, 2026, Lifted and other parties filed an action in the United States District Court for the Northern District of Ohio challenging the constitutionality of certain provisions of Ohio Senate Bill 56. The complaint seeks declaratory and injunctive relief, and the plaintiffs simultaneously moved for a temporary restraining order to prohibit enforcement of the challenged provisions during the pendency of the litigation. The litigation is in its preliminary stages, and the Company is unable to predict the ultimate outcome. |
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| (5) | Monti, et al. v. Garcia, et al. |
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| As described in NOTE 16 – SUBSEQUENT EVENTS, on July 31, 2026, Lifted, together with Thomas Monti and The Happy Cactus Apothecary LLC, filed a complaint in the United States District Court for the Southern District of Texas challenging the legality of certain reinstated Schedule I definitions adopted by the Texas Department of State Health Services relating to hemp-derived cannabinoids. The complaint seeks declaratory and injunctive relief, alleging, among other things, that the challenged definitions are preempted by federal law and violate the Due Process and Commerce Clauses of the United States Constitution. Concurrent with the complaint, the plaintiffs filed an emergency motion for a temporary restraining order and expedited preliminary injunction seeking to enjoin enforcement of the challenged definitions while the litigation is pending. The litigation is in its preliminary stages, and the Company is unable to predict the ultimate outcome. |
Settlement Agreement with Sergio Hernandez and Josue Hernandez
Plaintiffs had sued the Company as representatives of a putative class action case in the United States District Court for the Northern District of Illinois. The Complaint alleges that Plaintiffs bought the Company’s vape cartridge products and that the delta-9-THC cannabinoid content of those products was underreported. The Complaint alleges that the Company fraudulently misrepresented the nature of the products, breached an implied warranty, and was unjustly enriched. The Parties have engaged in settlement discussions to resolve the matter without the need to incur further expenses and attorney’s fees.
| F-31 |
| Table of Contents |
Lifted Liquids, Inc. v. Asad Awawdeh and Habib Cash and Carry SD, Inc.
The Company filed an action seeking to recover approximately $
Settlement Agreement with Former Insurance Carrier
On or about October 2, 2025, Lifted compromised and settled a dispute with one of its former insurance carriers, on terms agreeable to the parties.
Settlement Agreement with Chris Hillseth Enterprises Corporation and Ameri-Kal LLC
The Company had filed an action seeking to recover amounts paid for equipment that did not work as represented. On or about April 28, 2025, the parties resolved the matter via a signed settlement agreement, pursuant to which the Company will recoup a total of $
Dismissal of Loree Perry, Individually and on Behalf of All Others Similarly Situated v. Sheikhani Group, et al
Plaintiff added the Company and four of its officers to a putative class action case against a Texas retailer, several cannabis industry manufacturers, testing companies, and related individuals in the United States District Court for the Eastern District of Texas. The Amended Complaint alleges that Plaintiff bought two of the Company’s vape cartridge products and that the delta-9-THC cannabinoid content of those and additional unspecified “many” of the Company’s other products was underreported. The Amended Complaint alleges that all of the Defendants misrepresent the nature of their products and are intentionally engaging in ongoing illegal sales. The Amended Complaint asserts seven causes of action including a civil RICO claim and alleges the existence of 1,000 “John Doe” defendants. The Company contends that this lawsuit is without merit and filed a motion to dismiss. On March 8, 2025, Plaintiff has voluntarily dismissed the complaint without prejudice to refiling it at a later date.
Settlement Agreement with Girish GPO, Inc.
On November 9, 2023, Lifted entered into a settlement agreement that was mutually acceptable to the parties which has resolved the following lawsuit: Lifted Liquids, Inc. v. Girish GPO, Inc., Girish Ray, and the Law Offices of Saul Roffe. The Company had filed an action in a case styled “Lifted Liquids, Inc. v. Girish GPO, Inc., Girish Ray, and the Law Offices of Saul Roffe” seeking to recover $
Settlement Agreement With Dev Distribution, LLC
On October 9, 2023, Lifted entered into a settlement agreement that was mutually acceptable to the parties which has resolved the following lawsuit: Lifted Liquids, Inc. v. DEV Distribution, LLC, No, DC-22-15080. In October 2022, Lifted filed an action against Dev Distribution LLC (“Dev”),
Amendment to Settlement With Dev Distribution, LLC
On April 1, 2024, the Company entered into an Addendum to Settlement Agreement and Mutual Release (“Addendum”) with Dev. Under the Addendum, the total consideration to be paid by Dev has been increased from $230,000 to $
| F-32 |
| Table of Contents |
NOTE 13 – COMPANY-WIDE MANAGEMENT BONUS POOL
Pursuant to the employment agreements entered into between the Company and its three principal executives GJacobs, WJacobs and NWarrender (individually, “Executive”), the Company is obligated to compensate management of the Company via a management bonus pool.
For each fiscal year during the Employment Term, the Executive shall be eligible to be considered for an annual bonus (the “Annual Bonus”) as part of a Company-wide management bonus pool arrangement. During the fourth quarter of each year, the Chairman of the Compensation Committee of the Board (the “Compensation Committee”) shall recommend in writing a consolidated earnings before interest, taxes, depreciation and amortization (“EBITDA”) target (each, a “Target”) for the following year (the “Target Year”), which Target must be approved in writing by each of the following for as long as he remains employed by the Company: GJacobs, WJacobs, and NWarrender (collectively, and with respect to each for only as long as he is an employee of the Company, the “Executive Management Group”). If the Chairman of the Compensation Committee does not recommend in writing a Target for a Target Year that is approved in writing by all of the members of the Executive Management Group prior to the commencement of the Target Year, then the Target for the Target Year shall be equal to the actual consolidated EBITDA of the Company and its subsidiaries during the then-current year (i.e., the year preceding the Target Year) as certified in writing by the Company’s outside firm of independent certified public accountants. If the actual consolidated EBITDA of the Company and its subsidiaries during the Target Year as certified in writing by the Company’s outside firm of independent certified public accountants exceeds the Target (the amount by which the actual consolidated EBITDA of the Company and its subsidiaries during the Target Year as certified in writing by the Company’s outside firm of independent certified public accountants exceeds the Target, the “Excess Amount”), then cash equal to 33% of the Excess Amount shall be set aside by the Company as a cash management bonus pool (the “Bonus Pool”), and the amount of the Bonus Pool shall be allocated and paid out by the Company as bonuses or fees to the officers of the Company and its subsidiaries (and potentially, to directors or third parties who have significantly helped the Company and its subsidiaries during the Target Year), with the amount to be paid to each payee, including the amount of any Annual Bonus to be paid to the Executive, to be determined by unanimous written agreement of the Executive Management Group, in their sole discretion. The Executive expressly agrees and acknowledges that the amount of the Annual Bonus (if any) allocated and paid to the Executive as so determined by unanimous written agreement of the Executive Management Group shall be final, non-appealable, and binding upon the Executive, regardless of whether the Executive receives any Annual Bonus, and regardless of whether any Annual Bonus received by the Executive is higher or lower than any other person’s bonus, under any and all circumstances whatsoever. The Company shall pay the Executive the Annual Bonus, if any, no later than March 15th of the year following the applicable Target Year. In the event that there is funding for the Bonus Pool but the Executive Management Group does not reach a unanimous decision on Bonus allocations, then no annual bonus shall be paid. The Annual Bonus Pool would then be placed in escrow and the Executive Management Group would mediate.
Pursuant to the Amended Omnibus Agreement, the 2022 company-wide bonus pool shall not be allowed to be accrued or paid by LIFD if and to the extent that doing so would decrease LIFD’s 2022 diluted earnings per share of common stock below $
NOTE 14 – INCOME TAXES
Provisions for income taxes are based on taxes payable or refundable for the current year and deferred income taxes. Deferred income taxes are provided on differences between the tax bases of assets and liabilities and their reported amounts in the financial statements and on tax carry forwards. Deferred tax assets and liabilities are included in the financial statements at currently enacted income tax rates applicable to the period in which the deferred tax assets and liabilities are expected to be realized or settled. As changes in tax laws or rates are enacted, deferred tax assets and liabilities are adjusted through the provision for income taxes. A valuation allowance is provided against deferred income tax assets when it is not more likely than not that the deferred income tax assets will be realized.
| F-33 |
| Table of Contents |
Significant components of the Company’s income tax provision (benefit) for continuing operations are as follows:
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| For the Three Months Ended |
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| For the Six Months Ended |
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Domestic-Federal |
| $ | ( | ) |
| $ | ( | ) |
| $ |
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| $ | ( | ) | |
Domestic-State |
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Franchise taxes |
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Foreign |
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| Deferred |
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Domestic-Federal |
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| ( | ) |
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| ( | ) |
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| ( | ) |
Domestic-State |
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| ( | ) |
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Foreign |
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| ( | ) |
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| Total Provision/(Benefit) for Income Taxes |
| $ | ( | ) |
| $ | ( | ) |
| $ | ( | ) |
| $ | ( | ) |
The Company currently believes that all significant filing positions are highly certain and that all of its significant income tax filing positions and deductions would be sustained upon audit. Therefore, the Company has no significant reserves for uncertain tax positions and no adjustments to such reserves were required by US GAAP. The Company’s policy is to recognize accrued interest and penalties related to unrecognized tax benefits in the provision for income taxes.
A reconciliation of the amount of tax provision (benefit) computed using the U.S. federal statutory income tax rate to the provision for income taxes on continuing operations is as follows:
|
| For the Three Months Ended |
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| For the Six Months Ended |
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| June 30, |
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| June 30, |
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| 2026 |
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| 2025 |
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| 2026 |
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| 2025 |
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| Domestic-Federal |
| $ | ( | ) |
| $ | ( | ) |
| $ | ( | ) |
| $ | ( | ) |
| State taxes, net of federal benefit |
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| ( | ) |
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| ( | ) |
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| ( | ) |
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| ( | ) |
| Non-deductible expenses |
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| Franchise taxes |
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| Revision of prior years' deferred taxes |
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| ( | ) |
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| Change in estimated future income tax rates |
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| Change in valuation allowance |
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| ( | ) | ||
| Other |
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| ( | ) |
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| ( | ) |
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| ( | ) |
|
| ( | ) |
| Total Provision/(Benefit) for Income Taxes |
| $ | ( | ) |
| $ | ( | ) |
| $ | ( | ) |
| $ | ( | ) |
| F-34 |
| Table of Contents |
Deferred tax assets and liabilities as of June 30, 2026 and December 31, 2025 were as follows:
|
| June 30, |
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| December 31, |
| ||
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| 2026 |
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| 2025 |
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Deferred Tax Assets: |
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Operating Loss Carry forwards |
| $ |
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| $ |
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Stock-Based Compensation |
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Sales Allowances |
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Provision for Credit Losses Extrax NM Loans |
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Inventory Reserve (Allowance) |
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Accrued Related Party Expenses |
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Interest Carryforward |
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Allowance for Doubtful Accounts |
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Lease Liabilities |
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Investment Impairments |
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Fixed Asset Impairments |
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Less: Valuation allowance |
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Total Deferred Tax Assets |
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Deferred Tax Liabilities: |
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Depreciation & Amortization |
|
| ( | ) |
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| ( | ) |
Total Deferred Tax Liabilities |
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| ( | ) |
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| ( | ) |
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Net Deferred Tax Assets/(Liabilities) |
| $ |
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| $ |
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NOTE 15 – DEBT
On December 14, 2023, LFTD Partners and Lifted (together the “Borrower”), jointly borrowed a total of $
The Lender made two five-year loans to the Borrower, as joint borrowers: (1) a working capital loan of $
On November 20, 2025, Borrower paid off the principal balance and accrued interest on the Working Capital Loan, which totaled $
The Working Capital Loan had been evidenced by a credit agreement, promissory note, security agreement, collateral assignment agreement, and pledge agreement. The Working Capital Loan was to mature on
The Business Loan bears interest at a fixed annual rate of
As of June 30, 2026 and December 31, 2025, the Business Loan is secured by a first priority mortgage on the 5511 Building, along with a first priority security interest on all furniture, equipment, inventory, intangibles and fixtures, and other collateral, and also contains late payment penalties.
Prior to the WCL Payoff and Loan Term Changes, any default under these agreements could have resulted in the lender seizing the pledged collateral, including equity in key subsidiaries, intellectual property, and real estate, which could have a catastrophic impact on the Company.
| F-35 |
| Table of Contents |
The following presents the Business Loan in the Consolidated Balance Sheets as of June 30, 2026 and December 31, 2025:
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| June 30, 2026 |
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| December 31, 2025 |
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| Business Loan |
| $ |
|
| $ |
| ||
Total principal amount |
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|
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|
| ||
| Less: Unamortized debt financing costs |
|
| ( | ) |
|
| ( | ) |
| Less: Current portion of Surety Bank note |
|
| ( | ) |
|
| ( | ) |
| Non-Current portion of Surety Bank note |
| $ |
|
| $ |
| ||
The following represents aggregate payments due on the Business Loan as of June 30, 2026:
| 2026 |
| $ |
| |
| 2027 |
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|
| |
| 2028 |
|
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| |
| Thereafter |
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| |
Total |
|
|
| |
| Less: Interest portion |
|
| ( | ) |
| Total principal amount |
| $ |
|
NOTE 16 – SUBSEQUENT EVENTS
Management of the Company has evaluated the events that have occurred through the date of the filing of this Quarterly Report on Form 10-Q.
Monti, et al. v. Garcia, et al.
On July 31, 2026, Lifted, together with Thomas Monti and The Happy Cactus Apothecary LLC, filed a complaint in the United States District Court for the Southern District of Texas challenging the legality of certain reinstated Schedule I definitions adopted by the Texas Department of State Health Services relating to hemp-derived cannabinoids. The complaint seeks declaratory and injunctive relief, alleging, among other things, that the challenged definitions are preempted by federal law and violate the Due Process and Commerce Clauses of the United States Constitution. Concurrent with the complaint, the plaintiffs filed an emergency motion for a temporary restraining order and expedited preliminary injunction seeking to enjoin enforcement of the challenged definitions while the litigation is pending. The litigation is in its preliminary stages, and the Company is unable to predict the ultimate outcome.
Delta Beverages, Inc., et al. v. Canepa, et al.
On July 30, 2026, Lifted and other parties filed an action in the United States District Court for the Northern District of Ohio challenging the constitutionality of certain provisions of Ohio Senate Bill 56. The complaint seeks declaratory and injunctive relief, and the plaintiffs simultaneously moved for a temporary restraining order to prohibit enforcement of the challenged provisions during the pendency of the litigation. The litigation is in its preliminary stages, and the Company is unable to predict the ultimate outcome.
| F-36 |
| Table of Contents |
Federal Regulatory Actions Affecting Kratom-Derived Products
On July 29, 2025, during a joint press conference, the FDA announced that it had recommended to the DEA that 7-hydroxymitragynine (“7-OH”), a concentrated alkaloid derived from the kratom plant, be classified as a Schedule I controlled substance under the Controlled Substances Act (“CSA”). Since that time, the FDA and the DEA have continued to express concerns regarding products containing 7-OH. In July 2026, HHS initiated a Request for Information regarding proposed scheduling thresholds for 7-OH, and the DEA issued two notices of intent to issue temporary scheduling orders, which were published in the Federal Register. The first proposal would temporarily place 7-OH into Schedule I when present above specified concentration or dosage thresholds in botanical kratom and certain processed products. The second would place mitragynine pseudoindoxyl, MGM-15, and MGM-16 into Schedule I without concentration thresholds. Under the standard rulemaking process, the DEA generally would publish a proposed rule, provide an opportunity for public comment, and subsequently issue a final rule. Alternatively, the CSA authorizes the DEA to issue a temporary scheduling order if it determines that 7-OH presents an imminent hazard to public safety, which could become effective upon publication in the Federal Register and generally remain in effect for up to two years, subject to extension while permanent scheduling proceedings are pending. If either proposal is finalized, or if the DEA issues a temporary scheduling order, the manufacture, distribution, and sale of certain kratom-derived products sold by the Company could be materially restricted or prohibited, which could materially reduce the Company’s revenue, potentially by approximately half or more. Based on these developments, the Company recorded an inventory reserve of $
Agreement to Sell Real Property
On July 22, 2026, Lifted entered into a binding agreement to sell its real property located at 5511 95th Avenue, Kenosha, Wisconsin for a purchase price of $
| F-37 |
| Table of Contents |
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
As used in this Quarterly Report on Form 10-Q, references to the “Company,” “LFTD Partners,” “LIFD,” “Lifted,” “Highlandia”, “we,” “our” or “us” refer to LFTD Partners Inc. and Lifted, unless the context otherwise indicates.
The following Management’s Discussion and Analysis (“MD&A”) section includes a discussion of our results of operations, liquidity and financial condition and certain factors that may affect our future results. This MD&A should be read in conjunction with the Company’s risk factors, consolidated financial statements and related, accompanying notes that appear elsewhere in this Quarterly Report on Form 10-Q. In addition to historical financial information, the following MD&A contains forward-looking statements and forward-looking information, as defined under applicable United States securities laws, that reflect our plans, estimates and beliefs. MD&A of our financial condition and results of operations is provided as a supplement to the accompanying financial statements and related notes to help provide an understanding of our financial condition, the changes in our financial condition and the results of operations.
As a result of many factors, the Company’s actual results may differ materially from those anticipated in these forward-looking statements and information. The Company’s consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States (“US GAAP”). Financial information presented in this MD&A is presented in United States dollars (“$”).
Cautionary Note Regarding Forward-Looking Statements
Reference is hereby made to the disclosures in the following sections, which are hereby incorporated by reference thereto:
PART I – FINANCIAL INFORMATION
Cautionary Note Regarding Forward-Looking Statements
| 4 |
| Table of Contents |
PART II – OTHER INFORMATION
ITEM 1A. RISK FACTORS
Overview
The legal and regulatory risks facing the Company’s business are particularly acute at this point in time. In particular, reference is hereby made to the description of the business of LFTD Partners Inc., and to risks and uncertainties therewith, in the following sections, which are hereby incorporated by reference thereto:
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 – DESCRIPTION OF THE BUSINESS OF LFTD PARTNERS INC.
NOTE 3 - RISKS AND UNCERTAINTIES
Going Concern
Liquidity and Capital Resources
On February 24, 2020, the Company acquired 100% of the ownership interests of Lifted. All of the Company’s sales are generated by the Company’s wholly owned subsidiary Lifted; LFTD Partners by itself generates no sales. We also do not recognize any revenue or earnings from our investments in Bendistillery and Ablis. Prior to its dissolution in May 2026, LFTD Partners’ other wholly owned subsidiary, Highlandia Inc., did not generate any sales.
The Company’s cash needs for working capital, capital expenditures, growth opportunities, the payments of Series A and Series B Preferred Stock dividends, its financial obligations under its loan agreements with Surety Bank, and other obligations, are expected to be met with current cash on hand and cash flows provided by operating activities.
The Company’s ability to generate sufficient operating cash flow is directly affected by the timing and collectability of its accounts receivable. A significant portion of the Company’s revenue comes from wholesale and distributor sales, which often involve extended payment terms. As a result, delays in customer payments can have a material impact on cash flow, liquidity, and working capital availability. Fluctuations in cash collections can impact the Company’s ability to meet short-term obligations, fund inventory purchases, and invest in growth initiatives. Prolonged delays in accounts receivable collection could necessitate further adjustments to working capital management strategies, including modifications to vendor payment schedules, securing additional financing, or reevaluating sales terms to improve cash flow predictability. Management assesses the impact of delayed customer payments on overall liquidity and considers credit risk and allowance for doubtful accounts, in an effort to provide some safeguard against potential cash flow disruptions. However, if economic conditions deteriorate or customer creditworthiness declines further, additional measures may be required to preserve liquidity and operational stability.
The Company has a history of losses as evidenced by the accumulated deficit at June 30, 2026 of $34,444,821. We plan to sustain the Company as a going concern by taking the following actions: (1) continuing to operate Lifted; (2) acquiring and/or developing profitable businesses that will create positive income from operations; and/or (3) completing private placements of our common stock and/or preferred stock. We believe that by taking these actions, we will be provided with sufficient future operations and cash flow to continue as a going concern. However, there can be no assurance that we will be successful in consummating such actions on acceptable terms, if at all. Moreover, many of such actions can be expected to result in substantial dilution to the existing shareholders of the Company.
The following table summarizes our Company’s cash flows for the six months ended June 30, 2026 and 2025:
|
| For the Six Months Ended June 30, |
| |||||
|
| 2026 |
|
| 2025 |
| ||
Net Cash Provided By/(Used in) Operating Activities |
| $ | (96,085 | ) |
| $ | 86,143 |
|
Net Cash Used in Investing Activities |
|
| (138,998 | ) |
|
| (84,551 | ) |
Net Cash Used In Financing Activities |
|
| (27,743 | ) |
|
| (32,487 | ) |
| 5 |
| Table of Contents |
Cash Flows From Operating Activities
Net cash used in operating activities was $96,085 for the six months ended June 30, 2026, consisting of a net loss of $5,598,239, offset by net non-cash expenses of $6,616,285, with net changes in operating assets and liabilities using cash of $1,114,131. Non-cash expenses primarily related to inventory reserve expense (allowance) of $6,596,096. Changes in operating assets and liabilities primarily related to a $1,044,065 decrease in deferred revenue.
In comparison, net cash provided by operating activities was $86,143 for the six months ended June 30, 2025, consisting of a net loss of $571,992, offset by net non-cash expenses of $1,027,812, with net changes in operating assets and liabilities using cash of $369,677. Non-cash expenses primarily related to spoiled and written-off inventory of $780,929.
Cash Flows From Investing Activities
Net cash used in investing activities was $138,998 and $84,551 during the six months ended June 30, 2026 and 2025, respectively, driven by the purchase of fixed assets in both periods.
Cash Flows From Financing Activities
During the six months ended June 30, 2026, net cash used in financing activities was $27,743, primarily consisting of payments on the Surety Bank loan of $16,396 and payments of dividends to holders of preferred stock of $7,500. In comparison, during the six months ended June 30, 2025, net cash used in financing activities was $32,487, primarily consisting of proceeds of $350,000 from the Related Party Note (defined below), offset by payments on the Surety Bank loans of $278,833, and payments on the Related Party Note of $96,154.
During the six months ended June 30, 2026, net cash decreased by $262,826, and we had $1,504,297 of unrestricted cash at June 30, 2026. During the six months ended June 30, 2025, net cash decreased by $30,895, and we had $2,116,052 of unrestricted cash at June 30, 2025.
Comparison of the Consolidated Balance Sheets as of June 30, 2026 and December 31, 2025
The following table summarizes our Company’s current assets, current liabilities and working capital as of June 30, 2026 and December 31, 2025.
|
| June 30, 2026 |
|
| December 31, 2025 |
| ||
Current Assets |
| $ | 9,379,826 |
|
| $ | 15,691,047 |
|
Current Liabilities |
|
| 3,647,586 |
|
|
| 5,162,410 |
|
Working Capital |
|
| 5,732,240 |
|
|
| 10,528,637 |
|
As of June 30, 2026 and December 31, 2025, we reported cash and cash equivalents of $1,504,297 and $1,767,123, respectively.
As of June 30, 2026, we reported prepaid expenses of $175,237, primarily consisting of prepaid inventory of $106,338. In comparison, as of December 31, 2025, we reported prepaid expenses of $348,667, primarily consisting of prepaid inventory of $272,968.
Accounts receivable of $2,915,373, net of $1,207,367 allowance for doubtful accounts, were outstanding as of June 30, 2026. In comparison, accounts receivable of $2,531,524, net of $1,269,590 allowance for doubtful accounts, were outstanding as of December 31, 2025.
Reference is hereby made to the disclosures in the following sections, which are hereby incorporated by reference thereto:
NOTE 2 – BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES
Accounts Receivable
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NOTE 3 - RISKS AND UNCERTAINTIES
Going Concern
Inventory is valued at the lower of average cost or market value (net realizable value). Inventory consisted of the following at June 30, 2026 and December 31, 2025:
|
| June 30, 2026 |
|
| December 31, 2025 |
| ||
Raw Goods |
| $ | 5,422,051 |
|
| $ | 5,906,501 |
|
Finished Goods |
|
| 4,633,813 |
|
|
| 5,051,322 |
|
Inventory Reserve (Allowance) |
|
| (6,596,096 | ) |
|
| - |
|
Total Inventory |
| $ | 3,459,768 |
|
| $ | 10,957,823 |
|
Overhead expenses related to leases, 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. At June 30, 2026, $345,325 of overhead expenses were allocated to finished goods. At December 31, 2025, $373,269 of overhead expenses were allocated to finished goods.
A total inventory reserve (allowance) of $6,596,096 was recorded against Lifted’s inventory as of June 30, 2026; of which, $5,007,427 was recorded against its hemp-derived or hemp-related inventory, $1,434,458 was recorded against its kratom-derived or kratom-related inventory, and $154,211 was recorded against other inventory unrelated to hemp or kratom.
Reference is hereby made to the disclosures in the following sections, which are hereby incorporated by reference thereto:
NOTE 2 – BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES
Inventory
NOTE 3 - RISKS AND UNCERTAINTIES
Going Concern
The Act necessitated the calculation and recording of an impairment charge on the Lifted Goodwill and Oculus Goodwill. As of December 31, 2025, LFTD Partners recorded a goodwill impairment charge on the Lifted Goodwill and Oculus Goodwill, reducing the carrying value of both to $0. Reference is hereby made to the disclosures in the following section, which are hereby incorporated by reference thereto:
NOTE 4 – THE COMPANY’S INVESTMENTS
The Company’s Investment in Lifted
The Company recorded impairment charges against its investments in Ablis and Bendistillery and wrote down its investment in Ablis to $0 and its investment in Bendistillery to $99,800, as of December 31, 2025. Then, as of June 30, 2026, the Company recorded another impairment charge on its investment in Bendistillery, reducing the carrying value of its investment to $0. Reference is hereby made to the disclosures in the following section, which are hereby incorporated by reference thereto:
NOTE 4 – THE COMPANY’S INVESTMENTS
The Company’s Investments in Ablis and Bendistillery
Net fixed assets as of June 30, 2026 and December 31, 2025 were $643,021 and $2,273,377, respectively. In addition, as of June 30, 2026, the Company classified the 5511 Building, related building improvements and land, with an aggregate carrying amount of $1,294,211, as assets held for sale. The combined carrying amount of net fixed assets and assets held for sale was $1,937,232 as of June 30, 2026. Excluding the reclassification, the decrease was driven primarily by impairments of hemp-specific fixed assets totaling $208,049, and $254,967 of depreciation, partially offset by $138,998 of capital expenditures. The Act is expected to materially reduce or eliminate the utility and marketability of fixed assets used primarily in the manufacture of hemp-derived products, which is why the impairments were recorded. If the Act materially reduces our revenue from hemp-derived products, our cash flow may be insufficient to support ongoing operating expenses. In that event, we may be required to sell fixed assets or other assets to generate liquidity, which could occur at unfavorable prices and materially adversely affect our financial condition. Reference is hereby made to the disclosures in the following sections, which are hereby incorporated by reference thereto:
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NOTE 2 – BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES
Fixed Assets
Assets Held for Sale
NOTE 6 – ASSETS HELD FOR SALE
NOTE 3 - RISKS AND UNCERTAINTIES
Going Concern
As of June 30, 2026, current liabilities of $3,647,586 primarily consisted of accounts payable and accrued expenses of $2,757,476. In comparison, as of December 31, 2025, current liabilities of $5,162,410 primarily consisted of accounts payable and accrued expenses of $3,326,650 and deferred revenue of $1,380,049.
As of June 30, 2026, non-current liabilities of $1,351,994 consisted of the non-current portion of the loan payable to Surety Bank of $796,551 and operating lease liability of $555,444. In comparison, as of December 31, 2025, non-current liabilities of $1,477,877 consisted of the non-current portion of the loan payable to Surety Bank of $797,597, and operating lease liability of $680,280.
In prior years, the Company’s payables have been greater than its cash on hand. Prior to the Company’s acquisition of Lifted, the Company had inconsistent income-generating ability and was therefore reliant on raising money from loans or stock sales. The Company had an accumulated deficit of $34,444,821 and $28,839,889 as of June 30, 2026 and December 31, 2025, respectively.
Comparison of Operations for the Three and Six Months Ended June 30, 2026 to June 30, 2025
Net sales during the three and six months ended June 30, 2026 were $8,705,194 and $17,863,400, respectively, compared to net sales during the three and six months ended June 30, 2025 of $10,325,336 and $19,449,186, respectively. Some of the business challenges that we face include, but are not limited to: the adoption or proposal of federal and state legislation and regulations that prohibit or more tightly regulate intoxicating hemp-derived and kratom-derived products, including in significant markets for Lifted, such as in Florida, Texas, Illinois, Missouri 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. Reference is hereby made to the disclosures in the following sections, which are hereby incorporated by reference thereto:
NOTE 2 – BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES
Revenue
License Fee
During the year ended December 31, 2025, Lifted has launched certain 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 of Lifted’s brands and products; and increasing spending on marketing and advertising, and digital marketing.
On June 30, 2026, Lifted announced a strategic restructuring to reduce its operating costs as part of its ongoing efforts to align its cost structure with the evolving regulatory environment affecting portions of the hemp-derived and kratom-derived products. As part of this initiative, between June 12-26, 2026, Lifted reduced its workforce from approximately 100 employees and independent contractors to 77. The restructuring is expected to reduce Lifted’s future operating expenses by approximately $736,000 per year. Reference is hereby made to the disclosures in the following section, which are hereby incorporated by reference thereto:
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NOTE 3 - RISKS AND UNCERTAINTIES
Going Concern
Cost of Goods Sold
Cost of goods sold during the three and six months ended June 30, 2026 was $8,053,961 and $18,918,247, respectively, compared to cost of goods sold during the three and six months ended June 30, 2025 of $7,078,942 and $13,985,399, respectively.
Lifted’s industry, and customer preferences, are constantly and quickly evolving. The regulatory landscape at the municipal, state and federal levels in which Lifted operates is unstable and unpredictable. Consequently, Lifted finds it extremely difficult to predict future sales of its products and to anticipate raw goods needs for future production. These factors have caused Lifted to record a significant inventory reserve (allowance) against its inventory. A total inventory reserve of $6,596,096 was recorded against Lifted’s inventory as of June 30, 2026; of which, $5,007,427 was recorded against its hemp-derived or hemp-related inventory, $1,434,458 was recorded against its kratom-derived or kratom-related inventory, and $154,211 was recorded against other inventory unrelated to hemp or kratom.
No inventory reserve was taken against Lifted’s hemp-derived inventory as of December 31, 2025. Write offs of inventory during the three and six months ended June 30, 2026 were $207,274 and $296,378, respectively, compared to write offs of inventory during the three and six months ended June 30, 2025 of $316,408 and $780,929, respectively. Reference is hereby made to the disclosures in the following sections, which are hereby incorporated by reference thereto:
NOTE 2 – BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES
Inventory
Cost of Goods Sold
NOTE 3 - RISKS AND UNCERTAINTIES
Going Concern
Segment Disclosures
Reference is hereby made to the disclosures in the following section, which are hereby incorporated by reference thereto:
NOTE 2 – BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES
Segment Disclosures
Operating Expenses
Operating expenses include accounts such as payroll expense, professional fees, bank charges and merchant fees, advertising and marketing, bad debt (recovery)/expense, impairment of hemp-specific fixed assets, depreciation and amortization, collaboration commission and royalty expense, and other operating expenses. Total operating expenses during the three months ended June 30, 2026 were $2,178,388 compared to $3,356,034 during the three months ended June 30, 2025. This $1,177,646 decline was primarily due to an $899,466 reduction in bad debt expense, and a $177,240 reduction in other operating expense.
Total operating expenses during the six months ended June 30, 2026 were $5,037,569, compared to $5,901,813 during the six months ended June 30, 2025. This $864,244 decline was primarily due to a $325,207 reduction in other operating expense, a $246,391 reduction in bad debt expense, and a $219,070 reduction in professional fees.
Payroll Expense
Payroll Expense includes sales commissions paid to independent contractors. If the Act materially reduces demand for our hemp-derived products, or if kratom-derived products are classified as a Schedule I controlled substance under the Controlled Substances Act (“CSA”), we may be required to reduce our workforce and terminate relationships with independent contractors. Such actions could disrupt our operations, result in restructuring costs, and adversely affect our ability to operate or pursue future business opportunities.
Payroll expense during the three and six months ended June 30, 2026 was $1,092,119 and $2,410,900, respectively, compared to payroll expense during the three and six months ended June 30, 2025 of $1,196,704 and $2,496,274, 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 was accounted for as a reduction in payroll expenses in the first quarter of 2025.
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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.
Advertising and Marketing Expenses
Advertising and marketing costs are expensed as incurred. Advertising and marketing expenses primarily relate to marketing campaigns, trade shows, digital marketing, and promotional expenses. Lifted has been engaging with third party specialists to increase its presence in the direct-to-consumer space. Advertising and marketing expenses during the three and six months ended June 30, 2026 were $490,770 and $832,171, respectively, compared to advertising and marketing expenses during the three and six months ended June 30, 2025 of $531,873 and $947,445, respectively.
Provision for Credit Losses – Extrax NM Loans
Reference is hereby made to the disclosures in the following section, which are hereby incorporated by reference thereto:
NOTE 2 – BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES
License Fee
Bad Debt (Recovery)/Expense
Bad debt recovery during the three and six months ended June 30, 2026 was $249,829 and $623, respectively, compared to bad debt expense during the three and six months ended June 30, 2025 of $649,637 and $245,768, 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 – has increasingly become an issue for Lifted. Certain customers have become slower to pay Lifted for products purchased (“Slow Paying Customers”), and the Slow Paying Customers disregard payment terms. Management believes that some Slow Paying Customers may be delaying payments to Lifted because of their own accounts receivable collection issues, which may in part be caused by the regulatory uncertainty over the industries in which Lifted participates. 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. Reference is hereby made to the disclosures in the following section, which are hereby incorporated by reference thereto:
NOTE 2 – BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES
Accounts Receivable
Collaboration Commission and Royalty Expense
Collaboration commission and royalty expense during the three and six months ended June 30, 2026 was $0, compared to collaboration commission and royalty expense during the three and six months ended June 30, 2025 of $5,742 and $72,840, respectively. The change in collaboration commission and royalty expense primarily stems from decreased sales of the products covered by respective collaborations. Lifted has been de-emphasizing its collaboration efforts with outside brands due to the collaborations’ lack of traction in sales. As of June 30, 2026 and as of December 31, 2025, the only Manufacturing, Sales and Marketing Agreement still in effect was the Diamond Agreement.
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Other Operating Expenses
Other operating expenses include, for example, software expenses, travel, insurance expense, rent expense, repairs and maintenance, state license and filing fees, excise and sales tax expense, health benefits, warehouse and lab expenses below the Company’s capitalization threshold, and other expenses.
Other operating expenses during the three months ended June 30, 2026 were $467,588 compared to $644,828 during the three months ended June 30, 2025. This $177,240 decline was primarily due to a $173,938 reduction in warehouse and lab expense.
Other operating expenses during the six months ended June 30, 2026 were $970,952, compared to $1,296,159 during the six months ended June 30, 2025. This $325,207 decline was primarily due to a $154,397 reduction in warehouse and lab expense, a $38,222 reduction in excise and sale tax expense, and a $33,161 reduction in insurance expense.
Other Income/(Expenses)
Other expenses during the three and six months ended June 30, 2026 were $117,797 and $267,633, respectively, compared to other expenses during the three and six months ended June 30, 2025 of $214,138 and $268,502, respectively. During the quarter ended June 30, 2026, Other Expenses primarily consisted of the $99,800 impairment of the Company’s investment in Bendistillery. Reference is hereby made to the disclosures in the following section, which are hereby incorporated by reference thereto:
NOTE 4 – THE COMPANY’S INVESTMENTS
The Company’s Investments in Ablis and Bendistillery
During the six months ended June 30, 2026, Other Expenses primarily consisted of the $99,800 impairment of the Company’s investment in Bendistillery and settlement costs of $100,000. Reference is hereby made to the disclosures in the following section, which are hereby incorporated by reference thereto:
NOTE 12 – LEGAL PROCEEDINGS
Settlement Agreement with Sergio Hernandez and Josue Hernandez
During the quarter ended June 30, 2025, Other Expenses of $214,138 primarily consisted of theft expense of $350,000 and interest expense of $77,474 offset by settlement income of $177,500 and interest income of $19,098. During the six months ended June 30, 2025, Other Expenses of $268,502 primarily consisted of theft expense of $350,000 and interest expense of $157,467 offset by settlement income of $177,500 and interest income of $51,982.
Net Loss
Net loss during the three and six months ended June 30, 2026 was $1,438,290 and $5,598,239, respectively, compared to net loss during the three and six months ended June 30, 2025 of $268,950 and $571,992, respectively. Prior to the Loan Term Changes, the Business Loan required that Borrower maintained a minimum 1.50x Debt Service Coverage Ratio (“DSCR”) based on Borrower’s annual corporate tax return. The DSCR was to be tested annually, beginning with the 2023 return. The DSCR was to be calculated as EBIDA (earnings before interest, depreciation, and amortization) divided by contractual annual debt service payments. Borrower met the DSCR requirement contained in the Business Loan for the year ended December 31, 2023. Surety Bank agreed to waive any claim of default based on Borrower’s 2024 DSCR.
Off-Balance Sheet Arrangements
As of reported period end, the Company had no off-balance sheet arrangements.
Critical Accounting Policies and Estimates
Critical accounting policies and estimates are discussed in NOTE 2 – BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES of the consolidated financial statements accompanying this Quarterly Report on Form 10-Q.
Tax Provision
Please refer to NOTE 14 – INCOME TAXES for information about the Company’s tax provision.
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Other Matters
We may be subject to other legal proceedings, claims, and litigation arising in the ordinary course of business in addition to the matters discussed in NOTE 12 – LEGAL PROCEEDINGS. We intend to vigorously pursue and defend such litigation. Although the outcome of these other matters is currently not determinable, our management does not expect that the ultimate costs to resolve these matters will have a material adverse effect on our Company’s financial position, results of operations, or cash flows.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
As a smaller reporting company, we are not required to provide the information required by this Item.
ITEM 4. CONTROLS AND PROCEDURES
(a) Evaluation of Disclosure Controls and Procedures
Our Chief Financial Officer, WJacobs, evaluated the effectiveness of the Company’s disclosure controls and procedures. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports, such as this report, that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officer, as appropriate to allow timely decisions regarding required disclosure. Based on that evaluation, WJacobs concluded that because of the material weakness in internal control over financial reporting described below, our disclosure controls and procedures were not effective as of June 30, 2026.
(b) Management’s report on internal control over financial reporting
Management is responsible for establishing and maintaining adequate internal control over financial reporting for the Company. “Internal Control Over Financial Reporting” is defined in Exchange Act Rules 13a-15(f) and 15d-15(f) as a process designed by, or under the supervision of, an issuer’s principal executive and principal financial officers, or persons performing similar functions, and effected by an issuer’s board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. It includes those policies and procedures that:
| (1) | Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and disposition of an issuer; |
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|
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| (2) | Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the issuer are being made only in accordance with authorizations of management and directors of the issuer; and |
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| (3) | Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the issuer’s assets that could have a material adverse effect on the financial statements. |
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During June 2026, management conducted an evaluation of the effectiveness of our internal control over financial reporting as of June 30, 2026 based on the framework set forth in the report entitled Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on the evaluation, management concluded that our internal control over financial reporting as of June 30, 2026 was not effective. Management identified the following material weaknesses as of June 30, 2026:
| (1) | There existed a lack of segregation of duties in regard to the Company’s financial reporting, procedures for depositing of funds, procedures for cash disbursements, procedures for checkbook entries, period close procedures, and procedures for financial statement preparation. |
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|
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| (2) | There are not effective policies and procedures in place to provide adequate, independent oversight over financial reporting, timely preparation, and review of accounting records, and there is a lack of segregation of duties. |
Management is continually working to improve the effectiveness of our internal control over financial reporting. Our actions have included the following to improve controls over our financial statement preparation and reporting process:
| (1) | We have enhanced certain resources available within our accounting team. We hired a Chief Financial Officer of Lifted who is specifically responsible for overseeing the financial reporting processes of Lifted. We have also engaged a licensed, external certified public accountant who advises and assists us with various aspects of the financial reporting process, including at our direction, objectively reviewing work product significant to the closing of our financial statements. |
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| (2) | We have enhanced the use of specialist involvement in complex, non-routine, and technical areas of accounting, valuation, new accounting standards adoption, and tax matters. These specialists include the licensed, external certified public accountant referred to above, a tax firm, and a valuation firm. |
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| (3) | We are in the process of implementing tools to manage the structure of our financial closing processes. These tools include: (a) formalizing checklists designed to ensure accounting requirements and account reconciliations are completed and (b) formalizing required work instructions for completing and objectively reviewing financial closing work product, account reconciliations and analyses, which includes documenting preparer and reviewer responsibilities and signoffs. |
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| (4) | We are archiving, in an access-restricted retention domain, documentation critical to supporting our financial reporting, including financial closing work product, account reconciliations and analyses, supporting documents and agreements, accounting technical memoranda, and other documentation supporting complex, non-routine accounting and valuation matters. Starting with the April 2024 expense reports, all LFTD Partners and Lifted employee expense reports are also stored online in this access-restricted retention domain. We have made this documentation transparent and accessible to our registered public accounting firm, other advisers, and to our lead independent director, Mr. Vincent J. Mesolella. |
| (5) | From time to time, we have engaged a third-party consulting firm with expertise in corporate governance, internal controls, risk management, and assurance. This firm has been engaged to assist management with remediating internal control deficiencies and designing and implementing controls over our financial processes and reporting. |
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| (6) | Providing copies of LFTD Partners’ and Lifted’s bank statements to Mr. Mesolella. Starting with LFTD Partners’ April 2024 bank statements, the LFTD Partners bank statements and bank reconciliations are stored online in an access-restricted retention domain, in the same location as where Lifted’s bank statements and bank reconciliations are stored. Previously, our Chief Financial Officer, WJacobs, emailed copies of LFTD Partners and Lifted’s bank statements to Mr. Mesolella monthly. WJacobs engages with Mr. Mesolella, as needed, to address any questions or concerns. |
Because of its inherent limitations, internal controls over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies and procedures may deteriorate.
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Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, will be or have been detected. These inherent limitations include, but are not limited to, that judgments in decision making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate.
The Company is actively engaged in a comprehensive effort to remediate its material weaknesses in our internal control over financial reporting, but additional work is required, and no guarantee or assurance can be given as to when such work will be completed.
This Quarterly Report on Form 10-Q does not include an attestation report of our registered public accounting firm regarding internal controls over financial reporting.
Management’s report was not subject to attestation by our registered public accounting firm pursuant to temporary rules of the SEC that permit the Company to provide only management’s report in this Quarterly Report on Form 10-Q.
Notwithstanding the existence of the material weaknesses as described above, we believe that the consolidated financial statements in this Quarterly Report on Form 10-Q present fairly, in all material respects, our financial position, results of operations and cash flows as of the dates, and for the periods presented, in conformity with US GAAP.
(c) Changes in internal control over financial reporting
Our Chief Executive Officer and Chief Financial Officer have concluded that there were no significant changes in our internal controls over financial reporting that occurred during our last fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
(d) Inherent Limitations on Control Systems
Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, will be or have been detected. These inherent limitations include the realities that judgments in decision making can be faulty, and that breakdowns can occur because of a simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate.
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PART II — OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Description of Legal Proceedings
Lifted currently is involved in six pending legal proceedings, one as the defendant, and five as the plaintiff. Please refer to NOTE 12 – LEGAL PROCEEDINGS for more information.
ITEM 1A. RISK FACTORS
The Risk Factors identified under the sections “SUMMARY OF RISK FACTORS”, “ITEM 1A. RISK FACTORS”, and “ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS” and the consolidated financial statements and the related notes included elsewhere in our Annual Report on Form 10-K for the year ended December 31, 2025 (the “2025 Form 10-K”) filed with the SEC on April 1, 2026, and in our subsequent quarterly filings on Form 10-Q, continue to represent the most significant risks to the Company’s future results of operations and financial condition, without further modification or amendment. Reference is hereby made to the disclosures in the following section, which are hereby incorporated by reference thereto:
NOTE 3 - RISKS AND UNCERTAINTIES
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
Reference is hereby made to the disclosures in the following sections, which are hereby incorporated by reference thereto:
NOTE 9 – SHAREHOLDERS’ EQUITY AND STOCK BASED COMPENSATION
Issuance of Series A Convertible Preferred Stock
Issuance of Series B Convertible Preferred Stock
Share-Based Compensation
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None; not applicable.
ITEM 4. MINE SAFETY DISCLOSURES
None; not applicable.
ITEM 5. OTHER INFORMATION
During the six months ended June 30, 2026, none of the Company’s directors or officers (as defined in Rule 16a-1(f) under the Exchange Act) adopted, modified, or terminated any “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as those terms are defined in Item 408(c) of Regulation S-K.
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ITEM 6. EXHIBITS
The following Exhibits have been previously filed in the below referenced filings or have been attached hereto, and in any case, as is stated on the cover of this Report, all of the below Exhibits are incorporated herein by reference.
10.53 |
| Compensation Agreement between Acquired Sales Corp., Gerard M. Jacobs and William C. "Jake" Jacobs dated as of June 19, 2019 |
10.58 |
| Lease Agreement - 5511 95th Avenue, Kenosha, WI 53144 |
10.61 |
| Lease Agreement - 8920 58th Place, Suite 850, Kenosha, WI 53144 |
10.62 |
| Lease Agreement - 8910 58th Place, Suites 600 and 700, Kenosha, WI 53144 |
10.67 |
| Omnibus Agreement dated December 30, 2021 between LFTD Partners Inc. Nicholas S. Warrender, 95th Holdings, LLC, Gerard M. Jacobs and William C. “Jake” Jacobs |
10.68 |
| Amended Omnibus Agreement dated February 14, 2022 between LFTD Partners Inc. Nicholas S. Warrender, Gerard M. Jacobs and William C. “Jake” Jacobs |
10.69 |
| Lease Agreement - 9560 58th Place, Suite 360, Kenosha, WI 53144 |
10.70 |
| Acceleration Agreement |
10.71 |
| Commercial Sublease – 2701-09 West Fulton PH, Chicago, IL 60612 |
10.72 |
| Lease Agreement - 5732 95th Ave, Suites 200 and 300, Kenosha, WI 53144 |
10.72.1 |
| Manufacturing, Sales and Marketing Agreement – Cali Sweets, LLC |
10.73 |
| Manufacturing, Sales and Marketing Agreement – Diamond Supply Co. |
10.74 |
| Agreement and Plan of Merger - Oculus CHS Management Corp. |
10.75 |
| Hagan Sanchez Employment Agreement |
10.76 |
| Chase Sanchez Employment Agreement |
10.77 |
| Assignment and Assumption of Lease and Landlord Consent and Lease Agreement – Aztec New Mexico |
10.78 |
| Manufacturing, Sales and Marketing Agreement – DreamFields Brands Inc. d/b/a Jeeter |
10.79 |
| Finders Agreement – Florence Mirsky |
10.80 |
| Credit Agreement |
10.81 |
| Promissory Note ($3,000,000 Loan) |
10.82 |
| Security Agreement |
10.83 |
| Collateral Assignment Agreement |
10.84 |
| Pledge Agreement |
10.85 |
| Business Loan Agreement |
10.86 |
| Promissory Note ($910,000 Loan) |
10.87 |
| Mortgage |
10.88 |
| Assignment of Rents, Leases, and Security Deposits |
10.89 |
| Lease of 789 Tech Center Drive, Unit C, Durango, Colorado 81301 |
10.90 |
| Second Amendment to Lease of 8910 58th Place, Suites 600 and 700, Kenosha, Wisconsin 53144 |
10.91 |
| Jeeter Termination Agreement |
10.65 |
| Letter of Intent – TMD Ventures, LLC |
10.66 |
| Letter of Intent – Sustainable Growers, LLC, Buckbee Seed Co |
10.67 |
| Letter of Intent – Sustainable Properties, LLC – Real Property Purchase |
10.68 |
| Letter of Intent – Sustainable Innovations Inc. (SI) and certain subsidiaries |
10.69 |
| Letter of Intent – Boards of Directors and Executives |
99.1 |
| Letter from LFTD Partners Inc. dated April 11, 2025, terminating Letters of Intent with Sustainable parties. |
10.92 |
| Third Amendment to Lease Agreement - 5732 95th Avenue, Suite 400, Kenosha, Wisconsin 53144 |
10.93 |
| Fourth Amendment to Lease Agreement - 5732 95th Avenue, Suite 400, Kenosha, Wisconsin 53144 |
The following exhibits are filed with this Quarterly Report on Form 10-Q:
31.1 |
| Certification of principal executive officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
31.2 |
| Certification of principal accounting officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
32.1 |
| Certification of principal executive officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
32.2 |
| Certification of principal financial officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
101.INS |
| XBRL Instance Document |
101.PRE |
| XBRL Taxonomy Extension Presentation Linkbase Document. |
101.LAB |
| XBRL Taxonomy Extension Label Linkbase Document. |
101.DEF |
| XBRL Taxonomy Extension Definition Linkbase Document. |
101.CAL |
| XBRL Taxonomy Extension Calculation Linkbase Document. |
101.SCH |
| XBRL Taxonomy Extension Schema Document. |
| 16 |
| Table of Contents |
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| LFTD Partners Inc. |
| |
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Date: August 14, 2026 | /s/ Gerard M. Jacobs |
| |
|
| By: Gerard M. Jacobs |
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| Chief Executive Officer |
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| 17 |